CMS Will Be Given Discretion It Currently Does Not Have in Imposing Sanctions for Inadvertent PT Referrals

Since its enactment in 1992, the Certified Laboratory Improvement Amendments (CLIA) have imposed severe sanctions for the referral of a proficiency testing (PT) sample to an outside laboratory. PT is a test sent to a laboratory from an accrediting agency for the purpose of monitoring quality of performance on the test — it is not an actual patient sample, although it is required to be handled like one. Not all laboratories are required to engage in proficiency testing and whether they are depends on the complexity of tests handled by the laboratory.

Based on the plain language of CLIA and the precedent developed through administrative proceedings, the referral of PT to an outside laboratory resulted in revocation of certification and barred the laboratory director from acting in such capacity for two years from the date of the determination that a PT referral had occurred. The Center for Medicare and Medicaid Services (CMS) did not consider whether the PT referral was done with the intent of circumventing the quality testing required for certification, as the "intent" requirement was satisfied simply by the fact the PT was put in the mail to an outside laboratory. As a result, very harsh sanctions have been levied against laboratories and lab directors even when a referral was inadvertent. CMS had always taken the position that when the facts indicated less harsh sanctions might be advisable, it had no authority to levy lesser sanctions since the statutory language made it clear that revocation must occur.

TEST Act Allows CMS to Match Sanctions to Level of Noncompliance

The TEST Act, a bill ending severe mandatory sanctions against laboratories that inadvertently violate CLIA's PT referral ban, moved forward in Congress last week and passed with bipartisan support and without amendment from the House Energy and Commerce Subcommittee on Health to the full committee for consideration. The bill may result in laboratories avoiding the following:

  • severe sanctions which require potential shut down
  • disruption in patient care
  • substantial settlement costs

The proposed TEST Act would give CMS much needed flexibility to match sanctions to the level of noncompliance. While it would still forbid the practice of PT referral, the TEST Act would allow CMS flexibility in determining whether the referral was done by a laboratory intending to circumvent the testing process, versus inadvertently, and to levy intermediate sanctions short of revocation.

It is important to note, however, that even an inadvertent referral may still result in harsh sanctions. If a laboratory has a history of referrals of PT, a number of inadvertent referrals and/or does not have appropriate policies and procedures in place to prevent inadvertent referral, CMS is free to levy the revocation sanction. The development and effective use of policies and best practices in this area is even more important now that CMS may, if the TEST Act becomes law, consider these factors in determining whether sanction short of revocation is appropriate. It is assumed that CMS will continue to view the referral of PT as an immediate jeopardy type of deficiency upon survey, and thus it is important laboratories frequently orient personnel (physician and non-physician) to the CLIA ban on PT referral.

Also, CLIA requires laboratories that receive a PT referral to report the receipt to CMS. The TEST Act does not change this requirement, and all personnel should be alerted in order to be compliant. Policies should be developed that will aid laboratories in detecting PT referrals and to put in motion a process for detection in those circumstances wherein it is difficult to ascertain when a referred sample might be PT.