Pathologists will welcome this law, which provides more latitude for federal regulators should a medical laboratory inadvertently refer a proficiency testing specimen

Last Tuesday, the clinical laboratory testing industry gained an important measure of regulatory relief after President Obama signed into law the Taking Essential Steps for Testing (TEST) Act of 2012. This law removes severe penalties for medical laboratories that inadvertently violate proficiency testing (PT)  requirements.

More specifically, the language of the TEST Act provides guidance to federal regulators to resolve an issue concerning the inadvertent referral of PT specimens as defined by the Clinical Laboratory Improvement Amendments (CLIA) statute of 1988. (See The Dark Report “Congress May Respond to Tough CLIA PT Penalties,” August 6, 2012.)

Tough CLIA Penalties For Medical Laboratories

Previously, federal regulators believed CLIA regulations required them to levy the most severe penalties, even when medical labs mistakenly violated PT rules. No patients may be harmed as a result of such errors, but federal regulators have imposed severe sanctions, including the revocation of a clinical laboratory’s CLIA license, the banning of pathologists serving as medical directors from directing any clinical laboratory for two years, and requiring new ownership of the medical laboratory found to have inadvertently referred one or more PT specimens.

Last week, on December 4, 2012, President Barack Obama signed into law the bill titled “Taking Essential Steps for Testing (TEST) Act of 2012.” This brings important regulatory relief to clinical laboratories by amending the language of the CLIA statue of 1988, as it pertains to the penalties that may be assessed following an instance of an inadvertent referral of a proficiency test specimen. This new law was welcomed by pathologists, who serve as laboratory directors for CLIA-licensed medical laboratories. (Photo by Gothamist.com.)

“The TEST Act will ensure that laboratories are not unfairly punished when they follow the usual practice and refer a specimen to another laboratory,” commented Alan Mertz, President of the American Clinical Laboratory Association.

The legislation permits the federal Centers for Medicare & Medicaid Services (CMS) to impose alternative sanctions in cases in which a PT sample is referred to another laboratory for confirmatory testing or because the laboratory does not offer a specific test.

Sanctions Levied on Nationally Respected Clinical Laboratories

The signing is the culmination of efforts that began in July, when members of the laboratory medicine industry and its associations started to educate members of Congress about the need for this legislation. Adding urgency to this effort was the fact that several nationally respected clinical laboratories  had been cited for inadvertent PT violations. These lab organizations asked their members of Congress to address this matter.

One high-profile case involved the clinical laboratory at Ohio State University Wexner Medical Center (OSUWMC). As reported by DarkDaily.com, CMS regulators threatened to revoke the OSUWMC lab’s license as a result of unintentional PT errors. (See “CLIA Officials Propose Major Sanctions against Prominent Academic Center Clinical Laboratory Due to Inadvertent Referral of Proficiency Test Referrals,” August 13, 2012.)

After receiving the letter, OSU officials appealed the threatened suspension and wrote to every member of the Ohio Congressional delegation asking them to intervene on the lab’s behalf.

Big Medical Laboratory in Indiana Was Sanctioned Under CLIA

During 2011, after it was determined that PT specimens had been inadvertently referred by lab staff, CMS revoked the CLIA certificate of the Alverno Clinical Laboratories, LLC of Hammond, Indiana. This sanction meant that Alverno was forced to change its ownership and get a new laboratory director. This is the first time this CLIA license revocation has been reported publicly. This enforcement action is included in the CLIA Annual Laboratory Registry for 2011.

Dark Daily believes that this situation played an important role in the development and passage of the TEST Act. When the Indiana and Illinois Congressional delegations learned of the CLIA revocation at Alverno they became active supporters of the TEST Act. The congressional delegations in other states responded as well.

House Effort Led by Representative Michael Grimm

In the House, Representative Michael Grimm (R-N.Y.) sponsored the TEST Act and had 13 cosponsors: Steve Austria (R-OH), Michael Burgess (R-TX), Sean Duffy (R-WI), Tim Griffin (R-AR), Daniel Lipinski (D-IL), Ron Paul (R-TX14, Reid Ribble (R-WI,) Peter Roskam (R-IL), Mike Ross (D-AR), Steve Stivers, (R-OH), Pat Tiberi (R-OH), Timothy Walz, (D-MN), and Steve Womack (R-AR).

Senator Amy Klobuchar (D-MN) introduced the bill in the U.S. Senate and had six cosponsors: John Boozman, (R-AR), Sherrod Brown (D-OH), Richard Burr (R-NC), Al Franken (D-MN), Rob Portman (R-OH), and Jeanne Shaheen (D-NH).

An official summary of the TEST Act is provided on the website GovTrack.us. This summary was written by the the Congressional Research Service, a nonpartisan arm of the Library of Congress, and states:

Taking Essential Steps for Testing Act of 2012 – Amends the Public Health Service Act to revise sanctions for laboratories that intentionally refer proficiency testing samples required for certification to another laboratory for analysis by:

1) giving the Secretary of Health and Human Services (HHS) discretion to substitute intermediate sanctions for such violations instead of the two-year prohibition against ownership or operation which would otherwise apply, and,

2) making the one-year certificate revocation for such a laboratory optional rather than mandatory.

Lesson for Clinical Laboratories and Pathologists

One lesson for the clinical laboratory and anatomic pathology professions is that when all the interests in laboratory medicine work together, this collaboration can do an effective job of educating members of Congress on an issue. In this instance, legislators responded with appropriate solutions. As an illustration of how quickly and effectively the laboratory medicine profession worked on this issue, note that the bill was introduced on July 12 and was signed into law less than six months later.

—Joseph Burns

Related Information:

House passes bill from Staten Island’s Rep. Grimm aimed at aiding medical labs

Bill to Fix CLIA Proficiency Testing Language for Clinical Laboratories Passes in the House, Awaits Senate’s Return in November

CLIA Officials Propose Major Sanctions against Prominent Academic Center Clinical Laboratory Due to Inadvertent Referral of Proficiency Test Referrals

ACLA Applauds Introduction of Bill Increasing Flexibility of Regulations that Currently Limit Access to Clinical Laboratory Tests