From the Contributor’s Corner: The TEST Act and Laboratory Certification Revocation for Unintentional Referrals

Health Wolters Kluwer Law & Business will periodically feature posts from outside contributors who are members of our Advisory Board. Today’s post comes from Ericka L. Adler.

On December 4, 2012, President Obama signed the Taking Essential Steps for Testing Act of 2012 (“TEST Act”) into law. The TEST Act amends Section 353 of the Public Health Service Act to address the lack of regulatory flexibility given to CMS under CLIA rules in dealing with revocation of laboratory CLIA certificates for unintentional referrals of proficiency testing samples by laboratories. The TEST Act comes after much criticism of the CLIA rules by the industry and several high profile legal battles in which major medical institutions faced the loss of their certification due to existing regulations.

Laboratories that submit claims for Medicare reimbursement must have a CMS-issued certificate under the Clinical Laboratory Improvement Amendments (42 U.S.C. 263(a)) (“CLIA”). Holding such a certificate is a prerequisite to a laboratory being able to operate and conduct non-waived testing (e.g., tests of moderate to high complexity).

As part of the CLIA certification requirements, laboratories are required to engage in periodic proficiency testing, which essentially involves a CMS-approved proficiency testing program (“PT Program”) sending specimens to the CLIA laboratory at regular intervals, with the direction that the laboratory test the specimens in the same manner it would handle similar patient specimens. Upon completion of the testing of the PT Program specimen, the laboratory returns the results to the PT Program for analysis, where the data is compared to known, controlled results. Failure to achieve accurate testing results under the PT Program can lead to a loss of the laboratory’s CLIA certification and its ability to conduct non-waived testing.

In addition to inaccurate testing, there are other events that constitute a violation of proficiency testing, resulting in laboratories regularly (and often unknowingly) violating proficiency testing standards and jeopardizing their CLIA certification. Such events include, but are not limited to, the intentional or unintentional discussing or sharing of proficiency test processing or results with another laboratory. The most common proficiency testing violation occurs when one laboratory refers a PT Program specimen to a second laboratory to perform the proficiency testing or to confirm the original laboratory’s results. Often, this occurs when a laboratory’s normal protocol dictates handling certain patient testing in such a manner. However, in this instance, following the same procedures a lab uses for similar patient tests will actually violate the proficiency testing rules which prohibit an intentional referral of proficiency testing samples. These seemingly inconsistent requirements have led to confusion by laboratories as to how they can treat the proficiency testing sample in the same manner as patient samples, but not refer them to another laboratory if that is the usual manner in which the lab’s own patient samples would usually be handled.

Although laboratories attempt to put into place protocols to avoid the referral of proficiency testing between laboratories, a large number of accidental referrals occur through human error and automated systems that do not recognize a proficiency test sample. The resulting consequence has created great hardship for many laboratories, since violation of proficiency testing rules previously required CMS to revoke the CLIA certificate, regardless of intent. Moreover, once the certificate was revoked, CMS had no discretion under the law but to bar certain persons and entities, such as the owner and operator of the laboratory, the entire hospital network (if the laboratory is hospital-based), the laboratory director, the board of directors, or other laboratory-related parties, from owning and/or affiliating with another laboratory for period of time. The inability of a hospital or practice to own and/or operate a laboratory for any period of time can clearly effect the essential operations of that entity and access to quality patient care.

Great criticism from the industry over proficiency testing violations, as well as some high profile institutions losing their certifications, resulted in a call for a change to the law. The TEST Act addresses the lack of regulatory flexibility within CLIA rules and grants CMS discretion to circumvent the revocation of CLIA certificates for unintentional referrals of proficiency testing samples to other laboratories. This new legislation will permit CMS to impose alternative sanctions prior to revoking a laboratory’s CLIA certificate, where a proficiency testing sample was referred to another laboratory for confirmatory testing or because the laboratory does not offer a specific test. Additionally, the law now makes the certificate revocation for a laboratory optional rather than mandatory.

The TEST Act will hopefully prevent the harsh and often unwarranted loss of a laboratory’s CLIA certification for inadvertent violations of PT Program requirements, although it is still essential for all labs to take steps to comply with the PT Program’s strict requirements.

 Ericka L. Adler is a partner at the firm of Kamensky Rubinstein Hochman & Delott, LLP.  Her primary practice focus is in the areas of regulatory and transactional health care law and she has substantial experience structuring sophisticated health care ventures and advising clients regarding compliance with federal and state health care laws and regulations. Ms. Adler lectures to and advises physicians, providers and other health care specialists nationally regarding regulatory health care issues, day to day practice management, physician contract matters and other business issues that impact healthcare. Ms. Adler has a J.D. and an LL.M in health care law from the Health Law Institute at the DePaul University College of Law.  You can reach her at eadler@kr-law.com and can follow her on Twitter at @krhdhealthlaw.

President Obama Commits To Medicare and Medicaid In His Inaugural Address

Curtailing health care costs while maintaining Medicare, Medicaid and Social Security were objectives stated by President Barak H. Obama in his address following his inauguration for a second term as president of the United States of America. His speech, which was delivered after taking the oath of office on January 21, 2012, established the themes and concerns of the second term of his presidency.

Repurposing Government

The overarching theme of President Obama’s speech was that the government has to change to meet the changing needs of the people. “But we have always understood that when times change, so must we; that fidelity to our founding principles requires new responses to new challenges,” the president said. He provided an example of how American soldiers could not have met and defeated the forces of fascism or communism with muskets and militias. The president said, “We understand that outworn programs are inadequate to the needs of our time.” He continued by saying, “So we must harness new ideas and technology to remake our government, revamp our tax code, reform our schools and empower citizens with the skills they need to work harder, learn more, reach higher.”

Medicare and Medicaid

President Obama cautioned, however, that change cannot be made for change’s sake and that commitments must be maintained. “But we reject the belief that American must choose between caring for the generations that built this country and investing in generations that will build its future,” the president said. “The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us,” said the president. “They do not make us a nation of takers; they free us to take risks that make this country great,” continued the president.

While stating that entitlement programs such as Medicare, Medicaid and Social Security have added to our society and are commitments that must be maintained, he also acknowledged that costs are an issue. “We must make hard choices to reduce the cost of health care and the size of our deficit,” the president said.

ACA

The Affordable Care Act (ACA) (P.L. 111-148 and 111-152), which made significant changes in how health care is financed in this country, was one of the major pieces of legislation the president sought during his first year in office. Implementing the ACA will be a major activity of the president’s administration in his second term. Many of the provisions of the ACA are just going into effect in 2013 and 2014, during the president’s second term. Health care exchanges, the expansion of Medicaid, and the full implementation of the insurance mandate are all major provisions of the ACA that are just now being enacted.

The Tattoo Epidemic: What Are The Health Risks?

It seems that everywhere you look today you see people with tattoos. Tattoos, of course, are nothing new, they have been around for thousands of years. In recent times we have predominately seen them displayed on the muscular forearms and shoulders of our sailors or members of motorcycle clubs. Today, the tattooing craze extends not just to those who are most visible in our society, such as athletes, musicians, singers, and movie and TV stars, but to every walk of life, especially to adolescents and young adults. In fact, according to an August 22, 2012 report by the Centers for Disease Control and Prevention (CDC), 21 percent of adults in the United States have at least one permanent tattoo. So what are the health risks behind this tattoo epidemic?  

Who Regulates Tattoos?

Under the Federal Food, Drug, and Cosmetic Act, tattoo inks are categorized as cosmetics, and while the pigments in the tattoo inks are considered color additives, and thereby subject to premarket approval by the Food and Drug Administration (FDA), no specific FDA regulation requires that tattoo inks be sterile. Tattooing may be regulated locally by cities or counties. These regulations usually require blood-borne pathogen training and hygienic practices in tattooing. Some local jurisdictions also have required that sterile water be used in the dilution of tattoo ink.  

Analyzing the Health Risks

Most people seeking tattoos think they know what to look for when choosing a tattoo parlor. Does the parlor sterilize its equipment? Does the tattoo artist wear protective gloves? Does the artist open a package containing a new sterile needle right in front of you? Is this checklist enough? Probably not.

What about the tattoo ink? What does the ink consist of? Was the ink produced in a sterile fashion specifically for tattooing or was it made from products (i.e., calligraphy ink, drawing ink, or printing ink) never intended for tattooing?

And what about the water used to create the tattoo ink or the water used to dilute the ink product in the tattoo parlor? Is it merely tap-water, distilled water, or is it actually sterile?

The FDA has expressed concern about a family of bacteria called nontuberculous Mycobacteria (NTM) that was found in an outbreak of serious skin infections linked to contaminated tattoo inks in late 2011 and early 2012. These outbreaks occurred in four states. According to CDC, these NTM skin infections can be difficult to diagnose, may require 4-6 months of treatment with drugs that can cause serious side effects, and may require multiple surgeries to remove infected tissue leading to substantial scarring.

CDC Recommendations to Artists and Consumers

The CDC recommends that ink manufacturers produce only sterile inks. In addition, tattoo artists should not: (1) use inks not intended for tattooing; (2) dilute ink, but if dilution is needed, only use sterile water; (3) use non-sterile water to rinse equipment; and (4) use tattoo inks beyond their expiration date.

According to the CDC, consumers should: (1) use approved and register tattoo parlors; (2) request sterile inks manufactured specifically for tattooing; (3) insist upon correct hygienic practices by the artist (hand hygiene, the wearing of disposable gloves, and the use of sterile water); and (4) promptly seek medical care if skin problems occur. 

Additional Tattooing Risks

In addition to infection, additional complications can result from tattooing. According to CDC, these include: (1) removal problems; (2) allergic reactions; (3) granulomas (nodules that may form around material that the body perceives as foreign, such as particles of tattoo pigment); (4) keloid formation (scars that form beyond normal boundaries); and (5) MRI complications (swelling or burning in tattooed areas when they undergo magnetic resonance imaging (MRI).   

The bottom line: Think twice before tattooing. And if you have a bad reaction to tattooing, seek medical care, contact the tattoo artist and parlor, and notify the FDA’s MedWatch program.