Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
CLIA REGULATION OF 
UNESTABLISHED LABORATORY TESTS 
JULY 2001 
OEI-05-00-00250  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452 as 
amended by Public Law 100-504, is to protect the integrity of the Department of Health and 
Human Services programs as well as the health and welfare of beneficiaries served by them. 
This statutory mission is carried out through a nationwide program of audits, investigations, 
inspections, sanctions, and fraud alerts. The Inspector General informs the Secretary of program 
and management problems and recommends legislative, regulatory, and operational approaches 
to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General. It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public. 
The inspection reports provide findings and recommendations on the efficiency, vulnerability, 
and effectiveness of departmental programs. 
OEI's Chicago Regional Office prepared this report under the direction of William Moran, 
Regional Inspector General and Natalie Coen, Deputy Regional Inspector General. Principal 
OEI staff included: 
REGION  HEADQUARTERS 
John Traczyk, Team Leader  Bambi Straw, Program Specialist

Susan Otter, Lead Analyst

Dennis Tharp, Analyst

To obtain copies of this report, please call the Chicago Regional Office at 312-353-4124. 
Reports are also available on the World Wide Web at our home page address: 
http://www.dhhs.gov/progorg/oei  E X E C U T I V E  S U M M A R Y  
PURPOSE 
To examine how the Centers for Medicare and Medicaid Services (CMS) regulates 
laboratories conducting Live Blood Cell Analysis and other unestablished laboratory 
tests. 
BACKGROUND 
The CMS has become aware that an increasing number of laboratory sites are offering 
patients Live Blood Cell Analysis and other unestablished laboratory tests. For the 
purposes of this inspection we have defined unestablished laboratory tests as those 
laboratory test methods that are not generally accepted by many of the people involved in 
traditional laboratory practice and oversight. 
One such test, Live Blood Cell Analysis, uses a drop of blood from a patients finger. 
The blood is placed on a slide and viewed under a specialized microscope connected to a 
video monitor. Sites where this test is performed are considered laboratories as defined 
by the Clinical Laboratory Improvement Amendments of 1988 (CLIA) and are subject to 
CLIA regulation. The CMS has encountered problems in trying to regulate Live Blood 
Cell Analysis and other unestablished laboratory tests such as Biological Terrain 
Assessment, hair analysis to assess nutritional deficiencies, food allergy testing and other 
tests. 
FINDINGS 
Live Blood Cell Analysis Has Not Been Able to Meet CLIA Requirements 
To date, laboratories conducting Live Blood Cell Analysis and other unestablished 
laboratory tests have not been able to meet all CLIA requirements. Many Live Blood 
Cell Analysis providers are nutritionists, herbologists, naturopaths, chiropractors and 
others who are unlikely to meet CLIA personnel requirements. All laboratories that offer 
Live Blood Cell Analysis are unable to meet requirements pertaining to the establishment 
and verification of test methods. 
An unknown, but perhaps significant, number of laboratories that offer unestablished 
laboratory tests may be operating without CLIA certification. During this study, we 
identified 200 laboratories that offer unestablished laboratory tests. Eighty percent of 
these laboratories do not have a CLIA certificate. 
i 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  CMS Faces Significant Barriers in Enforcing CLIA Regulations for Unestablished 
Tests 
The CMS has difficulty identifying laboratories that perform unestablished laboratory 
tests and, once identified, CMS has even greater difficulties getting these laboratories 
into compliance with all CLIA requirements. The program relies on laboratories to 
voluntarily identify themselves for CLIA enrollment, but laboratories using unestablished 
test methods have few, if any, incentives to voluntarily enroll in CLIA. Moreover, CMS 
has inadequate administrative remedies that would permit them to take action against 
laboratories that refuse to enroll or comply with the Federal law. 
Some Laboratories Performing Live Blood Cell Analysis May Have Improperly 
Obtained CLIA Certificates 
The CMS may be unaware that laboratories with waived or provider-performed 
microscopy CLIA certificates are conducting unestablished laboratory testing. Obtaining 
these types of certificates is relatively easy. Applications from laboratories do not 
require disclosure of the use of unestablished test methods, and laboratories seeking 
waived and provider-performed microscopy certificates are not routinely visited. 
Consequently, CMS may never discover that these laboratories are performing Live 
Blood Cell Analysis or other unestablished tests. 
Laboratories performing Live Blood Cell Analysis and other unestablished tests that 
apply for a CLIA Certificate of Compliance to conduct complex testing are more likely to 
be detected and have their certificate revoked because CLIA surveyors routinely visit 
them. However, this process is resource intensive and may take up to 3 years to 
complete. Under current CMS policy, all CLIA laboratories that conduct unestablished 
tests do so outside the scope of their certificate. These certified laboratories should not 
be performing Live Blood Cell Analysis or any unestablished test. 
State Agencies and Practitioner Respondents Believe Live Blood Cell Analysis 
Should Be Regulated, but They Differ on How this Should Be Accomplished 
Most State agencies believe that CLIA regulation of Live Blood Cell Analysis 
laboratories would help to ensure the quality of testing and help protect patients from 
unscrupulous providers. Two-thirds of State agencies believe that CMS should change 
CLIA policies to better address Live Blood Cell Analysis and other unestablished tests. 
Most providers of unestablished laboratory tests agree that unestablished tests should be 
regulated to protect patients, but they feel that CLIA is the wrong program to do this. 
Few States Restrict the Use of Unestablished Laboratory Tests; Oversight by Other 
Federal Agencies Is Limited 
The CLIA program plays the primary role in oversight of laboratories. State laws and 
other Federal regulations may affect laboratories, but CMS is primarily responsible for 
ii 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  overseeing the quality of testing performed at each CLIA certified laboratory. Many States 
place restrictions on who can order and receive laboratory test results, but only a few have 
laws that prohibit unestablished laboratory testing. Other Federal agencies enforce 
regulations that affect the marketing of laboratory equipment, advertising claims, and 
disposal of biohazardous materials, but these agencies have no direct oversight of 
laboratory testing practices. 
RECOMMENDATIONS 
The Clinical Laboratory Improvement Amendments of 1988 were enacted to improve the 
quality of laboratory testing and to protect the public from harm that might result from poor 
quality laboratory testing. It recognizes that the risk of harm to patients differs from test to 
test. The greater the risk of harm, the greater the regulatory requirements. 
This report demonstrates that laboratories conducting Live Blood Cell Analysis and other 
unestablished tests do not fit well into the current CLIA regulatory framework. To help 
address this situation, we are recommending that CMS take the following actions: 
<	 Conduct a study to determine whether Live Blood Cell Analysis has value as a 
diagnostic tool. 
<  Establish procedures for evaluating the usefulness of other unestablished tests. 
<	 Seek new administrative authorities that would permit CMS to take specific 
actions when a laboratory fails to enroll in CLIA. 
<	 Require laboratories to disclose on their CLIA application whether they are 
conducting unestablished tests. 
<	 Improve test verification reviews by improving surveyor training and 
standardizing reviews. 
<	 Use the CMS Internet site and other means to provide the public with 
information on unestablished laboratory tests. 
Implementation of these actions should assist CMS in finding a long-term solution 
regarding laboratories conducting unestablished tests. 
AGENCY COMMENTS 
The CMS concurs with all of the recommendations in this report. 
iii 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  T A B L E  O F  C O N T E N T S  
PAGE

EXECUTIVE SUMMARY

INTRODUCTION .............................................................. 1

FINDINGS

Live Blood Cell Analysis Has Not Been Able to Meet CLIA Requirements  ........... 6

Barriers in Enforcing CLIA Regulations for Unestablished Tests  ................... 7

Some Laboratories May Have Improperly Obtained CLIA Certificates ............... 8

Respondents Believe CLIA Needs to Change ................................... 9

State Restrictions and Federal Oversight Are Limited  ........................... 12

RECOMMENDATIONS  ....................................................... 16

APPENDICES

A: CMS Comments on this Report  .......................................... 17

iv 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  I N T R O D U C T I O N  
PURPOSE 
To examine how the Centers for Medicare and Medicaid Services (CMS) regulates 
laboratories conducting Live Blood Cell Analysis and other unestablished laboratory 
tests. 
BACKGROUND 
In 1988, Congress passed the Clinical Laboratory Improvement Amendments (CLIA). 
The CLIA law establishes quality standards for all laboratory testing to ensure the 
accuracy, reliability and timeliness of patient test results regardless of where the test was 
performed. The CMS is responsible for implementing CLIA, including laboratory 
registration, fee collection, onsite surveys and enforcement. The CMS contracts with 
State agencies and professional organizations to carry out the provisions of the law. 
Under current law, all laboratories except those specifically exempted by law, must be 
CLIA certified to perform testing on human specimens. The CLIA regulations define a 
laboratory as: 
[A] facility for the . . . examination of materials derived from the 
human body for the purpose of providing information for the 
diagnosis, prevention or treatment of any disease or impairment 
of, or the assessment of the health of, human beings. These 
examinations also include procedures to determine, measure, or 
otherwise describe the presence or absence of various substances 
or organisms in the body. 
The CLIA regulations exempt some laboratories from regulation. Forensic laboratories, 
drug testing laboratories certified by the Substance Abuse and Mental Health Services 
Administration and some Federal laboratories are exempt from CLIA regulation. 
Research laboratories that do not report test results to patients are also exempt from CLIA 
regulation. 
As of July 2000, nearly 170,000 laboratories were registered under CLIA. About 86,500 
laboratories have been issued a Certificate of Waiver. These laboratories only perform 
simple laboratory procedures cleared by the Food and Drug Administration (FDA). 
Laboratory surveyors do not make routine visits to waived laboratories ensure 
compliance with CLIA requirements. 
1 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  Approximately 36,000 laboratories 
hold Certificates for Provider- Types of CLIA Certificates 
Performed Microscopy Procedures. 
These certificates are issued to  Certificate of Waiver 
physicians and other approved  This certificate is issued to laboratories that only 
perform tests approved for home use or that employ 
providers who meet CLIA 
methodologies that are so simple and accurate the 
requirements to perform certain 
likelihood of erroneous results is negligible or they 
moderate level microscopy procedures.  pose no reasonable risk of harm to the patient if the 
In addition to specified microscopy  test is performed incorrectly. These laboratories are 
procedures, providers issued this type  not routinely visited. 
of certificate can also perform waived 
tests. As with laboratories issued a  Certificate for Provider-Performed 
Certificate of Waiver, laboratories  Microscopy Procedures 
issued a Certificate for Provider- This certificate is issued to laboratories where a 
physician or other qualified provider performs 
Performed Microscopy Procedures are 
specific microscopy procedures permitted by CLIA. 
not routinely visited by the CLIA 
Laboratories with provider-performed microscopy 
program.  certificates are also permitted to perform waived 
tests. These laboratories are not routinely visited. 
The remaining 41,500 laboratories 
conduct moderate or high complexity 
Certificate of Registration 
testing. They have been issued a  This certificate is issued to laboratories that conduct 
Certificate of Compliance or a  moderate or high complexity testing or both. This 
Certificate of Accreditation. All  certificate is issued when a laboratorys application is 
accepted by CLIA and is valid until the laboratory is 
laboratories conducting moderate and 
surveyed. 
high complexity testing are required to 
meet specific CLIA requirements. 
When these laboratories apply for  Certificate of Compliance
Certificate of Accreditation 
certification they are issued a 
A Certificate of Compliance or a Certificate of 
Certificate of Registration that enables 
Accreditation is issued after a laboratory is surveyed 
them to participate in the Medicare and  and found to be in compliance with all applicable 
Medicaid program until an onsite visit  CLIA requirements. Routine onsite visits are made 
can be conducted to verify compliance  to these laboratories to ensure compliance. 
with CLIA standards. They are then 
issued a Certificate of Compliance. 
State and accrediting agency surveyors revisit these laboratories at least every 2 years to 
ensure continued compliance with CLIA requirements. 
Live Blood Cell Analysis 
The CMS has identified several unestablished laboratory tests that use blood, urine and 
saliva.1  Live Blood Cell Analysis (LBA) uses a drop of blood from a patients finger. 
1  Information we received from CMS identifies Live Blood Cell Analysis, Biological Terrain Assessment, 
Thromboelastograph, dental sensitivity testing, food allergy testing and hair analysis to assess nutritional 
deficiencies as alternative tests. These and other tests meet our definition of unestablished testing. 
2 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  The blood is placed on a slide and viewed while the cells are alive using a specialized 
microscope connected to a video monitor.2  The video monitor allows patients to view 
their blood cells while the provider describes substances found in the blood sample. 
Some providers use results to assess nutritional deficiencies, to outline a course of 
treatment or to assess the effects of treatment. Other providers may use Live Blood Cell 
Analysis for other purposes. 
Under current regulations, meeting all CLIA requirements for certification is virtually 
impossible for a laboratory performing Live Blood Cell Analysis (LBA). Many LBA 
providers are complementary and alternative medicine providers such as nutritionists, 
herbologists, naturopaths, chiropractors and others who are unlikely to meet CLIA 
personnel requirements. The CMS has determined that facilities performing Live Blood 
Cell Analysis must meet CLIA requirements for high complexity testing including patient 
test management, proficiency testing, quality control and quality assurance. 
Every laboratory must establish and verify every high complexity test method used in the 
laboratory. Establishing and verifying a test method is usually demonstrated, in part, by 
1) comparing the new test results with the results obtained from established methods, 2) 
testing samples of known value, and 3) testing the same sample multiple times to see if 
the results are comparable. 
Laboratories are required to run quality control samples to ensure that a test is working 
correctly from day to day. The laboratory must also verify test accuracy by participating 
in a proficiency testing program. Because LBA is performed on freshly drawn blood 
samples, it is much more difficult to comply with these CLIA quality assurance 
requirements. 
CMSs Efforts to Address Live Blood Cell Analysis 
In 1995, CMS created a work group to address regulation of Live Blood Cell Analysis 
and other unestablished laboratory tests. The work group asked their Office of General 
Counsel and the Centers for Disease Control and Prevention (CDC) for assistance in 
understanding what role, if any, the program should play in regulating laboratories 
conducting Live Blood Cell Analysis. The Office of General Counsel advised CMS that 
laboratories conducting LBA are subject to all CLIA requirements. The CDC determined 
that laboratories performing this test must meet all of the requirements for laboratories 
2  The laboratory method used for LBA is also used in unestablished tests with the following names: 
Peripheral Blood Assessment, High Resolution Blood Morphology, High Resolution Microscopy, Live Cell 
Analysis, Live Blood Demonstration, Unchanged Blood Analysis, Vital Hematology, darkfield microscopy and 
nutritional microscopy. 
3 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250   conducting high complexity testing. The CMS posted the CDC and Office of General 
Counsel findings in a Special Alert on its website. 
The work group developed guidelines for State surveyors to help them when surveying 
laboratories conducting LBA. The work group has also asked States and their regional 
offices to provide them with information on laboratories identified as providing LBA and 
other unestablished tests. 
METHODOLOGY 
For the purposes of this study, we use the term unestablished laboratory tests to mean 
tests that are not generally accepted by many of the people involved in traditional 
laboratory practice and oversight. 
We collected information about Live Blood Cell Analysis and some information about 
Biological Terrain Assessment, hair analysis, food allergy testing and other unestablished 
tests for this study. We focused this report on LBA because it is the unestablished test 
most often encountered by CLIA personnel, and because CMS has made an effort to 
address how this test should be regulated by the program. While this report focuses on 
Live Blood Cell Analysis, the problems in attempting to regulate laboratories doing this 
test also appear to apply to other laboratory locations that perform unestablished 
laboratory tests. 
This study did not address the validity or accuracy of LBA or any other unestablished 
laboratory test. Nothing in this report should be construed as an endorsement or 
condemnation of any laboratory test. 
We reviewed CLIA regulations, policies and procedures to determine how they relate to 
laboratories conducting Live Blood Cell Analysis and other unestablished tests. We 
interviewed CMS central office staff and regional office staff in five regions. We 
discussed CLIA enrollment and certification processes, and staff experiences relating to 
LBA testing and laboratory sites that use unestablished test methods. Similar discussions 
were held with representatives from the College on Office Laboratory Accreditation, the 
Joint Commission on Accreditation of Healthcare Organizations and the College of 
American Pathologists. These accrediting organizations were contacted because they 
have contracts with CMS to provide survey and certification services for some 
laboratories. 
We contacted the State agencies responsible for carrying out the CLIA provisions in all 
50 States, the District of Columbia and Puerto Rico. We conducted in-person interviews 
with State CLIA staff in the District of Columbia and 11 States: Arizona, California, 
Delaware, Illinois, Kansas, Maryland, Missouri, New Jersey, New York, Pennsylvania 
and Wisconsin. We discussed CLIA enrollment and certification processes and obtained 
4 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250   information and opinions about CLIA regulation of laboratories performing 
unestablished tests. The remaining 39 States and Puerto Rico completed written surveys. 
Overall, we received responses from 52 State agencies.3 
To identify facilities offering LBA, we solicited information from CMS central and 
regional offices, State agencies and the three accrediting organizations. We also used 
Internet searches to identify manufacturers, instructors, promoters and practitioners of 
LBA. We were unable to obtain reliable data to determine the total number of laboratory 
sites performing LBA or other unestablished laboratory tests. From the information we 
obtained, we compiled a list of laboratory sites conducting LBA and other unestablished 
tests in the United States. 
To obtain the perspective of those providers who use unestablished laboratory test 
methods, we interviewed people involved in LBA laboratory testing. We contacted 
industry representatives identified as manufacturing, promoting or offering Live Blood 
Cell Analysis. Of the 38 potential respondents that we attempted to contact, 18 agreed to 
participate in this study. Others could not be contacted or were unable to meet with us. 
We also interviewed staff at Center for Disease Control and Prevention, National 
Institutes of Health, the Food and Drug Administration, the Federal Trade Commission, 
and the Occupational Safety and Health Administration. These agencies were identified 
by State agencies and CMS staff as playing a role in regulating unestablished laboratory 
tests. We conducted these interviews to determine what, if any, oversight responsibility 
each agency has in relation to laboratory testing. 
We conducted our review in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
3  Collectively, the respondents from the 50 States, the District of Columbia and Puerto Rico will be 
referred to as State Agencies or States in this inspection report. 
5 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  F I N D I N G S  
Live Blood Cell Analysis has not been able to meet CLIA
requirements 
An unknown, but perhaps significant, number of Live Blood Cell Analysis sites 
operate without CLIA certificates 
We identified 200 laboratories in 38 States that purport to offer Live Blood Cell Analysis 
(LBA) or other unestablished laboratory tests. One hundred fifteen sites were identified 
using information we received from CMS and State CLIA surveyors. We believe that the 
remaining 85 sites have not been identified by CMS or State survey staff. 
We checked the names and addresses of the 200 laboratory sites offering LBA against 
CLIA enrollment records and found that nearly 80 percent did not have a CLIA 
certificate. The remaining sites were certified by the CLIA program. They had been 
issued Certificates of Waiver, Certificates for Provider-Performed Microscopy 
Procedures and Certificates of Compliance. Some of these certificates were revoked 
when CMS discovered that they were doing LBA. Other certificates remain in effect 
because the laboratory has assured CMS that it has ceased performing LBA. 
We asked industry representatives to estimate the number of laboratories offering LBA. 
One respondent claims to have trained 300 to 400 American physicians to conduct LBA. 
Another respondent stated that he had trained about 3,000 practitioners. Based on his 
knowledge of the industry, this respondent estimates that between 10,000 and 15,000 sites 
may be conducting LBA in the United States. 
When a non-certified laboratory is identified, the laboratory is sent a letter advising them 
to cease testing and to apply for CLIA certification if they wish to resume testing. State 
agency respondents suspect that some laboratories that offer unestablished testing 
continue to test despite agreeing to cease and desist. Other laboratories claim they are 
exempt from CLIA because they are conducting LBA as research. To qualify for this 
exemption laboratories must agree not to provide test results to patients. Some State 
agency respondents have expressed concern that these facilities may be providing test 
results to patients. 
Laboratories that perform Live Blood Cell Analysis and other unestablished 
laboratory tests have difficulty meeting many CLIA requirements 
All laboratories that perform LBA must meet regulatory requirements for laboratories 
performing high complexity testing. To date, no laboratory performing LBA has 
6 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250   successfully met these requirements. Complementary and alternative medicine providers 
appear most likely to offer their patients LBA and other unestablished laboratory tests. 
These complementary and alternative medicine providers often do not meet CLIA 
personnel requirements for high complexity testing. Those laboratories that can meet the 
personnel requirements cannot meet other CLIA requirements. Meeting the regulatory 
requirement concerning the establishment and verification of test methods has been 
particularly problematic for the LBA test method. To meet this requirement, each 
laboratory must prove that LBA is accurate, precise and an analytically sensitive test. 
The laboratory must also establish reference ranges to distinguish normal or acceptable 
results from abnormal or unacceptable results. 
CMS faces significant barriers in enforcing CLIA regulations
for unestablished tests 
CMS cannot take administrative actions against laboratories that refuse to enroll 
in CLIA and must rely on other agencies to take action 
According to CMS staff, CLIAs enforcement provisions work well for CLIA certified 
laboratories, but are problematic for laboratories not enrolled in the program. When a 
State agency or CMS discovers that a laboratory is operating without a CLIA certificate, 
they send the laboratory a letter advising them that they must cease and desist from 
testing until the laboratory is CLIA certified. 
There are no administrative remedies available to CMS when a laboratory refuses to 
enroll in CLIA and refuses to cease testing. The CMS cannot impose monetary or other 
administrative penalties on laboratories that defy the law. The only course of action 
available to CMS is to refer cases to other Federal or State investigative and law 
enforcement agencies for civil suit or criminal prosecution. There are no intermediate 
remedies with more proportionate administrative penalties. Consequently, laboratories 
may be subject to criminal prosecution or civil action that may result in fines or 
imprisonment. A criminal conviction can result in a fine of up to $10,000 and up to 1 
year in prison or both. 
As with other laboratory tests that obtain a blood sample using a finger prick, obtaining 
blood for an LBA test, in itself, appears to pose little risk of harm to patients. Harm to 
patients is more likely when providers fail to recognize and take appropriate action based 
on test results and other non-test related factors. Regulations permit CMS to bring suit in 
the district court of the United States to enjoin a laboratory if CMS believes that 
continuation of an activity by a laboratory constitutes a significant hazard to the public 
health. It may be difficult for CMS to establish that LBA and other unestablished tests 
pose a significant hazard to patients or the public. During our in-person interviews, we 
asked State and Federal respondents whether LBA had harmed any patients. We found 
no evidence that would suggest that LBA or any other unestablished test has harmed 
patients. 
7 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  Getting laboratories that perform unestablished tests to enroll in the CLIA 
program is difficult 
Laboratories conducting LBA have little incentive to enroll in the CLIA program. The 
main incentive for traditional laboratories to enroll under CLIA is reimbursement by 
Medicare or Medicaid. Nearly all providers bill patients directly for unestablished 
laboratory tests. Medicare, Medicaid and most other insurance programs do not cover 
these laboratory tests. 
Most State agencies believe that at least 95 percent of all laboratories in their State 
voluntarily identify themselves for CLIA enrollment. States report that laboratories 
operating without CLIA certificates often decide to enroll when Medicare and other 
insurance payers deny their claims. 
The CLIA programs reliance on laboratories to identify themselves for enrollment is 
problematic when it comes to laboratories conducting LBA and other unestablished tests. 
Some complementary and alternative medicine providers have heard that CMS forces 
laboratories conducting Live Blood Cell Analysis to close; consequently, laboratories that 
perform LBA and other unestablished tests may seek to avoid CMS detection. 
Chiropractors, herbologists, naturopaths, nutritionist, therapists, health food store owners 
and other complementary and alternative medicine providers may be unaware of the 
CLIA program. These practitioners may not be associated with schools or organizations 
that offer a laboratory curriculum. Physicians (medical and osteopathic) who perform or 
offer their patients LBA and other unestablished laboratory tests appear more likely to be 
aware of CLIA. Traditional medical schools and professional organizations help to keep 
physicians informed about CLIA and other Federal and State regulations that affect 
laboratories. Training programs, schools and organizations for complementary and 
alternative medicine practitioners may not adequately inform their clients about CLIA 
requirements. 
Some laboratories performing unestablished tests may have
improperly obtained CLIA certificates 
The number of laboratories that perform LBA and other unestablished tests is unknown. 
We do know that some laboratories doing these tests have been issued CLIA certificates. 
In some cases, a laboratory applied for a CLIA certificate because they were performing 
traditional laboratory procedures. They subsequently added LBA or other unestablished 
tests and did not notify CLIA. Others stopped doing the traditional laboratory tests that 
they were approved to perform under CLIA and only offer LBA and other unestablished 
tests. 
8 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  Laboratories doing unestablished tests can easily obtain a CLIA certificate 
Any laboratory, including those operated by complementary and alternative medicine 
providers, can easily obtain a CLIA Certificate of Waiver or a Certificate for Provider-
Performed Microscopy Procedures. Applications from laboratories for these types of 
certificates may be approved and CLIA numbers issued because the CLIA application 
does not ask laboratories if they are doing LBA or any other unestablished testing. Since 
laboratories with waived and provider-performed microscopy certificates are not 
routinely visited, CMS may never know that they are performing Live Blood Cell 
Analysis or other unestablished tests and that they have been improperly issued a CLIA 
certificate. 
Laboratories that perform unestablished testing and apply for a CLIA Certificate of 
Compliance are more likely to be detected and have their certificate revoked. However, 
the process may take up to 3 years to complete. Despite the inability of laboratories 
performing LBA to meet CLIA requirements, CMS requires that surveyors complete a 
full site visit of all laboratories performing LBA that submit correctly completed 
applications. Surveyors examine and determine which CLIA requirements the laboratory 
meets. Deficiencies noted during onsite surveys are documented on Statements of 
Deficiency. Deficiency statements for some laboratories conducting LBA have 
approached 30 pages in length - significantly more than most laboratories. One LBA 
laboratory response to CLIA survey findings exceeded 200 pages, and we have seen other 
complex responses to Statements of Deficiency. The CMS must address the issues raised 
in a laboratorys response to deficiencies cited during the survey process. After receiving 
CMSs response the laboratory is given the opportunity to, once again, respond to CMS. 
Laboratories that meet CLIA requirements and satisfactorily pass their onsite inspection 
may not be visited for 2 years. Those that have difficulty meeting CLIA requirements are 
given up to 1 year to correct deficiencies before their CLIA certificate is revoked. 
The survey and certification process is a long and arduous process considering that no 
laboratory conducting Live Blood Cell Analysis (or other unestablished tests) has been 
able to meet all CLIA requirements. Currently, all CLIA certified laboratories that 
conduct LBA and other unestablished tests do so outside the scope of their certificate. 
These CLIA certified laboratories should not be performing LBA or other unestablished 
tests and may be violating the law. 
State agencies and practitioner respondents believe Live
Blood Cell Analysis should be regulated, but they differ on
how this should be accomplished 
More than two-thirds of State agencies believe that laboratories conducting LBA create 
difficulties for CLIA enrollment and certification. State agencies reported several 
difficulties including: identifying laboratories conducting LBA, enforcing CLIA 
9 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250   requirements for certification for all laboratories, and fitting Live Blood Cell Analysis 
and other unestablished tests into CLIA standards. Several States reported that they 
spend an extensive amount of time and resources when laboratories doing LBA apply for 
CLIA certification. 
Laboratory surveyors and providers who offer their patients LBA disagree on the validity 
of Live Blood Cell Analysis. They also disagree as to whether CLIA is the appropriate 
program to regulate LBA and other unestablished laboratory procedures. Most State 
agency respondents and providers who offer LBA and other unestablished tests do agree 
that these tests should be regulated. 
Most of our State agency respondents believe Live Blood Cell Analysis should be 
regulated under CLIA to protect the public 
Most State agency respondents believe that CLIA regulation of laboratories performing 
LBA and other unestablished tests is needed to protect the public. State surveyors believe 
that they help protect the public by verifying that laboratories meet CLIA requirements 
designed to ensure accurate laboratory testing. However, CLIA surveyors cannot ensure 
that LBA laboratories conduct quality testing if the laboratory fails to enroll in CLIA. 
State surveyors are not convinced that LBA provides quality diagnostic information. 
Many State surveyors generally believe that LBA tests yield results that are inconsistent 
with basic principles of biology, chemistry and physics. One State respondent said that 
the scientific application of LBA is limited to what performance characteristics the 
laboratory can actually validate. This respondent and others believe that some 
practitioners may make claims about LBA testing that cannot be supported. 
Some State respondents also believe that laboratories performing LBA and other 
unestablished laboratory tests should be regulated because the public assumes some 
governmental agency is ensuring that their laboratory tests are reliable and accurate. One 
State respondent said, If the public is led to believe that any test, whether standard or 
alternative, is one on which they could or should base some lifestyle adjustment, then 
there should be accountability of the testing person and the site. . . . Another State 
respondent said that the general public operates under the assumption that anyone in a 
laboratory coat is a professional and will operate in a professional manner. 
A majority of States believe CMS should change CLIA processes rather than the 
law to address laboratories performing unestablished tests 
Two out of three States believe CLIA regulations, policies and processes should be 
adapted or changed to better address LBA and other unestablished procedures. Some 
respondents believe that clarification of processes and better guidelines would help them 
determine whether laboratories that offer LBA and other unestablished tests can comply 
with current CLIA requirements. Others believe changes to regulations, policies and 
10 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  processes are needed to better address laboratories that use unestablished methods and 
offer unestablished tests. 
State agency respondents are divided as to whether the CLIA law needs to be changed to 
address laboratories that perform unestablished testing. Some State respondents believe 
that the current law is adequate. Other State respondents believe that any changes would 
dilute the existing law and encourage exceptions for other procedures. Of the States that 
would like to see a change in the law, many mentioned stronger enforcement authority. A 
few would like to see language that would specifically exclude unestablished laboratory 
tests from CLIA regulation. 
Some CLIA surveyors are uncomfortable evaluating Live Blood Cell Analysis test 
methods 
Several State surveyors expressed concern about their ability to evaluate non-traditional 
tests. Others indicated that CLIA regulations and policies are unclear as to what levels of 
proof are necessary to meet the regulatory requirements concerning validation of test 
methods. They mentioned that their training is based on traditional laboratory practices 
and that they often have no experience with unestablished tests. Some State surveyors 
and CMS personnel would like another entity to determine whether LBA is a reliable and 
accurate test method. If this question were resolved, CLIA surveyors felt they would be 
more comfortable evaluating LBA test validity. 
Providers of unestablished laboratory tests with whom we spoke believe Live 
Blood Cell Analysis should be regulated, but not by the CLIA program 
Most providers of unestablished tests with whom we spoke would like to be regulated by 
their peers and not by the CLIA program. One respondent summarized the sentiments of 
many LBA providers when he said, CLIA is not in a position to make definitive 
statements about LBA technology. They believe that many CLIA surveyors have little 
or no understanding of LBA. Many providers who use unestablished tests believe that 
there needs to be some checks and balances to protect the public from unscrupulous 
providers. 
One provider with whom we spoke believes that there should be no regulation of LBA 
testing when providers do not bill Medicare or other insurance. Some pathologists and 
other traditional medical practitioners who perform Live Blood Cell Analysis also shared 
this viewpoint. They believe that LBA falls within the scope of their license to practice 
medicine and that it should not be regulated under CLIA. 
Half of our provider respondents believe that an alternative laboratory division should be 
established. This new division would be responsible for registration and oversight of 
unestablished laboratory tests. It would regulate unestablished testing, set standards and 
enforce requirements. This new division would protect the public from providers who 
11 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  fail to act in the best interest of their patients while not impeding access to unestablished 
laboratory tests. 
A few laboratory providers want to comply with CLIA requirements but with some 
modifications 
Three physician respondents who perform LBA said that they are not opposed to CLIA 
regulation. They are willing to comply with CLIA if standards more applicable to 
providers and the unestablished tests they use are developed by CMS. They believe that 
the CLIA program needs to provide more guidance on how they can come into 
compliance. They also believe that CMS needs to be more reasonable in assessing new 
technologies. One respondent said, CLIA is going to drive the legitimate people out of 
LBA, and the illegitimate ones will prevail underground. 
These three physicians operate laboratories certified to perform moderate and high 
complexity testing. They meet most CLIA requirements for LBA testing, but they cannot 
establish the validity of the LBA test method to meet CMS requirements. 
Few States restrict unestablished laboratory testing;
oversight by other Federal agencies is limited 
The CMS plays the primary role in oversight of laboratories. Little oversight exists 
outside CLIA. Half the States require that laboratories obtain a State laboratory license, 
but the requirements for most of these licenses do not differ substantially from CLIA. A 
few States have laws that may affect laboratories offering LBA or other unestablished 
tests. Other Federal agencies have limited roles in laboratory oversight. Laboratories, the 
tests they perform and the equipment they use may also come under the scrutiny of FDA, 
CDC, the Federal Trade Commission and the Occupational Safety and Health 
Administration. 
Few State laws and regulations restrict laboratories from conducting 
unestablished laboratory tests 
Only three States reported that they had State statutes that they believe prohibit 
laboratories from performing unestablished testing. These three State laws, while 
somewhat different, prohibit laboratories from conducting tests that do not have 
substantial proof of efficacy, and are not substantiated by an independently conducted 
and documented scientifically based clinical trial. The Alabama Administrative Code 
states that procedures employed in a laboratory . . . shall be the standard procedures 
which are generally accepted by leading authorities or are equivalents approved by the 
Alabama Department of Public Health. Maryland and Pennsylvania have statutes with 
similar language. These States believe that they have the authority to deny or revoke the 
State laboratory license of any laboratory doing unestablished testing. 
12 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  Several States reported that they had State laws restricting who can order or receive 
laboratory test results. Connecticut, Georgia, Hawaii, Oregon, Pennsylvania and 
Tennessee require that laboratories examine specimens only when requested by a 
physician or other person authorized by State law to use the findings of laboratory 
examinations. These States also require that laboratory test results be provided only to 
physicians or other persons authorized to receive such tests by State law. Some of these 
State laws also prohibit the reporting of laboratory test results directly to patients. 
Three States believe that complementary and alternative medicine providers may not 
meet State standards governing laboratory personnel. California, Hawaii and Tennessee 
respondents mentioned that they had State personnel standards that would affect some 
laboratories doing unestablished testing. For example, California law prohibits 
chiropractors from drawing blood and thus affects chiropractors who conduct LBA. 
Federal agencies play a limited role in regulating unestablished laboratory 
practices 
The CLIA provisions are intended to ensure the quality of laboratory testing. Poor test 
quality can lead to misdiagnosis, inappropriate treatment and patient harm. Only CLIA 
looks at how well laboratories perform tests. However, other Federal agencies play a role 
in regulating discrete elements of laboratory practice, including manufacturer and 
provider claims, equipment and employee safety. 
The Food and Drug Administration.  The FDAs Office of Device Evaluation ensures 
that medical devices are safe and effective. They ensure that these devices perform as 
claimed and that valid scientific evidence supports the claims made about a product. New 
medical devices for use in laboratories must receive FDA approval before manufacturers 
can market them. The FDA is also responsible for classifying new laboratory tests and 
kits into the various CLIA regulatory categories. 
Manufacturers of laboratory equipment and chemical reagents are not required to seek 
FDA approval to market products that do not substantially differ from products already 
approved by FDA. The FDA advised us that the microscopes used to perform LBA 
testing do not differ substantially from microscopes already approved by the FDA for 
other diagnostic purposes. They indicated that additional FDA approval would only be 
required if a manufacturer of the microscopes made new claims about the capabilities and 
uses for their microscope. 
Some LBA practitioners make claims as to how this test can be used to assess nutritional 
deficiencies, diseases and patient health status. These claims are made by the user and 
not the manufacturer of LBA equipment; therefore, the FDA has no jurisdiction. 
The Centers for Disease Control and Prevention. The mission of the CDC is to 
promote health and quality of life by preventing and controlling disease, injury and 
13 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  disability. The CDC conducts research and provides services to meet public needs and to 
achieve public health goals. The CDC is responsible for CLIA program and policy 
evaluation. The CDC has provided support and technical advice to CMS, and has helped 
CMS in the development of CLIA regulations and guidelines. Until the year 2000 (when 
the FDA assumed this task), CDC was also responsible for classifying new laboratory 
tests and kits into the various CLIA regulatory categories. It was CDC that first advised 
CMS that laboratories performing LBA would need to meet CLIA requirements for 
laboratories doing high complexity testing. 
We asked CDC if Live Blood Cell Analysis posed any health risks to the population. 
They advised us that the risk of infection and disease transmission to patients from a 
finger prick (such as that used in LBA) is low. Our CDC respondents stressed that while 
the risk of disease transmission was low, it did not mean that no risk existed. They 
pointed out that anything contaminated with blood poses a potential biohazard. Such 
products should be properly handled and disposed of to prevent transmission of disease, 
particularly hepatitis that can remain virulent longer than most other contagious diseases. 
As with all patient provider encounters, CDC respondents expressed concern about 
potential harm that might occur when providers fail to recognize seriously ill patients. 
The Federal Trade Commission. The FTC is responsible for enforcing Federal antitrust 
and consumer protection laws. It has enforcement and administrative responsibilities for 
statutes relating to business competition and consumer protection. The FTC seeks to 
protect consumers against unfair, deceptive or fraudulent practices by combating actions 
that threaten consumers opportunities to exercise informed choice. The FTC can stop 
advertisers who make false claims about products. 
The FTCs Bureau of Consumer Protection reviews the advertising claims made by 
sellers of health care products to consumers. They focus their investigation and 
prosecution efforts on large providers where they can have a greater impact and where 
national publicity is likely to have the greatest deterrent effect. Infractions by smaller 
businesses are usually addressed through more cost-effective, non-enforcement activities, 
such as consumer education. The FTC remains a potential source for CMS to use when 
they find that a provider makes false or misleading claims in their advertising about an 
unestablished laboratory test. False or misleading claims that providers make to their 
patients are not addressed by the FTC. 
As part of its oversight responsibility, the FTC monitors the Internet for sites containing 
bogus claims for products and treatments touted as cures for various diseases. This 
campaign, known as Operation Cure.all uses the Internet both as a law enforcement 
tool to identify bogus claims and as a communication tool to give consumers reliable 
health care information. Operation Cure.all has identified five areas of interest: dietary 
supplements, products that make therapeutic claims, medical devices, diagnostic tests 
(including LBA) and fraudulent foreign clinics. It is too early to evaluate the effect 
Operation Cure.all will have on laboratories performing unestablished tests. 
14 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  The Occupational Safety and Health Administration.  Some State and CMS 
respondents suggested that OSHA could help protect patients from exposure to 
potentially harmful laboratory tests including unestablished tests. We discussed this with 
OSHA and found that its primary mission is to save lives, prevent injuries and protect the 
health of Americas workers. The Agency and its State partners ensure that employers 
provide safety guidelines and adequate protections for their employees. They ensure that 
employees are safe and that they are not exposed to hazardous materials or events in the 
workplace. 
The Health Standards Programs Division within OSHA ensures that workers follow 
universal precautions for drawing blood. They also ensure that laboratories properly 
equip their staff with the tools to perform their jobs in a safe and sterile environment, and 
that laboratories properly dispose of blood products and biohazardous wastes. To date, 
OSHA headquarters is not aware of any laboratories offering LBA that would warrant 
their intervention. The OSHA would become involved in laboratories that offer 
unestablished tests if they felt that any of these laboratories exposed their employees to 
biohazardous wastes or any other potential harm. 
15 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250  R E C O M M E N D A T I O N S  
The Clinical Laboratory Improvement Amendments of 1988 were enacted to improve the 
quality of laboratory testing and to protect the public from harm that might result from 
poor quality laboratory testing. It recognizes that the risk of harm to patients differs from 
test to test. The greater the risk of harm, the greater the regulatory requirements. 
This report demonstrates that laboratories conducting LBA and other unestablished tests 
do not fit well into the current CLIA regulatory framework. To help address this 
situation, we are recommending that CMS take the following actions: 
<	 Conduct a study to determine whether Live Blood Cell Analysis has value as 
a diagnostic tool. 
<	 Establish procedures for evaluating the usefulness of other unestablished 
tests. 
<	 Seek new administrative authorities that would permit CMS to take specific 
actions when a laboratory fails to enroll in CLIA. 
<	 Require laboratories to disclose on their CLIA application whether they are 
conducting unestablished tests. 
<	 Improve test verification reviews by improving surveyor training and 
standardizing reviews. 
<	 Use the CMS Internet site and other means to provide the public with 
information on unestablished laboratory tests. 
Implementation of these actions should assist CMS in finding a long-term solution 
regarding laboratories conducting unestablished tests. 
AGENCY COMMENTS 
The CMS concurs with all of the recommendations in this report. The full text of their 
comments can be found in Appendix A. 
16 
CLIA and Unestablished Laboratory Tests  OEI-05-00-00250   APPENDIX  A 
Centers for Medicare and Medicaid Services Comments

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