QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.1    
  


[DHS Logo]


State of California—Health and Human Services Agency

DEPARTMENT OF HEALTH SERVICES  





June 28, 2002 


Douglas
S. Harrington, MD

Laboratory Director and CEO

Specialty Laboratories, Inc

2211 Michigan Avenue

Santa Monica, CA 90404-3900 


Dear
Dr. Harrington, 


        The
Department of Health Services has determined that Specialty Laboratories is in substantial compliance with California clinical laboratory law effective June 28, 2002, as
determined by an onsite monitoring on June 18 and 19, 2002, and acceptance of your June 25, 2002 Plan of Correction. It is our understanding that you have withdrawn the
December 8, 2001 Plan of Correction submitted by the previous Laboratory Director of Specialty Laboratories, Albert Rabinovitch, M.D. 


        A
Plan of Correction was submitted by Specialty Laboratories on June 25, 2002 for deficiencies observed in an unannounced complaint investigation conducted October 9 and
10, 2001 and follow-up onsite monitoring on May 7 and 8, 2002. Based on review of the Plan of Correction, as well as of documents secured during the onsite monitoring and supporting
materials submitted by Specialty Laboratories, the Department has determined substantial compliance. These submissions constitute a credible allegation of compliance. 



        Three
standard level deficiencies remain uncorrected, however. These must be brought into compliance as soon as possible. They are: 



	1.
	The
Plan of Correction for deficiencies cited at D1200, D1214, D5201, and D6076 should be amended as shown (by underlining) below: Unlicensed persons may make primary inoculations of
test material onto appropriate culture media, stain slide preparations for microscopic examination, and subculture from liquid media (all activities authorized pursuant to BPC §
1269(e)(2)).



	2.
	Regarding
the deficiency cited at D4135, when Specialty Laboratories resumes testing for the Natural Killer Cell Function by Chromium Release (NK) by its "revised" procedure, the
procedure shall be signed as approved and dated by the current Laboratory Director. 




[Flex
Logo] 




Laboratory
Field Services, 1111 Broadway, 19th Floor, Oakland, CA 94607

Telephone: 510-873-6328 Internet: http//www.dhs.cahwnet.gov/ps/ls/lfsb/lfsbindex.htm 






	3.
	In
further reference to D4135, page 5 of the NK procedure refers to an assay-specific coversheet that was not submitted for review with the plan of correction. It is stated that this
coversheet defines activities performed by licensed persons and those, by unlicensed laboratory aides. The coversheet shall be submitted to LFS for review prior to the laboratory resuming NK testing.
Alternatively, these could be incorporated into an amended procedure that is signed off by the current Laboratory Director and submitted to LFS for review. 




        Department
staff also conducted an unannounced onsite inspection of Specialty Laboratories on June 18 and 19, 2002 to assess the progress Specialty Laboratories was making to
correct deficiencies found in October 9 and 10, 2001. A comprehensive review on those days showed that the laboratory had already corrected many areas of non-compliance. 


        By
regaining substantial compliance with state law, Specialty Laboratories is no longer in jeopardy of the principal sanction of license revocation. However, the alternative sanctions
noticed to you on March 28, 2002 will be continued. Such notice will follow in a separate communication. 


        If
you have any questions, do not hesitate to contact me at (510)-873-6371. 


Sincerely,



/s/
ROBERT J. THOMAS                        

Robert J. Thomas,
 Chief Personnel Licensing Section


	Cc
	Linda
Bryant, Chief

Facility Licensing Section

Laboratory Field Services

1111Broadway, 19th Floor

Oakland, CA 94607 



Karen
Fuller, Acting Director

Division of State Operations, CLIA Program

Center for Medicare and Medicaid Services, Region IX

75 Hawthorne Street, Fourth Floor

San Francisco, CA 94105 


Cindy
Lloyd, Senior Counsel

Department of Health Services

Office of Legal Services

714 P Street, Room 1216

Sacramento, CA 95814 


Mary
Jew, CLIA Health Insurance Specialist

Division of State Operations, CLIA Program

Center for Medicare and Medicaid Services, Region IX

75 Hawthorne Street, Fourth Floor

San Francisco, CA 94105 


Karen
L. Nickel, Chief

Laboratory Field Services

1111 Broadway St., 19th Floor

Oakland, CA 94607 










QuickLinks



Exhibit 10.1