Clinical Labs: CMS and Survey Organization Oversight Is Not Sufficient to Ensure Lab Quality
Published: 2006-06-27T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Today's hearing focuses on oversight of clinical labs. The Clinical Laboratory Improvement Amendments of 1988 (CLIA) strengthened quality requirements for labs that perform tests to diagnose or treat disease. About 36,000 labs that perform certain complex tests must be surveyed biennially by a state survey agency, a state CLIA-exempt program, or a private accrediting organization. CMS oversees implementation of CLIA requirements, which includes determining the CLIA equivalency of the inspection requirements used by exempt states and accrediting organizations. GAO was asked to discuss (1) the quality of lab testing and (2) the adequacy of CLIA oversight. To examine these issues, GAO analyzed data on lab performance and reviewed the procedures used by CMS and survey organizations to implement CLIA and oversee lab performance. This testimony is based on the GAO report, Clinical Lab Quality: CMS and Survey Organization Oversight Should Be Strengthened, GAO-06-416 (June 16, 2006).
section_title: What GAO Found
paragraphs: In summary, insufficient data exist to identify the extent of serious quality problems at labs. When CMS implemented revised CLIA survey requirements in 2004, it modified historical state survey agency findings and, as a result, data prior to 2004 no longer reflect key survey requirements in effect at the time of those surveys. The limited data available suggest that state survey agency inspections do not identify all serious deficiencies. In addition, the lack of a straightforward method to link similar requirements across survey organizations makes it virtually impossible to assess lab quality in a standardized manner. Furthermore, CMS does not effectively use available data, such as the proportion of labs with serious deficiencies or proficiency testing results, to monitor lab quality. Proficiency testing is an objective measurement of a lab's ability to consistently produce accurate test results. GAO's analysis of proficiency testing data suggests that lab quality may not have improved at hospital labs in recent years. Oversight of clinical lab quality is not adequate to ensure that labs are meeting CLIA requirements. Weaknesses in five areas mask real and potential quality problems at labs. First, the balance struck between the CLIA program's educational and regulatory goals is sometimes inappropriately skewed toward education, which may result in understatement of survey findings. For example, even though the initial test failure rates were high, CMS instructed state survey agencies not to cite deficiencies during the first two years of required Pap smear proficiency testing to allow labs and their staff to become familiar with the program. Second, the manner in which one accrediting organization structures its survey teams raised concerns about appropriate levels of training and the appearance of a conflict of interest that could undermine the integrity of the survey process. Third, concerns about anonymity and lab workers' lack of familiarity with how to file a complaint suggests that some quality problems are not being reported. Fourth, based on the large number of labs with proposed sanctions from 1998 through 2004 that were never imposed--even for labs with the same serious deficiencies on consecutive surveys--it is unclear how effective CMS's enforcement process is at motivating labs to consistently comply with CLIA requirements. Finally, CMS is not meeting its requirement to determine in a timely manner the continued equivalency of accrediting organization and exempt-state program inspection requirements and processes, nor has the agency reviewed changes to accrediting organization and exempt-state program inspection requirements before implementation.

section_title: Letter
paragraphs: I am pleased to be here today as you discuss oversight of the quality of  testing performed by the nation’s clinical laboratories. Clinical lab tests  are one of the most frequently billed Medicare procedures and, according  to the American Clinical Laboratory Association, affect an estimated   70 percent of medical decisions. Ensuring accurate and reliable lab test  results is critical because erroneous results may lead to improper  treatment, unnecessary mental and physical anguish for patients, and  higher health care costs. Concerns about the quality of lab testing resulted  in enactment of the Clinical Laboratory Improvement Amendments of 1988  (CLIA). In recent years, despite CLIA, lab quality problems in several  states have raised questions about the adequacy of lab oversight.
The Centers for Medicare & Medicaid Services (CMS) is responsible for  overseeing compliance with clinical lab testing requirements. As of  December 2005, there were approximately 193,000 labs nationwide  ranging from very small physician office labs that conduct fewer than  2,000 tests annually, to hospital labs that conduct millions of tests each  year. Most clinical labs regulated under CLIA must obtain a certificate  from CMS, but only about 19 percent—those that conduct moderate- to  high-complexity tests—undergo biennial inspections, which are also  referred to as surveys. During the surveys, inspectors assess lab  compliance with mandated personnel and testing standards. In addition,  surveyed labs must participate in proficiency testing, a program that  requires them to test samples with unknown characteristics that are then  graded by an external party. Labs with serious deficiencies may be  sanctioned. Labs may choose to be surveyed by (1) their state survey  agency, under contract with CMS; (2) their state CLIA-exempt program for  labs in New York and Washington; or (3) one of six private accrediting  organizations. State survey agency inspections use CLIA requirements that  are intended to help ensure valid and reliable lab tests; the two state CLIA- exempt programs and six accrediting organizations survey labs using their  own requirements that CMS has determined to be at least equivalent to  CLIA’s. Each survey organization is also responsible for investigating  complaints about lab quality.
My remarks today will focus on (1) the quality of lab testing and (2) the  effectiveness of CMS and survey organization oversight of the CLIA  program. My testimony summarizes the findings of a report we released  today that examines these issues in more detail and includes numerous  recommendations to the CMS Administrator for improving the quality of  laboratory testing through closer oversight of clinical labs and the  administration of CLIA standards.
To determine what is known about the quality of lab testing, we analyzed  data on serious deficiencies identified during surveys by state survey  agencies using CMS’s On-Line Survey, Certification, and Reporting system  (OSCAR). We requested comparable data on serious deficiencies from  state CLIA-exempt programs and the three largest accrediting  organizations—the College of American Pathologists (CAP), COLA, and  the Joint Commission on Accreditation of Healthcare Organizations  (JCAHO)—which together survey about 97 percent of accredited labs. We  also analyzed proficiency testing data—another indicator of a lab’s ability  to produce accurate test results. To evaluate the effectiveness of CLIA  program oversight, we reviewed the processes used to ensure the quality  of clinical lab testing and analyzed available data related to these issues.  Based on our review and discussions with CMS and survey organization  officials, we focused on several key issues: (1) the balance struck between  the regulatory and educational goals of lab surveys, (2) the implications of  CAP’s use of volunteer surveyors from neighboring labs to conduct  inspections, (3) how survey organizations facilitate the filing of  complaints, (4) the use of sanctions to encourage compliance, (5) CMS’s  process for determining that the standards used by state CLIA-exempt  programs and accrediting organizations are at least equivalent to those of  CLIA, and (6) the results of validation reviews that are intended to assess  the adequacy of inspections by survey organizations. In addition, we  interviewed officials from CMS, three CMS regional offices, 10 state  survey agencies, the New York and Washington CLIA-exempt programs,  and the three largest accrediting organizations. We conducted our work  from January 2005 through May 2006 in accordance with generally  accepted government auditing standards.
In summary, insufficient data exist to identify the extent of serious quality  problems at labs. When CMS implemented revised CLIA survey  requirements in 2004, it modified historical state survey agency findings  stored in its OSCAR database and, as a result, data prior to 2004 no longer  reflect key survey requirements in effect at the time of those surveys. The  limited data available suggest that state survey agency inspections do not  identify all serious deficiencies. In addition, the lack of a straightforward  method to link similar requirements across survey organizations makes it  virtually impossible to assess lab quality in a standardized manner, such as  identifying the proportion of labs with condition-level deficiencies, which  indicate serious or systemic quality problems. Furthermore, CMS does not  effectively use available data—such as the proportion of labs with serious  deficiencies or proficiency testing results—to monitor lab quality.  Proficiency testing is the one available data source that can be used to  uniformly compare lab quality across survey organizations. Although CMS  noted that proficiency testing trend data show a decrease in failures for  labs as a whole, we found that the data suggest that quality may not have  improved at hospital labs in recent years. Despite the importance of, and  the statutory requirement for, quarterly proficiency testing, CMS requires  proficiency testing for almost all laboratory tests only three times a year.
Regarding oversight of clinical lab quality, we found that it is inadequate to  ensure that labs are meeting CLIA requirements. Weaknesses in six areas  mask real and potential quality problems at labs. First, the balance struck  between the CLIA program’s educational and regulatory goals is  sometimes inappropriately skewed toward education, which may result in  understatement of survey findings. In one instance, CMS instructed state  survey agencies not to cite deficiencies for Pap smear proficiency test  results during the first two years of required testing, to allow labs and their  staff to become familiar with the program. Second, the way one  accrediting organization structures its volunteer survey teams raised  concerns about appropriate levels of training and the appearance of a  conflict of interest. Third, although few labs were the subject of a  complaint each year from 2002 through 2004—significantly less than one  complaint per lab per year—concerns about anonymity and lab workers’  lack of familiarity with how to file a complaint suggest that some quality  problems may not be reported. Fourth, based on the large number of labs  with proposed sanctions from 1998 through 2004 that were never  imposed—even for labs with the same serious, condition-level deficiencies  on consecutive surveys—it is unclear how effective CMS’s enforcement  process is at motivating labs to consistently comply with CLIA  requirements. Fifth, CMS is not meeting its requirement to determine in a  timely manner the continued equivalency of accrediting organization and  exempt-state inspection requirements and processes. For example, New  York’s and COLA’s reviews were about 4 years and 3 years past due,  respectively, as of December 2005. Moreover, CMS allows the  implementation of changes to accrediting organization and exempt-state  program inspection requirements between periodic equivalency  determinations before it reviews the proposed changes. CMS attributed  these delays to having insufficient staff. Finally, validation reviews—one  of CMS’s most important oversight tools—do not provide an independent  assessment of the extent to which surveys identify all serious deficiencies  because many are performed simultaneously with such surveys.
Accordingly, in the report we released today, we made specific  recommendations to the CMS Administrator to standardize survey findings  across survey organizations in order to make meaningful comparisons;  strengthen survey, complaint, and enforcement processes; and improve  oversight of the CLIA program. In its comments on a draft of our report,  CMS endorsed our overall conclusion that quality assurance for the  nation’s clinical labs should be strengthened and said that it would take  action in response to 11 of our 13 recommendations. CMS provided an  alternative assessment of lab quality, and disagreed with our  recommendations concerning the frequency of proficiency testing and the  extent of simultaneous accrediting organization validation reviews. CMS  also expressed concern about identifying and sanctioning labs with repeat  condition level deficiencies. After considering CMS’s comments, we  believe that implementing our recommendations is necessary to improve  oversight of labs and accrediting organizations.
subsections: section_title: Background
paragraphs: A clinical lab is generally defined as a facility that examines specimens  derived from humans for the purpose of disease diagnosis, prevention, and  treatment, or health assessment of individuals. Labs conduct a wide range  of tests that are categorized as waived tests or as moderate- or high- complexity tests. Approximately 81 percent of all labs (about 157,000) are  not subject to routine biennial surveys because they perform (1) “waived”  tests, which are generally simple tests that have an insignificant risk of  erroneous results, such as those approved for home use or (2) tests  performed during the course of a patient visit with a microscope on  specimens that are not easily transportable. CLIA establishes more  stringent requirements for the 19 percent (about 36,000) of labs  performing moderate- or high-complexity testing, including the  requirement for a survey and participation in routine proficiency testing.  Surveys examine lab compliance with CLIA program requirements in  several areas including: personnel qualifications, proficiency testing,  quality control, quality assurance, and recordkeeping.
subsections: section_title: Survey Organizations
paragraphs: In general, labs have a choice of who conducts their surveys—state survey  agencies using CLIA inspection requirements or other survey  organizations that use requirements CMS has determined to be at least  equivalent to CLIA’s. CMS contracts with state survey agencies in most  states to inspect labs against CLIA requirements. CLIA established an  approval process to allow states and private accrediting organizations to  use their own requirements to survey labs. As noted earlier, New York and  Washington operate CLIA-exempt programs and CMS has approved six  private, nonprofit accrediting organizations to survey labs—the American  Association of Blood Banks (AABB), the American Osteopathic  Association (AOA), the American Society of Histocompatibility and  Immunogenetics (ASHI), CAP, COLA, and JCAHO. The requirements of  both state CLIA-exempt programs and accrediting organizations must be  reviewed by CMS at least every 6 years to ensure CLIA equivalency, but  may be more stringent than those of CLIA. Figure 1 lists the three types of  survey organizations and indicates whether they survey labs under CLIA  requirements, or use their own CLIA-equivalent requirements. It also  shows the percentage of labs performing moderate- to high-complexity  testing surveyed by each type of organization. In general, state survey  agencies, COLA, and Washington’s CLIA-exempt program survey physician  office labs, while New York’s CLIA-exempt program, CAP, and JCAHO  survey hospital labs.
section_title: Surveys and Complaint Investigations
paragraphs: Survey organizations (1) conduct surveys and complaint investigations  and (2) monitor proficiency test results submitted by surveyed labs three  times a year. Surveys are typically conducted by former or current lab  workers, who assess lab compliance with CLIA or CLIA-equivalent  requirements. Generally, surveyors verify that lab personnel are  appropriately qualified to conduct testing, evaluate proficiency test  records, check equipment and calibration to ensure that appropriate  quality control measures are in place, and determine whether the lab has a  quality assurance plan and uses it to, among other things, appropriately  identify and resolve problems affecting testing quality. Surveys also  include an educational component to assist labs in understanding how to  comply with CLIA requirements.
Lab survey requirements are classified as either “standard-” or “condition-”  level. Deficiencies are also characterized as standard- or condition-level  based on the requirement in which the deficiency occurs. Standard-level  deficiencies denote problems that generally are not serious, while  condition-level deficiencies are cited when the problems are serious or  systemic in nature. When deficiencies are found during surveys or  complaint investigations, labs are required to submit a plan of correction,  detailing how and when they will address the deficiencies. Additionally,  CMS can impose principal or alternative sanctions, or both. Principal  sanctions include revocation of a CLIA certificate, cancellation of the right  to receive Medicare payments, or limits on testing. Alternative sanctions,  authorized by Congress to give CMS more flexibility to achieve lab  compliance, are less severe and include civil money penalties or on-site  monitoring. For condition-level deficiencies that do not involve an  imminent and serious threat to patient health and a significant hazard to  public health, labs have an opportunity to correct the deficiencies, which  we refer to as a grace period, before the sanctions are imposed. If a lab is  unable to correct a deficiency during this grace period, CMS determines  whether to impose sanctions.
section_title: CMS Oversight
paragraphs: CMS, including its 10 regional offices, oversees state and accrediting  organization survey activities. CMS reviews and approves initial and  subsequent applications from exempt-state programs and accrediting  organizations to ensure CLIA equivalency. Validation reviews are one of  CMS’s primary oversight tools. Federal surveyors in CMS regional offices  are responsible for conducting validation reviews of state survey agency  and exempt-state program inspections, but state survey agency staff  conduct the validation reviews of accrediting organization inspections.  An objective of these reviews is to determine if all condition-level  deficiencies were identified. These reviews are conducted within 60 days  of a state’s, or 90 days of an accrediting organization’s, survey of a lab.
section_title: Insufficient Data Exist to Identify Extent of Serious Lab Quality Problems
paragraphs: The extent of serious quality problems at labs is unclear because CMS has  incomplete data on condition-level deficiencies identified by state survey  agencies prior to 2004. Survey results for 2004 show substantial variability  across states, which suggests that state survey agencies do not conduct  surveys in a consistent manner. We also found that the lack of a  straightforward linkage between CLIA requirements and the CLIA- equivalent requirements of some survey organizations makes it virtually  impossible to assess lab quality in a standardized manner. CMS does not  effectively use available data, such as the results of surveys and  proficiency testing, to monitor and assess lab quality. Although CMS noted  that proficiency testing trend data show a decrease in failures for labs as a  whole, the data suggest that quality may not have improved at hospital  labs for the period 1999 through 2003.
subsections: section_title: Limited Quality Data for Labs Inspected by State Survey Agencies Suggest Survey Inconsistencies
paragraphs: CMS’s OSCAR database contains limited data on the quality of labs  inspected by state survey agencies and, as a result, it is not possible to  analyze changes in the quality of lab testing over time. In January 2004,  CMS implemented revised CLIA survey requirements and modified the  existing OSCAR data—state survey agency findings—to reflect the  changes. The revisions affected approximately two-thirds of the CLIA  condition-level requirements. As a result of the data modifications, the  findings for surveys conducted prior to 2004 no longer reflect all key  condition-level requirements in effect at the time of those surveys.
Based on the available 2004 OSCAR data (which represent about one half  of all labs surveyed by state survey agencies), we found that 6.3 percent of  labs had condition-level deficiencies. However, variability in the OSCAR  data suggests that labs are not surveyed in a consistent manner. In 2004,  the percentage of labs that were reported to have condition-level  deficiencies varied considerably by state, ranging from none in 6 states to  about 25 percent of labs in South Carolina. Based on interviews with CMS  and 10 state survey agencies, it appears that at least some of this  variability is due to differences in states’ approaches to conducting their  surveys as opposed to true differences in lab quality. For example, CMS  told us that, because there is not a prescriptive checklist to guide the  survey process, the reliance on state surveyor judgment results in  variations in the citing of deficiencies. In fact, officials in several states  said that there are circumstances under which condition-level deficiencies  would not be cited, such as if the lab staff were new or if the lab had a  good history of compliance. As a result, available data likely understate  the extent of serious quality problems at labs.
section_title: Quality of Labs Inspected by Survey Organizations Is Very Difficult to Measure in a Standardized Manner
paragraphs: Differences in the inspection requirements used by survey organizations  make it virtually impossible to measure lab quality in a standardized  manner. Because exempt-state programs and accrediting organizations do  not classify inspection requirements and related deficiencies with the  same criteria used by state survey agencies—as either standard- or  condition-level—they cannot easily identify the proportion of surveyed  labs with condition-level deficiencies.
We asked exempt-state programs and accrediting organizations what  percentage of their requirements, and any deficiencies cited for failure to  meet those requirements, indicated serious problems that were equivalent  to CLIA condition-level deficiencies. CAP and COLA crosswalked their  recent survey findings to CLIA condition-level requirements. Although  their analysis suggested that from about 56 to 68 percent of labs surveyed  during 2004 had a deficiency in at least one condition-level requirement,  they acknowledged that these proportions overstated the subset of labs  with serious problems. JCAHO did not crosswalk its inspection  requirements to those of CLIA because staff would have had to manually  review each survey report to determine which deficiencies were  equivalent to deficiencies in CLIA condition-level requirements.
Despite the difficulty of identifying CLIA equivalent condition-level  deficiencies, two of the three accrediting organizations we reviewed have  systems to identify labs they survey that have serious quality problems.  COLA estimated that about 9 percent of labs it surveyed in 2004 were  subject to closer scrutiny because of the seriousness of the problems  identified. According to JCAHO, about 5 percent of the labs it surveyed in  2004 were not in compliance with a significant number of requirements.  The third accrediting organization, CAP, has criteria for identifying labs  that warrant greater scrutiny, but CAP officials told us that identifying  such labs had to be accomplished on a case by case basis, rather than  through a database inquiry.
section_title: CMS Use of Data for Monitoring Lab Quality Is Limited
paragraphs: CMS does not effectively use available data, such as the results of surveys  and proficiency testing data, to monitor and assess lab quality. Although  CMS tracks the most frequently cited deficiencies at labs in an effort to  improve quality, it does not routinely track the proportion of labs, by state,  in which state survey agencies identify condition-level deficiencies—those  that denote serious or systemic problems. As noted earlier, variability in  survey findings suggests inconsistencies in how surveys are conducted.  CMS also does not require exempt-state programs and accrediting  organizations to routinely submit data on serious deficiencies identified at  the labs they inspect, unless the deficiencies pose immediate jeopardy to  the public or an individual’s health.
We also found that CMS does not effectively use proficiency testing data to  assess clinical lab quality. Proficiency testing is an important indicator of  lab quality because it is an objective assessment of a lab’s ability to  produce accurate test results and is conducted more frequently than  surveys—three times a year versus once every 2 years. In the absence of  comparable survey data, proficiency testing results provide a uniform way  to assess the quality of lab testing across survey organizations. Although  CMS’s analysis of proficiency testing data showed improvements over  time, our analysis of proficiency testing data for 1999 through 2003  suggests that there has been an increase in proficiency testing failures for  labs inspected by CAP and JCAHO, which generally inspect hospital labs,  and a decrease in such failures for labs surveyed by state survey agencies  and COLA, which tend to inspect physician office labs.
Importantly, CMS’s decision to require proficiency testing for almost all  laboratory tests only three times a year is inconsistent with the statutory  requirement. CLIA requires that proficiency testing be conducted “on a  quarterly basis, except where the Secretary determines for technical and  scientific reasons that a particular examination or procedure may be  tested less frequently (but not less often than twice per year).” In CMS’s  1992 rule implementing CLIA, the agency provided a rationale for reducing  the frequency of proficiency testing, but did not provide a technical and  scientific basis for reducing the frequency for particular procedures or  tests. CMS told us that officials from CMS and the Centers for Disease  Control and Prevention had together determined that the reduced  frequency was based on technical and scientific grounds and supplied a  brief, undated narrative which it attributed to the Centers for Disease  Control and Prevention. However, the narrative focused on the relative  costs and benefits of proficiency testing at various intervals and did not  include an analysis of the technical and scientific considerations with  regard to particular tests that presented a basis for reducing the frequency.
section_title: CLIA Program Oversight Is Inadequate
paragraphs: Oversight by CMS and survey organizations is not adequate to ensure that  labs meet CLIA requirements. For example, the goal of educating lab  workers during surveys takes precedence over the identification and  reporting of deficiencies, while the use of volunteer rather than staff  surveyors by one accrediting organization raises questions about  appropriate levels of training and the appearance of a conflict of interest.
The significant increase in complaints since CAP took steps to help ensure  that lab workers know how to file a complaint suggests that some quality  problems at labs inspected by some survey organizations may not be  reported. In addition, sanctions are not being used effectively as an  enforcement tool to promote labs’ compliance with CLIA requirements, as  evidenced by the relatively few labs with repeat condition-level  deficiencies on consecutive surveys from 1998 through 2004 that had  sanctions imposed. Furthermore, CMS is not meeting its responsibility to  determine that accrediting organization and exempt-state program  requirements and processes continue to be at least equivalent to CLIA’s.  Finally, ongoing CMS validation reviews do not provide an independent  assessment of the extent to which surveys identify all condition-level  deficiencies—primarily due to their timing.
subsections: section_title: Balance Between Educational and Regulatory Roles by CMS and Survey Organizations Appears to Be Inappropriate
paragraphs: The goal of educating lab workers sometimes takes precedence over, or  precludes, the identification and reporting of deficiencies that affect the  quality of lab testing. For example, surveyors from one state survey  agency told us they do not cite condition-level deficiencies when lab  workers are new but prefer to educate the new staff. As a result, data on  the quality of lab testing and trends in quality over time may be misleading.  CMS also appears to be inappropriately stressing education over  regulation. For instance, in its 2005 implementation of proficiency testing  for lab technicians who interpret Pap smears, a test for cervical cancer,  CMS instructed state surveyors to refrain from citing deficiencies at labs  whose staff fail the tests in 2005 or 2006. According to CMS, this  educational focus allows labs and their staff to become familiar with the  proficiency testing program; however, it is important to note that there  was about a 13-year time lag between the 1992 regulations that  implemented CLIA and the 2005 implementation of Pap smear proficiency  testing. In addition, CMS noted that it was concerned about some of the  high initial Pap smear proficiency testing failure rates. An inappropriate  balance between the educational and regulatory roles is also evident in  some accrediting organization practices. For instance, for COLA, the  process of educating labs begins even prior to a survey, when labs are  encouraged to complete a self-assessment to identify COLA requirements  with which they are not in compliance. A CAP surveyor we interviewed  with over 30 years of lab experience estimated that the majority of  pathologists—individuals who generally serve as CAP survey team  leaders—view surveys as educational, rather than as assessments of  compliance with lab requirements.
section_title: Use of Volunteer Surveyors by CAP Raises Concerns
paragraphs: The use of volunteer inspectors by CAP raises concerns about appropriate  levels of training and the appearance of a conflict of interest. Although  state survey agencies, exempt-state programs, COLA, and JCAHO employ  dedicated staff surveyors, CAP relies primarily on volunteer teams  consisting of lab workers from other CAP-inspected labs to conduct  surveys. In contrast to the mandatory training and continuing education  programs in place for the staff surveyors of other survey organizations,  training for CAP’s volunteer surveyors is currently optional. According to  data provided by CAP, two-thirds of volunteer surveyors who had recently  participated in a survey had no formal training in the 3 to 5 years  preceding the survey. While full-time surveyors employed by other survey  organizations conduct from 30 to about 200 surveys per year, CAP  volunteer surveyors have much less experience conducting surveys  because they only survey about one lab each year. CAP officials told us  they plan to establish a mandatory training program for survey team  leaders beginning in mid-2006. However, the required training will take  only 1 or 2 days. In contrast, state survey agency inspectors must complete  5 days of basic training, while COLA staff inspectors participate in a   5-week orientation program and an annual 20 hours of continuing  education.
CAP’s method for staffing survey teams also raises concerns about the  appearance of a conflict of interest. Typically, inspection team leaders are  pathologists who direct other labs in the community, and the inspection  team is comprised of several employees from the team leader’s lab. In the  event of differing opinions about survey findings, team members who are  subordinates to the team leader may feel that they have no other recourse  than to follow the team leader’s instructions—such as downgrading the  record of an inspection finding to a less serious category. Recognizing that  team members’ objectivity may be compromised in this situation, CAP’s  revised conflict of interest policy instructs all parties to be cautious to  retain objectivity in fact finding throughout the inspection process.
section_title: Lab Workers Who File Complaints About Quality Problems in Lab Testing Not Afforded Whistle- blower Protections
paragraphs: Some lab workers may not be filing complaints about quality problems at  their labs because of anonymity concerns or because they may not be  familiar with filing procedures. Based on OSCAR data and data obtained  from exempt-state programs and accrediting organizations for 2002  through 2004, few complaints were received about lab testing relative to  the number of labs—significantly less than one complaint per lab per  year. We found that lab workers may not know how to file a complaint.  CAP experienced a significant increase in the number of complaints it  received since October 2004 when it began requiring CAP-inspected labs  to display posters on how to file complaints. Specifically, from October  through December 2004, CAP received an average of 22 complaints per  month, compared to an average of 11 complaints per month in the   9 months preceding the poster requirement.
Because of the difficulty of protecting the anonymity of lab workers who  file complaints, whistle-blower protections for such individuals are  particularly important. Two of the three accrediting organizations we  interviewed have whistle-blower protections—CAP and JCAHO. While  officials from New York and Washington’s exempt-state programs told us  that whistle-blower laws in their states provide some protection for lab  workers who file complaints, officials in most of the other 10 states we  interviewed told us that they did not have any whistle-blower protections  or were unable to identify specific protections that applied to lab workers  in their state. Although there are no federal whistle-blower protections  specifically for workers in labs covered by CLIA, legislation was  introduced in 2005 to provide such protections.
section_title: Lab Sanctions Are Rarely Imposed
paragraphs: Few labs were sanctioned by CMS from 1998 through 2004—even those  with the same condition-level deficiencies on consecutive surveys— because many proposed sanctions are never imposed. Our analysis of CMS  enforcement data from 1998 through 2004 found that while over 9,000 labs  had sanctions proposed during these years, only 501 labs were  sanctioned. This equates to less than 3 percent of the approximately  19,700 labs inspected by state survey agencies. Before sanctions go into  effect, labs are given a grace period to correct condition-level deficiencies,  unless the deficiencies involve an imminent and serious threat to patient  health and a significant hazard to public health. Most labs correct the  deficiencies within the grace period. CMS officials told us that it was  appropriate to give labs an opportunity to correct such deficiencies within  a prescribed time frame and thus avoid sanctions.
However, the number of labs with the same repeat condition-level  deficiencies from one survey to the next also raises questions about the  overall effectiveness of the CLIA enforcement process. From 1998 through  2004, 274 labs surveyed by state survey agencies had the same condition- level deficiency cited on consecutive surveys and 24 of these labs had the  same condition-level deficiency cited on more than two surveys. This  analysis may understate the percentage of labs with repeat condition-level  deficiencies because OSCAR data prior to 2004 no longer reflect about  two-thirds of condition-level requirements and associated deficiencies at  the time of those surveys. We found that only 30 of the 274 labs with  repeat condition-level deficiencies had sanctions imposed—either  principal, alternative, or both. With respect to accredited labs, from 1998  through 2004, less than 1 percent of accredited labs (81) lost their  accreditation; few of these labs were subsequently sanctioned by CMS and  many still participate in the CLIA program. Moreover, CMS did not  sanction 3 labs that COLA concluded had cheated on proficiency testing  by referring the samples to another lab to be tested. By statute, the  intentional referral of samples to another lab for proficiency testing is a  serious deficiency that should result in automatic revocation of a lab’s  CLIA certificate for at least 1 year. Based on our interviews, we found  that the 3 labs were allowed to continue testing because they had initiated  corrective actions; in effect, these labs were given an opportunity to  correct a deficiency that appears to have required a loss of their CLIA  certificate for at least 1 year.
section_title: CMS Is Late in Ensuring CLIA Equivalency of Exempt States’ and Accrediting Organizations’ Inspection Requirements and Processes
paragraphs: We found that CMS has been late in determining that exempt states’ and  accrediting organizations’ inspection requirements and processes are at  least equivalent to CLIA’s. Because CMS has not completed its equivalency  reviews within required time frames, accrediting organizations and exempt  state programs have continued to operate without proper approval.  Equivalency reviews for CAP, COLA, JCAHO, and Washington due to be  completed between November 1, 1997, and April 30, 2001, were an average  of about 40 months late. In August 1995, CMS determined that New York’s  next equivalency review should be completed by June 30, 2001, but was  over 4 years past due as of December 2005. Similarly, COLA’s equivalency  review was about 3 years past due. Furthermore, although federal  regulations require CMS to review equivalency when an accrediting  organization or exempt-state program adopts new requirements, CMS has  not reviewed changes in the inspection requirements prior to use by these  entities. As a result, such survey organizations may introduce changes  that are inconsistent with CLIA requirements. For example, JCAHO made  a significant change to its inspection requirements in January 2004; CMS  did not begin an in-depth review of JCAHO’s revised requirements until  early 2005—over a year after they were implemented by JCAHO.
According to CMS, its review has identified several critical areas where  JCAHO standards are less stringent than those of CLIA. JCAHO  acknowledged the need to make some adjustments to its revised  requirements.
CMS officials attributed delays in making equivalency determinations and  reviewing interim changes to having too few staff. The CLIA program,  located in CMS’s Center for Medicaid and State Operations (CMSO),  currently has approximately 21 full-time-equivalent positions compared to  a peak of 29 such positions several years ago. As required by statute, the  CLIA program is funded by lab fees and since its inception the program’s  fees have exceeded expenses. As of September 30, 2005, the CLIA program  had a carryover balance of about $70 million—far more than required to  hire an additional six to seven staff members. However, CMS officials told  us that because the CLIA program staff are part of CMSO, they are subject  to the personnel limits established for CMSO, regardless of whether or not  the program has sufficient funds to hire more staff.
section_title: CMS Validation Reviews Skip Some State Survey Agencies and Many Lack Independence
paragraphs: CMS validation reviews that are intended to evaluate lab surveys  conducted by both states and accrediting organizations do not provide  CMS with an independent assessment of the extent to which surveys  identify all serious—that is, condition-level or condition-level equivalent— deficiencies. CMS requires its regional offices to conduct validation  reviews of 1 percent of labs inspected by state survey agencies in a year.  However, CMS does not specifically require that validations occur in each  state. As a result, from 1999 through 2003, there were 11 states in which no  validation reviews were conducted in multiple years. Without validating at  least some surveys in each state, CMS is unable to determine if the states  are appropriately identifying deficiencies.
Many validation reviews occur at the same time a survey organization  conducts its inspection and, in our view, the collaboration among the two  teams during these simultaneous surveys prevents an independent  evaluation. Seventy-five percent of validations of state lab surveys were  conducted simultaneously from fiscal years 1999 through 2003. According  to CMS officials, the large proportion of simultaneous validation reviews  provides an opportunity for federal surveyors to share information with  state surveyors, monitor their conformance with CLIA inspection  requirements, and identify training and technical assistance needs.  However, we found that such reviews do not provide an accurate  assessment of state surveyors’ ability to identify condition-level  deficiencies. Of the 13 validation reviews that identified missed condition- level deficiencies, only 1 was a simultaneous review. Regarding validation  reviews of accrediting organization’s survey of labs, CMS officials were  unable to tell us how many of the roughly 275 validation reviews  conducted each year from fiscal year 1999 through fiscal year 2003 were  simultaneous. However, JCAHO estimated that 33 percent of its  validation reviews were conducted simultaneously. CMS officials told us  that the agency’s intent in instituting simultaneous reviews was for state  and accrediting organization surveyors to share best practices, to promote  understanding of each other’s programs, and to foster accrediting  organization improvement. In contrast, most of the state survey agency  officials we interviewed told us that simultaneous validation reviews do  not provide a realistic evaluation of the adequacy of accrediting  organizations’ inspection processes.
section_title: Concluding Observations
paragraphs: Clinical labs play a pivotal role in the nation’s health care system by  diagnosing many diseases, including potentially life-threatening diseases,  so that individuals receive appropriate medical care. Given this important  role, lab tests must be accurate and reliable. Our work demonstrated that  the oversight of clinical labs needs to be strengthened in several areas.  Without standardized survey findings across all survey organizations, CMS  cannot tell whether the quality of lab testing has improved or worsened  over time or whether deficiencies are being appropriately identified. Using  data to analyze activities across survey organizations can be a powerful  tool in improving CMS oversight of the CLIA program, yet CMS has not  taken the lead in ensuring the availability and use of data from survey  organizations to help it monitor their performance. Furthermore, the  agency is not requiring that labs participate in proficiency testing on a  quarterly basis, as required by CLIA. More broadly, CMS and survey  organization oversight of the lab survey process is not adequate to enforce  CLIA requirements. Educating labs to ensure high-quality testing should  complement but not replace the enforcement of CLIA inspection  requirements. Labs with the same serious deficiencies on consecutive  surveys often escape sanctions, even though Congress authorized  alternative sanctions to give CMS more flexibility to achieve lab  compliance. Without the threat of real consequences, labs may not be  sufficiently motivated to comply with CLIA inspection requirements. By  allowing validation reviews to occur simultaneously with surveys and  permitting some states to go without validation reviews over a period of  several years, CMS is not making full use of this oversight tool. Moreover,  independent validation reviews of accrediting organization surveys are  critical because CMS has not conducted equivalency reviews within the  time frames it established. The recommendations we have made would  help CMS to consistently identify and address lab quality problems.
Mr. Chairman, this concludes my prepared remarks. I would be happy to  answer any questions that you or other Members of the Subcommittee  may have.
section_title: Contact and Acknowledgments
paragraphs: For further information regarding this statement, please contact Leslie G.  Aronovitz at (312) 220-7600 or aronovitzl@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found in the  last page of this statement. Walter Ochinko, Assistant Director; Jenny  Grover; Kevin Milne; and Michelle Rosenberg contributed to this  statement.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. It may be reproduced and distributed in its entirety without further  permission from GAO. However, because this work may contain copyrighted images or  other material, permission from the copyright holder may be necessary if you wish to  reproduce this material separately.