Opinion ID: 718320
Heading Depth: 2
Heading Rank: 1

Heading: Personnel Qualifications

Text: 9 The section of CLIA directing HHS to develop national personnel standards requires that medical labs 10 use only personnel meeting such qualifications as the Secretary may establish ... which qualifications shall, as appropriate, be different on the basis of the type of examinations and procedures being performed by the laboratory and the risks and consequences of erroneous results associated with such examinations and procedures. 11 42 U.S.C. § 263a(f)(1)(C). In its May, 1990 Notice of Proposed Rulemaking (NPRM) implementing this provision, HHS proposed a three-tiered scheme of personnel qualifications. Each type of lab test would be placed into one of three categories--waived tests (those so simple to perform that the likelihood of an erroneous test result is extremely small, as well as those which pose no reasonable risk of harm to the patient if performed incorrectly), Level I tests, or Level II tests--depending upon the consequences to the patient if the test was performed incorrectly, the complexity of the testing methodology, the degree to which the test requires independent judgment and interpretation, the degree to which interpretation of the test result requires knowledge of external variables, and the training required to perform the test. Regulations Implementing the Clinical Laboratory Improvement Amendments of 1988 (CLIA '88), 55 Fed.Reg. 20,895, 20,901-02 (1990). Under this scheme, personnel would have to satisfy increasingly rigorous qualifications to perform waived tests, Level I tests, and Level II tests, respectively. Id. at 20,902. 12 During the notice-and-comment period, HHS received approximately 14,470 comments regarding this classification model, more than 95% of which expressed opposition to the scheme. See Regulations Implementing the Clinical Laboratory Improvement Amendments of 1988 (CLIA), 57 Fed.Reg. 7002, 7016 (1992). In general, opponents described the model as essentially unworkable because it failed to realistically represent actual testing patterns or account for the multitude of testing methodologies and instruments in use. Id. Several commenters focused on the criterion which measured the consequences to a patient of an erroneous test result (the risk of harm criterion), contending that it was too vague and indeterminate to be consistently applied. See id. at 7020. 13 In the final rule, the agency retained a three-tiered system, but substantially changed the way in which tests were classified by eliminating the consequences of erroneous test result criterion and focussing primarily on the complexity of the test procedure. 3 It set forth three categories of tests: waived, moderate complexity, or high complexity. As in the NPRM, waived tests included those which are so simple to perform that the likelihood of an erroneous test result is extremely small. 4 These tests were exempt from regulation. Id. at 7019-20. The remainder of all clinical tests were assigned a score of one to three, for each of seven different criteria: (1) knowledge needed to perform the test; (2) training and experience needed to perform the test; (3) complexity of reagent and materials preparation; (4) characteristics of the steps required to perform the test; (5) availability of materials for calibration, quality control, and proficiency testing; (6) troubleshooting and equipment maintenance required; and (7) degree of interpretation and judgment required. See 42 C.F.R. § 493.17. In contrast to the NPRM, the agency eliminated any express consideration of the risks or consequences to the patient of an erroneous test result. 57 Fed.Reg. at 7020-21. After these values were assigned and totaled, any test with a cumulative score of 12 or less was placed in the moderate complexity category, and all other tests (with a score of greater than 12) in the high complexity category. 42 C.F.R. § 493.17. HHS then assigned specific personnel qualification requirements to labs in each category. Facilities performing only waived tests must follow accepted laboratory practices and comply with other relevant federal, state, and local requirements, but are not subject to the new CLIA standards. Labs performing moderate and high complexity tests must comply with CLIA regulations regarding proficiency testing, patient test management, quality control and assurance, and personnel standards; the standards for high complexity labs are even stiffer than those imposed on moderate complexity facilities. 57 Fed.Reg. at 7109. 14 Consumer Federation challenged this personnel qualification scheme before the district court. It argued that HHS's decision not to explicitly consider the risks and consequences to the patient of an erroneous test result contravened CLIA's statutory directive to establish qualifications which shall, as appropriate, be different on the basis of ... the risks and consequences of erroneous results. Because Congress used the word shall, Consumer Federation contended, the agency was mandated as a matter of law to expressly include the risk and consequence of error factors in its system of personnel standards. The district court agreed, reasoning that while the words as appropriate suggested that the agency had discretion in deciding whether to expressly incorporate the risks and consequences of error, the use of the word shall provided a stronger indication to the contrary that Congress meant to require explicit consideration of both factors. Consumer Fed'n of America, at 664-665 (D.D.C.1995) (Mem.Op.). Accordingly, it granted summary judgment for Consumer Federation on this issue. 15 At the outset of our analysis, we underscore that this part of the case presents a paradigmatic Chevron question: do the agency's implementing regulations reflect a permissible construction of CLIA? Although the district court did ultimately discuss whether the final rule contradicted any relevant portions of CLIA, it never expressly engaged in the two-step statutory analysis required by Chevron. 5 We now proceed to do so. In reviewing an agency's construction of a statute, we first ask whether Congress has spoken unambiguously to the precise issue at hand. If it has, we give effect to Congress' intent. If not, we consider the agency's action under Step Two of Chevron, and defer to the agency's interpretation if it represents a permissible construction of the statute. Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). 16 The provision at issue directs the Secretary to establish personnel qualifications which 17 shall take into consideration competency, training, experience, job performance, and education and which qualifications shall, as appropriate, be different on the basis of the type of examinations and procedures being performed by the laboratory and the risks and consequences of erroneous results associated with such examinations and procedures. 18 42 U.S.C. § 263a(f)(1)(C) (emphasis added). Consumer Federation argues that use of the term shall makes explicit consideration of the risks and consequences of erroneous results mandatory; the qualifying words as appropriate merely give the agency discretion as to the manner in which it considers these two factors. The government, on the other hand, contends that the statutory intent is not so clear at all. We find the government's identification of some ambiguity to be correct. Although the word shall is often used to impose a mandatory duty, see Train v. City of New York, 420 U.S. 35, 47-48, 95 S.Ct. 839, 846, 43 L.Ed.2d 1 (1975); Moon v. Dep't of Labor, 727 F.2d 1315, 1318-19 (D.C.Cir.1984), the inclusion of the words as appropriate directly following shall suggests that the agency is not required to include an explicit consideration of risks and consequences of error in its qualifications regime. Even without the as appropriate, the agency still would have enjoyed discretion to decide exactly how to incorporate risks and consequences of error in its regulations, provided that it did so in some manner. If as appropriate is to have any effect, then, it must mean that the agency must specifically include the risks and consequences factors in its regulations only to the extent appropriate. To conclude otherwise, as Consumer Federation advocates, would violate a basic canon of statutory construction by treating the two words as surplusage. See Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, --- U.S. ----, ----, 115 S.Ct. 2407, 2413, 132 L.Ed.2d 597 (1995). 6 19 Concluding that Congress has not spoken clearly to the question of whether CLIA requires HHS to explicitly consider the risks and consequences of error in formulating personnel qualifications, we proceed to the Chevron II analysis of whether the scheme of personnel standards established by the agency reflects a permissible construction of the statute. Here, the two factors--risks of error and consequences of error--are best considered separately, since HHS has offered different explanations for its treatment of the two criteria. As to the risks of incorrect test results, the agency contends that it did address this factor in its final rule, although not explicitly. In its 1993 rule classifying all of the clinical tests, the agency stated that the various measures of test complexity included in the classification model serve as a proxy for risk of error, because error is more likely to occur as the complexity of a test and the independent judgment required of the analyst increases. See infra at 1502; 57 Fed.Reg. at 7020-21; 58 Fed.Reg. at 39,864. Consumer Federation has presented no evidence disputing this relationship between test complexity and risk of error, and we find the agency's explanation a reasonable one. Accordingly, we conclude that the agency's treatment of the risks of erroneous test results in its final rule represents a permissible construction of the relevant CLIA provision, contrary to the district court's conclusion. 20 The agency's admitted decision to eliminate consequences of error from classification scheme presents a knottier problem, since HHS does not claim to address this factor either directly or through use of a proxy criterion. By way of explanation, HHS indicated that it was deleting the consequences of error criterion in response to rulemaking comments about its vagueness; these comments led HHS to conclude that such a criterion was unworkable. In its subsequent final rule, HHS elaborated upon this decision: 21 ... [T]he consequences to the patient of an erroneous test result will vary tremendously depending on such factors as the patient's medical condition, the purpose for which a test is being conducted, and the treatment prescribed by a physician due to the test result. For example, the harm to the patient caused by an erroneous lymphocyte count will vary depending on the actual medical condition of the patient. If a serious medical condition such as leukemia goes undetected for a long period of time due to the erroneous result, then the harm to the patient may be quite serious. If however, the patient has a viral upper respiratory infection, a disease for which there is very little treatment, the consequences to the patient will be far less serious. The risk of harm will also vary depending on how a physician reacts to an erroneous test result. If an inaccurate test report leads a physician to order additional tests, then the patient will suffer no tangible harm. Incorrect test results that lead a physician to prescribe more intensive treatments, however, may have more serious consequences for the patient. 22 Thus, in order for the categorization process to truly reflect the risk of harm to the patient if a test is performed incorrectly, each test would have to be separately categorized based on why the test was being prescribed, the type of condition that was being tested, and the condition of the patient. Adding this layer of complexity to what was already an intricate system would have been an impossible task. Even if a classification scheme incorporating risk of harm could have been developed, the application of that scheme would have been unworkable. Under such a scheme, clinicians and laboratory directors would required [sic] to ascertain the context of each tests [sic] before determining which laboratory personnel could perform it. Introducing this type of subjectivity into the process would frustrate our goal of developing manageable regulations that would contribute to improved performance of the nations's [sic] clinical laboratories. 23 58 Fed.Reg. at 39,864. 24 The agency's rationale can be summed up as follows: although it considered inclusion of a consequences of error criterion in the proposed rule, upon reflection it determined that this factor can only be evaluated in hindsight and is too time-consuming to apply to each of the thousands of clinical tests. On balance we think this conclusion represents a reasonable construction of the statutory requirement that qualifications shall, as appropriate, be different on the basis of ... [the] consequences of erroneous results. The statutory provision does require that the agency give due deliberation to the question of whether to incorporate consequences of error in its classification scheme. It does not, however, mandate inclusion of this factor if it has reasonably been found not to be appropriate. HHS has provided a coherent explanation for why this criterion is not a useful or manageable one. These difficulties are only increased by the agency's decision to classify each clinical test separately instead of grouping tests that perform the same function together, since this methodology requires the categorization of thousands more tests than if they were categorized in groups. Legislative history further supports HHS's course of action. The committee reports accompanying CLIA do not provide much guidance on precisely how HHS shall establish personnel qualifications, but do conclude that since Congress had only limited information available to it on the connection between personnel standards and quality control, the Secretary should be given latitude in determining both when personnel standards are needed and what those standards should be. H.R.REP. NO. 899 at 28, reprinted in U.S.S.C.A.N. at 3849; see also S.REP. NO. 561 at 24-25 (discretion granted to Secretary in establishing performance standards so that the degree of regulatory oversight may be tailored to the type of tests which a laboratory performs). We therefore find its interpretation of § 263a(f)(1)(C) a permissible one and reverse the district court's invalidation of the relevant HHS regulation.