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Clinical Laboratory Improvement Act (CLIA)
History of CLIA
In response to public furor about one or more deaths attributed to false-negative Pap smear readings, Congress passed the Clinical Laboratory Improvement Act of 1988. Although the erroneous readings had occurred in federal laboratories, and no deaths or injuries had been ascribed to erroneous urine dipstick reports, Congress decided to regulate every test in every laboratory throughout the land, including those in physicians’ offices.
The definition of a ``laboratory'' is all-inclusive:
Some tests were “waivered” from proficiency testing and other detailed requirements, although there was no provision for this in the initial legislation, to mute opposition. Initially, the waivered tests included only dipstick or tablet reagent urinalysis, fecal occult blood, ovulation tests, urine pregnancy tests, erythrocyte sedimentation rate, and hemoglobin testing. Even though a test is “waivered,” one still needs the federal government’s permission to perform it, according to CLIA, even if the same or a similar test can be purchased over the counter at a pharmacy and performed by the patient at home. A spun hemocrit and blood glucose by FDA-cleared home-testing devices were added, as were certain microscopic examinations performed personally by a physician (wet mounts, KOH preparations, pinworm examinations, fern test, post-coital examinations of vaginal or cervical mucus, and urine sediment examinations, but not Gram stains).
In order to identify laboratories, the Health Care Financing Administration (HCFA) sent a bill for $261 and an electronically numbered (nonreproducible) application for a “provisional certificate” to about 640,000 entities believed to perform testing on human specimens. When Congressman John Dingell (D-MI) objected to allowing doctors to pay $261 for the privilege of hanging up a “worthless piece of paper” that said nothing about the holder’s competence, HCFA Director Gail Wilensky defended the plan as a method of finding out what tests were being done, and where, so that the information could be entered into a computer data base.
State agencies may have helped HCFA in locating all the laboratories. One Maryland physician’s office received a call from a state employee asking whether laboratory tests were performed there. When told that she had reached a physician’s office, not a laboratory, she asked whether urine dipsticks were ever done.
“Sometimes,” was the reply.
“Then you’re a laboratory,” said the official.
Many states implemented their own regulations, which may have been more stringent than federal CLIA requirements.
The cost of implementing CLIA regulations was initially estimated at $4 billion. The Veterans Administration estimated, in 1990, that its costs would be $82 million the first year and $75 million per year thereafter, and therefore asked for (and received) an exemption.
In addition to the VA, public health laboratories, forensic laboratories, and research or teaching laboratories are exempt. Patients performing tests in their own home are exempt, but the exclusion does not extend to persons residing in nursing or intermediate-care facilities.
In 1996, a provision added to the Budget Reconciliation bill to exempt physician office labs (POLs) was deleted because the Congressional Budget Office calculated that no federal deficit reduction would result.
Compliance Requirements
The final rule contained 242 pages of fine print. Requirements include certification and recertification, frequent proficiency testing, a quality control program, employment of properly accredited personnel, submission to on-site inspections, procedure manuals, and extensive documentation. Dermatologists performing fungal cultures must demonstrate their ability to distinguish red from orange three times a year. Even tests that can demonstrably be performed by grade-school students after reading the instructions, such a screen for Streptococcus, are classified as “moderately complex” and require proficiency testing.
Physicians who hold a certificate to perform waivered examinations must submit to on-site inspections to be sure they are not performing non-waivered examinations.
Requirements are exceedingly detailed. One POL was threatened with closure because two RNs who inserted urine dipsticks into a machine and pushed a button were unable to locate their high-school diplomas.
The Effect of CLIA
HCFA expected to receive 320,000 replies to its mailing of application forms. Only 127,000 were returned by May, 1992. By 2003, 177,615 nonexempt laboratories were registered, including 101,000 physician office laboratories—suggesting that a large number of POLs were simply closed.
By 1992, under state regulations similar to CLIA, the price of a Pap smear had tripled in New York State.
HCFA itself admitted that there is no “irrefutable” evidence that the regulations improved laboratory testing or public health outcomes and that it lacked the ability to compute the dollar value of largely qualitative requirements. It is impossible to determine how many diagnoses could be missed or delayed because of lack of affordable, timely tests by physicians in their offices, or how much funding is diverted from patient care to compliance activities. An increase in mortality from cervical cancer owing to increased cost of testing would not be detectable for 10 years, stated pathologist R. Marshall Austin, M.D.
“The law has set back testing about 20 to 30 years by preventing POLs from taking advantage of the latest technology,” stated M. Edward Keenan, Vice President of the American Academy of Pediatrics, in 1995. A Heritage Foundation study showed that large companies were seeking markets for their testing kits in Europe and the Third World.
Physician Responses
At a meeting of the now-defunct President’s Council on Competitiveness, headed by Vice President Dan Quayle, on July 30, 1992, physicians stated that preventing them from performing certain laboratory tests was like taking away their stethoscope. Some tests, like wet mounts of vaginal secretions, cannot be referred because they must be done immediately, before the specimen dries. Some examinations, such as checking the spinal fluid in suspected meningitis, admit no delay because of clinical urgency. It would be immoral not to do those tests, stated Dr. Robert Brodell of the American Academy of Pediatrics.
“We will go ahead and do these tests,” stated Dr. Richard Jones, President of the American College of Obstetrics and Gynecology.
A hematologist declared that he would continue to look at blood films, and a nephrologist said he’d look at urine specimens. Some physicians would either do without confirmatory tests, or do them and say “take me to jail or to court and we’ll fight it out later,” said Dr. Gerald Keller, President of the American Academy of Family Practice.
There is no way to determine whether some physicians are ignoring CLIA to take care of their patients. It is likely that younger physicians are more compliant than their older colleagues, who started practice in an atmosphere of much greater freedom and respect for professional discretion. Younger physicians may not have received the same amount of training in laboratory medicine as their elders did.
The introduction to the laboratory chapter in the third edition of Sapira’s Art and Science of Bedside Diagnosis by Jane M. Orient reads:
Shortly after the first edition of this book appeared, the U.S. Congress passed the so-called Clinical Laboratory Improvement Act (CLIA), in reaction to some tragic consequences of false-negative Pap smears that had been performed, ironically, in federally regulated clinical laboratories. The Act applies to all laboratory examinations performed nationwide, subjecting physicians, even in remote rural areas, to onerous requirements such as the need to demonstrate periodically their ability to do such things as tell the difference between orange and red, in order to perform such things as fungal cultures legally in their offices. Even the simplest tests such as a urine dipstick (which patients may perform themselves) require the payment of a fee to obtain a federal permit, although the more onerous paperwork and proficiency testing requirements are “waivered.” The effect was to shut down many office laboratories.
It is not the intention of this book to advocate that students violate any federal laws. However, to the best of this author’s knowledge, laboratory activity is still permitted for the purpose of education or entertainment. Students should take every opportunity to learn these useful skills. Some day they may have occasion to use them to their patients’ advantage in a setting in which CLIA’s legal impediments to lifesaving or life-enhancing activities do not apply.
Unfortunately, it may be impossible to find the equipment and supplies with which to practice or the more experienced persons to serve as mentors, and advances in bedside laboratory diagnosis are not to be expected.
Enforcement
There are criminal penalties for violating CLIA regulations including a year’s imprisonment, as well as civil monetary penalties of $10,000 per day, and exclusion from federal programs.
Commonly cited “deficiencies” found on inspections of dermatologists’ laboratories included: the failure to document to temperatures of their refrigerators where the culture media for dermatophytes is stored and the temperature of the room where the cultures are incubated (although these temperatures are of no importance); failure to note the exact time to the nearest minute when a fungal culture was inoculated (though it takes more than a week to grow); failure to perform a Gram-positive and Gram-negative control for each and every Gram stain; failure to perform quality control testing (inoculation with a known pathogen and contaminant) on every lot of culture medium, even though the manufacturer is required to do this; failure to have a protocol for quality assurance (telling what action is to be taken if the medium fails the test); failure to have a job description for all the ``positions'' in the laboratory even if all of them are filled by the dermatologist personally; and failure to have proper laboratory requisition forms for ordering the tests.
During the first round of inspections in 1995, 80 percent of laboratories had some kind of problem identified, and 11 percent had a “serious” problem. The number of regulated labs declined by 8 percent. The result of a CLIA inspection may be thousands of dollars in bills to make modifications demanded by the inspectors.
CLIA inspectors are trained to look for Medicare violations, and Medicare inspectors check to be sure that a physician has a CLIA certificate for every procedure for which it billed.
In 2002, sanctions were imposed on 132 labs under CLIA.
Lessons for Independent Physicians
The federal government exerts tremendous power over the practice of physicians, even though the regulation of the practice of medicine is supposed to be a state responsibility. The justification for this expansion of power is generally the “voluntary” acceptance of this regulation because of acceptance of federal funds, and possibly of funds from “private” third parties. Check the forms that you are asked to sign for promises to comply with all rules and regulations. This is another meaning for “first-dollar coverage.” Taking the first dollar makes you a subject of the bureaucracy.
If a physician who has not signed such an agreement were to defy the CLIA bureaucracy on constitutional grounds, he might become a test case. He might ultimately win, but must be prepared for a lengthy and costly struggle and be aware of the consequences of losing.
Potential triggers for an inspection to look for violations:
Anyone zealously looking for an infraction will probably find one, owing to the complexity and wide scope of regulations. If you have a certificate of waiver, you have identified yourself as a laboratory and have consented to monitoring. While documentation is widely recommended as a defensive measure, remember that it is a double-edged sword. Most regulatory actions rely heavily on self-incrimination.
Many physicians avoid doing laboratory in an effort to escape entanglement with CLIA. If you feel you must do some testing because it is urgently needed by a patient, and you sincerely believe it is an extension of your physical examination, do it yourself and do not bill for it.
As far as I know, it is not illegal to simply possess a microscope, a centrifuge, laboratory reagents, or other laboratory equipment (although it might attract suspicion of possible involvement in a clandestine drug operation). Nor is it unlawful to educate patients or to supervise their performance of a test on themselves, at least not if it is FDA-approved for home use, and they live in their own home. But also remember that laws change and ignorance of the law is not an excuse.
If you think you can earn enough revenue from laboratory testing to justify the costs of compliance, read and understand the regulations, employ vigilant personnel, and prepare to invest in frequent seminars and updates provided by the lucrative compliance industry.
Additional Information:
CLIA Frequently asked questions
CLIA Performance Goals in CMS Annual Performance Plan
The official procedures for enforcement of CLIA may be accessed at: www.phppo.cdc.gov/clia/regs/subpart_r.aspx.
CLIA history and physicians’ responses: Use search engine and index to AAPS News.
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