United States: OIG Report Evaluates CLIA Regulation of Unestablished Tests

On July 30, the OIG released a report titled "CLIA Regulation of Unestablished Laboratory Tests." Such tests include but are not limited to: Live Blood Cell Analysis (LBA), Biological Terrain Assessment, Thromboelastograph, dental sensitivity testing, food allergy testing and hair analysis to assess nutritional deficiencies. The OIG examined how the Centers for Medicare and Medicaid Services (CMS, formerly HCFA) regulates these tests and found that labs performing such tests are not able to meet all of CLIA’s requirements. They are aware of a number of labs operating without CLIA certificates, which has raised concern.

The OIG determined that unestablished tests do not "fit well into the current CLIA regulatory framework." OIG did admit that exemption from CLIA does exist in some circumstances, such as certain tests where results are not reported to patients. It also acknowledged that physicians practicing alternative and complementary medicine perform most of the tests.

Possibly one of the more provocative statements made is the fact that the OIG now has a list of labs that perform unestablished tests. The Federal Trade Commission (FTC) searches the Internet for providers advertising unestablished testing under its "Operation Cure.all" project. Depending on the future outcome of CMS and OIG action, such labs may face scrutiny from state and/or federal officials since most of the labs identified do not have proper CLIA certification.

The OIG also conducted a survey of all the states and learned that Alabama, Maryland and Pennsylvania believe that their state statutes prohibit unestablished testing. California, Hawaii and Tennessee also have state personnel standards that affect labs doing unestablished tests. Federal regulation of labs providing these tests has been limited because of the lack of CLIA certification. Though the federal government would like to see more labs comply with CLIA requirements, it has admitted in this report that most providers that have applied for certification including unestablished testing have not been approved because they cannot meet the personnel requirements.

Perhaps realizing the unfairness of the application of current regulatory requirements, the OIG recommended that CMS establish procedures for evaluating the usefulness of unestablished tests. The OIG also made the following recommendations:

• CMS should conduct a study to determine if LBA has value as a diagnostic tool;
• CMS should seek new administrative authorities to permit CMS to take specific action when labs fail to enroll in CLIA;
• CMS should require labs to disclose on CLIA applications whether they conduct unestablished tests; and
• CMS should improve test verification reviews by improving surveyor training and standardizing reviews.

The OIG admitted that federal oversight of labs conducting unestablished tests is limited and that CMS relies on other federal and state investigative and law enforcement agencies to prosecute labs. Criminal conviction can bring up to one year in prison, a fine up to $10,000 or both.

The report proves the federal government is showing an increased interest in scrutinizing labs that provide unestablished tests in this country. The ultimate outcome of such scrutiny remains to be seen. There are definite risks to providing unestablished tests without proper CLIA certification. The risks include but are not limited to possible civil or criminal action, revocation of CLIA certificate (for other testing), and loss of revenue.

The first step is to determine if you are performing unestablished tests. You also need to determine your state’s position and law on unestablished testing and whether your state is exempt from CLIA. You may fit within a research exemption, however, you must still evaluate state and federal requirements to determine if you should become CLIA certified.