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CMS Publishes Proposed Changes to CLIA’s Proficiency Testing Regulations

Written by Julie Lappas and Karen Lovitch

Yesterday the Centers for Medicare & Medicaid Services (CMS) filed a proposed rule (the Proposed Rule) that would make significant changes to existing regulations governing the proficiency testing (PT) process mandated by the Clinical Laboratory Improvement Amendments of 1988 (CLIA).  Under current regulations, any laboratory that intentionally refers a PT sample to another laboratory for analysis will automatically lose its CLIA certificate for at least one year.  CMS has always interpreted the term “intentional” very broadly to mean an intention to act and thus has not considered the circumstances surrounding the referral of a PT sample when imposing revocation.  Even so, CMS recognizes in the Proposed Rule that revocation of the laboratory’s CLIA certificate in cases of certain PT referrals involving “reflex” or “confirmatory” testing may have adverse effects on patients and has therefore proposed an exception.  Described by CMS as “an infrequent and narrowly crafted carve-out from the long-standing interpretation of ‘intentional,’” the exception would apply only to a laboratory that refers a PT sample to another laboratory for “reflex” or “confirmatory” testing in accordance with the laboratory’s standard operating procedures for patient testing.  As long as the PT referral is not a repeat referral (i.e., no other PT referral occurred during the two survey cycles prior to the time of the PT referral at issue), CMS would consider the referral to be “improper” rather than “intentional” and would impose alternative sanctions, rather than revoke a laboratory’s CLIA certificate.

The Proposed Rule also includes another, related amendment to existing regulations that would implement the recently enacted Taking Essential Steps for Testing Act of 2012 (TEST Act), which gives CMS the express authority to impose alternative sanctions in the event of a PT referral.  Specifically, the word “will” would be replaced with “may” in the regulation that currently requires revocation of a laboratory’s CLIA certificate if it refers a PT sample to another laboratory.  CMS noted that it intends to undertake further rulemaking to implement the TEST Act.

Finally, the Proposed Rule also addresses confusion created by the regulation that requires laboratories to treat PT samples in the same manner as patient samples.  CMS proposes to clarify that if a laboratory’s testing procedures for patient samples would normally require reflex or confirmatory testing at another laboratory, the laboratory should treat the PT sample like a patient sample up until the point it would refer the patient sample to a second laboratory for further testing.   

The laboratory community will welcome relief from CMS’s historically rigid enforcement of the PT requirements, which resulted in automatic revocation of a laboratory’s CLIA certificate even where the laboratory did not intend to violate the ban on referral of PT samples.  This situation arose in a number of recent cases where a laboratory employee mistakenly referred a sample for reflex or confirmatory testing in compliance with the laboratory’s standard operating procedures for patient samples.

The Proposed Rule, Medicare and Medicaid Programs; Part II – Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction, will be published in the Federal Register on February 7, 2013.  The text of the proposed rule is currently available on the Office of the Federal Register’s website. 

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Karen S. Lovitch

Chair, Health Law Practice & Co-Chair, Health Care Enforcement Defense Practice

Karen advises industry clients on regulatory, transactional, operational, and enforcement matters. She has deep experience handling FCA investigations and qui tam litigation for laboratories and diagnostics companies.