Report 2007-040 Recommendations and Responses in 2012-041

Report 2007-040: Department of Public Health: Laboratory Field Services' Lack of Clinical Laboratory Oversight Places the Public at Risk

Department Number of Years Reported As Not Fully Implemented Total Recommendations to Department Not Implemented After One Year Not Implemented as of Most Recent Response
Department of Public Health 4 11 9 9

Recommendation To: Public Health, Department of

Laboratory Services should perform all its mandated oversight responsibilities for laboratories subject to its jurisdiction operating within and outside California, including, but not limited to the following:
Inspecting licensed laboratories every two years.
Sanctioning laboratories as appropriate.
Reviewing and investigating complaints and ensuring necessary resolution.

Response

Laboratory Field Services (LFS) continues its efforts to inspect licensed laboratories every two years, sanction laboratories as appropriate, review and investigate complaints, and ensure necessary resolution.

LFS has leveraged existing staff by using the state portion of federal Clinical Laboratory Improvement Amendments (CLIA) surveys to biennially inspect licensed laboratories. LFS uses the 20 percent state portion of CLIA surveys for review of state issues when we perform biennial inspections of unaccredited laboratories. This entails a minimal review consisting of a checklist with ten elements specific to state licensing requirements. Any deficiencies identified are referred as a complaint for state follow up. Between September 2010 and September 2012, LFS performed biennial inspections of 1361 or 92% of the 1,476 non-accredited laboratories. Between September 2011 and September 2012, state surveyors also conducted 239 initial surveys of laboratories applying for licensure and approximately 27 validation inspections of accredited laboratories in California.

Senate Bill (SB) 744 (Strickland, Chapter 201, Statutes of 2009) allows laboratories accredited by a private, nonprofit organization to be deemed by the Department to meet state licensure or registration requirements. Once the accrediting organizations are approved, the state will be able to leverage its ability to perform biennial inspections of accredited laboratories by using the accrediting organizations. This will increase the number of licensed laboratories that are inspected every two years. Beginning January 2011, the Department has accepted accrediting organization applications to conduct state surveys. The Department has received four applications and is reviewing those applications. We anticipate approving these applications by spring of 2013 and will continue to review new applications as we receive them.

In 2010, LFS received approval to add 35.5 additional Examiner and program support staff. However, budget cuts in 2012 resulted in the loss of 17 vacant Examiner positions and 5 vacant support staff positions. In addition, LFS lost 17 retired annuitant support staff pursuant to the mandate to eliminate such staff. LFS will need to re-establish and fill these positions to conduct all mandated activities.

LFS continues to identify new Examiner candidates and recruit to fill the remaining 11 vacant Examiner positions. Because Examiner salaries are 30-50 percent lower than those for comparable positions in the private sector, LFS continues to work with CDPH Human Resources Branch to implement a recruitment and retention bonus. When the bonus is in place (anticipated in 2014), LFS anticipates improved ability to fill vacant positions. LFS is also working with CalHR to remove the requirement for supervisory experience for entry level Examiners to allow more scientists to qualify for the Examiner series. We anticipate completion of this change by 2014.

LFS redirected staff to review and investigate complaints and ensure resolution. From October 2011 to September 2012, LFS received 122 complaints, investigated and closed 72, referred 20 to the responsible board or program, and performed 6 onsite inspections.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: June 2015
  • Response Date: October 2012

Recommendation To: Public Health, Department of

Laboratory Services should adopt and implement proficiency-testing policies and procedures for staff to do the following:
Promptly review laboratories' proficiency-testing results and notify laboratories that fail.
Follow specified timelines for responding to laboratories' attempts to correct proficiency-testing failures and for sanctioning laboratories that do not comply.
Monitor the proficiency-testing results of out-of-state laboratories.
Verify laboratories' enrollment in proficiency testing, and ensure that Laboratory Services receives proficiency-testing scores from all enrolled laboratories.

Response

LFS continues to promptly review and notify laboratories of proficiency test results and to follow specified timelines for responding to proficiency testing failures. LFS reviews proficiency testing results every 30 days for two out of three failed proficiency test events. LFS mails the laboratory a warning letter within 10 days after review and the laboratory must respond within 10 days of receipt of the letter. If LFS does not receive a response, we send a second letter 10 to 15 days after the first letter. If the laboratory does not respond to the second letter, LFS initiate sanctions. LFS monitors out-of-state laboratory proficiency test results once a year during the annual license renewal. LFS continues to verify laboratory enrollment in proficiency testing appropriate to the testing performed when we conduct biennial inspections. Since September 1, 2008, LFS has conducted 3018 biennial inspections, using the state portion of the federal CLIA surveys to inspect licensed laboratories and perform validation inspections of accredited laboratories.

LFS has applications to conduct state surveys from four accrediting organizations and we are reviewing those submissions with a crosswalk of state and federal clinical laboratory law. Once approved (anticipated spring 2013), the accrediting organizations will be able to conduct biennial inspections on behalf of LFS and we will issue those laboratories a certificate of deemed status. The accrediting organizations will review proficiency test results for their accredited laboratories, monitor proficiency test results, and refer to LFS laboratories that fail proficiency testing.

LFS continues to monitor the proficiency testing results of out-of state laboratories to ensure that the laboratories are enrolled in appropriate proficiency testing. LFS reviews proficiency test results when the out-of state laboratories submit their annual license renewal and compare that with the testing menu that is submitted.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: June 2015
  • Response Date: October 2012

Recommendation To: Public Health, Department of

To update its regulations, Laboratory Services should review its clinical laboratory regulations and repeal or revise them as necessary. As part of its efforts to revise regulations, Laboratory Services should ensure that the regulations include requirements such as time frames it wants to impose on the laboratory community.

Response

LFS continues to review its clinical laboratory regulations and repeal or revise them as necessary. In September 2010, LFS issued draft revised personnel certification regulations and is revising the draft based on the 15,000 public comments we received. LFS expects to reissue the revised regulations in spring 2013. We anticipate drafting additional regulation packages for new license categories such as Clinical Biochemist when the current personnel regulation package has been adopted.

In 2009, SB 744 (Strickland, Chapter 201, Statutes of 2009), authorized a sliding fee schedule for laboratory license fees based on the volume of testing performed by a laboratory and increased the registration fee for registered laboratories. SB 744 increased funding and improved LFS efficiency to allow better enforcement of clinical laboratory standards. LFS will continue to use a portion of the $3.5 million generated by SB 744 to fund additional legal staff to review regulations.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: June 2015
  • Response Date: October 2012

Recommendation To: Public Health, Department of

To strengthen its complaints process, Laboratory Services should identify necessary controls and incorporate them into its complaints policies. The necessary controls include, but are not limited to, receiving, logging, tracking, and prioritizing complaints, as well as ensuring that substantiated allegations are corrected. In addition, Laboratory Services should develop and implement corresponding procedures for each control. Further, Laboratory Services should establish procedures to ensure that it promptly forwards complaints for which it lacks jurisdiction to the entity having jurisdiction.

Response

In March 2009, LFS developed a master complaint register that tracks the following for each complaint: the facility or professional identified by the complaint, the sequential case number, date opened, date closed, acuity/priority, acknowledgement of receipt, disposition (letter to facility/professional, referral to outside agency or internal section). LFS uses the complaint register to track complaint investigation or referral to the appropriate agency.

LFS has developed policies and procedures for receiving, processing, and following up on complaints (attached).

In March 2009, LFS developed a master complaint register that tracks the following for each complaint: the facility or professional identified by the complaint, the sequential case number, date opened, date closed, acuity/priority, acknowledgement of receipt, disposition (letter to facility/professional, referral to outside agency or internal section). LFS uses the complaint register to track complaint investigation or referral to the appropriate agency.

LFS has developed policies and procedures for receiving, processing, and following up on complaints (attached).

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: June 2015
  • Response Date: October 2012

Recommendation To: Public Health, Department of

To strengthen its sanctioning efforts, Laboratory Services should do the following:
Maximize its opportunities to impose sanctions.
Appropriately justify and document the amounts of the civil money penalties it imposes.
Ensure that it always collects the penalties it imposes.
Follow up to ensure that laboratories take corrective action.
Ensure that when it sanctions a laboratory it notifies other appropriate agencies as necessary.

Response

LFS has developed written procedures to maximize its opportunities to impose sanctions, appropriately justify and document the amounts of the civil money penalties it imposes, ensure penalties imposed are always collected, to ensure laboratories take corrective action, and notify other appropriate agencies when we sanction laboratories. Investigations of complaints have identified issues that could result in civil money penalties. Staffing has been insufficient to follow up.

Budget cuts in 2012 resulted in the loss of 17 vacant Examiner positions and 5 vacant support staff positions. In addition, LFS lost 17 retired annuitant support staff pursuant to the mandate to eliminate such staff. LFS will need to re-establish and fill these positions to conduct all mandated activities.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: June 2015
  • Response Date: October 2012

Recommendation To: Public Health, Department of

Public Health, in conjunction with Laboratory Services, should ensure that Laboratory Services has sufficient resources to meet all its oversight responsibilities.

Response

In 2009, SB 744 (Strickland, Chapter 201, Statutes of 2009), authorized a sliding fee schedule for laboratory license fees and increased phlebotomy certification fees. LFS expected to use the additional $3.5 million dollars generated by SB 744 to provide the resources necessary to meet LFS oversight responsibilities.

In 2010, LFS received budget change approval to add 35.5 additional Examiner and program support staff. However, budget cuts in 2012 resulted in the loss of 17 vacant Examiner positions and 5 vacant support staff positions. In addition, LFS lost 17 retired annuitant support staff pursuant to the mandate to eliminate such staff. LFS will need to re-establish and fill these positions to conduct all mandated activities. LFS continues to work on a recruitment and retention bonus proposal that will enhance its ability to recruit and retain qualified candidates.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: June 2015
  • Response Date: October 2012

Recommendation To: Public Health, Department of

Laboratory Services should work with its Information Technology Services Division and other appropriate parties to ensure that its data systems support its needs. If Laboratory Services continues to use its internally developed databases, it should ensure that it develops and implements appropriate system controls.

Response

In spring 2012, the Department began consolidating all information technology resources within the Information Technology Services Division (ITSD). ITSD continues to provide database support to LFS. LFS staff continues to identify and correct data inaccuracies within the existing databases and develop and implement appropriate system controls. LFS and ITSD continue to work on identifying a strategy for replacing the Health Application Licensing (HAL) system.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: June 2015
  • Response Date: October 2012

Recommendation To: Public Health, Department of

To demonstrate that it has used existing resources strategically and has maximized their utility to the extent possible, Laboratory Services should identify and explore opportunities to leverage existing processes and procedures. These opportunities should include, but not be limited to, exercising clinical laboratory oversight when it renews licenses and registrations, developing a process to share state concerns identified during federal inspections, and using accreditation organizations and contracts to divide its responsibilities for inspections every two years.

Response

LFS implemented several mechanisms to leverage existing processes and procedures.

LFS has leveraged existing staff by using the state portion of federal Clinical Laboratory Improvement Amendments (CLIA) surveys to biennially inspect licensed laboratories. LFS uses the 20 percent state portion of CLIA surveys for review of state issues when we perform biennial inspections of unaccredited laboratories. This entails a minimal review consisting of a checklist with ten elements specific to state licensing requirements. Any deficiencies identified are referred as a complaint for state follow up.

LFS also initiated validation surveys of accredited laboratories by state surveyors. Since September 2008, LFS staff inspected 3607 laboratories. This includes all initial biennial and validation inspections. LFS implemented ongoing reviews of facility license renewal applications to verify ownership and qualifications of the director and ten percent of testing personnel.

Senate Bill (SB) 744 (Strickland, Chapter 201, Statutes of 2009) allows laboratories accredited by a private, nonprofit organization to be deemed by the Department to meet state licensure or registration requirements. Once the accrediting organizations are approved, the state will leverage its ability to perform biennial inspections of accredited laboratories by using the accrediting organizations. This will increase the number of licensed laboratories that are inspected every two years. Beginning January 2011, the Department has accepted accrediting organization applications to conduct state surveys. The Department has received four applications and is reviewing those applications. We anticipate approving these applications by spring 2013 and will continue to review new applications as we receive them.

LFS meets quarterly with the Centers for Medicare and Medicaid Services to share state concerns identified during federal and state inspections and to provide an update on LFS programs.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: June 2015
  • Response Date: October 2012

Current Status of Recommendations

All Recommendations in 2012-041