Report 2007-040 All Recommendation Responses

Report 2007-040: Department of Public Health: Laboratory Field Services' Lack of Clinical Laboratory Oversight Places the Public at Risk (Release Date: September 2008)

Recommendation #1 To: Public Health, Department of

This recommendation has been superseded by a recommendation from a subsequent report. See 2015-507 #2.

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.

Annual Follow-Up Agency Response From September 2016

Laboratory Field Services (LFS) approved two additional Accreditation Organizations (AO) applications during SFY 2015/2016. As of September 2016, of the 2,688 licensed facilities that require biennial inspections, 1,234 are AO certified, reducing the number of inspections LFS will be required to perform in SFY 2016/2017. LFS continues to work to fill vacant positions.

In SFY 2015/2016, 1,274 of California clinical laboratories required routine in-state inspections; of these, 1,020 (80%) were performed. COLA, a Public Health approved AO for clinical laboratories, completed 187 inspections. LFS Clinical Laboratory Improvement Amendments (CLIA) Section completed 652 surveys that were both state licensing and CLIA inspections. LFS On-Site Licensing Section performed 181 inspections. Additionally, 30 out-of-state labs were inspected, LFS inspected 26 and COLA inspected 4.

LFS revised its sanctioning and enforcement policies and procedures and developed a database system to track sanctions. These efforts will help LFS track deficiencies and identify opportunities to impose sanctions, document sanctions imposed and civil money penalty amounts, and document our penalty collection procedure and follow-up policy. The new tracking system is available and accessible by authorized LFS managers to monitor and track sanctions in process.

LFS revised its complaint policies and procedures; increased staffing dedicated to focusing on complaints by three, and enhanced its complaint database. Changes made to the complaint database include documenting the rationale for not investigating a complaint, and when to perform follow-up investigations to verify corrective action has been completed. In addition, the database now has a reporting function that provides "due dates" of complaint investigations, which staff review to ensure that the appropriate timeframes are being met. LFS staff was trained on the sanction and complaint policies and procedures on August 18, 2016.

California State Auditor's Assessment of Annual Follow-Up Status: See 2015-507 #2 for the most current assessment

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

Laboratory Field Services (LFS) leveraged existing staff 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 to review state issues when we biennially inspect unaccredited laboratories. This minimal review consists of a checklist with ten elements specific to state requirements. Deficiencies identified are referred as a complaint for state follow up. Between October 2012 and September 2013, LFS performed biennial inspections of 700 or 95% of the 1476 non-accredited laboratories. Between September 2012 and July 2013, state surveyors conducted 133 initial licensure surveys and 44 validation inspections of accredited laboratories.

LFS received four applications from accrediting organizations to conduct state surveys. In September 2013, LFS approved COLA's application. COLA currently accredits approximately 450 or 35% of the total 1,281 accredited laboratories. Their inspections will ensure that the laboratories they accredit are surveyed according to state standards. LFS anticipates approving the remaining three applications by spring 2014 and will review new applications as we receive them.

LFS continues to identify Examiner candidates and recruit to fill 11 vacant Examiner positions. Because Examiner salaries are 30-50 percent lower than comparable positions in the private sector, LFS continues to work with CDPH Human Resources Branch to implement a recruitment and retention bonus by fall 2014. LFS is also working with CalHR to remove the requirement for supervisory experience for entry level Examiners to allow more scientists to qualify. We anticipate completion of this change by June 30, 2015.

From October 2012 through September 2013, LFS received 147 complaints, investigated and closed 138, referred 18 to the responsible board or program, and performed 6 onsite inspections.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

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 Annual Follow-Up Status: Not Fully Implemented

Recommendation #2 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.

Annual Follow-Up Agency Response From September 2016

Laboratory Field Services (LFS) revised its proficiency testing policies and procedures to ensure that out-of-state laboratories (OOS) proficiency testing results are reviewed twice a year to ensure that laboratories are enrolled in appropriate proficiency testing. The monitoring begins when OOS laboratories submit their annual license renewal, and a follow up review is conducted six months later. In addition, OOS laboratory proficiency testing is reviewed during on-site visits by both LFS and accrediting organizations. LFS staff was trained on these new proficiency policy and procedures on August 18, 2016.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

As a result of a follow-up audit of Laboratory Field Services that the State Auditor issued in August 2016 [report 2015-507], Public Health has taken steps to address weaknesses in its proficiency testing practices including ensuring it reviews the results of proficiency testing for out-of-state labs it has licensed.

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

Laboratory Field Services (LFS) promptly notifies laboratories of proficiency test results and follows specified timelines for responding to proficiency testing failures. LFS reviews proficiency testing results every 30 days for two of three failed proficiency tests. 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 appropriate proficiency testing when we conduct biennial inspections.

LFS has received four applications from accrediting organizations to conduct state surveys. In September 2013, LFS approved COLA's application. COLA currently accredits approximately 450 or 35% of the total 1,281 accredited laboratories. Their inspections will ensure that the laboratories they accredit are surveyed according to state standards. LFS anticipates approving the remaining three applications by spring 2014 and will review new applications as we receive them. Once approved, the accrediting organizations will review proficiency test results for their accredited laboratories and refer to LFS laboratories that fail proficiency testing.

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

Full implementation of these policies and procedures is pending sufficient staffing.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

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 Annual Follow-Up Status: Not Fully Implemented

Recommendation #3 To: Public Health, Department of

This recommendation has been superseded by a recommendation from a subsequent report. See 2015-507 #10.

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.

Annual Follow-Up Agency Response From September 2016

To ensure that Laboratory Field Services (LFS) develops regulations as necessary, Public Health dedicated staff in LFS and Public Health's Office of Legal Services to coordinate and work on regulatory needs for LFS. To ensure local stakeholder feedback is received and considered on regulation needs and changes, the Clinical Laboratory Technical Advisory Committee (CLTAC) organized a separate subcommittee to review regulation packages and provide feedback to LFS. The subcommittee met over 12 times in State Fiscal Year 2015/2016 and has provided comments and suggestion to proposed regulations to CLTAC and LFS. Public Health continues to make progress on addressing regulation packages noted in the audit report and has completed actions to repeal outdated state regulations, and developed internal controls to improve and maintain its tracking and monitoring of LFS regulatory needs. In addition, Public Health has split the Clinical Laboratory Personnel Standards regulation package into four separate packages in order to minimize the complexity of the package to ensure better stakeholder engagement and to ensure that forward momentum on completing the packages can continue.

California State Auditor's Assessment of Annual Follow-Up Status: See 2015-507 #10 for the most current assessment

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

Laboratory Field Services (LFS) continues to review its clinical laboratory regulations and repeal or revise them as necessary. In September 2010, LFS issued draft 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 2014. LFS has also drafted regulations for sperm washing. LFS will draft an additional regulation package for new license categories for clinical biochemists and endocrinologists when the current personnel certification regulation package has been adopted in 2014.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

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 Annual Follow-Up Status: Not Fully Implemented

Recommendation #4 To: Public Health, Department of

Laboratory Services should continue its efforts to license California laboratories that require licensure. Further, it should take steps to license out-of-state laboratories that perform testing on specimens originating in California but are not licensed, as the law requires.

Annual Follow-Up Agency Response From October 2016

Laboratory Field Services (LFS) continues to annually license California and out-of-state (OOS) laboratories. LFS implemented an interagency agreement with the Department of Health Care Services (DHCS). When laboratories bill DHCS for Medi-Cal reimbursement for lab services, DHCS checks with LFS for license verification. In the process of verifying licensure, LFS identifies unlicensed labs, which must be licensed by LFS pursuant to Welfare and Institutions Code section 14043.27. As of June 2016, LFS licensed 446 OOS laboratories and as of September 2016, LFS registered 15,405 and licensed 2,403 in state laboratories that perform tests on specimen from California patients.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Laboratory Services is taking steps to license both in-state and out-of-state laboratories that perform tests on specimens from California patients.

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From November 2013

As of September 30, 2013, Laboratory Field Services (LFS) licensed 13,025 of the 14,724 waived laboratories. LFS has also licensed 249 out-of-state laboratories performing testing on California patients. LFS has 50 pending applications for initial or renewal out-of-state licensing.

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 by fall 2014. 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 June 30, 2015

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

LFS continues its efforts to license California laboratories and those outside California performing testing on California patients. As of September 14, 2012, LFS has registered 11,734 of the estimated 12,266 laboratories required to be registered. LFS has also licensed 398 out-of-state laboratories performing testing on California patients. LFS has 50 pending applications for either initial out-of-state licensing or renewal.

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 expected to use the additional $3.5 million generated by SB 744 to fund additional staff positions needed to identify and license laboratories within and outside of California. 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 in 2014.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Recommendation #5 To: Public Health, Department of

This recommendation has been superseded by a recommendation from a subsequent report. See 2015-507 #4.

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.

Annual Follow-Up Agency Response From September 2016

Laboratory Field Services (LFS) revised its complaint policies and procedures; increased staffing dedicated to focusing on complaints by three full-time staff, and enhanced its complaint database. Changes made to the complaint database include documenting the rationale for not investigating a complaint, and when to perform follow-up investigations to verify corrective action has been completed. In addition, the database now has a reporting function that provides "due dates" of complaint investigations, which staff review to ensure that the appropriate timeframes are being met.

LFS staff was trained on the new complaint policy and procedures on August 18, 2016.

California State Auditor's Assessment of Annual Follow-Up Status: See 2015-507 #4 for the most current assessment

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

In March 2009, Laboratory Field Services (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.

Full implementation of these policies and procedures is pending sufficient staffing. 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 by fall 2014. 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 June 30, 2015.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

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 Annual Follow-Up Status: Not Fully Implemented

Recommendation #6 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.

Annual Follow-Up Agency Response From September 2016

Laboratory Field Services (LFS) revised its sanctioning and enforcement policies and procedures and developed a database system to track sanctions. These efforts will help LFS track deficiencies and identify opportunities to impose sanctions, document sanctions imposed and civil money penalty amounts, and document penalty collection and follow-up procedures. The new tracking system is available and accessible by authorized LFS managers to monitor and track sanctions in process. The On-Site Licensing Section Chief responsible for sanctioning efforts was hired in December 2015. LFS staff was trained on these revised sanctioning and enforcement policy and procedures on August 18, 2016. Also, LFS will notify other appropriate agencies about sanctions taken as necessary.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

As a result of a follow-up audit of Laboratory Field Services that the State Auditor issued in August 2015 [report 2015-507], Public Health has taken steps to address weaknesses in its sanctioning and enforcement practices including dedicating staff to these functions, updating policies and procedures, and training staff.

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

Laboratory Field Services (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.

Full implementation of these policies and procedures is pending sufficient staffing. 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 by fall 2014. 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 June 30, 2015.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

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 Annual Follow-Up Status: Not Fully Implemented

Recommendation #7 To: Public Health, Department of

This recommendation has been superseded by a recommendation from a subsequent report. See 2015-507 #8.

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

Annual Follow-Up Agency Response From September 2016

Laboratory Field Services (LFS) continues to make progress addressing staffing and recruitment issues for the program. LFS implemented the recruitment event calendar and made progress on the recruitment plan reported in the March 2016 update to this audit. LFS also revised numerous policies and procedures and workflow processes to optimize use of clerical and analytical support for administrative functions. This frees examiners to focus on the clinical technical aspects of their job. In September 2016, LFS provided a job offer to a candidate for LFS Branch Chief, and has hired two Examiners (an Examiner I and an Examiner III), a Supervising Program Technician II, and a Program Technician II.

LFS has approved two additional Accreditation Organizations (AO) applications during SFY 2015/2016. This enables the AOs to perform more inspections and complaint investigations for effective oversight of labs. The required routine clinical laboratory facility inspections will be performed by AOs or in coordination with LFS federal Clinical Laboratory Improvement Amendments surveys.

Rather than acquiring a consultant to develop a succession plan, LFS will work with the Department's Human Resources Branch, Office of Quality Performance and Accreditation, and CalHR to develop a succession plan specific to LFS's recruitment and retention needs. It's anticipated that this could be completed by July 2017.

California State Auditor's Assessment of Annual Follow-Up Status: See 2015-507 #8 for the most current assessment

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

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

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 by fall 2014. 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 June 30, 2015.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

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 Annual Follow-Up Status: Not Fully Implemented

Recommendation #8 To: Public Health, Department of

This recommendation has been superseded by a recommendation from a subsequent report. See 2015-507 #9.

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.

Annual Follow-Up Agency Response From September 2016

Laboratory Field Services (LFS) is working with the Information Technology Services Division to develop an electronic licensing system for clinical laboratory facilities that will provide better record keeping and tracking of facility licensure, registration, ownership, complaint tracking, enforcement tracking and management reports; accelerate the applications processing time, which will help ensure that all labs testing California specimens are inspected in a timely manner and are in compliance with federal and state laws; centralize the application process for both new and renewal license and registration applications; streamline workload for LFS staff; and establish better accountability for management within Public Health. The application will be developed on the department's existing PEGA System. The PEGA System licensing platform will replace the existing legacy mainframe and will be a foundation on which all new and existing licensing applications are built. The department is developing a scope of work to bring a contractor on-board to begin configuring the licensing system for LFS.

The LFS electronic licensing system now has an approved Stage 1 Business Analysis (S1BA). Department of Technology, Technology Letter 16-08, as of September 12, 2016 delegated approval of S1BA documents to Agency Chief Information Officers (ACIO). As of July 8, 2016 the S1BA was approved by the California Health and Human Resources ACIO. LFS continues to work with the Department's Information Technology Services Division on the Stage 2 Alternative Analysis (S2AA), which is estimated to be completed by December 31, 2016

California State Auditor's Assessment of Annual Follow-Up Status: See 2015-507 #9 for the most current assessment

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

The Information Technology Services Division (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 identified a strategy for replacing the Health Application Licensing (HAL) system and it is incorporated in the CDPH IT Capital Plan.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

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 Annual Follow-Up Status: Not Fully Implemented

Recommendation #9 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.

Annual Follow-Up Agency Response From September 2016

Laboratory Field Services (LFS) revised its proficiency testing policies and procedures to ensure that out-of-state laboratories (OOS) proficiency testing results are reviewed twice a year to ensure that laboratories are enrolled in appropriate proficiency testing. The monitoring begins when OOS laboratories submit their annual license renewal, and a follow up review is conducted six months later. In addition, OOS laboratory proficiency testing is reviewed during on-site visits by both LFS and accrediting organizations. LFS staff was trained on these new proficiency policy and procedures on August 18, 2016.

LFS reviewed and approved two additional Accreditation Organizations (AO) applications during SFY 2015/2016. Laboratory Services now has three AOs working in partnership to perform inspections and investigate complaints. All Clinical Laboratory Letters (ACLL) have been developed in partnership with the Department's Office of Legal Services and issued detailing the program components.

-Initial Notice of Approval of LFS Accrediting Organizations: http://www.cdph.ca.gov/programs/lfs/Documents/Initial%20Notice%20-%20LFS%20Approval%20of%20Accrediting%20Organizations.pdf

-ACLL 16-01: http://www.cdph.ca.gov/programs/lfs/Documents/ACLL%2016-01%20Final%20Action.pdf

-ACLL 16-02: http://www.cdph.ca.gov/programs/lfs/Documents/AOs%20-%20ACLL%2016-02.pdf

The required routine clinical laboratory facility inspections will be performed by AOs or in coordination with Laboratory Services federal Clinical Laboratory Improvement Amendments surveys. Laboratory Field Services staff was trained on the ACLL letters on August 18, 2016. COLA, a Public Health approved Accrediting Organization (AO) for clinical laboratories, completed 187 inspections.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

As a result of a follow-up audit of Laboratory Field Services that the State Auditor issued in August 2015 (report 2015-507), Public Health has partnered with several accreditation organizations to perform inspections and investigate complaints. The department addressed the remainder of this recommendation in 2012.

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

Laboratory field Series (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 4500 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.

LFS has received four applications from accrediting organizations to conduct state surveys. In September 2013, LFS approved COLA's application. COLA currently accredits approximately 450 or 35% of the total 1,281 accredited laboratories. Their inspections will increase the number of licensed laboratories that are inspected every two years. LFS anticipates approving the remaining three applications from accrediting organizations by spring 2014 and will 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 Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

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 Annual Follow-Up Status: Not Fully Implemented

Recommendation #10 To: Public Health, Department of

Laboratory Services should work with Public Healths budget section and other appropriate parties to ensure that it adjusts fees in accordance with the budget act.

1-Year Agency Response

Laboratory Services stated that it developed policy and procedures to adjust fees and implemented them after the October 2008 Budget Bill was signed. It told us that it retains documentation of the fee adjustment for each year in its policy and procedure manual. Although the department concluded that it did not have the authority to retroactively adjust fees for previous years, we confirmed that the department adjusted fees in accordance with the budget act for fiscal year 2008-09. (See 2010-406, p. 48)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #11 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 monitoring proficiency-testing results

1-Year Agency Response

Laboratory Services stated that it reviews electronic proficiency test results once each month and since August 2008 has notified 195 laboratories of a first proficiency testing failure within 30 days of reviewing the test data. (2010-406, p. 43)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

All Recommendations in 2007-040

Agency responses received after June 2013 are posted verbatim.