Laboratory Law Heats Up, Part One Clinical Labs
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Laboratory Law Heats Up — Part One: Clinical Labs

Representing or working for a laboratory in a legal capacity is an under-the-radar job and practice opportunity that may expand further as the population ages and the issues become more complex, and will likely be subject to increasing regulation. This first in a two-blog series looks at clinical laboratories.

A Background Note

There are two major categories of laboratories for purposes of this blog: (1) clinical labs, where medical testing is done on clinical samples from individuals in order to diagnose, treat, and/or prevent disease; and (2) research labs that perform R&D and whose research, innovations, and processes may be subject to commercialization.

This blog focuses on clinical labs.

Numbers

The U.S. diagnostic and medical laboratory industry consists of 26,000+ businesses that own more than 251,000 labs. In 2015, the industry brought in more than $54 billion and employed almost 300,000 people. Most clinical labs are represented by outside counsel. A minority have in-house counsel offices. A larger number employ attorneys in other capacities.

Why Labs?…and Why Now?

The aging of the population means more potential illnesses and diseases. That has moved healthcare more in the direction of detecting and preventing illness and toward more personalized care. The money flow has substantially increased because both physicians and third-party insurance payors realize that clinical lab functions improve health while reducing costs. Lab sub-types include those providing general or clinical pathology services, X-ray and other radiology and imaging services, including magnetic resonance imaging (MRIs) and computer tomography (CT), blood and DNA testing, dental labs, and pathology and forensic testing.

The Referral "Supply Chain"

Not to be overlooked by aspiring legal practitioners is the supply chain of referring professionals and organizations that also require intermittent laboratory law legal services, including not only medical service providers but hospitals, veterinarians, chemical manufacturers and wholesalers, and medical device and supply manufacturers.

Geography

Clinical laboratories are usually located near their principal referral agencies—hospitals and physicians' offices—overwhelmingly in metropolitan areas. Few are found in rural areas, although they may soon follow the small trend of physicians relocating to smaller cities and towns.

Regulation

Clinical labs are subject to regulation by several different federal and state agencies which generates demand for legal counsel and services.

Federal Regulation

Regulation of clinical labs falls largely under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), Pub. L. 100-578 and its implementing regulations. The federal CLIA program issues four types of CLIA certificates:

Certificate of Waiver—issued to a laboratory to perform only waived tests.

Certificate of Provider—Performed Microscopy Procedures—issued to a laboratory in which a physician, midlevel practitioner or dentist performs no tests other than the microscopy procedures. This certificate permits the laboratory to also perform waived tests.

Certificate of Compliance—issued to a laboratory after an inspection that finds the laboratory to be in compliance with all applicable CLIA requirements.

Certificate of Accreditation—issued to a laboratory on the basis of the laboratory's accreditation by an accreditation organization approved by the Centers for Medicare and Medicaid.

Primary regulatory authority is divided among four components of the U.S. Department of Health and Human Services (HHS):

The Centers for Medicare & Medicaid Services (CMS) is the principal regulator. It regulates all laboratory testing (except research) performed on humans in the U.S. through CLIA. In total, CLIA covers approximately 251,000 laboratory entities. The Division of Laboratory Services, within the Survey and Certification Group, under the Center for Clinical Standards and Quality (CCSQ), is responsible for implementing the CLIA Program. CMS also issues rules for lab HIPAA compliance.

The Food and Drug Administration (FDA) categorizes lab tests based on complexity, reviews requests for "Waiver by Application," and develops rules and guidance for CLIA complexity categorization.

The Centers for Disease Control and Prevention (CDC) provides analysis, research, and technical assistance to labs; develops technical standards and laboratory practice guidelines, including standards and guidelines for cytology; conducts laboratory quality improvement studies; monitors proficiency testing practices; develops and distributes professional information and educational resources; and manages the Clinical Laboratory Improvement Advisory Committee (CLIAC).

The HHS Office of Inspector General (OIG) issues compliance guidance for clinical labs. HIPAA requires that: lab workers be trained on procedures to ensure confidentiality of patient information; training sessions be documented to verify compliance; disclosure of protected health information, when required by law, be within 30 days of patient request or to facilitate treatment, payment, or health care operations, or when consent has been granted by the patient; labs correct incorrect patient health information; labs keep a record of patient health information disclosures; and patients are notified of their rights under HIPAA.

Clinical labs must also comply with compliance and enforcement rules issued by the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA), including: making available and properly maintaining safety equipment; taking measures to control the risk of exposure to chemical hazards or biological specimens by lab employees; maintaining sanitary conditions; having an approved waste management program; putting in place procedures for infectious material response, ventilation failure, first aid, fires, and other emergencies; documenting all spills and exposure incidents; and participating in annual inspections.

State Regulation

State laboratories often contract with CMS to carry out CLIA at the state level. In addition, they exercise their own regulatory authority over the clinical labs in their state. They typically license labs and specify the types of testing they may perform. Testing outside of that authorized is unlicensed activity and subject to fines and penalties, including criminal penalties. In some instances, state requirements exceed those of the U.S. government.

Credentials

Law school courses in health law, including medical device law, are good platforms from which to try to position yourself for laboratory law positions or representation. In addition, the selected certificate programs listed below can supplement your law degree. (Note: Programs such as these are subject to constant change. Make sure that you research them thoroughly.)