OSU Spends More Than $700,000 to Keep Lab Open After Proficiency Testing Referral Violation

Ohio State University’s Wexner Medical Center so far has spent $450,550 in legal fees as part of its successful effort to keep its clinical laboratory certified and open, according to a report in the Columbus Dispatch. The university in January agreed to pay the federal government $268,000 to settle allegations that its lab violated proficiency testing laws. The agreement allows the lab to stay open and under OSU control. Between the legal fees and the settlement payment, the university has incurred at least $718,550 in case-related expenses. The Centers for Medicare and Medicaid Services levied sanctions this past summer after the lab sent six proficiency-test samples to the Mayo Clinic and to another OSU lab for testing. Federal law prohibits a lab from sending such samples to another lab, even within the same hospital system. The sanctions could have cost OSU millions of dollars in Medicare and Medicaid reimbursement. As part of the settlement, the university appointed a new clinical laboratory director, Daniel Sedmak, M.D., a professor of pathology, who has replaced Amy Gerwitz, M.D. In addition, the lab staff will undergo additional training. The university faces more expenses related to the settlement, according to the Dispatch. It has yet to hire an outside firm to conduct a “root-cause analysis” to determine what led to the improper referrals, as stipulated in the settlement. In 2011, the university’s medical laboratory network performed 9.1 million patient tests, 7.24 million of which were performed at the lab in question. It is central Ohio’s only fully automated hospital lab.