Los Angeles Times

State virus testing lab avoids penalties after investigat­ion

$25-million facility, opened late last year in Valencia, has been beset with problems.

- By Melody Gutierrez

SACRAMENTO — After investigat­ing its own COVID-19 testing lab for much of the year, the California Department of Public Health closed its case without issuing sanctions as the state released a long-overdue report Monday that downplayed widespread issues identified during inspection­s at the Valencia Branch Laboratory.

The lab, which was opened in partnershi­p with Massachuse­tts-based diagnostic­s company PerkinElme­r, has been beset with problems since the $25-million facility opened late last year. The Newsom administra­tion promised a full report in March on “significan­t deficienci­es” found during inspection­s, but it was not released until Monday — weeks after the state renewed its $1.7-billion, no-bid contract with PerkinElme­r to keep the testing site going.

Newly released documents show California inspectors raised alarms earlier this year about whether staff were properly trained, how the lab was reporting its own processing errors and

whether protocols that reduce the likelihood of contaminat­ion were being followed, all of which called into question the accuracy of tests at one of the largest testing facilities in the state.

“It should not have taken 287 days for California­ns to receive answers about this taxpayer-funded COVID testing lab,” said Sen. Scott Wilk (R-Santa Clarita). “Especially when our vulnerable students are the ones at risk, parents and families deserve accountabi­lity and transparen­cy from the Newsom administra­tion.”

The Laboratory Field Services division in the state public health department issued a “Notice of Intent to Impose Sanctions” letter on Oct. 21 after finding that the Valencia lab had not corrected all of the issues identified during its inspection­s, despite being given several extensions during the year. Ten days later, the state allowed the contract with PerkinElme­r to automatica­lly renew, which a public health spokesman said was done to protect California from a potential winter surge of COVID-19.

“The state was confident in the contractua­l language and its ability to terminate the contract, and therefore, felt confident proceeding without the final report,” Corey Egel, a spokesman for the public health department, said of the renewal.

The state withdrew its threat of sanctions on Nov. 10 “based upon the demonstrat­ed correction” of issues.

The existence of the investigat­ion in February was made public after a report by CBS 13 in Sacramento highlighte­d issues in the lab, with whistleblo­wers telling the station that they saw lab techs sleeping or watching videos while processing nasal swabs and that unsupervis­ed staff processed samples before completing required training.

The state opened a separate investigat­ion into the allegation­s made in the CBS report. A federal investigat­ion by the Centers for Medicare and Medicaid Services is ongoing, Egel said.

The documents released Monday show the state issued a report to the lab in April highlighti­ng widespread issues that investigat­ors said threatened the accuracy of tests conducted at the Valencia lab.

Among the findings from inspection­s in February were that the lab failed to assess the competency of more than half of its staffers before allowing them to independen­tly process, test and report patient samples.

The lab responded that all employees were trained as required but that there was a delay in documentin­g that training.

State investigat­ors also said the Valencia lab did not have a policy in place outlining how to issue corrected results, and the state’s investigat­ors found the lab was altering test results days after patients were initially notified without apprising them of the changes, according to the April report.

When the lab lost or damaged a specimen, it blamed the situation on an “unsatisfac­tory sample,” state investigat­ors wrote in April.

The state’s public health department issued letters in February and April instructin­g Laboratory Director Adam Rosendorff to fix the failings, writing that state investigat­ors “determined that the deficient practices of your laboratory pose immediate jeopardy to patient health and safety.”

The state threatened to sanction the lab and Rosendorff, who is the former lab director of the failed bloodtesti­ng startup Theranos. Rosendorff is a key witness for the prosecutio­n in the criminal trial of that company’s former chief executive officer, Elizabeth Holmes.

State officials promised to release a full report in mid-March on the issues facing the Valencia lab, with lawmakers criticizin­g the Newsom administra­tion for stalling as the state’s contract with PerkinElme­r was set to renew.

Some have questioned whether the investigat­ion could remain impartial since the state was essentiall­y investigat­ing its own lab.

The Laboratory Field Services at the public health department operates independen­tly, said Engel, the department’s spokesman.

The Newsom administra­tion released its report Monday, which largely downplayed the issues facing the lab, characteri­zing the deficienci­es as those “routinely found in laboratory inspection­s,” and said each problem had been corrected. The report said California’s public-private lab is a model other states should emulate.

“The regulatory process worked as designed, addressing the identified deficienci­es and holding the laboratory operator accountabl­e — ensuring that the integrity of tests processed at this laboratory were not impacted and high standards were maintained,” Dr. Toma s Arago n, the director of the state pub- lic health department, said in a statement.

The report touted the lab’s achievemen­ts, saying it has helped increase testing in high-risk communitie­s and has processed more than 5.5 million specimens from churches, schools, clinics, essential workplaces and other sites.

The state’s contract with PerkinElme­r dictates that California pays for tests based on the number processed. The report said the cost is $55 per test for community and employer programs and $21 for schoolbase­d testing.

To date, California has paid PerkinElme­r $716 million, of which $684 million has been reimbursed to the state by the Federal Emergency Management Agency.

In October 2020, Newsom toured the newly constructe­d facility in Valencia that he said would create 700 new jobs in Southern California when it reached full capacity.

State officials said the lab was built to ensure adequate testing in schools, for healthcare providers and in hardto-reach communitie­s using polymerase chain reaction, or PCR, diagnostic tests.

“Earlier in this pandemic, our ability to test California­ns for COVID-19 and get results quickly was hampered by supply chain challenges and overwhelme­d laboratori­es — so we built our own supply chain and our own lab with PerkinElme­r,” Newsom said in a statement that October.

The state’s contract with PerkinElme­r requires a testing turnaround time of 24 to 48 hours, which public health officials said is critical to limiting the spread of COVID-19 by allowing for timely contact tracing and quarantini­ng.

State data show the Valencia lab processed nearly 161,000 tests during the week of Nov. 7-13, of which 66% had results within one day and 30% within two days.

By comparison, commercial labs processed more than 1 million tests, with 78% of those results returned within a day and 18% within two days.

But the Valencia lab has fallen behind amid higher demand. Between Sept. 26 and Oct. 2, when the lab processed nearly 233,000 samples, a third of the results took more than three days to process, state data show.

State officials said building lab capacity is critical and will help prepare for future outbreaks.

“California seized on the opportunit­y to leverage its people, innovation and diversity to not only expand laboratory testing capacity, but the availabili­ty of specimen collection sites in neighborho­ods that were disproport­ionately impacted by the COVID-19 pandemic,” the state’s report reads.

 ?? Marcio Jose Sanchez Associated Press ?? GOV. GAVIN NEWSOM tours the newly opened Valencia coronaviru­s testing facility on Oct. 30, 2020.
Marcio Jose Sanchez Associated Press GOV. GAVIN NEWSOM tours the newly opened Valencia coronaviru­s testing facility on Oct. 30, 2020.
 ?? Marcio Jose Sanchez Associated Press ?? A STATE CORONAVIRU­S TESTING LAB, opened in partnershi­p with Massachuse­tts-based diagnostic­s company PerkinElme­r late last year, had its accuracy and operations questioned by California inspectors.
Marcio Jose Sanchez Associated Press A STATE CORONAVIRU­S TESTING LAB, opened in partnershi­p with Massachuse­tts-based diagnostic­s company PerkinElme­r late last year, had its accuracy and operations questioned by California inspectors.

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