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County terminates contract with private lab providing first responder COVID testing

By Carla O'Day

Taking advice of emergency officials who cited breach of contract, Washoe County commissioners on Tuesday voted to terminate an agreement with a company that provided COVID-19 test kits locally, and is seeking an $825,000 refund.

At request of the Incident Management Team, Washoe County entered into the contract with Reno-based Cerecare Clinical Services and placed an order in early April for 5,000 SDI viral test kits for COVID-19. The county was promised test results within 72 hours of specimen receipt, although results reportedly took much longer.

The Incident Management Team is made up of officials in Washoe County, Reno and Sparks who are organizing local response to the pandemic. The kits were primarily used by fire, law enforcement, and emergency responders. Kits were also used for vulnerable populations, such as those in assisted-living facilities.

The Cerecare contract was meant to increase the ability to test and for the county to get quick results in order to notify those with positive results to quarantine, which would stop the spread of coronavirus.

“The longer the delay in notification, the greater the risk to the community as a positive individual is unaware that they are spreading the disease,” Aaron Kenneston, Washoe County emergency management administrator, wrote in a report to commissioners. “Rather than the specified 72-hour turnaround, the results of these test kits have taken as long as 11-14 days. This creates a public health risk as responders continued to work unaware of their positive status. It also creates a financial burden and risk for Washoe County with increased spread of the disease.

Other COVID-19 tests had been going to the Nevada State Public Health Laboratory, which county officials said was experiencing backlog in the spring but has since increased its capacity. Specimens that would’ve gone to Cerecare are now going to the state health lab.

Ozman Mohiuddin, SDI Labs chief executive officer, said the Cerecare testing delays were related to a change in collection protocol. The first 1,100 tests it analyzed for Washoe County showed a positivity rate of 5 to 6 percent. The next 360 showed a positivity rate of less than 1 percent, prompting questions about how samples were being collected. This meant some inconclusive results, potential false negatives, and some re-testing, he said.

Cerecare kits were only approved for COVID-19 nasal cavity and saliva tests, not the nostril swab, although he said the company learned the nostril swab method was being used.

“At that point in time, we found out that the program had changed and the collection method had changed,” Mohiuddin said. “As a result, we weren’t collecting enough human cells.”

Washoe County Health District officer Kevin Dick said the county first received nasopharyngeal swabs from Cerecare as samples, although the bulk shipment contained swabs for oral collection.

Mohiuddin asked commissioners for the opportunity to work with the county to rectify the situation. He also said Cerecare kept records and would provide the county detailed information on any case requested.

County Manager Eric Brown said he’s been on calls about three times weekly since the pandemic hit locally in March and has often heard about “consistent and persistent delays” in Cerecare results.

However, delayed results weren’t the only problem.

Local testing personnel discovered some COVID-19 tests were leaking fluid and had to be discarded. This was brought to the attention of the health district, which informed responders to cease the use of the product. The remaining kits were then collected. Approximately 3,100 of the initial 5,000 kits remain.

Health district staff then contacted Cerecare about returning the remaining kits and requested a prorated refund. The company countered with a proposal that did not include the county receiving reimbursement for the unused kits.

Until Tuesday, no explanation was provided from Cerecare about delayed results or other issues, Dick said. However, Mohiuddin noted trying to communicate to the correct people at Washoe County was also challenging.

Commission Chairman Bob Lucey said he’d heard enough comment on both sides.

“I don’t think this is an issue of science, this is an issue of performance on a contract that needed to be addressed in a timely manner,” Lucey said.

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