A. The department may inspect the premises and operations of a clinical laboratory subject to licensure pursuant to this article to study and evaluate the operation, supervision and procedures of that facility to determine if it is in substantial compliance with this article and rules adopted pursuant to this article. Inspections may be unannounced and shall take place during regular working hours.

B. The department shall require a laboratory to enroll in an approved proficiency testing program. The department may also submit proficiency test specimens for examination by a laboratory to determine its compliance with the provisions of this chapter, if a laboratory has failed to meet the standards for proficiency testing, pursuant to this article.

C. A laboratory is exempt from on-site inspection conducted pursuant to this article and on-site inspection fees if it is in substantial compliance with the licensure requirements of this article and is licensed or certified by the federal government, licensed or accredited by another state or accredited by a federally approved program. The laboratory shall submit to the department verified proof of this licensure, certification or accreditation along with the laboratory’s evaluation report. A laboratory shall notify the department within twenty-four hours of its receipt of notice that its accreditation has been rescinded or modified. If the department determines that an accreditation program is no longer approved, it shall conduct on-site inspections pursuant to this section.

D. If the director has reasonable cause to believe that a licensed or unlicensed laboratory or a laboratory requesting licensure is not in substantial compliance with the licensing requirements established pursuant to this article, the director may make announced or unannounced on-site inspections of the laboratory at any reasonable time to determine compliance. An application for licensure grants the department permission to conduct on-site inspections as prescribed pursuant to this section.

E. If as a result of an inspection the director determines that a laboratory is not in substantial compliance with this article and rules adopted pursuant to this article, he may modify, suspend, revoke or deny renewal of the license. This action shall follow a hearing held pursuant to chapter 41, article 6. If the director believes that the immediate interests of the general public will be best served by allowing the laboratory an opportunity to correct the deficiency, he may issue a provisional license for not more than six months. The laboratory shall agree to carry out a plan approved by the department to correct the deficiencies. The laboratory may be relicensed only after the expiration of its provisional license and only if the department determines that the licensee is in substantial compliance with this article and rules adopted pursuant to this article.