DEPARTMENT OF HEALTH & HUMAN SERVICES  
Centers for Medicare & Medicaid Services 
 
                 
7500 Security Boulevard 
                  Baltimore, MD  21244-1850 
 
 
 
  SMDL # 02-004 
                     
 
April 1, 2002 
             
 
 
 
 
 
Dear State Medicaid Director: 
 
The Centers for Medicare & Medicaid Services (CMS) is initiating on-site visits to facilities enrolled 
in the Clinical Laboratory Improvement Amendments of 1988 (CLIA) program that have a certificate 
of waiver (COW).  The CLIA program conducted an initial pilot study in the States of Colorado and 
Ohio, where on-site visits of a random sample of 200 CLIA COW and certificate of Provider 
Performed Microscopy Procedures (PPMP) laboratories were performed.  Significant quality and 
certification problems were identified in over 50 percent of these laboratories. 
 
CMS expanded this pilot to include eight additional States to verify the scope and seriousness of 
Colorados and Ohios initial study findings.  As a result of this expanded pilot, quality problems were 
identified that corroborated the initial study findings, which included: 
 
-  32 percent failed to have current manufacturers instructions; 
-  32 percent didnt perform quality control as required by manufacturer or Centers for Disease 
Control and Prevention (CDC); 
-  16 percent failed to follow current manufacturers instructions; 
 
The Centers for Disease Control and Prevention (CDC), Office of Inspector General (OIG) and New 
York studies have similar findings.  
 
Due to the significant increase in the number and types of tests waived, the rapidly expanding number 
of laboratories with no oversight, and the serious findings in COW laboratories, CMS will be visiting 
two percent of the COW laboratories starting early 2002.  The laboratories will be notified in advance, 
first by letter and then by telephone to confirm the on-site visit.  The visits will focus on the education 
of testing personnel to ensure quality testing.  If quality problems are found, the inspectors will 
provide assistance to the laboratories to achieve accurate and reliable results.  If certificate problems 
are found, the inspectors will ensure the laboratories operate under the correct certificate.  There will 
be no fee charged to the laboratories at this time for these visits.  Preliminary follow up data from 
CMSs expanded pilot studies indicates the educational approach to be highly effective.  Other 
educational efforts for COW laboratories are in development. 
 
  Page 2  State Medicaid Director 
 
 
Enclosed you will find a CMS Fact Sheet, Questions and Answers, and Surveyor Questions COW 
Laboratories.  Please do not hesitate to contact Judith A. Yost of my staff at telephone number (410) 
786-3407 or by email at jyost@CMS.HHS.gov with your questions or concerns. 
 
              Sincerely, 
 
                  /S/ 
 
              Dennis G. Smith 
              Director 
              Center for Medicaid and State Operations 
 
Enclosures 
 
cc: 
 
CMS  Regional Administrators 
 
CMS Associate Regional Administrators 
  for Medicaid and State Operations 
 
Lee Partridge 
Director, Health Policy Unit 
American Public Human Services Association 
 
Joy Wilson 
Director, Health Committee 
National Conference of State Legislatures 
 
Matt Salo 
Director of Health Legislation 
National Governors Association 
 
Brent Ewig 
Senior Director, Access Policy 
Association of State and Territorial Health Officials 
 
Jennifer King 
Director, Health and Human Services Task Force 
American Legislative Exchange Council 
 
Trudi Matthews 
Senior Health Policy Analyst 
Council of State Governments 
 
  CMS FACT SHEET 
 
Visiting CLIA  
Certificate of Waiver Laboratories 
   
 
BACKGROUND 
 
Congress passed the Clinical Laboratory Improvement Amendment s(CLIA) in 1988.  
CLIA requires all laboratories that examine materials derived from the human body for 
diagnosis, prevention, or treatment purposes to be certified by the Secretary of Health and 
Human Services.  The Centers for Medicare & Medicaid Services (CMS) (formerly the 
Health Care Financing Administration) operates the CLIA laboratory certification 
program for the Secretary in conjunction with the Centers for Disease Control and 
Prevention (CDC) and the Food and Drug Administration (FDA).  
 
For many Americans, the accuracy of clinical laboratory test results can be a life or death 
matter.  For instance, if a clinical laboratory misreads a patients blood sample as having 
a normal cholesterol level, when in fact it is high in cholesterol, that patient may not 
receive the treatment needed to prevent a heart attack. It is also important to note that 
even though waived tests are deemed simple to perform, erroneous results are possible 
and can produce untoward patient outcomes if acted upon.  For example, glucose tests 
performed on a meter approved by FDA for home use are waived under CLIA and can be 
done at any site by any person.  Thus, in a point of care setting such as a skilled nursing 
facility (SNF), these test results can be utilized to monitor a patients treatment to 
determine their next dose of insulin.  If the SNF does not train its testing personnel to 
follow the manufacturers instructions, to control and maintain the device appropriately, 
and to read the test results within the specified time frame, a patient could receive an 
incorrect insulin dose and sustain potentially dangerous consequences. 
 
Waived Tests and Facilities 
 
By the CLIA law, certificate of waiver (COW) laboratories perform only tests that are 
determined by FDA or CDC to be so simple that there is little risk of error.  
 
The COW laboratories must meet only the following requirements under CLIA: 
  Enroll in the CLIA program; 
  Pay applicable certificate fees biennially; and 
  Follow manufacturers test instructions. 
 
The number and types of tests waived under CLIA has increased from 8 tests to 40 since 
the inception of the program in 1992; thereby, the number of COW laboratories has 
grown exponentially from 20 percent to 55 percent of the total 174,504 laboratories 
enrolled. 
 
   
Page 2  CMS Fact Sheet  
 
 
The regulations, however, do provide for oversight of COW laboratories under certain 
circumstances such as: 
 
  If a complaint is alleged; 
  To determine if a laboratory is testing beyond the scope of its certificate; 
  If there is risk of harm due to inaccurate testing; and, 
  To collect information about waived tests. 
 
Initial Pilot Study 
 
Due to the increases in the types of tests waived, the large number of laboratories with no 
oversight, and the serious findings in complaint investigations of these waived 
laboratories, the States of Colorado and Ohio initiated on-site inspections of a random 
sample of 200 CLIA COW and Provider Performed Microscopy Procedures (PPM) 
laboratories. These pilots consisted of focused on-site inspections with prior notification 
and screening of the laboratory to confirm whether the States concerns about quality 
problems were correct.   Significant quality and certification problems were identified in 
over 50 percent of these laboratories.  If quality problems were found, the inspectors 
provided assistance to the laboratories to achieve accurate results.  Ohio found 10 percent 
and Colorado found 7 percent of the laboratories inspected to be testing beyond their 
certificates.  These laboratories were performing moderate complexity tests and, if 
properly enrolled in CLIA, would be subject to biennial inspections and additional fees.   
 
Expansion of Pilot Study 
 
To verify the scope and seriousness of these initial findings, CMS expanded this pilot to 
include 8 additional States.  Using Colorado and Ohios pilot as a model, CMS visited 2.5 
percent (approximately 460) of COW and PPMP laboratories in 8 selected States. The 
visits were conducted with an educational approach.  CMS believes it is obligated to 
follow up on these major findings as an effective steward of quality and to be responsive 
to the public good.  
 
Results of Expanded Pilot Study 
 
Quality problems were identified in these laboratories which included: 
 
  32 percent failed to have current manufacturers instructions;  
  32 percent didnt perform quality control as required by manufacturer or CDC; and,  
  16 percent failed to follow current manufacturers instructions.   
  The Centers for Disease Control and Prevention, Office of Inspector General, and 
New York studies have similar findings. 
    
Page 3  CMS Fact Sheet 
 
 
Next Steps 
 
Starting in early 2002 CMS will be initiating on-site visits to approximately 2 percent of 
COW laboratories as a result of the significant quality findings in the above mentioned 
studies.  These visits will continue to be information-gathering and educational.  
Preliminary follow-up data from the expanded pilot study indicates that the education 
provided during these on-site visits is effective.  Additionally, CMS is compiling 
information about existing COW laboratory education programs and vehicles.  By 
working together with our partners and stakeholders we will ensure that every COW 
laboratory can ultimately receive education about basic good laboratory practices and 
how to understand and follow manufacturers instructions. 
 
 
  QUESTIONS AND ANSWERS FOR ON SITE VISITS  
OF CLIA CERTIFICATE OF WAIVER LABORATORIES  
 
 
 
 
1.   What is CLIA?  
 
CLIA is the acronym for the Clinical Laboratory Improvement Amendments of 
1988.  This law requires any facility performing examinations of human specimens 
(e.g., tissue, blood, urine, etc.) for diagnosis, prevention, or treatment purposes to be 
certified by the Secretary of the Department of Health and Human Services.  
 
2.   Why is CLIA important?  
    
For many Americans, the accuracy of clinical laboratory test results can be a life or 
death matter.  If glucose tests are not performed correctly, a patient could receive an 
incorrect insulin dose and sustain potentially dangerous consequences.  If your 
cholesterol is high and the laboratory results are reported as normal, you may not 
receive the care necessary to prevent a heart attack.   
 
3.  What is waived testing?   
 
By the CLIA law, waived tests are those tests that are determined by CDC or FDA to 
be so simple that there is little risk of error.  Some testing methods for glucose and 
cholesterol are waived along with pregnancy tests, fecal occult blood tests, some 
urine tests, etc.  Currently, 40 tests have been approved for certificate of waiver 
(COW) status at CLIA website http://www.fda.gov/cdrh/clia. 
 
4.  What does CLIA require of a COW laboratory?     
 
COW laboratories must enroll in the CLIA program, pay applicable certificate fees 
biennially, and follow manufacturers test instructions. 
 
5.  How many laboratories hold a COW?     
 
Of the 174,504 laboratories enrolled in CLIA, approximately 93,129 (55%) of these 
hold a COW. 
 
6.  Why is CMS visiting COW laboratories on site?     
 
Colorado and Ohio performed on-site inspections of a random sample of 200 CLIA 
COW and Provider Performed Microscopy Procedures (PPMP) laboratories.  
Significant quality and certification problems were identified in over 50 percent of 
these laboratories. CMS expanded the initial pilot to include 8 additional States across  
  Page 2  Questions and Answers for Onsite Visits for CLIA COW Laboratories 
 
the nation, verifying the scope and seriousness of Colorados and Ohios initial 
findings and other studies.  Quality problems were identified in those laboratories.  
Therefore, CMS is initiating on-site visits to facilities enrolled in CLIA that have 
COW certificates. 
 
7.  What types of COW laboratories will CMS visit? 
 
CMS will visit all laboratory types, such as community clinics, HMOs, skilled 
nursing facilities, rural health clinics, physician office laboratories, etc.  The number 
of each facility type visited will reflect the overall percentage of each type in our 
database. 
 
8.  How many COW laboratories will CMS visit? 
 
CMS will be visiting 2 percent of COW laboratories within the United States 
annually. 
 
9.  Since the COW laboratories are not routinely inspected, how will CMS 
approach these laboratories?   
 
CMS believes an educational approach is necessary for these laboratories.  Inspectors 
will focus on the education of testing personnel to ensure quality testing.  If quality 
problems are found, the inspectors will provide assistance to the laboratories to 
achieve accurate and reliable results.  If certificate problems are found, the inspectors 
will ensure the laboratories operate under the correct certificate.  
 
10. Has the educational approach been effective? 
 
Yes, preliminary data from follow-up visits indicate education has been effective.  
Laboratories are continuing with the practices they learned. 
 
11. What was the reaction to the educational surveys in the expanded pilot? 
 
Each COW facility in the expanded pilot was given a discreet, anonymous evaluation 
to rate their experience during the on-site visit.  Seventy-five percent responded that 
the educational visit was overall good and useful.  One POL director, a MD, stated 
that any effort to improve testing in POLs is welcome. 
 
12. How will CMS notify the COW laboratories that have been selected? 
 
COW laboratories will be notified in advance, first by letter and then by telephone to 
confirm the on-site visits. 
 
   
Page 3  Questions and Answers for Onsite Visits for CLIA COW Laboratories 
 
13. Will CMS assess a fee for these on-site visits? 
 
No fee will be assessed for these visits. 
 
14. What else is CMS doing to assure quality testing in COW laboratories? 
 
CMS is working with their partners and stakeholders to develop and ensure 
comprehensive educational programs through various mechanisms are available and 
provided to COW laboratories.  CMS will also include educational information on its 
CLIA website at www.hcfa.gov/medicaid/clia/cliahome.htm 
 
Additionally, CMS will work with manufacturers to provide initial training to testing 
personnel and provide clear instructions with the test system. 
 
15. What if education doesnt work? 
 
CMS in conjunction with Centers for Disease Control and Prevention (CDC) and 
Food and Drug Administration (FDA) will evaluate other alternatives for ensuring 
quality. 
 
16. Will COW laboratories close because of these visits? 
 
The number of COW laboratories has steadily increased over time.  In 1992, it was 
estimated 20% of laboratories would be COW.  In 2002, 54 percent are COW.  
Responses on the survey evaluation form called the visits a good idea, and valuable 
for assuring good performance.  Well-performed waived testing is an important tool 
for patient care and is supported by CMS.  It will continue to be used in a variety of 
settings. 
 
 
  Internal Q and A 
Questions  
 
1.  Do we have information concerning adverse outcome as a result of inaccurate 
waived testing? 
 
Yes, we have some anecdotal information.  For example: A Medical Technologist in 
Alabama is the mother of 4 diabetic sons.  Each morning all sons are tested for glucose 
before breakfast.  One son's result was flagged with an error code.  Because this was a 
new instrument and the mother wanted to verify the accuracy of the test, the mother took 
that son to the doctor's office.  The POL performed the glucose test using a waived 
glucose instrument.  The results were normal; despite the clinical symptoms presented by 
the son.  No intervention was recommended by the doctor's office.  The mother was still 
concerned and doubted the results.  She took her son to the hospital emergency room to 
have the glucose confirmed on a non-waived instrument (moderate complexity test).  The 
ER results showed an elevated blood sugar and appropriate treatment was rendered.  
Because this mom had laboratory background, she was able to discern that something 
was amiss.  If she had not questioned the POL's waived instrument results, preventable 
harm could have resulted. Another example involves the use of test cards detecting fecal 
occult blood.  Some waived laboratories were found to be cutting the test cards in halves 
or thirds in order to save money.  The cards have predetermined amounts of reagent and 
cutting them alters the chemical distribution.  This will affect the patients test results.  
False negative could result in delay of diagnosis/treatment for colorectal cancer. 
 
2.  Does testing have to be as accurate as that performed in other laboratories since 
the physician is available to correlate the test results and the patient's history 
and symptoms? 
 
The CLIAC notes of the May 30-31, 2001 meeting state  ...waived tests should have 
higher accuracy standards than moderate or high complexity tests.  The importance of 
performing the tests properly to avoid adverse outcomes cannot be emphasized enough.  
All test results must be accurate and reliable in order to properly diagnose and treat 
patients regardless of where performed.  Test results must be accurate and reliable 
because all patients may not present with classic symptoms or may have numerous 
physiological problems.  In the aforementioned example, the inaccurate POL glucose test 
meant the patient did not receive appropriate treatment immediately and could have 
caused harm or death to the patient. Also tests in waived laboratories need to be accurate 
because there are no other mechanisms like quality control, testing personnel 
qualifications and training, quality assurance, etc. to ensure that there are accurate results 
and problems are identified and resolved. The CLIAC notes of the May 30-31, 2001 
meeting state further, A physician member noted accurate prothrombin time results are 
critical in an emergency room and using test results from a home-use device, which can 
be inaccurate, could lead to unnecessary transfusions or inappropriate anticoagulant 
treatment, and, Many Committee members noted these monitoring devices, designed 
for self-use by lay-users, are inappropriately used as diagnostic tools by health care 
providers.  Waived tests designed for screening are being used for diagnosis and  treatment.  The adverse outcome of a waived test result used inappropriately (for 
diagnosis rather than screening), or of an inaccurate waived test is not always apparent at 
the POL or waived facility.  ASPE, using Medicare data, did a study involving 
prothrombin times done in doctors offices (waived tests) compared to those done in 
surveyed laboratories (moderate or high complexity tests).  Many more re-admissions to 
hospitals and additional testing occurred with the patients seen in the POLs compared to 
the surveyed labs.  In addition, a study was published in the early 1990s about multiple 
deaths that occurred in nursing homes due to inaccurate glucose meter testing. 
 
 
    SURVEYOR QUESTIONS 
  CERTIFICATE OF WAIVER LABORATORIES 
 
 
 
 
Laboratory:            COW since what date: 
 
C  LIA #       State:      State Laboratory Licensure Program:  Y or N   
 
S urveyor:                                                                                         Date:          
 
E  stimated annual test volume:                                                            Number of different tests:        
 
PLEASE ANSWER EVERY QUESTION.   
 
  YES  NO  N COMMENTS  
A 
1.  Are all tests performed classified as        See the attached list. 
waived?      
493.15(c) and 493.1775(b)(3) 
2.  If the answer to #1 is NO, list the non-        
waived tests.                     493.1775(b)(3)     
3.   Does the laboratory operate in and         
perform testing in a manner that constitutes   
an imminent and serious risk to public health? 
If the answer is YES, contact the RO for 
further instructions (ASAP).         
493.1775(b)(1) 
4.  Does the laboratory have the current         
manufacturers instructions for the tests 
performed?                         493.15(e)(1) 
5.   Does the laboratory follow the current         
manufacturers instructions for the tests 
performed by:                     493.15(e)(1) 
a)  Using the appropriate specimen? 
b)  Adding the required reagents in the       
prescribed order? 
c)  Adhering to the manufacturers storage       
and handling instructions? 
d)  Using the proper expiration date for the       
storage method? 
e)  Performing the quality control?       
f)  Performing additional requirements       
defined by the CDC? 
g)  Performing function checks or       
calibration? 
h)  Performing confirmatory tests as       
required? 
i)  Reporting the patients test results with       
the terminology or in the units described 
in the package insert? 
 
  1    YES  NO  N COMMENTS  
A 
j)  Performing instrument maintenance?         
6.  Are there problems with the         
manufacturers instructions? E.g. unclear or 
complex language, etc.  Send copies of 
problem package inserts to CO.    
7. Are the testing personnel instructed to:         
a)  Retain the current manufacturers product 
insert? 
b)  Read and follow the manufacturers       
instructions in the product insert? 
c)  Document the name of the test, lot       
number, and expiration date? 
8. Is there training for the testing personnel?         
(Please note who provided the training).  
 
a)  Is the staff observed or evaluated to 
assure they can provide accurate and 
reliable testing? 
b)  Are the testing personnel shown how to       
document the patients test results? 
c)  Are the testing personnel shown how to       
identify inaccurate results and/or test 
system or device problems? 
d)  Are the testing personnel shown how to       
handle inaccurate results or device 
problems? 
e)  If training courses were developed for       
waived laboratories, would you attend? If 
NO, why not?  
f)  What type of training would you find       
helpful?   (Please describe). 
9. Are the testing personnel informed when         
theres a change in the test procedure or 
theres a new test kit? (If NO, note how the 
testing personnel learned about the new test). 
a)  If YES, is training given? (Please note 
who provided the training).  
b)  Has there been a change in  (new) testing       
personnel within the last 12 months? 
c)  Is the laboratory informed when there is a       
revision to the manufacturers product 
insert? 
d)  Are the products clearly labeled to advise       
of a revision? 
 
  2    YES  NO  N COMMENTS  
A 
10.  Have the testing personnel ever been         
asked to repeat a waived test? 
a)  If YES, was the second result different 
than the original result? 
b)  If YES, what result was used by the       
physician? 
c)  If No, was action taken to resolve the       
differences? 
11.  Does the laboratory have an         
understanding of good laboratory practices? 
a) Are patient results correlated with patient       
information? 
12.  Does the laboratory :         
a)  Check patient identification? 
b)  Collect the proper specimen for the test       
requested? 
c)  Require a requisition (or patients chart)       
before performing a test?  
d)  Maintain a log or record of laboratory       
tests performed? 
e)  Keep the patients test report in the       
patients chart? 
f)  Keep the reference laboratory results in       
the patients chart? 
13. Does the laboratory use any waived test         
kits that require additional confirmatory   
procedures? (Some rapid strep kits may 
recommend or require a throat culture if the 
patients test result is negative).  
a)  If YES, does the laboratory meet the 
additional requirements defined by CDC 
or the manufacturer? (Please write the 
name of the test and send CO a copy of 
the package insert). 
b)  If YES, are the testing personnel trained       
to perform the additional requirements?   
c)  If YES, is the laboratory sending out the       
specimen to meet the additional 
requirement?  
d)  If the specimen is sent out to meet the       
additional requirements, does the 
laboratory report results prior to receiving 
the confirmation report? 
e)  Are the results of the confirmatory test         
documented? 
 
  3    YES  NO  N COMMENTS  
A 
14.  Is the laboratory performing diagnostic         
glucose testing?  (e.g., GTT, 2 hour post-
prandial, diagnosis of diabetes, diagnosis of 
gestational diabetes).  If YES, please write the 
name of the instrument and send CO a copy 
of the package insert. 
15.  If the laboratory performs glucose,         
prothrombin, or any quantitative analyte 
waived testing, what does the laboratory do 
when the results are outside the reportable 
range of the instrument? 
a)  Repeat the test. 
b)  Notify the physician.       
c)  Draw blood and send it to a reference       
laboratory. 
d)  Send the patient to the hospital.       
e)   Other  (please describe)       
16. Does the laboratory identify questionable         
or erroneous test results for waived tests? 
a)  Instrument or device error codes       
b)  Internal (procedural) quality control       
failure 
c)  External (liquid) quality control failure       
d)  Electronic quality control failure       
e)  Proficiency testing failure       
f)  Test results dont match patients       
symptoms or history 
g)  Other (please describe)       
h)  The laboratory cannot identify erroneous       
or questionable results for waived tests. 
17.  Are the laboratorys results timely?         
18.  Is the laboratory voluntarily enrolled in         
proficiency testing?           
19.  Has the lab ever received a complaint that         
involved waived testing?  If YES,  
a)  Who submitted the complaint?  
b)  Did the laboratory investigate the       
complaint? 
c)  Does the laboratory have a mechanism       
for handling complaints? 
d)  Does the laboratory get repeat       
complaints? 
e)  Is there someone assigned to investigate       
complaints?  (Please indicate the 
complaint investigator). 
 
  4    YES  NO  N COMMENTS  
A 
20. Has the laboratory had another CLIA         
certificate prior to the current Certificate 
of Waiver?  If YES: 
a)  Indicate what type in the comment box.       
b)  Did the laboratory change certificate type       
as a plan  of correction?  
c)  Did the laboratory have condition level       
deficiencies on the inspection? 
21.  Did you give the laboratory the 668B?         
Testing Personnel          
Please check all that apply. 
Dentist 
Physician  (M.D., D.O.) 
Podiatrist (D.P.M.) 
Physicians Assistant 
Registered Nurse (R.N.) 
Nurse Practitioner 
Licensed Practical Nurse (LPN) 
Medical Technologist  (B.S.) 
Medical Laboratory Technician 
  MLT  (A.A. ) 
Medical Assistant  
Military Training 
High School Diploma 
Other (please specify) 
 
Laboratory Director:         
Dentist 
Physician  (M.D., D.O.) 
Podiatrist (D.P.M.) 
Physicians Assistant 
Registered Nurse (R.N.) 
Nurse Practitioner 
Licensed Practical Nurse (LPN) 
Medical Technologist  (B.S.) 
Medical Laboratory Technician 
  MLT  (A.A. ) 
Medical Assistant  
Military Training 
High School Diploma 
Other (please specify) 
 
 
 
  5    YES  NO  N COMMENTS  
A 
Name the tests you would still perform if         
these tests were not waived.   
 
 
 
 
 
 
 
 
 
 
 
Use this space to describe any situations where waived testing caused a problem with a patient (list the type of testing, inaccurate 
results, etc).  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  6   
 
  SURVEY TIME 
 
 
Pre-survey: 
 
 
On-site: 
 
 
Travel: 
 
 
*Post-survey: 
 
 
*The post survey time does not include the final report for RO and CO. 
 
 
Final Jan. 31, 2002 
 
  7