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[Federal Register Volume 78, Number 188 (Friday, September 27, 2013)]
[Notices]
[Pages 59704-59706]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23659]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-3111-N]

Medicare, Medicaid, and CLIA Programs; Clinical Laboratory 
Improvement Amendments of 1988 Exemption of Laboratories Licensed by 
the State of Washington

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice announces that laboratories located in and 
licensed by the State of Washington that possess a valid license under 
the Medical Test Site law, Chapter 70.42 of the Revised Code of 
Washington, are exempt from the requirements of the Clinical Laboratory 
Improvement Amendments of 1988 (CLIA) for a period of 6 years.

DATES: The exemption granted by this notice is effective from September 
27, 2013 to September 27, 2019.

FOR FURTHER INFORMATION CONTACT: Sandra Farragut, (410) 786-3531.

SUPPLEMENTARY INFORMATION:

I. Background and Legislative Authority

    Section 353 of the Public Health Service Act (PHSA), as amended by 
the Clinical Laboratory Improvement Amendments of 1988 (CLIA) (Pub. L. 
100-578), which was enacted on October 31, 1988, generally provides 
that no laboratory may perform tests on human specimens for the 
diagnosis, prevention or treatment of any disease or impairment of, or 
assessment of the health of, human beings unless it has a certificate 
to perform that category of tests issued by the Secretary of the 
Department of Health and Human Services (HHS). Under section 1861(s) of 
the Social Security Act (the Act), the Medicare program will only pay 
for laboratory services if the laboratory has a CLIA certificate. 
Section 1902(a)(9)(C) of the Act requires that state Medicaid plans pay 
only for laboratory services furnished by CLIA-certified laboratories. 
Thus, although subject to specified exemptions and exceptions, 
laboratories generally must have a current and valid CLIA certificate 
to test human specimens for medical purposes noted above to be eligible 
for payment for those tests from the Medicare or Medicaid programs. 
Regulations implementing section 353 of the PHSA are contained in 42 
CFR part 493.
    Section 353(p) of the PHSA provides for the exemption of 
laboratories from CLIA requirements in states that enact legal 
requirements that are equal to or more stringent than CLIA's statutory 
and regulatory requirements. Section 353(p) of the PHSA is implemented 
in subpart E of our regulations at 42 CFR part 493. Sections 493.551 
and 493.553 provide that we may exempt from CLIA requirements, for a 
period not to exceed 6 years, all state-licensed or -approved 
laboratories in a state if the state licensure program meets the 
specified conditions. Section 493.559 provides that we will publish a 
notice in the Federal Register when we grant exemption to an approved 
state licensure program. It also provides that the notice will include 
the following:
     The basis for granting the exemption.
     A description of how the laboratory requirements are equal 
to or more stringent than those of CLIA.
     The term of approval, not to exceed 6 years.

State of Washington's Application for CLIA Exemption of Its 
Laboratories

    The State of Washington has applied for exemption of its 
laboratories from CLIA program requirements. The State of Washington 
submitted all of the applicable information and attestations required 
by Sec.  493.551, Sec.  493.553, and Sec.  493.557 for state licensure 
programs seeking exemption of their licensed laboratories from CLIA 
program requirements.
    Examples of documents and information submitted include: a 
comparison of its laboratory licensure requirements with comparable 
CLIA condition-level requirements (that is, a crosswalk); and a 
description of the following: Its inspection process; its proficiency 
testing monitoring process; its data management and analysis system; 
its investigative and response procedures for complaints received 
against laboratories; and its policy regarding announced and 
unannounced inspections.

CMS Analysis of Washington's Application and Supporting Documentation

    To determine whether we should grant a CLIA exemption to 
laboratories licensed by a state, we review the application and 
additional documentation that the state submits to us and conducts a 
detailed and in-depth comparison of the state licensure program and 
CLIA's statutory and regulatory requirements to determine whether the 
state program meets the requirements at subpart E of part 493.
    In summary, the state generally must demonstrate that:
     It has state laws in effect that provide for a state 
licensure program that has requirements that are equal to or more 
stringent than CLIA condition-level requirements for laboratories.
     It has implemented a state licensure program with 
requirements that are equal to or more stringent than the CLIA 
condition-level requirements such that a

[[Page 59705]]

laboratory licensed by the state program would meet the CLIA condition-
level requirements if it were inspected against those requirements.
     The requirements under that state licensure program meet 
or exceed the requirements of Sec.  493.553, Sec.  493.555, and Sec.  
493.557(b) and is suitable for approval by us under Sec.  493.551. For 
example, among other things, the program would need to:
    ++ Demonstrate that it has enforcement authority and administrative 
structures and resources adequate to enforce its laboratory 
requirements.
    ++ Permit us or our agents to inspect laboratories within the 
state.
    ++ Require laboratories within the state to submit to inspections 
by us or our agents as a condition of licensure.
    ++ Agree to pay any costs associated with our activities to 
validate their state licensure program as well as the state's pro rata 
share of the general overhead to develop and implement CLIA as 
specified in Sec.  493.645(a), Sec.  493.646(b), and Sec.  493.557(b).
    ++ Take appropriate enforcement action against laboratories found 
by us or our agents out of compliance with requirements comparable to 
CLIA condition-level requirements, as specified in Sec.  493.557(b).
    As specified in our regulations at Sec.  493.555 and Sec.  
493.557(b), our review of a state licensure program includes (but is 
not necessarily limited to) an evaluation of the following:
     Whether the state's requirements for laboratories are 
equal to or more stringent than the CLIA condition-level requirements.
     The state's inspection process requirements to determine 
the following:
    ++ The comparability of the full inspection and complaint 
inspection procedures to those of CMS.
    ++ The state's enforcement procedures for laboratories found to be 
out of compliance with its requirements.
     The ability of the state to provide us with electronic 
data and reports with the adverse or corrective actions resulting from 
proficiency testing (PT) results that constitute unsuccessful 
participation in CMS-approved PT programs and with other data we 
determine to be necessary for validation review and assessment of the 
state's inspection process requirements.
     The state's agreement with us to ensure that the agreement 
obligates the state to do the following:
    ++ Notify us within 30 days of the action taken against any CLIA-
exempt laboratory that has had its licensure or approval withdrawn or 
revoked or been in any way sanctioned.
    ++ Notify us within 10 days of any deficiency identified in a CLIA-
exempt laboratory in cases when the deficiency poses an immediate 
jeopardy to the laboratory's patients or a hazard to the general 
public.
    ++ Notify each laboratory licensed by the state under its approved 
state licensure program within 10 days of a withdrawal of our approval 
of the state's licensure program, and the resulting loss of the 
laboratory's exemption from CLIA based on its licensure under that 
program.
    ++ Provide us with written notification of any changes in the 
state's licensure (or approval) and inspection requirements.
    ++ Disclose to us or our agent any laboratory's PT results in 
accordance with the state's confidentiality requirements.
    ++ Take appropriate enforcement action against laboratories that we 
or our agents find to be out of compliance with CLIA condition-level 
requirements in a validation survey, and report these enforcement 
actions to us.
    ++ Notify us of all newly licensed laboratories, and any changes in 
the specialties and subspecialties for which any laboratory performs 
testing, within 30 days.
    ++ Provide us, as requested, inspection schedules for validation 
purposes.
    In keeping with the process described above, we evaluated the 
application and supporting materials that were submitted by Washington 
State to verify that the laboratories licensed through its program will 
meet or exceed the requirements of the following subparts of part 493: 
Subpart H, Participation in Proficiency Testing for Laboratories 
Performing Nonwaived Testing; Subpart J, Facility Administration for 
Nonwaived Testing; Subpart K, Quality Systems for Nonwaived Testing, 
Subpart M, Personnel for Nonwaived Testing; Subpart Q, Inspection; and 
Subpart R, Enforcement Procedures.
    We found that Washington State's laboratory licensure program 
requirements mapped to all the CLIA condition-level requirements. Its 
licensure program's inspection process and proficiency testing 
monitoring processes were adequate. Other materials that were submitted 
demonstrated compliance with the other above-referenced requirements of 
subpart E of part 493. As a result, we concluded that the submitted 
documents supported exempting laboratories licensed under that program 
from the CLIA program requirements. Furthermore, a review of our 
validation inspections conducted by our regional office in Seattle, 
Washington, supported this conclusion.
    The federal validation inspections of CLIA-exempt laboratories, as 
specified in Sec.  493.563, were conducted on a representative sample 
basis, as well as in response to any substantial allegations of 
noncompliance (complaint inspections). The outcome of those validation 
inspections has been, and will continue to be our principal tool for 
verifying that the laboratories located in, and licensed by the state 
are in compliance with CLIA requirements.
    Our regional office in Seattle, Washington, has conducted 
validation inspections of a representative sample (approximately 5 
percent) of the laboratories inspected by the Washington State Office 
of Laboratory Quality Assurance (LQA). The validation inspections were 
primarily of the concurrent type; that is, our surveyors accompanied 
Washington State's inspectors, each inspecting against his or her 
agency's respective regulations. Analysis of the validation data 
revealed no significant differences between the state and federal 
findings. The validation surveys verified that the State of Washington 
inspection process covers all CLIA conditions applicable to each 
laboratory being inspected and also verified that the state laboratory 
licensure requirements meet or exceed CLIA condition-level 
requirements. Our validation surveys found the state inspectors highly 
skilled and qualified. The LQA inspected laboratories in a timely 
fashion; that is, all laboratories were inspected within the required 
24-month cycle. All parameters monitored by our Seattle office to date 
indicate that the State of Washington is meeting all requirements for 
approval of CLIA exemption. This federal monitoring will continue as an 
on-going process.

Conclusion

    Based on review of the documents submitted by the Washington state 
licensure program pursuant to the requirements of subpart E of part 
493, as well as the outcome of the validation inspections conducted by 
our regional office in Seattle, we find that the State of Washington's 
licensure program meets the requirements of 42 CFR 493.551(a), and 
that, as a result, we may exempt from CLIA program requirements all 
state-licensed or -approved laboratories.
    Approval of the CLIA exemption for laboratories located in and 
licensed by the State of Washington laboratory licensure program is 
subject to removal if we determine that the outcome of a

[[Page 59706]]

comparability review or a validation review inspection is not 
acceptable, as described under Sec.  493.573 and Sec.  493.575, or if 
the State of Washington fails to pay the required fee every 2 years as 
required under Sec.  493.646.

Laboratory Data

    In accordance with our regulations at Sec.  493.557(b)(8), the 
approval of this exemption for laboratories located in and licensed by 
the State of Washington is conditioned on the State of Washington's 
continued compliance with the assertions made in its application, 
especially the provision of information to us about changes to a 
laboratory's specialties or subspecialties based on the state's survey, 
and changes to a laboratory's certification status, such as a change 
from a CLIA certificate of compliance to a CLIA certificate of waiver.

Required Administrative Actions

    CLIA is a user-fee funded program. The registration fee paid by 
laboratories is intended to cover the cost of the development and 
administration of the program. However, when a state's application for 
exemption is approved, we do not charge a fee to laboratories in the 
state. The state's share of the costs associated with CLIA must be 
collected from the state, as specified in Sec.  493.645.
    The State of Washington must pay for the following:
     Costs of federal inspections of laboratories in the state 
to verify that Washington State's laboratory licensure program 
requirements are equivalent to or more stringent than those in the CLIA 
program, and that they are enforced in an appropriate manner. The 
average federal hourly rate is multiplied by the total hours required 
to perform federal validation surveys within the state.
     Costs incurred for federal surveys, including 
investigations of complaints that are substantiated. We will bill the 
State of Washington on a semiannual basis.
     The State of Washington's proportionate share of the costs 
associated with establishing, maintaining, and improving the CLIA 
computer system, based on the portion of those services from which the 
State of Washington received direct benefit or which contributed to the 
CLIA program in the state. Thus, the State of Washington is being 
charged for a portion of our direct and indirect costs of administering 
the CLIA program. Such costs will be incurred by CMS, the Centers for 
Disease Control and Prevention (CDC), the Food and Drug Administration 
(FDA) and contractors working on behalf of these respective agencies.
    To estimate the State of Washington's proportionate share of the 
general overhead costs to develop and implement CLIA, we determined the 
ratio of laboratories in the state to the total number of laboratories 
nationally. Approximately 1.5 percent of the registered laboratories 
are in the State of Washington. We determined that a corresponding 
percentage of the applicable CMS, CDC, FDA, and their respective 
contractor costs should be borne by the State of Washington.
    The State of Washington has agreed to pay the state's pro rata 
share of the anticipated overhead costs and costs of actual validation 
(including complaint investigation surveys). A final reconciliation for 
all laboratories and all expenses will be made. We will reimburse the 
state for any overpayment or bill it for any balance.

II. Approval

    In light of the foregoing, we grant approval of the State of 
Washington's laboratory licensure program under subpart E. All 
laboratories located in and licensed by the State of Washington under 
the Medical Test Site law, Chapter 70.42 of the Revised Code of 
Washington, are CLIA-exempt for all specialties and subspecialties 
until September 27, 2019.

    Authority:  Section 353(p) of the Public Health Service Act (42 
U.S.C. 263a).

    Dated: August 8, 2013.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2013-23659 Filed 9-26-13; 8:45 am]
BILLING CODE 4120-01-P
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