Federal Register / Vol. 62, No. 168 / Friday, August 29, 1997 / Notices 45815

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Centers for Disease Control and

Prevention

Health Care Financing Administration

[HSQ–219–GNC]

RIN 0938–AG87

CLIA Program; Fee Schedule Revision

AGENCY: Health Care Financing

Administration (HCFA), Centers for

Disease Control and Prevention (CDC),

HHS.

ACTION: General Notice with comment

period.

SUMMARY: This notice updates the

certificate fees for laboratories

established under the Clinical

Laboratory Improvement Amendments

of 1988 (CLIA) consistent with the

methodology set forth in 42 CFR part

493. Section 353(m) of the Public Health

Service Act requires that fees be

collected to recoup costs of general

administration of the CLIA Program. By

economizing at every opportunity, the

CLIA program has managed to maintain

the fees established in 1992 and has

absorbed all increases in costs.

Revisions to the fees are necessary

because the current fees are no longer

sufficient to support the administration

of the CLIA program. This restructuring

of fees will more equitably distribute

fees across all sizes and complexity of

laboratories. For purposes of

simplification, this notice announces a

flat fee of $100 for a certificate of

registration.

DATES: Effective Date: The updated fee

schedule is effective for certificate fees

assessed as of January 1, 1998, unless

we announce changes in response to

public comments in a subsequent

notice.

Comments: Comments will be

considered if we receive them at the

appropriate address, as provided below,

no later than 5 p.m. on October 28,

1997. We will not consider comments

concerning any other issue.

ADDRESSES: Mail written comments (1

original and 3 copies) to the following

address: Health Care Financing

Administration, Department of Health

and Human Services, Attention: HSQ–

219-GNC, P.O. Box 26676, Baltimore,

MD 21207.

If you prefer, you may deliver your

written comments (1 original and 3

copies) to one of the following

addresses:

Room 309–G, Hubert H. Humphrey

Building, 200 Independence Avenue,

SW., Washington, DC 20201, or

Room C5–09–26, 7500 Security

Boulevard, Baltimore, MD 21244–

1850.

Because of staffing and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission. In

commenting, please refer to file code

HSQ–219–GNC. Comments received

timely will be available for public

inspection as they are received,

generally beginning approximately 3

weeks after publication of a document,

in Room 309–G of the Department’s

offices at 200 Independence Avenue,

SW., Washington, DC, on Monday

through Friday of each week from 8:30

a.m. to 5 p.m. (phone: (202) 690–7890).

Copies: To order copies of the Federal

Register containing this document, send

your request to: New Orders,

Superintendent of Documents, P.O. Box

371954, Pittsburgh, PA 15250–7954.

Specify the date of the issue requested

and enclose a check or money order

payable to the Superintendent of

Documents, or enclose your Visa or

Master Card number and expiration

date. Credit card orders can also be

placed by calling the order desk at (202)

512–1800 or by faxing to (202) 512–

2250. The cost for each copy is $8. As

an alternative, you can view and

photocopy the Federal Register

document at most libraries designated

as Federal Depository Libraries and at

many other public and academic

libraries throughout the country that

receive the Federal Register.

This Federal Register document is

also available from the Federal Register

online database through GPO Access, a

service of the U.S. Government Printing

Office. Free public access is available on

a Wide Area Information Server (WAIS)

through the Internet and via

asynchronous dial-in. Internet users can

access the database by using the World

Wide Web; the Superintendent of

Documents home page address is http:/

/www.access.gpo.gov/suldocs/, by

using local WAIS client software, or by

telnet to swais.access.gpo.gov, then

login as guest (no password required).

Dial-in users should use

communications software and modem

to call (202) 512–1661; type swais, then

login as guest (no password required).

FOR FURTHER INFORMATION CONTACT:

Judith Yost (410) 786–3531.

SUPPLEMENTARY INFORMATION:

I. Background

On October 31, 1988, the Congress

enacted the Clinical Laboratory

Improvement Amendments of 1988

(CLIA), Pub. L. 100–578. CLIA replaced

in its entirety section 353 of the Public

Health Service (PHS) Act and applies to

every laboratory in the United States

and its territories that examines human

specimens for the diagnosis, prevention,

or treatment of any disease or

impairment of, or the assessment of the

health of, human beings subject to the

requirements established by the

Department of Health and Human

Services (HHS). These requirements

apply whether or not a laboratory

receives reimbursement for services,

participates in the Medicare or

Medicaid program, and whether or not

it tests specimens in interstate

commerce. Section 353 of the PHS Act

requires HHS to establish certification

requirements for any laboratory that

performs tests on human specimens. An

amendment to the Social Security Act

also requires laboratories to meet the

CLIA requirements if they choose to

participate in the Medicare or Medicaid

programs.

On February 28, 1992, we published

regulations (57 FR 7002) that contain

the CLIA standards that all laboratories

must meet. Also on that date, we issued

regulations (57 FR 7188) concerning

CLIA fees and their collection. Section

353(m) of the PHS Act requires HHS to

impose fees sufficient to cover the

general costs of administration incurred

by HHS in implementing the CLIA

program.

The preamble to the final regulations

published on February 28, 1992, stated

that, as experience was gained from

administering the CLIA program, the fee

schedules would be revised as

necessary. The regulations themselves

provide for periodic updating

(§ 493.638(b)).

The statute requires that CLIA be a

self-funded program with two separate

types of fees: (1) Certificate fees and (2)

additional fees for laboratory specific

monitoring activities. Of these two types

of fees, this notice revises only

certificate fees, which is the only type

of fee authorized by the statute to cover

general administrative program costs.

• Certificate fee means a fixed charge

for the issuance and renewal of

certificates. Section 353(b) of the PHS

Act requires that every laboratory have

in effect a certificate issued by the

Secretary applicable to the nature and

scope of tests performed. The categories

or types of certificates are described in

the regulations at Part 493. Section

353(m) of the PHS Act requires that

certificate fees must be sufficient to

cover the Federal administrative costs of

the program. These Federal

administration costs to be recouped

include costs incurred by HCFA, the

Centers for Disease Control and

Prevention (CDC) and contractors for

both agencies. Administrative activities
45816 Federal Register / Vol. 62, No. 168 / Friday, August 29, 1997 / Notices

include locating and registering

laboratories, issuing and reissuing

certificates, developing regulatory

standards, evaluating States’ requests for

exemption and accrediting

organizations’ petitions for deemed

status, reviewing, approving and

monitoring proficiency testing

programs, evaluating which procedures,

tests, or examinations meet the criteria

for inclusion in the appropriate

complexity category, carrying out

special public health research studies

required by law, providing public

information, training surveyors,

developing and maintaining a

comprehensive CLIA data system, and

developing and overseeing the fiscal

management of the program.

This notice updates the fees

associated with issuance of certificates,

consistent with the applicable statutory

requirements and regulations.

Certificate fees, as required in part 493

subpart F, support the Federal CLIA

administration activities.

• Additional fees are the fees

associated with the inspection of

laboratories found in § 493.643 of the

CLIA regulation. These fees are to be

used for the costs associated with the

inspection of laboratories and to assess

compliance with CLIA requirements.

This notice does not increase these fees.

II. Current Types of Certificates and

Fees

Laboratories must pay the following

applicable fees biennially depending on

the type of certificate they receive.

(These fees and certificates do not apply

to laboratories licensed in States which

are CLIA-exempt under subpart E of this

part. In this case the State pays a fee for

CLIA administrative costs.)

• Certificate of Waiver (§ 493.638). A

laboratory that performs only tests

categorized as waived must obtain a

certificate of waiver. The certificate of

waiver fee, established in 1992, is $100.

• Certificate for Provider-Performed

Microscopy (PPM) Procedures

(§ 493.638). A certificate for PPM

procedures is required for a laboratory

that performs:

1. Only tests specified as PPM

procedures, or

2. Only tests specified as PPM

procedures and tests categorized as

waived.

The certificate fee for PPM

procedures, set in 1993, is $150, which

is $50 more than the fee for certificates

of waiver and Schedules LVA, A, B, and

C laboratories. (See Section IV Volume

and Scope of Laboratory Services.) This

fee reflects the additional expenses

involved in reviewing moderate

complexity tests to determine if they

meet the criteria for classification as

PPM procedures. (NOTE: This

subcategory was first established in a

rule published January 19, 1993, (58 FR

5212) and subsequently revised in a rule

published April 24, 1995 (60 FR

20035).)

• Certificate of Registration (part 493,

subparts B and C)

The CLIA regulations, issued on

February 28, 1992, and revised April 24,

1995, describe the fees charged for a

certificate of registration. Every

laboratory is required to obtain a

certificate of registration (subparts B and

C) except for the following: laboratories

performing only those tests categorized

as waived; laboratories performing only

tests specified as PPM procedures or

performing PPM procedures and waived

tests; and laboratories located in and

licensed by a State which has a CLIA

exemption, as specified in subpart E. In

the 1992 regulations the cost to the

laboratory for the certificate of

registration varied with the volume and

specialties of services of the laboratory.

The fees for the certificate of

registration, established by the February

28, 1992 regulations, are: $100 (Small

volume laboratories), $350 (Medium

volume laboratories), and $600 (Large

volume laboratories). (See Table I)

• Certificate of Accreditation

(§ 493.638). Any laboratory performing

testing beyond waived and PPM

procedures may request a certificate of

accreditation based on its accreditation

by a HCFA approved accrediting body.

The laboratory must initially pay a fee

for a certificate of registration. The

certificate of registration fee is based on

the laboratory’s volume and number of

specialties. The certificate of registration

is valid for a period of no more than 2

years or until such time as the

laboratory shows proof of compliance

with the requirements of the

accreditation organization. Once

compliance is established through the

accreditation program, the laboratory

must pay the appropriate certificate fee

based on volume and number of

specialties, prior to the issuance of the

certificate of accreditation. The fees, set

in 1992, for these certificates are: $100

(Small volume laboratories), $350

(Medium volume laboratories), and

$600 (Large volume laboratories).

• Certificate of Compliance

(§ 493.638). All laboratories performing

testing beyond waived and PPM

procedures and requesting a certificate

of compliance must initially pay a fee

for a certificate of registration. The

certificate of registration fee is based on

the laboratory’s volume and number of

specialties. The certificate of registration

is valid for no more than 2 years or until

such time as an inspection by HCFA or

a HCFA agent establishes compliance

with the CLIA requirements. Once

compliance is established, the

laboratory must pay the appropriate

certificate fee based on volume and

number of specialties, prior to the

issuance of the certificate of

compliance. The fees for these

certificates, set in 1992, are: $100 (Small

volume laboratories), $350 (Medium

volume laboratories), and $600 (Large

volume laboratories).

III. Revisions to Certificates

If a laboratory issued a certificate,

changes its name, location, or meets any

conditions specified in § 493.639 of our

regulations before the certificate

expiration date, the administrative fee to

issue the revised certificate is $50. (The

categorization of laboratories by scope

and volume (see below) was discussed

in detail in the preamble to the February

28, 1992 rule (at page 7194) and is

specified in our regulations at

§ 493.643(c).)

IV. CLIA Schedules Defined by Number of

Specialties and Volume (See Table II)

Section 493.643(c), lists the schedules

based on the laboratory’s number of

specialties and volume of testing

(including PPM procedures but

excluding tests performed for quality

control, quality assurance, and

proficiency testing purposes). These

schedules, as set forth below, are used

to establish the certificate fees, as well

as fees associated with monitoring

activities.

• Schedule A Low Volume (LVA). The

laboratory performs not more than 2,000

laboratory tests annually.

• Schedule A. The laboratory

performs tests in no more than three

specialties of service with a total annual

volume of more than 2,000, but not

more than 10,000 laboratory tests.

• Schedule B. The laboratory

performs tests in at least four specialties

of service with a total annual volume of

more than 2,000, but not more than

10,000 laboratory tests.

• Schedule C. The laboratory

performs tests in no more than three

specialties of service with a total annual

volume of more than 10,000, but not

more than 25,000 laboratory tests.

• Schedule D. The laboratory

performs tests in at least four specialties

with a total annual volume of more than

10,000, but not more than 25,000

laboratory tests.

• Schedule E. The laboratory

performs more than 25,000, but not

more than 50,000 laboratory tests

annually.

• Schedule F. The laboratory

performs more than 50,000, but not
Federal Register / Vol. 62, No. 168 / Friday, August 29, 1997 / Notices 45817

more than 75,000 laboratory tests

annually.

• Schedule G. The laboratory

performs more than 75,000, but not

more than 100,000 laboratory tests

annually.

• Schedule H. The laboratory

performs more than 100,000, but not

more than 500,000 laboratory tests

annually.

• Schedule I. The laboratory performs

more than 500,000, but not more than

1,000,000 laboratory tests annually.

• Schedule J. The laboratory performs

more than 1,000,000 laboratory tests

annually.

For purposes of assessing certificate

fees in 1992, we considered laboratories

in Schedules LVA through C as small

volume ($100 fee), in Schedules D

through G as medium volume ($350

fee), and Schedules H through J as large

volume ($600 fee).

V. Need for Increased Fees

After careful review of CLIA

administration costs and revenues

generated from the current certificate

fees, we have concluded that current

certificate fees are not sufficient to

satisfy the requirements of section 353

of the PHS Act. According to our

regulations at § 493.638, the total of fees

collected must be sufficient to cover the

general costs of administering the CLIA

program. The total cost of the CLIA

program is estimated to be

approximately $37.5 million annually.

CLIA generates about $25 million in

total revenue annually, through a

combination of certificate fees and

additional fees, leaving a projected

shortfall of approximately $12.5 million

annually.

The shortfall in revenue is the result

of two factors. First, more than half of

all registered laboratories now pay fees

based on their performing only waived

tests or performing only PPM

procedures, or both. When the initial

fees were established in February 1992,

there were no national data available on

the number or types of testing

performed. We projected that only 15

percent of all laboratories would have a

certificate of waiver, and the PPM

procedures category had not yet been

established. Second, our revenue

projections were based on an initial

estimate of 180,000 to 250,000

registered laboratories. In fact, less than

150,000 laboratories are currently

registered. This number does not

include laboratories in CLIA exempt

States.

This shortfall has been exacerbated by

the lack of appropriations for start up

costs at the inception of the program in

1988. As a result, we have taken a

number of steps to curtail CLIA costs

and administrative activities in order to

meet the statutory mandate which

requires CLIA revenues to cover the

costs of administering the program.

These steps have included:

implementing survey efficiencies,

improving the fee collection process,

limiting or postponing CLIA research

projects, restricting hiring of additional

staff and delaying some other Federal

administrative activities. Overall

Federal administrative costs have been

reduced significantly by decreasing staff

positions and reducing costs for travel,

printing, subscriptions, and training.

Even though we have reduced

administrative costs, a portion of CLIA’s

administrative expenditures remains

fixed and cannot be reduced without

seriously undermining the effectiveness

of the program. These costs are

associated with activities such as:

evaluating test systems for appropriate

complexity categorization under CLIA;

revising survey procedures, such as

instituting the Alternate Quality

Assessment Survey (AQAS); providing

training and consultation to States,

other Federal agencies, professional

organizations, and laboratories; mailing

information and application materials to

laboratories; and operating and

maintaining the accounting and data

systems needed to provide accurate and

timely information about laboratory

registration and about CLIA receipts and

expenses. Other costs are those

associated with collecting unpaid fees

and administration of the enforcement

process.

In order to comply with statutory

requirements requiring that CLIA be

self-funded, we have already made

substantial efforts to decrease Federal

administrative costs. Now, we must also

seek additional revenues within the

authority of the statute and existing

regulations to eliminate an anticipated

CLIA shortfall.

While this increase in fees will have

a varying impact on laboratories,

depending on the size and volume of

testing performed and other market

place factors, it will ultimately provide

for a more effective and efficient

management of the CLIA program and

be a cost effective investment. For

example, research projects will enable

us to identify, expand and develop

innovative, less burdensome survey

processes, appropriate personnel

qualifications, effective quality control

requirements, and could ultimately

reduce costs to individual laboratories.

VI. Revised Fees

The CLIA regulations require

laboratories to pay a fee for the issuance

of a CLIA certificate. In updating the

certificate fee levels to meet statutory

revenue requirements, the methodology

set forth in § 493.638(b) has been

retained. This is consistent with the

intent to allocate fees to avoid any

undue burden and to maintain site

neutrality among all laboratories. This

means that laboratories performing

similar types and volumes of testing

despite the location of testing have the

same fees imposed upon them.

Currently, there are three certificate fees

for small, medium and large volume

laboratories. This notice sets forth a

$150 certificate fee for Schedules LVA,

A and B laboratories. It also establishes

eight other certificate fees based on

volume differences in laboratories.

Registration Fee—Currently, a

laboratory pays the same amount for a

certificate of registration and its

certificate of compliance or certificate of

accreditation. Schedules LVA, A, B, and

C laboratories pay $100. Schedules D, E,

F, and G laboratories pay $350; and

Schedules H, I, and J laboratories pay

$600. To be consistent, a set registration

fee of $100 will be charged to every

laboratory applying for a certificate of

accreditation or certificate of

compliance. Therefore, this notice

provides for a reduction in certificate of

registration fees for Schedules D

through J laboratories. The fee for

Schedules LVA, A, B, and C laboratories

will remain $100. (See Table I). We

invite comments if there are other

alternatives which might be adopted in

place of this flat registration fee.

Fee for Revised Certificates—The

regulations require laboratories to

provide notification of certain changes

such as name, location, director, and

deleting or adding services as outlined

in § 493.639. Prior to the expiration of

the certificate, these changes require

payment of a fee for the issuance of a

revised certificate. Based on the costs

involved to issue a revised certificate,

this fee will increase from $50 to $75.

It should be noted that, to date, no fees

have been charged for issuing revised

certificates, due to changes in the CLIA

program such as the addition of PPM

procedures; categorization of additional

waived tests and revisions to other

federal regulations pertaining to

laboratory ownership.

Biennial Certificate Fees—The statute

requires fees be imposed to cover the

costs of administering the CLIA

program. Even though significant cost

reductions in the program have already

occurred, the certificate fees must be

increased to maintain program integrity.

In order to equitably distribute the

biennial certificate fees, the average

annual testing volume for laboratories in
45818 Federal Register / Vol. 62, No. 168 / Friday, August 29, 1997 / Notices

Schedules LVA through J were

considered. Table III in this section lists

average annual testing volumes for the

various schedules of laboratories.

The regulations at § 493.643(c) require

that certificate fees be based on the

‘‘number of specialties and volume of

testing.’’ It was determined that an

equitable manner to spread costs while

conforming to regulatory requirements

would be to set certificate fees for

Schedules C through J laboratories on an

average per-test basis. Fees for

Schedules LVA, A, and B laboratories

would be set at a minimum amount—

$150. Use of this basis to determine fees

is expected to result in a more

appropriate allocation of cost across all

fee schedules. (See Table III).

Economies of scale among

laboratories are accounted for by

applying reductions in the per-test rates

as the number of specialties and volume

of a laboratory increases. New fees for

laboratory Schedules C through J are

calculated by multiplying the average

testing volume by the corresponding

per-test rate. This will result in a fairer

allocation of costs than the current flat

fees for small, medium and large

laboratories. The revised fees are

summarized below.

• Certificate of Waiver (§ 493.638).

The biennial fee for this certificate is

being increased from $100 to $150. This

increase is necessary to cover added

administrative costs to the CLIA

program as more tests are waived.

Laboratories may perform these tests at

any volume and pay only $150

biennially.

• Certificate for Provider-Performed

Microscopy (PPM) Procedures

(§ 493.638). The biennial fee for the

certificate is being increased from $150

to $200. This increase in fees is required

to cover administrative costs associated

with this subcategory of testing. This

certificate allows a laboratory to

conduct both PPM procedures and

waived tests, at any volume and pay no

other fee.

• Certificate of Compliance and

Certificate of Accreditation (§ 493.638).

• Schedule A Low Volume. If the

laboratory performs not more than 2,000

laboratory tests annually, the biennial

certificate fee will be $150.

• Schedule A. If the laboratory

performs tests in no more than three

specialties of service with a total annual

volume of more than 2,000, but not

more than 10,000 laboratory tests, the

biennial certificate fee will be $150.

• Schedule B. If the laboratory

performs tests in at least four or more

specialties of service with a total annual

volume of not more than 10,000

laboratory tests, the biennial certificate

fee will be $150.

• Schedule C. If the laboratory

performs tests in no more than three

specialties of service with a total annual

volume of more than 10,000, but not

more than 25,000 laboratory tests, the

biennial certificate fee will be $430.

• Schedule D. If the laboratory

performs tests in at least four or more

specialties with a total annual volume of

more than 10,000, but not more than

25,000 laboratory tests, the biennial

certificate fee will be $440.

• Schedule E. If the laboratory

performs more than 25,000, but not

more than 50,000 laboratory tests

annually, the biennial certificate fee will

be $650.

• Schedule F. If the laboratory

performs more than 50,000, but not

more than 75,000 laboratory tests

annually, the biennial certificate fee will

be $1,100.

• Schedule G. If the laboratory

performs more than 75,000, but not

more than 100,000 laboratory tests

annually, the biennial certificate fee will

be $1,550.

• Schedule H. If the laboratory

performs more than 100,000, but not

more than 500,000 laboratory tests

annually, the biennial certificate fee will

be $2,040.

• Schedule I. If the laboratory

performs more than 500,000, but not

more than 1,000,000 laboratory tests

annually, the biennial certificate fee will

be $6,220.

• Schedule J. If the laboratory

performs more than 1,000,000

laboratory tests annually, the biennial

certificate fee will be $7,940. The

revised certificate fees in schedule C

through J are based on the average

annual number of tests performed.

The following examples illustrate

how these fees are determined:

• The average annual test volume for

laboratories in Schedule D is 16,445

tests each year. The certificate fee,

rounded to the nearest $10, for those

laboratories is $0.0269 times 16,445

annual tests, or $440.

• Similarly, the average annual test

volume for Schedule J laboratories is

2,886,393. At a per-test rate of $0.00275,

Schedule J laboratories will pay a

biennial certificate fee, rounded to the

nearest $10, of $7,940.

TABLE I.—REDUCTIONS IN MOST REGISTRATION FEES

Type of lab Current registration fee

Reduction in registration feeNew registration

fee

Waived ........................................................................................................................ N/A N/A N/A

PPM ............................................................................................................................ N/A N/A N/A

Low Vol A ................................................................................................................... $100 $0 $100

Schedule A ................................................................................................................. 100 0 100

Schedule B ................................................................................................................. 100 0 100

Schedule C ................................................................................................................. 100 0 100

Schedule D ................................................................................................................. 350 250 100

Schedule E ................................................................................................................. 350 250 100

Schedule F ................................................................................................................. 350 250 100

Schedule G ................................................................................................................. 350 250 100

Schedule H ................................................................................................................. 600 500 100

Schedule I .................................................................................................................. 600 500 100

Schedule J .................................................................................................................. 600 500 100

TABLE II.—CLIA LABORATORY SCHEDULE

Type of lab Number of specialties Annual test volume Current biennial

certificate fee

New biennial certificate fee

Waived .......................... N/A ................................ N/A ........................................................................ $100 $150

PPM ............................... N/A ................................ N/A ........................................................................ 150 200
Federal Register / Vol. 62, No. 168 / Friday, August 29, 1997 / Notices 45819

TABLE II.—CLIA LABORATORY SCHEDULE—Continued

Type of lab Number of specialties Annual test volume Current biennial

certificate fee

New biennial certificate fee

Low Vol A ...................... N/A ................................ Less than 2,000 .................................................... 100 150

Sch. A ............................ 3 or Fewer ..................... 2,000–10,000 ........................................................ 100 150

Sch. B ............................ 4 or More ...................... 2,000–10,000 ........................................................ 100 150

Sch. C ........................... 3 or Fewer ..................... 10,001–25,000 ...................................................... 100 430

Sch. D ........................... 4 or More ...................... 10,001–25,000 ...................................................... 350 440

Sch. E ............................ N/A ................................ 25,001–50,000 ...................................................... 350 650

Sch. F ............................ N/A ................................ 50,001–75,000 ...................................................... 350 1,100

Sch. G ........................... N/A ................................ 75,001–100,000 .................................................... 350 1,550

Sch. H ........................... N/A ................................ 100,001–500,000 .................................................. 600 2,040

Sch. I ............................. N/A ................................ 500,001–1,000,000 ............................................... 600 6,220

Sch. J ............................ N/A ................................ Greater than 1,000,000 ........................................ 600 7,940

TABLE III.—CLIA LABORATORIES BY TESTING VOLUME

Type of lab Current biennial

cert. fee

Number of labs as

of 3/96

Average annual

testing volume Biennial per test rate New biennial cert.fee

Waived ................................................ $100 70948 N/A N/A $150

PPM .................................................... 150 26707 N/A N/A 200

Low Vol A ........................................... 100 18307 852 N/A 150

Sch. A ................................................. 100 11204 4911 N/A 150

Sch. B ................................................. 100 2864 5509 N/A 150

Sch. C ................................................. 100 3599 15969 $0.027 430

Sch. D ................................................. 350 1840 16445 0.0269 440

Sch. E ................................................. 350 2990 35928 0.0181 650

Sch. F ................................................. 350 1417 61669 0.0179 1,100

Sch. G ................................................. 350 938 87145 0.0178 1,550

Sch. H ................................................. 600 3566 226237 0.0090 2,040

Sch. I ................................................... 600 988 711213 0.00875 6,220

Sch. J .................................................. 600 1058 2886393 0.00275 7,940

VII. Comment Opportunities and

Alternatives Considered

We are publishing this as a general

notice with opportunity to comment

because it relates only to the application

of § 493.638 by the agency, and is

limited to the issue of the amount of the

CLIA certificate fee. While we will be

accepting public comment on this

notice, a fee increase is required by

statute because section 353(m)(3)(A) of

the PHS Act mandates that certificate

fees cover the cost of general CLIA

program administration. Moreover, we

believe this fee increase is consistent

with the methodology set forth in our

regulations at §§ 493.638 and 493.649.

We will consider all comments

received within 60 days of the date of

publication of this notice, and if

necessary, we may revise the certificate

fees laid out in this notice based on

issues raised by commenters. Other

alternatives to the changes in fee

schedules may exist, and we will

consider options suggested by

commenters. If we determine that

changes in the certificate fees are

required in response to public

comments, we will announce the

changes in a subsequent notice.

Otherwise, the certificate fees

announced in this notice will become

effective on January 1, 1998.

We considered several options before

establishing the certificate fees. The first

option we considered was to establish a

single registration and certificate fee for

all laboratories, regardless of their size.

This option was first presented in the

proposed rule on CLIA program fees in

May 1990 (55 FR 31758). After further

discussion and consideration of public

comments, it was rejected because a

single certificate fee would create an

unfair burden on small laboratories.

The second option we considered was

to retain separate registration and

certificate fees for small, medium, and

large laboratories, using the existing size

categories; that is, for purposes of

assessing fees, we considered

laboratories in Schedules LVA through

C as small volume, in Schedules D

through G as medium volume, and in

Schedules H through J as large volume.

We dismissed this option because, in

order to generate adequate revenue, the

increase in fees from one category to

another would be too extreme.

Laboratories with nearly identical test

volumes could, under this option, pay

extremely disparate fees.

We also considered basing certificate

fees on each laboratory’s annual

revenue, but dismissed this option

because accurate information regarding

revenues for each laboratory is not

readily available. Therefore, after careful

evaluation of these options, it was

determined that a set fee would be

assessed for certificates of waiver, PPM

procedures, registration and Schedules

LVA, A and B laboratories. Certificate of

compliance and certificate of

accreditation fees, for Schedules C

through J laboratories, are based on the

average annual test volume and number

of specialties. This was the most

equitable and practical method for

determining fees. This approach has the

merit of assessing larger fees to large

volume laboratories, while setting their

cost per test performed at a lower rate

than that of smaller laboratories to

acknowledge economies of scale. This

approach is based on the fee

methodology already set forth in the

CLIA regulations.

We will continue to review these

certificate fees and may adjust the fee

amounts in the future as additional

experience in program implementation

is gained. We are considering whether

to establish a mechanism to adjust fees

periodically for inflation and invite

specific suggestions on mechanisms,

including specific indices, which could

be used to accommodate adjustments
45820 Federal Register / Vol. 62, No. 168 / Friday, August 29, 1997 / Notices

based on inflation and changes to the

program. Any future changes in the fees

will be preceded by an announcement

in the Federal Register.

VIII. Impact Analysis

A. Regulatory Impact Statement

We generally prepare a regulatory

flexibility analysis that is consistent

with the Regulatory Flexibility Act

(RFA) (5 U.S.C. 601 through 612) unless

the Secretary certifies that a final rule

will not have a significant economic

impact on a substantial number of small

entities. For purposes of the RFA, all

laboratories are considered to be small

entities. Individuals and States are not

included in the definition of a small

entity. Although this notice would not

have a significant economic impact on

a substantial number of small entities,

we are preparing the following

voluntary regulatory flexibility analysis.

This notice revises the fees for all

CLIA certificates. The effect of this

notice will vary widely among

laboratories. This notice is projected to

generate certificate fees of $50 million

on a biennial basis or $25 million

annually.

Section 353(m) of the PHS Act, as

amended by CLIA, requires HHS to

impose fees for the issuance and

renewal of certificates and for

determining program compliance. The

statute requires that all certificate

holders share in the costs that the

government incurs in administering the

CLIA program. The statute states that

the fees imposed vary by group or

classification of laboratory, based on

such considerations as the Secretary

determines are relevant. Hence, the

imposition of fees is not a discretionary

action on the part of HHS or HCFA.

The CLIA fee collection rule,

published on February 28, 1992,

established 12 classifications of

laboratories based on volume and scope

of services. (A thirteenth schedule,

certificate for PPM procedures, was

added January 19, 1993.) These

classifications are unchanged by this

notice. Previously, laboratories applying

for certificate of waiver or certificate of

PPM procedures paid a set fee.

Laboratories applying for certificates of

compliance or accreditation paid one of

three registration and certificate fees

determined by number of specialties

and volume of services.

In developing the CLIA regulations

and implementation policies, we were

cognizant of the costs and attempted to

avoid unnecessary burden on

laboratories due to unreasonable costs of

regulation, particularly on small

providers in rural areas. The graduated

fee amounts also were adopted in order

to avoid any undue burden on small

laboratories and represented our best

attempt, using the limited data available

at the time, to apportion the estimated

costs of administering CLIA while

maintaining site neutrality among the

projected universe of laboratories.

In the comprehensive regulatory

impact analysis of the February 28,

1992, regulations implementing CLIA,

we presented several assumptions

regarding the universe of laboratories

and the projected distribution of

laboratories by certificate fee category.

Our most conservative assumption

estimated a universe of 180,000

laboratories, with 50 percent of the

laboratories paying the lowest fee of

$100 by virtue of being classified as

waived or small, and 50 percent paying

either $350 or $600, depending on

whether they were classified as medium

or large.

Our 1992 projections have proven to

be incorrect. At that time, there was no

way to accurately predict that the total

number of laboratories registering under

CLIA would fall short of our estimate,

and the number of waived and small

laboratories would exceed our

projection. Recent data indicate that

approximately 90 percent of the

registered laboratories pay minimum

fees because they hold certificates of

waiver, PPM procedures, or are

categorized as small based on volume of

testing. The remaining 10 percent

(Schedules C through J) have average

annual testing volumes greater than

10,000.

Current total CLIA revenues generated

are approximately $25 million annually

and are not sufficient to fully support

the continued operation of the CLIA

program and retain the intended goals of

the program. Even with the reduction in

administrative activities, we estimate

that the cost of the program will be

approximately $37.5 million annually or

$75 million biennially. After enactment

of this certificate fee schedule, we

estimate that annual CLIA revenues,

through a combination of certificate fees

and additional fees, will maintain the

viability of the program.

Once this notice is effective, there

will be a set fee for certificates of

registration, waiver, PPM procedures

and the certificates for Schedules LVA,

A and B laboratories. For Schedules C

through J laboratories, the certificate fee

changes in this notice result in increases

in fee amounts from one schedule to

another, based on test volume. These

changes also retain the policy of

allowing the laboratories doing the least

amount of testing to pay the lowest

certificate fee necessary to cover the

costs of implementing the CLIA

requirements. This is a minimal change

because laboratories holding a

certificate of waiver, certificate for PPM

procedures, or laboratories falling in

Schedules LVA through B will each see

an increase of only $50 over a 2 year

period, amounting to less than $.07 per

day.

Currently, laboratories pay $100,

$350, or $600 for a certificate of

registration, depending on their volume

of testing. The new certificate of

registration fee for all laboratories will

be $100, regardless of testing volume.

We believe this approach is in keeping

with our policy of attempting to

minimize fee increases for laboratories

performing a smaller volume of testing,

and at the same time, simplifies the

registration process.

A certificate of registration allows the

laboratory to begin performing testing

before compliance is assessed. We will

maintain the policy of not requiring a

certificate of registration for laboratories

seeking a certificate of waiver or a

certificate for PPM procedures;

therefore, these laboratories’ will not

have to pay a certificate of registration

fee. We will assess these laboratories

fees biennially only for their respective

certificate of waiver or certificate for

PPM procedures.

We are soliciting comments on

whether assessing even a new minimal

$100 registration fee for laboratories

seeking a certificate of compliance or

certificate of accreditation creates a

barrier into the market place. If so,

specifically how do such fees create a

barrier into the market place?

When we examined total fees related

to the volume of tests performed, we

concluded that disproportionally small

fees were being collected from large

laboratories. Under the current

certificate fees, laboratories holding a

certificate of waiver, certificate for PPM

procedures and laboratories falling in

Schedules LVA, through B

(approximately 130,000 or 89 percent of

the total number of laboratories) pay 70

percent of the administrative costs of

the CLIA program through the certificate

fees. Under the new certificate fees, the

same laboratories pay only 42 percent of

the administrative costs. We were

conservative in raising the certificate

fees for small laboratories in order to be

sensitive to their need to provide direct

patient care and not impede access to

quality laboratory testing. Larger

laboratories, based on the volume of

tests, reap a greater financial benefit

than the smaller laboratories due to the

conceivable economies of scale and,

therefore, have unlimited potential to

provide service to a larger share of the
Federal Register / Vol. 62, No. 168 / Friday, August 29, 1997 / Notices 45821

market. In an effort to distribute costs

more equitably among the various types

and sizes of laboratories, while

generating sufficient revenue, we now

rely more heavily on average annual test

volumes to determine certificate fees.

The fees for certificate of waiver or PPM

procedures have been, and will

continue to be, a flat fee irrespective of

volume of testing performed. The $50

fee increase for these laboratories is

based on expenditures related to these

types of certificates. These costs

include: reviewing test systems for

categorization as waived or PPM

procedures; maintaining and updating

the data systems; issuing certificates;

issuing test categorization notices;

collecting fees; and analyzing data.

For other certificate types, instead of

using the three-tiered fee schedule

based on general ranges of test volume,

we are maintaining the 11 laboratory

schedules, LVA through J, previously

established on February 28, 1992. The

new biennial certificate fees for each

schedule are computed using a

decreasing per test rate as the volume of

tests increases. This per-test rate is

multiplied by the average annual test

volume performed in each schedule,

with the exception of the smallest

laboratories, LVA through B, being

charged a certificate fee of $150.

Laboratories in Schedules C through G,

which encompass test volumes up to

100,000, each will pay a certificate fee

based on the per-test rate. (See Table III)

Between Schedules G and H

laboratories, the per-test rate is being

reduced by almost one half, because of

the dramatic increase in volume for

Schedule H laboratories. These test

volumes range from more than 100,000

to 500,000. Another very large increase

in volume occurs for Schedule J

laboratories, which perform over 1

million tests annually. Between

Schedules I and J laboratories, the pertest rate is being reduced by

approximately three-fourths, in

recognition of the large increase in the

test volume of these laboratories.

The revisions to the CLIA certificate

fees will significantly alter the biennial

certificate fees for some laboratories.

Table III presents the approximate

number of laboratories in each

laboratory type and their new biennial

certificate fees.

The effect of this new fee schedule

will vary widely among clinical

laboratories. Nearly 62 percent of the

laboratories now hold certificate of

waiver or certificate for PPM procedures

and pay a flat certificate fee. For

certificates of waiver, laboratories will

pay $150 biennially and for certificates

for PPM procedures, the biennial fee

will be $200. These $50 biennial

increases amount to less than $0.07 per

day per laboratory. The new fees take

into account the increased number of

tests that may be performed under these

types of certificates.

Laboratories with a change in name,

location or in any of the conditions

specified in § 493.639 of our regulations

will find the fee for a revised certificate

increased by $25, from $50 to $75.

As previously stated, we are required

by statute to establish fees to support

the CLIA program. Although certificate

fees increase proportionately, we

believe that by relating the fee more

precisely to the number of tests a

laboratory performs each year, the costs

of administering CLIA will be

distributed more equitably across all

laboratories. The laboratories bearing

the largest increase in certificate fees,

Schedules C through J, account for more

than 90 percent of the annual test

volume in this country. Because of their

large test volumes we have applied the

lowest possible per-test rates to those

laboratories, consistent with generating

sufficient revenues. We concluded that

basing certificate fees on the average

annual test volume for each schedule

and a decreasing per-test rate was the

most equitable and practical method for

constructing the fee schedule. (See

Table III) This approach has the merit of

charging larger laboratories less per test

performed, while still basing the overall

fees directly on the volume of testing.

These fees will result in large increases

in certificate fees for the laboratories

with the highest test volumes. These

differences are directly proportional to

test volumes, resulting in laboratories

with similar volumes paying similar

fees.

For the reasons given above, we

certify that this proposed fee schedule

would not have a significant effect on a

substantial number of small entities and

that a regulatory flexibility analysis is

not needed.

B. Rural Hospital Impact Statement

Section 1102(b) of the Act requires us

to prepare a regulatory impact analysis

if a rule may have a significant impact

on the operations of a substantial

number of small rural hospitals. This

analysis must conform to the provisions

of section 604 of the RFA. For purposes

of section 1102(b) of the Act, we define

a small rural hospital as a hospital that

is located outside of a Metropolitan

Statistical Area and has fewer than 50

beds. We are not preparing a rural

impact statement since we have

determined, and certify, that this notice

would not have a significant impact on

the operations of a substantial number

of small rural hospitals.

In accordance with the provisions of

Executive Order 12866, this notice was

reviewed by the Office of Management

and Budget.

(Catalog of Federal Domestic Assistance

Program No. 93–778, Medical Assistance

Program; No. 93.773 Medicare—Hospital

Insurance Program; and No. 93–774,

Medicare—Supplementary Medical

Insurance Program)

Dated: December 20, 1996.

Bruce C. Vladeck,

Administrator, Health Care Financing

Administration.

Dated: December 11, 1996.

David A. Satcher,

Director, Centers for Disease Control and

Prevention.

Dated: March 26, 1997.

Donna E. Shalala,

Secretary.

[FR Doc. 97–23084 Filed 8–28–97; 8:45 am]

BILLING CODE 4210–01–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Centers for Disease Control and

Prevention

Translation Advisory Committee for

Diabetes Prevention and Control

Programs: Meeting

In accordance with section 10(a)(2) of

the Federal Advisory Committee Act

(Pub. L. 92–463), the Centers for Disease

Control and Prevention (CDC)

announces the following committee

meeting.

Name: Translation Advisory Committee for

Diabetes Prevention and Control Programs.

Times and Dates: 9 a.m.–6 p.m., September

16, 1997. 9 a.m.–12 noon, September 17,

1997.

Place: Crown Plaza Ravinia, 4355 AshfordDunwoody Road, Atlanta, Georgia 30346,

telephone 770/395-7700.

Status: Open to the public, limited only by

the space available. The meeting room

accommodates approximately 50 people.

Purpose: This committee is charged with

advising the Director, CDC, regarding policy

issues and broad strategies for diabetes

translation activities and control programs

designed to reduce risk factors, health

services utilization, costs, morbidity, and

mortality associated with diabetes and its

complications. The Committee identifies

research advances and technologies ready for

translation into widespread community

practice; recommends broad public health

strategies to be implemented through public

health interventions; identifies opportunities

for surveillance and epidemiologic

assessment of diabetes and related

complications; and for the purpose of

assuring the most effective use and