Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices 5433

Cosmetic Act: July 21, 1993. The

applicant claims July 15, 1993, as the

date the new drug application (NDA) for

DIFFERIN Topical Gel (NDA 20–380)

was initially submitted. However, FDA

records indicate that NDA 20–380 was

submitted on July 21, 1993.

3. The date the application was

approved: May 31, 1996. FDA has

verified the applicant’s claim that NDA

20–380 was approved on May 31, 1996.

This determination of the regulatory

review period establishes the maximum

potential length of a patent extension.

However, the U.S. Patent and

Trademark Office applies several

statutory limitations in its calculations

of the actual period for patent extension.

In its application for patent extension,

this applicant seeks 433 days of patent

term extension.

Anyone with knowledge that any of

the dates as published is incorrect may,

on or before April 7, 1997, submit to the

Dockets Management Branch (address

above) written comments and ask for a

redetermination. Furthermore, any

interested person may petition FDA, on

or before August 4, 1997, for a

determination regarding whether the

applicant for extension acted with due

diligence during the regulatory review

period. To meet its burden, the petition

must contain sufficient facts to merit an

FDA investigation. (See H. Rept. 857,

part 1, 98th Cong., 2d sess., pp. 41–42,

1984.) Petitions should be in the format

specified in 21 CFR 10.30.

Comments and petitions should be

submitted to the Dockets Management

Branch (address above) in three copies

(except that individuals may submit

single copies) and identified with the

docket number found in brackets in the

heading of this document. Comments

and petitions may be seen in the

Dockets Management Branch between 9

a.m. and 4 p.m., Monday through

Friday.

Dated: January 17, 1997.

Stuart L. Nightingale,

Associate Commissioner for Health Affairs.

[FR Doc. 97–2871 Filed 2–4–97; 8:45 am]

BILLING CODE 4160–01–F

Health Care Financing Administration

[R–137]

Agency Information Collection

Activities: Submission for OMB

Review; Comment Request

In compliance with the requirement

of section 3506(c)(2)(A) of the

Paperwork Reduction Act of 1995, the

Health Care Financing Administration

(HCFA), Department of Health and

Human Services, has submitted to the

Office of Management and Budget

(OMB) the following proposal for the

collection of information. Interested

persons are invited to send comments

regarding the burden estimate or any

other aspect of this collection of

information, including any of the

following subjects: (1) The necessity and

utility of the proposed information

collection for the proper performance of

the agency’s functions; (2) the accuracy

of the estimated burden; (3) ways to

enhance the quality, utility, and clarity

of the information to be collected; and

(4) the use of automated collection

techniques or other forms of information

technology to minimize the information

collection burden.

Type of Information Collection

Request: Reinstatement, with change, of

a previously approved collection for

which approval has expired; Title of

Information Collection: Internal

Revenue Service/Social Security

Administration/Health Care Financing

Administration Data Match 42 CFR

411.20–411.206; Form No.: HCFA–R–

137; Use: Employers who are identified

through a match of IRS, SSA, and

Medicare records will be contacted

concerning group health plan coverage

of identified individuals to ensure

compliance with Medicare Secondary

Payer provisions found at 42 U.S.C.

1395y(b). Frequency: Semi-annually

Affected Public: Individuals or

Households, Business or other for profit,

Not for profit institutions, Farms,

Federal Government and State, Local or

Tribal Government; Number of

Respondents: 596,241; Total Annual

Responses: 596,241; Total Annual

Hours Requested: 2,325,449.

To obtain copies of the supporting

statement for the proposed paperwork

collections referenced above, access

HCFA’s WEB SITE ADDRESS at http://

www.hcfa.gov, or to obtain the

supporting statement and any related

forms, E-mail your request, including

your address and phone number, to

Paperwork@hcfa.gov, or call the Reports

Clearance Office on (410) 786–1326.

Written comments and

recommendations for the proposed

information collections must be mailed

within 30 days of this notice directly to

the HCFA Paperwork Clearance Officer

designated at the following address:

OMB Human Resources and Housing

Branch, Attention: Allison Eydt, New

Executive Office Building, Room 10235,

Washington, D.C. 20503.

Dated: January 29, 1997.

Edwin J. Glatzel,

Director, Management Analysis and Planning

Staff, Office of Financial and Human

Resources, Health Care Financing

Administration.

[FR Doc. 97–2764 Filed 2–4–97; 8:45 am]

BILLING CODE 4120–03–P

[HSQ–244–N]

CLIA Program; Clinical Laboratory

Improvement Amendments of 1988—

Denial of Exemption of Laboratories in

the Commonwealth of Puerto Rico

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Notice.

SUMMARY: The Public Health Service Act

provides for the exemption of

laboratories from the requirements of

the Clinical Laboratory Improvement

Amendments of 1988 (CLIA) if the State

in which they are located has been

determined to have requirements equal

to or more stringent than those of CLIA.

Under our regulations, HCFA’s decision

to approve or deny a requested

exemption from CLIA requirements is

published in the Federal Register. This

notice announces that a request from the

Commonwealth of Puerto Rico for

exemption from CLIA requirements has

been denied.

EFFECTIVE DATE: The denial of

exemption from CLIA was effective on

October 28, 1996.

FOR FURTHER INFORMATION CALL:

Lee Feehely, (410) 786–3401.

SUPPLEMENTARY INFORMATION:

I. Background and Legislative

Authority

Section 353 of the Public Health

Service Act, as amended by the Clinical

Laboratory Improvement Amendments

of 1988 (CLIA), requires any laboratory

that performs tests on human specimens

to meet the requirements established by

the Department of Health and Human

Services. Regulations implementing

section 353 of the Public Health Service

Act are contained in 42 CFR part 493,

Laboratory Requirements. Subject to

specified exceptions included in

subpart D, laboratories must have a

current and valid CLIA certificate to test

human specimens. Section 353(p) of the

Public Health Service Act provides for

the exemption of laboratories from CLIA

requirements in a State that is
5434 Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices

1For purposes of CLIA, the term ‘‘state’’ includes

each of the 50 states, the District of Columbia, the

Commonwealth of Puerto Rico, the Virgin Islands

and a political subdivision of a State where the

State, acting pursuant to State law, has expressly

delegated powers to the political subdivision

sufficient to authorize the political subdivision to

act for the State in enforcing requirements equal to

or more stringent than CLIA requirements. 42 CFR

Section 493.2.

2Condition-level requirements are defined as any

of the requirements identified as ‘‘conditions’’ in

subparts G through Q of Part 493. 42 CFR Section

493.3.

3See May 10, 1995, letter to Dr. Carmen Feliciano

de Melecio, Secretary of Health from Anthony J.

Tirone, Director of the Office of Survey and

Certification, Health Standards Quality Bureau.

4See May 22, 1996 letter to Dr. Feliciano from

Anthony Tirone, hereinafter referred to as the

‘‘denial’’ or ‘‘initial determination.’’

determined to have requirements that

are equal to or more stringent than those

of CLIA. The statute does not

specifically require the promulgation of

criteria for the exemption of laboratories

in a State. The authority to determine

whether a State qualifies for an

exemption has been delegated by the

Secretary to the Administrator of HCFA.

Part 493, subpart E, Accreditation by

a Private, Nonprofit Accreditation

Organization or Exemption Under an

Approved State Laboratory Program,

implements section 353(p) of the Public

Health Service Act. Section 493.513

provides that we may exempt from CLIA

requirements, for a period not to exceed

6 years, State licensed or approved

laboratories in a State if the State meets

specified conditions.

When a request for exemption from

CLIA is not granted, the State may

request a reconsideration. Our policy on

reconsiderations is set forth in our

regulations in Part 488, subpart D—

Reconsideration of Adverse

Determinations-Deeming Authority for

Accreditation Organizations and CLIA

Exemption of Laboratories Under State

Programs. Sections 488.205 and 488.207

provide for the opportunity for an

informal hearing and set out the

informal hearing procedures. The

hearing officer presents his findings

within 30 days of the close of the

hearing (§ 488.209). Section 488.211

provides that the hearing officer’s

decision is final unless the

Administrator, within 30 days of the

hearing officer’s decision, chooses to

review that decision. The Administrator

may accept, reject, or modify the

hearing officer’s decision. If the

Administrator chooses to review the

hearing officer’s decision, the

Administrator’s decision becomes the

final decision. Section 488.211 provides

that we will publish, in the Federal

Register, the final reconsideration

determination.

On December 5, 1992, the

Commonwealth of Puerto Rico, which is

considered a State for CLIA purposes,

requested exemption from the CLIA

requirements. The Health Quality and

Standards Bureau, HCFA, notified

Puerto Rico on May 10, 1995 that its

request was denied. On July 10, 1995,

the Commonwealth requested a

reconsideration. A reconsideration

hearing was held on August 30, 1996.

The hearing officer rendered his

decision on September 27, 1996,

affirming the denial of the request for

exemption. The Administrator declined

his right to review the hearing officer’s

decision. Thus, in accordance with

§ 488.211(a), the hearing officer’s

decision became the final

reconsideration determination on

October 28, 1996.

II. Notice of Denial of CLIA Exemption

to Laboratories in the Commonwealth

of Puerto Rico

Attached as an addendum to this

notice is the hearing officer’s decision

on the Commonwealth of Puerto Rico’s

request for exemption from CLIA.

Authority: Section 353 of the Public Health

Service Act (42 U.S.C. 263a).

Dated: January 27, 1997.

Bruce C. Vladeck,

Administrator, Health Care Financing

Administration.

Addendum—Reconsideration of the

Commonwealth of Puerto Rico’s

Application for Exemption From CLIA

Hearing Officer’s Recommended

Decision

I. Background

The Clinical Laboratories

Improvement Amendments of 1988 (the

‘‘CLIA’’) requires that all laboratories

must be certified in order to perform

testing on human specimens. (Section

353 Public Health Service Act, 42 U.S.C.

263a). The Health Care Financing

Administration (the ‘‘HCFA’’) using

scientific and technical support, as

needed, from the Centers for Disease

Control (the ‘‘CDC’’), Public Health

Service (the ‘‘PHS’’), administers the

CLIA program for the Department of

Health and Human Services. HCFA has

promulgated regulations containing the

requirements concerning the Medicare,

Medicaid and CLIA programs in 42 CFR

part 493.

The CLIA statute provides that ‘‘[i]f a

State enacts laws relating to matters

covered by [CLIA] which provide for

requirements equal to or more stringent

than the requirements of [CLIA], the

Secretary may exempt clinical

laboratories in that State from

compliance with [CLIA].’’ 42 U.S.C.

263a(p)(2). This statutory authority is

reflected in HCFA’s regulations which

provide that HCFA may exempt from

CLIA program requirements all Statelicensed or approved laboratories in a

State 1 if the State meets the

requirements of 42 C.F.R. 493.513(a).

Section 493.513(a)(1) of the regulations,

which mirrors 42 U.S.C. 263a(p)(2),

explains that in order to be granted an

exemption from CLIA, the State must

have in effect laws that provide for

requirements equal to or more stringent

than condition-level requirements.2

Section 493.513(a)(1).

On December 5, 1992, the Secretary of

Health for the Commonwealth of Puerto

Rico submitted an application for

exemption from CLIA. On May 10, 1995,

the Commonwealth was notified that its

application for CLIA exemption was

denied.3 The basis for the denial was a

determination by HCFA that several of

Puerto Rico’s personnel standards did

not meet the respective CLIA condition

level requirements and that the

Commonwealth’s laboratory licensure

requirements, especially as applied to

tests performed by physicians, were less

stringent than CLIA requirements.

By letter dated July 10, 1995, and in

accordance with § 488.201 of the

regulations, the Commonwealth

requested a reconsideration of the

denial of its application for CLIA

exemption. At the same time, Puerto

Rico also requested permission to

submit a proposal addressing HCFA’s

concerns and establishing equivalencies

with applicable CLIA requirements. The

revised proposal was sent by the

Commonwealth on July 26, 1995. This

proposal addressed Puerto Rico’s

laboratory environment and outlined

proposed changes to regulations

establishing educational standards for

certain laboratory personnel. On

October 24, 1995, the Hearing Officer

then appointed by HCFA requested that

the Commonwealth submit materials

pertinent to its request for exemption

and recommended that the

Commonwealth submit a complete and

current application for exemption.

On December 5, 1995, Puerto Rico

submitted revised application materials,

including an updated cross-walk of the

Puerto Rico equivalents to the CLIA

regulations together with complete

addenda, to HCFA for review. On May

22, 1996, after having reviewed the

revised application materials, HCFA

again decided to deny the

Commonwealth’s application for

exemption.4 The Commonwealth was

advised that the application failed to

demonstrate the existence of CLIA-level

laws and regulations in several key
Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices 5435

5The Commonwealth has asked, for purposes of

rendering a decision on reconsideration, that the

Hearing Officer disregard the May 22, 1996 letter.

According to counsel for the Commonwealth,

‘‘Puerto Rico finds this May 22 letter highly

irregular’’ since it was issued approximately a year

after the May 1995, notice of denial and it identifies

additional reasons underlying HCFA’s decision to

deny the application for exemption. (Position

Paper, pg. 10). However, I note that by letter dated

July 26, 1995, the Commonwealth submitted a ‘‘new

proposal’’ to ‘‘override the objections stated in

* * * (the) May 10, 1995 (denial) letter.’’ See July

26, 1995 letter to Anthony Tirone from Dr. Carmen

A. Feliciano de Melecio. In that same letter, the

Commonwealth offered to meet with HCFA to

discuss the proposed new standards and included

‘‘a copy of the final official documentation of the

application for exemption.’’ Id. at pg. 15. Thus,

while I agree that it was unusual for HCFA to send

two separate letters representing initial

determinations, the record suggests that the second

letter illustrates HCFA’s attempts to accommodate

the interests of the Commonwealth. HCFA could

have elected to limit the Commonwealth’s recourse

to a reconsideration hearing after it sent the May

1995 letter. However, the agency allowed the

Commonwealth a chance to buttress its application

outside of the reconsideration process. Therefore,

for purposes of this reconsideration determination,

I will consider in its entirety the May 22, 1996 letter

sent by HCFA to the Commonwealth.

6 ‘‘Clinical Analysis’’ is defined broadly as ‘‘any

facility, place or location, where any sample

obtained from a human being is handled and/or

processed for the purpose of it being tested or

analyzed by any biological, biophysical,

microbiological, serological, immunological,

chemical, hematological, immunohematological,

cytogenetical or any other test of materials derived

from the human body (sic) are performed with the

purpose of providing information for the

prevention, diagnostic (sic) and treatment of any

disease, or deterioration, or for the health

evaluation of human beings.’’ Reg. 83, Chpt. 1, Art.

III, sec. 1.

7Should likely read ‘‘unless a license.’’

areas including, but not limited to, those

identified in the May 10, 1995 letter and

in the areas of enforcement authority,

proficiency testing and quality

assurance.5

In accordance with 42 CFR § 488.201,

et seq., the Commonwealth requested a

reconsideration of HCFA’s denial of the

application for CLIA-exemption. A

hearing was scheduled for August 30,

1996 to review each of the grounds for

denial identified by HCFA in making its

initial determination. In an effort to

facilitate a full understanding of the

Commonwealth’s position on each of

those issues, the Commonwealth was

asked to submit a Position Paper prior

to the scheduled hearing date. The

Position Paper was submitted and the

hearing took place, as scheduled, on

August 30, 1996 at HCFA’s

Headquarters in Baltimore, Maryland.

II. Issue

Whether the Commonwealth of Puerto

Rico has submitted evidence in

connection with its application for

exemption from CLIA that, in

accordance with 42 U.S.C. 263a(p)(2)

and 42 CFR 493.513(a)(1), demonstrates

that it has in effect laws that provide for

requirements equal to or more stringent

than condition-level CLIA requirements.

III. Discussion

In reaching its initial determination to

deny the Commonwealth’s application

for exemption, HCFA identified several

different grounds for denial in a

summary referred to in and attached to

the May 22, 1996 denial letter. In the

following discussion, for each of the

grounds for denial, I review the CLIA

requirements, the cited deficiency, and

the evidence of equivalency offered by

Puerto Rico in its submissions, Position

Paper and at the hearing. My finding of

fact is provided at the end of each

section.

A. Basis and Scope

Upon review of the initial application,

HCFA determined that the

Commonwealth failed to clarify whether

testing performed in certain locations

was subject to the Commonwealth’s

laboratory licensing regulations. Of

particular concern was testing in

physician’s office laboratories, clinics,

group practices, seropheresis centers,

non-hospital transfusion services, blood

and blood products processing centers,

temporary testing sites, such as health

fairs, and testing performed during

patient examinations in a physician’s

office.

The CLIA regulations set forth the

conditions that all laboratories must

meet to be certified to perform testing

on human specimens. 42 CFR 493.1. A

laboratory is defined, in pertinent part,

as ‘‘a facility for the biological,

microbiological, serological, chemical,

immunohematological, hematological,

biophysical, cytological, pathological, or

other examination of materials derived

from the human body for the purpose of

providing information for the diagnosis,

prevention, or treatment of any disease

or impairment of, or the assessment of

the health of, human beings.’’ 42 CFR

493.2.

HCFA’s assessment was that when

compared with the CLIA regulations,

the Commonwealth’s laboratory

regulations did not clearly show that all

testing sites were regulated. The agency

also viewed as problematic the issue of

whether physician-operated laboratories

were required to be licensed.

In its Position Paper, the

Commonwealth explained that the

statutory provisions regulating clinical

laboratories are contained in Public Law

97 and Regulation 83. (Position Paper,

pg. 21). Section 91 of Public Law 97

mandates the issuance of a license by

the Secretary of Health prior to

establishing and operating clinical

analysis laboratories, plasmaphereses

centers, seropheresis centers or blood

banks. Similarly, Regulation 83, Chapter

2 states that ‘‘(n)o entity, be it a natural

or juridical person, may establish or

operate a clinical analysis laboratory,6

an anatomical pathology laboratory, or a

Blood Bank, a licensed (sic) 7 issued by

the Department of Health is previously

obtained.’’ Thus, the Commonwealth’s

position is that any place where clinical

analysis is performed must be licensed

and is subject to the laboratory

regulations. (Position Paper, pg. 23). It is

their contention that this includes cases

where clinical analysis is performed in

temporary testing sites, such as

physician’s offices and at health fairs.

Id.

During the proceedings, testimony

was offered by witnesses called by the

Commonwealth that all testing sites in

Puerto Rico were regulated. (Position

Paper, pp. 65, 69, 74, and 83). The key

inquiry appears not to be who is

performing the test but whether a

clinical analysis test covered by

Regulation 83 is being performed. Id. at

69. In cases where a physician elects to

perform clinical analysis testing in his

or her office, Regulation 83 requires that

the physician comply with applicable

licensing requirements. Id. at 70. In

such instances, the physician must

secure a special license in accordance

with Regulation 83, Chapter 2, Article I,

sec. 3(a). Id. at 80.

Based upon the foregoing, I believe

that the Commonwealth has sustained

its burden of demonstrating that all

laboratories of the type covered by

CLIA, including physician operated

laboratories, must be licensed.

Regulation 83 encompasses all locations

where clinical analysis is performed and

explicitly mandates that, as a

prerequisite of performing such tests, a

license must be obtained. While

arguably the Commonwealth’s

regulations could be amended to

explicitly include physician operated

laboratories in the list of covered

laboratories, the regulations currently

are broad enough to include physician

operated laboratories. Thus, I disagree

with HCFA’s initial determination that

the Commonwealth’s regulations

defining the scope of coverage are not as

broad as the CLIA regulations and find

that the scope is in fact, equivalent.

B. Categories of Test by Complexity

HCFA determined in its initial review

of the application that the

Commonwealth needed to provide

clarification and evidence on how
5436 Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices

provider-performed microscopy (PPM)

procedures and waived tests were

regulated. In its application, the

Commonwealth indicated that all tests

were treated as high complexity tests.

However, the application was silent

with regards to waived tests and PPM

procedures.

HCFA categorizes laboratory tests as

waived tests, tests of moderate

complexity, including PPM procedures,

or tests of high complexity. 42 CFR

493.5. The type of CLIA certificate

issued is a function of what type of

testing the laboratory performs. 42 CFR

493.5(c); § 493.3. The CLIA regulations

at §§ 493.15 and 493.19 explain that

waived tests include simple laboratory

examinations that impose no reasonable

risk to the patient if done properly

while PPM procedures are moderately

complex tests performed by certain

health care practitioners.

In its Position Paper, the

Commonwealth explained that

regardless of complexity, all clinical

analysis testing is regulated in the same

way. (Position Paper, p. 24). Both

waived tests and PPM procedures are

included in the definition of clinical

analysis testing and are subject to the

requirements of Regulation 83. Id. In

other words, rather than issuing

different certificates for highcomplexity, waived tests or PPM

procedures, the Commonwealth

regulates all clinical analysis tests in the

same way. Similarly, during the hearing,

witnesses for the Commonwealth

reiterated that all tests in Puerto Rico

were treated as high complexity and,

thus, were subject to the standards

applicable to high complexity tests.

(Position Paper, p. 62, 81).

Based upon my review of the

Commonwealth’s regulations and an

evaluation of the testimony given at the

hearing, I reverse HCFA’s finding with

regard to waived tests and PPM

procedures. I find that the

Commonwealth’s use of a single

criterion for all tests, which is

comparable to the CLIA requirement for

high complexity tests, should be

recognized as more stringent than the

CLIA regulations.

C. General Requirements for Exemption

1. Retrospective Review of Cytology

Smears. Section 493.513(a)(4) of the

CLIA regulations states that a State

seeking exemption from CLIA must

‘‘(demonstrate) that it has enforcement

authority and administrative structures

and resources adequate to enforce its

laboratory requirements.’’ One of the

grounds for HCFA’s initial denial of the

application for exemption was that the

Commonwealth failed to demonstrate an

administrative structure and adequate

resources to arrange for a retrospective

review of cytology smears by

appropriately trained individuals if

necessary to investigate or enforce

cytology requirements. The application

and materials submitted together with

the application were silent with regard

to this issue.

In its Position Paper, the

Commonwealth indicated that it would

develop a cytology enforcement

program to support the Laboratory

Inspection Division. (Position Paper, p.

25) However, there was no indication in

either the Position Paper or through

testimony that there are current

procedures for performing retrospective

reviews of cytology smears or for the

investigation and enforcement of

cytology requirements.

Thus, I concur with HCFA’s initial

determination and find that the

Commonwealth has not satisfied the

requirements of § 493.513(a)(4) insofar

as they concern retrospective reviews of

cytology smears.

2. Enforcement Authority,

Administrative Structure, and

Resources. Section 493.513(c)(3) of the

CLIA regulations states that an

application for exemption must include

‘‘(a) description of the State’s

enforcement authority, administrative

structure and resources to enforce the

State standards.’’ When reviewing the

application submitted by the

Commonwealth, HCFA determined that

Puerto Rico failed to submit adequate

information necessary to evaluate its

enforcement authority, administrative

structure or resources for enforcement.

In its Position Paper, the

Commonwealth asserted that the

organizational charts found in addenda

18 and 19 of the application for

exemption clearly set forth the

information required by § 493.513(c)(3).

(Position Paper, p. 25). Addendum 18

simply is an organizational chart for the

Office of the Assistant Secretariat for

Regulation and Accreditation of Health

Facilities for the Department of Health.

Addendum 19 merely represents the

Fiscal Year 1994–1995 budget for the

Laboratory Division for the Department

of Health.

During the hearing, testimony was

offered with regard to the enforcement

authority that could be exercised by the

Department of Health. Counsel for the

Commonwealth explained that the

‘‘Uniform Administrative Procedures

Act’’ (the ‘‘UAPA’’) empowered the

Secretary to take immediate remedial

action, ex parte, against laboratories

where there is a (sic) indication of

immediate and serious threats to public

health and safety. (Position Paper, p. 91)

According to the Commonwealth,

section 2167 of the UAPA allows an

agency to use emergency adjudicatory

procedures in any situation in which

there is imminent danger to the public

health, safety and welfare. Section 2201

of the UAPA provides that any

violations of laws administered by

agencies shall be penalized by

administrative fines not to exceed $5000

for each violation. With the exception of

discussing the UAPA, which is a statute

of general application, little additional

information on the Commonwealth’s

enforcement authorities was provided at

the hearing.

By contrast, subpart R of part 493 sets

forth detailed requirements relating to

the use of intermediate sanctions, and

on the suspension, limitation or

revocation of laboratory certifications.

These requirements direct the correction

of deficiencies within a certain time

period, provide for alternative sanctions

and set forth the penalties that may be

assessed in the event a laboratory

operates without a license.

Neither the application nor Position

Paper submitted by the Commonwealth

provided sufficient information to

assess the scope and breadth of the

Commonwealth’s enforcement authority

as compared to subpart R of part 493.

Accordingly, I must concur with

HCFA’s initial determination and find

that the Commonwealth failed to

produce adequate evidence concerning

the enforcement authority,

administrative structure and resources

available in its laboratory program to

demonstrate that its requirements are

equal to or more stringent than the CLIA

requirements.

3. Cases Involving Immediate and

Serious Jeopardy. Section 493.513(c)(5)

of the regulations directs a State

applying for exemption from the CLIA

program to provide information

concerning its procedures for

responding to and investigating

complaints against licensed or approved

laboratories. In its initial determination,

HCFA found that the Commonwealth

did not explain how it would

investigate complaints indicating

possible immediate and serious

jeopardy to public health.

In its Position Paper, the

Commonwealth referenced Regulation

83, Chapter 10, Art. VI, Sec. 10 as the

section identifying procedures for

responding to and investigating such

complaints. Also referenced was a Letter

of Intent dated February 24, 1995 which

represents that if an onsite investigation

or inspection is required, appropriate

personnel will visit the facility within

30 days of receiving the complaint.

(Position Paper, p. 25).
Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices 5437

8 While § 493.513(c)(5) does not dictate the

manner of investigation and response to complaints

that each State must show in an application for

exemption, § 493.513(a)(1) requires a demonstration

of the existence of laws at least comparable with

CLIA condition-level requirements. Thus, a review

of the State’s process for investigating and

responding to complaints must be done when

considering how the State’s enforcement laws

compare with those set forth in subpart R of Part

493. See discussion at I. Subpart R—Enforcement,

section 1, (pp. 32–34) of this Decision.

I have considered the information

submitted by the Commonwealth and

reject the agency’s determination in this

regard. I note that § 493.513(c)(5) only

requires a State to submit information

on the State’s procedures for responding

to and investigating complaints against

laboratories. This section of the

regulation does not direct, in any way,

the manner in which the State must

respond to or investigate any such

complaints.8 In order to satisfy

§ 493.513(c)(5), the State need only

include with its application for

exemption this required information.

Since the Commonwealth included a

copy of Regulation 83 in its application,

which at Chapter 10, Art. VI, Sec. 10

outlines its investigation and complaint

procedures, I find that the plain

requirements of 42 CFR 493.513(c)(5)

were satisfied.

4. Documentation Requirement.

Section 493.513(d) of the regulations

directs that States applying for

exemption submit supporting

documentation on the ability to furnish

HCFA with electronic data in ACSII

compatible code and a statement

acknowledging that it will notify HCFA

through electronic data transmission of

certain licensure and specialty change

events. In the initial determination,

HCFA found that Puerto Rico failed to

submit documentation demonstrating

the intent and ability to provide HCFA

with this data.

In a Letter of Intent dated February

24, 1995, the Commonwealth assured

HCFA that it would notify HCFA ‘‘by

electronic transmission of any

laboratory having its license revoked,

limited, withdrawn or suspended and/

or of all enforcement actions of

sanctions imposed and/or any changes

in licensing or inspection requirement

and/or any changes in specialties and/

or subspecialities of laboratories’’

within 30 days after such event. The

Letter indicated that the Commonwealth

would modify the ASPEN system,

currently utilized by the Medicaid

program, to satisfy this requirement. In

its Position Paper, the Commonwealth

assured HCFA that it is currently

mechanizing operations and, once the

process is completed, would be able to

provide the necessary information via

electronic transmission. (Position Paper,

pg. 25–26).

The regulations at § 493.513(d)

specifically require that at the time of

application the State must demonstrate

its ability to provide HCFA with

electronic data in ASCII compatible

code. However, the Commonwealth has

not been able to document its current

ability to satisfy this requirement.

Hence, I concur with the initial

determination of HCFA on this issue

and find that the Commonwealth has

failed to demonstrate an ability to

furnish HCFA with electronic data in

the appropriate code format.

D. Enrollment and Testing of Samples

Section 493.801 of the regulations

requires that each laboratory must enroll

in a proficiency testing program that

meets the criteria of subpart I of part 493

and is approved by HHS. In its initial

determination, HCFA found that the

Commonwealth’s proficiency program

was not HHS-approved for direct

antigen testing in bacteriology and that

the regulations did not require all

licensed laboratories to seek enrollment

with another HHS-approved program if

the Commonwealth lost its Federal

approval.

The Commonwealth points out that

Regulation 83, Chapter 6, Art. I, sec. 1(a)

provides that each institution which

processes clinical analysis tests must

participate satisfactorily in a proficiency

program established by the Department

of Health. (Position Paper, p. 26). The

regulation further provides that those

programs must be accredited by HHS.

Id. As explained by the Commonwealth

in its Position Paper, in cases involving

direct antigen testing, the laboratory

must participate in an HHS-approved

proficiency program. (Position Paper, p.

26)

Based upon the language of the

regulations and the assurances provided

in the Position Paper, I reverse the

initial determination of HCFA on this

matter and find that the Commonwealth

has in effect laws equal to or more

stringent than 42 CFR 493.801.

E. Referral of Specimens

Section 493.1111 of the CLIA

regulations at subsection (b) states that

referring laboratories may permit each

testing laboratory to send the test result

directly to the authorized person who

initially requested the test. In its

application, the Commonwealth cited as

an equivalent regulation its Regulation

83, Chpt. 7, Art. IV, sec. 2(1), which

states that the referring laboratory ‘‘will

deliver the original report sent by the

testing laboratory directly to the

physician or to the patient.’’

In its initial determination, HCFA

found that the Commonwealth’s

regulation raised concerns because it

appeared to allow the testing report to

be given to either the patient or to the

physician, without assuring that a copy

of the test results would be sent to the

individual who initially requested the

test.

The Position Paper submitted by the

Commonwealth provided additional

information regarding reporting test

results. (Position Paper, pp. 26–27)

First, other subsections of section 2 of

Regulation 83, Art. IV, more fully

explain how referred laboratory tests are

handled and, at subsection (3), states

that ‘‘(t)he referring institution may

permit each testing laboratory to sent

(sic) the test result directly to the

physician who initially requested the

test.’’ Id. Secondly, the Commonwealth

cites section 1(a) of the same Article,

which provides that ‘‘(a)ll laboratory

report (sic) must be sent promptly to the

authorized physician who requested

said test.’’ (Position Paper, p. 27)

Testimony also was given to clarify that

all laboratory reports are sent to the

physician ordering the test. (Position

Paper, p. 109)

Thus, based upon the

Commonwealth’s current regulations, I

reject the initial determination of HCFA

and find that the Commonwealth has in

effect laws which are equal to those set

forth at 42 CFR 493.1111.

F. Quality Control Issues

1. Control Procedures. Section

493.1218(f)(1) of the regulations directs

each laboratory, as part of its routine

control procedures, to check each batch

or shipment of reagents, discs, stains,

antisera and identification systems

when prepared or opened for positive

and negative reactivity, as well as

graded reactivity.

In both its application and its Position

Paper, the Commonwealth cites to its

comparable regulation, Regulation 83,

Chapter 8, Article IV, sec. 1(a)(6).

(Position Paper, p. 28). That section

provides that each laboratory will

‘‘(v)erify each lot and delivery of

reagents, media (if applicable), disks,

stains, antiserums, and identification

systems when they are prepared or

opened for positive or negative

reactions.’’ However, in its initial

determination, HCFA noted that the

Commonwealth’s requirements fell

short of the requirements of

§ 493.1218(f)(1) since they do not

require laboratories to check for graded

reactivity, if applicable.

Similarly, § 493.1218(f)(3) requires

that laboratories check fluorescent

stains for positive and negative
5438 Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices

reactivity each time of use, unless

otherwise specified in subpart K of part

493. The Commonwealth’s regulations

on this aspect of reagent and supply

checks requires laboratories to check

fluorescent stains for reactivity each

time of use, unless otherwise indicated.

Reg. 83, Chpt. VIII, Art. IV, sec. 1(a)(8).

In its Position Paper, the

Commonwealth acknowledged that the

current regulations do not require

laboratories to check for graded

reactivity or to check fluorescent stains

for positive and negative reactivity each

time of use. (Position Paper, p. 28) In

order to resolve the lack of regulations

equivalent to paragraphs (1) and (3) of

§ 493.1218(f), the Commonwealth has

offered to amend its regulations. Id.

Notwithstanding the offer to amend

the deficient regulations, since they

currently do not include such

requirements, I must concur with the

initial determination made by HCFA. I

find that the Commonwealth’s

regulations on control procedures are

not equivalent to the corresponding

CLIA requirements set forth at

§§ 493.1218(f)(1) and 493.1218(f)(3).

2. Syphilis Serology. In order to meet

the quality control requirements for

syphilis serology, the current CLIA

regulations at section 493.1239 state that

a laboratory must comply with

applicable requirements including, as

relevant here, employing positive and

negative controls that evaluate all

phases of the test system to ensure

reactivity and uniform dosages. In the

initial determination, the

Commonwealth was advised that it

needed to show evidence to assure

HCFA that its regulations met this

specific requirement. However, neither

in its Position Paper, which set out in

great detail SARAFS Quality Control

Specific Requirements, nor in testimony

offered at the hearing, was the

Commonwealth able to identify a

specific regulatory provision that

indicated that it required laboratories to

use positive and negative controls in all

phases of the syphilis serology.

(Position Paper, pp. 28–30; Testimony,

pp. 106–107).

Hence, based upon the application,

Position Paper and the testimony

offered at the hearing, I must concur

with the initial determination made by

HCFA. I find that the Commonwealth

has failed to demonstrate that it has

regulations in place, comparable to 42

CFR 493.1239, which require

laboratories to employ positive and

negative controls that evaluate all

phases of syphilis testing.

3. Urinalysis Testing. In order to meet

the quality control requirements for

urinalysis, § 493.1251 of the regulations

states that the laboratory must comply

with the applicable requirements in

§§ 493.1201 through 493.1221. In its

application, the Commonwealth

indicated that it requires facilities to

comply with all applicable general

quality control and routine chemistry

requirements as well as additional

requirements for urinalysis. However,

HCFA’s initial review suggested that

these requirements appeared to conflict.

The Position Paper submitted by the

Commonwealth clarified the apparent

inconsistency and explained that

institutions must comply with general

quality controls and routine chemistry

requirements. (Position Paper, p. 30). In

addition, certain positive controls and

confirmatory tests must be run for

urinalysis. Id. I believe that this

explanation clears up the inconsistency

noted by HCFA and, thus, I find that the

Commonwealth has demonstrated the

existence of regulatory requirements

equal to those set forth at 42 CFR

493.1251.

G. Personnel Qualifications

At the outset, I must note that the

issues relating to the personnel

qualifications have been the most

contentious. The Commonwealth, HCFA

and CDC have spent a significant

amount of time discussing the

educational and training levels for key

laboratory personnel. The

Commonwealth has suggested in its

Position Paper that Puerto Rico has

distinct sociological and economic

limitations that should militate in favor

of establishing different educational

qualifications for laboratory personnel.

(Position Paper, pp. 1–9) However, as I

counseled the Commonwealth in the

hearing, the discretion granted to the

Hearing Officer in CLIA reconsideration

hearings is limited. See 42 CFR 488.201,

et seq. Accordingly, my decision must

be based on whether the

Commonwealth can cite existing

regulations or laws that represent

criteria or standards equal to or more

stringent than those required by CLIA.

Sociopolitical, economic nor cultural

differences may not be considered. It is

also inappropriate for me to consider

proposed laws that would amend the

Commonwealth’s laws.

The Commonwealth also argues that

applying the CLIA standards strictly,

especially as regards personnel

qualifications, does not allow a

consideration of whether the

Commonwealth’s laws demonstrate

‘‘equivalency’’ with CLIA. (Position

Paper, p. 9) As used in the CLIA

regulations, ‘‘equivalency’’ means that:

An accreditation organization’s or a State

laboratory program’s requirements, taken as a

whole, are equal to or more stringent than the

CLIA requirements established by HCFA,

taken as a whole. It is acceptable for (a)

* * * State laboratory program’s

requirements to be organized differently or

otherwise to vary from the CLIA

requirements, as long as (1) all of the

requirements taken as a whole would provide

at least the same protection as the CLIA

requirements taken as a whole; and (2) a

finding of noncompliance with respect to

CLIA requirements taken as a whole would

be matched by a finding of noncompliance

with the * * * State requirements as a

whole.

Thus, the term ‘‘equivalency’’ as

defined in § 493.2 of the regulations

requires a consideration of the entirety

of the State’s program and a

consideration of whether the same

protections provided by CLIA would be

provided under that State’s program.

Accordingly, it would be inappropriate

to use ‘‘equivalency’’ as a tool to

measure whether or not a particular

standard or requirement is present in a

State’s program when compared with

CLIA. Instead, it is necessary to evaluate

the totality of the State’s program

consonant with the scope and intent of

CLIA.

That said, I will now address the

specific personnel requirements at issue

in the Commonwealth’s application.

1. Laboratory Director. The

regulations at § 493.1443 set forth the

qualifications for laboratory directors.

The laboratory director must be

qualified to manage and direct the

laboratory personnel, to perform certain

tests and be eligible to be an operator of

a laboratory within the requirements of

subpart R. Subsection (b) of § 493.1443

specifies the educational criteria

necessary for laboratory directors and

states, in pertinent part, that the

laboratory director must (1) be a

licensed doctor of medicine or

osteopathy and certified in anatomic or

clinical pathology, or both; (2) be a

licensed doctor of medicine, osteopathy,

or podiatric medicine and have either at

least one year of laboratory training

during medical residency or two years

experience directing or supervising high

complexity testing; or, (3) hold an

earned doctoral degree in chemical,

physical, biological or clinical

laboratory science and be certified by

specified licensing organizations.

Section 493.1443. Provision is made in

the regulations for ‘‘grandfathering’’ in

laboratory directors who qualified and

served as such on or before February 28,

1992.

The Commonwealth’s current

regulations do not establish educational

criteria for laboratory directors that are

at all comparable to those set forth in

§ 493.1443. HCFA was advised in
Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices 5439

9 July 26, 1995 Letter from Dr. Carmen A.

Feliciano de Melecio to Anthony J. Tirone.

correspondence, and testimony was

offered in the hearing, that the

Commonwealth would be willing to

amend its existing regulations to

establish new qualifications equivalent

to CLIA. However, as of the date of the

hearing, such action has not been taken

by the Commonwealth.

Consequently, I must concur with the

initial determination reached by HCFA.

I find that the personnel requirements

for laboratory directors in the

Commonwealth of Puerto Rico are not

equal to or more stringent than those set

forth in section § 493.1443.

2. Technical Supervisor. Section

493.1447 mandates that laboratories

performing high complexity testing

must have a technical supervisor who

meets the qualification requirements of

§ 493.1449 and who provides technical

supervision in accordance with

§ 493.1451. Section 493.1449 requires

that laboratories employ one or more

persons qualified by education and

either training or experience to provide

technical supervision for each of

specialties and subspecialties of service

in which the laboratory performs high

complexity tests or procedures. In

§ 493.1449 the education and

experience qualifications differ based

upon the types of procedures and tests

that the laboratory performs.

The Commonwealth was notified by

HCFA in May 1995, that the standards

set forth in its existing regulations for

laboratory supervisors, when compared

with those required by CLIA for the

various types of laboratory testing, were

insufficient. More specifically, HCFA

explained that

For most specialties, CLIA requires

individuals with a bachelor’s degree to have

4 years training/experience in the specialty

with, if applicable, a minimum of 6 months

experience in a subspecialty. Although

Puerto Rico requires an individual with a

bachelor’s degree to have 5 years experience,

two of which should be supervisory, there is

no requirement for the experience to be in

the specialty/subspecialty. In addition, CLIA

requires a technical supervisor of

histocompatibility or clinical cytogenetics to

have at minimum a doctoral degree and 4

years of specific training or experience, or

both. PR [sic] allows an individual with a

bachelor’s degree in medical technology and

specialized training * * * to serve as a

technical supervisor in these specialties.

The Commonwealth never disputed

HCFA’s characterization of the apparent

differences in qualifications for

technical supervisors. Instead, the

Commonwealth asserted that ‘‘the

nature of the practice of laboratory

testing in Puerto Rico is very different

from that on the mainland’’ 9 and offered

to change its regulations on technical

supervisor qualifications ‘‘in order to

upgrade this particular personnel

standard to the C.L.I.A. standard’’

contingent of the approval of Puerto

Rico’s request for exemption. (Position

Paper, p. 16 and Feliciano letter).

However, as discussed at the outset,

the requirements for exemption from

CLIA are clear. In order to be granted an

exemption, the State must demonstrate

the current existence of laws that

represent standards equal to or more

stringent than CLIA condition level

requirements. An offer to change

existing regulations at sometime in the

future to meet the ‘‘CLIA standard’’ is

insufficient.

Accordingly, I must concur with the

initial determination reached by HCFA

with regard to the technical supervisors

qualifications. I find that the

qualifications for technical supervisor

represent a condition-level requirement

and that the Commonwealth has not

produced existing regulations

demonstrating the existence of

standards equal to or more stringent

than those required by 493.1447.

3. Clinical Consultants. Section

493.1453 requires that all laboratories

performing high complexity testing

must have a clinical consultant meeting

the requirements of § 493.1455 and who

provides clinical consultation in

accordance with § 493.1457.

In its application, the Commonwealth

stated that, with the exception of

hospital laboratories, it did not require

laboratories to have a clinical

consultant. On this basis, HCFA made

an initial determination that the

Commonwealth did not demonstrate

that it had laws equal to or more

stringent than the CLIA regulations

regarding clinical consultants.

In the Feliciano letter and in the

Position Paper, the Commonwealth

argues that clinical consultants have no

role in Puerto Rico since the clinical

laboratories use the physician who

orders the test as the clinical consultant.

(Position Paper, p. 19; Feliciano letter,

p. 7). The Commonwealth believes that

requiring independent clinical

consultants interferes with the

physician-patient relationship and

could cause ethical conflicts. Id.

However, notwithstanding these

concerns, the Commonwealth has

offered to amend its regulations to

include a requirement relating to

clinical consultants if the request for

exemption is granted.

As discussed above, a future offer to

amend the regulations to meet or exceed

CLIA requirements may not be

considered in a request for CLIA

exemption. Thus, on the issue of

clinical consultants, I concur with the

determination reached by HCFA. I find

that the Commonwealth has failed to

demonstrate that it has in effect

regulations regarding clinical

consultants that are equal to or more

stringent than those required by

§ 493.1453.

4. General Supervisor—Cytology.

Section 493.1467 sets as a conditionlevel standard for the subspecialty of

cytology, that the laboratory must have

a general supervisor who meets the

qualification requirements of section

493.1469 and who provides supervision

in accordance with section 493.1471. In

reviewing the Commonwealth’s

submission, HCFA noted that the

application failed to address certain

requirements for cytology general

supervisors, including the requirement

that the individual have at least three

years of full-time experience as a

cytotechnologist within the preceding

ten years.

In its Position Paper, the

Commonwealth concedes that its

regulations at Regulation 83, Chpt. 5,

Art. IV, Sec. 1(a)(5) do not mandate that

cytology general supervisors have the

same number of years of experience as

a cytotechnologists. (Position Paper, pg.

31). To resolve this deficiency, the

Commonwealth offers to amend their

regulations to correct this ‘‘oversight.’’

Id.

As stated, a future offer to amend

regulations to meet or exceed CLIA

standards can not be considered when

evaluating a request for exemption. The

Commonwealth acknowledges that its

current regulations establishing the

qualifications for cytology general

supervisors are not equal to the CLIA

regulations. Thus, I concur with the

initial determination reached by HCFA

and find that the Commonwealth has

failed to document the existence of

regulations equal to or more stringent

than those set forth at § 493.1467.

5. Cytotechnologists. Section

493.1483(b)(4) of the CLIA regulations

requires that cytotechnologists seeking

the benefit of the ‘‘grandfathering’’

provisions must have completed two

years of full-time supervised experience

in cytotechnology before January 1,

1969. Section 493.1483(b)(5), in turn,

allows an individual to be

‘‘grandfathered’’ in if, on or before

September 1, 1994, they had two years

of full-time experience within the

preceding five years under the

supervision of a physician and on or
5440 Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices

before September 1, 1995, either have

graduated from an accredited

cytotechnology school or become

certified in cytotechnology.

HCFA informed the Commonwealth

as one of the grounds for denial that

their personnel qualifications for

cytotechnologists wanting to be

‘‘grandfathered’’ into the program were

less stringent than these CLIA

requirements. Specifically, HCFA noted

that the regulations cited by the

Commonwealth did not require an

additional two years of full-time

supervised experience in cytology

before January 1, 1969. The

Commonwealth’s regulations also did

not require an individual to have

graduated from cytotechnology school

or have certification in addition to

possessing the requisite number of years

of full-time experience.

In responding to these issues in its

Position Paper, the Commonwealth did

not dispute the existence of a difference

in qualifications. The Commonwealth

avers that the applicable provisions in

Regulation 83, Chpt. 5, Art. IV, sec.

1(a)(5) contains an error, causing one to

read these qualifications in the

alternative rather than as cumulative,

that will be corrected at some time in

the future. (Position Paper, p. 31).

However, to the extent that the

language of the current regulatory

provision is lacking when compared to

§§ 493.1483(b)(4) and (b)(5), I concur

with the determination reached by

HCFA. I find that the Commonwealth

has failed to demonstrate the existence

of regulations setting forth

cytotechnologist qualifications equal to

or more stringent than those required by

§§ 493.1483(b)(4) and (b)(5).

6. Testing Personnel. § 493.1487

requires that laboratories performing

high complexity testing have a sufficient

number of individuals meeting the

qualification requirements of § 493.1489

to handle the volume and complexity of

testing performed. The qualification

standards set forth at section 493.1489

apply to all individuals performing such

high complexity testing. In its initial

determination, HCFA stated that the

Commonwealth did not provide

assurances that individuals given

special licenses, such as hemodialysis

technicians, nursing personnel and

emergency medical technicians, would

have to meet these CLIA level standards.

The Commonwealth has stated that all

testing performed in the Commonwealth

is treated as high complexity testing.

Thus, even individuals granted special

licenses by the Commonwealth would

need to possess qualifications equal to

or more stringent than those set forth at

§ 493.1489.

The Commonwealth cites Regulation

83, Chapter 2, Section 2 as the currently

applicable regulation governing the

qualifications of individuals accorded

special licenses. That regulation allows

a laboratory to undertake

responsibilities for training personnel

working under a special license and

allows the laboratory to certify

proficiency through a written and

practical tests. (Position Paper, p. 32).

However, there is no indication that

these individuals are required to

complete any accredited laboratory

training program or that they must

attain any particular educational level.

By contrast, § 493.1489 of the CLIA

regulations sets forth in detail the

licensing, accreditation and educational

requirements for personnel who perform

high complexity testing. Nothing in the

documentation provided by the

Commonwealth represents similar

regulatory requirements.

The Commonwealth states in its

Position Paper that ‘‘the personnel

authorized under special license to

perform certain testing shall either

comply with Puerto Rico’s stricter

testing personnel requirements or at a

minimum, comply with the less

stringent C.L.I.A. requirements.’’

(Position Paper, pp. 31–31.) However, as

with other personnel qualification

requirements, the Commonwealth’s

proposed manner of assuring the

application of such standards is by

taking regulatory action in the future.

Thus, I agree with the determination

made by HCFA regarding the

qualifications for testing personnel. I

find that the Commonwealth has not

produced evidence of existing

regulations that are equal to or more

stringent than the CLIA regulations on

testing personnel qualifications set forth

at § 493.1489.

H. Comparison of Test Results

Section 493.1709 of the regulations

provides that if a laboratory performs

tests that are not included in a

proficiency testing program, the

laboratory must have a system for

verifying the accuracy of its test results

at least twice a year. Upon reviewing the

Commonwealth’s application, HCFA

determined that it failed to demonstrate

the existence of an equivalent

regulation.

In its Position Paper, the

Commonwealth draws our attention to

the text of Regulation 83, Art. XI, Chpt.

9, sec. 5(b). (Position Paper, p. 34.) That

section, which is entitled ‘‘Evaluation of

the Comparison of the Test Results,’’

states in pertinent part that ‘‘(t)he

Institution must develop mechanisms to

verify the accuracy and reliability of the

processed tests through different

methods at least twice a year.’’

However, the Commonwealth

acknowledges, and we must note, that

this regulation does not specifically

require that laboratories maintain the

accuracy of a testing procedure at least

two times a year for tests for which

proficiency testing is not available. In

order to ensure that its regulations

correspond more closely with

§ 493.1709, the Commonwealth has

offered to amend its regulations

accordingly.

This change, necessary to ensure that

the Commonwealth has in effect a law

equal to or more stringent than

§ 493.1709, has not yet been made.

Hence, I concur with the initial

determination of HCFA and find that

the Commonwealth has not satisfied the

requirements of § 493.513(a) with regard

to the comparison of test results.

I. Subpart R—Enforcement

1. Relationship of Proprietor to

Owner/Operator. When apprising the

Commonwealth of its initial

determination, HCFA generally noted

that ‘‘(t)he relationship of the proprietor

to the owner/operator is unclear. This is

important because, under CLIA, certain

consequences to the owner-operator of a

laboratory occur when the laboratory

loses its certificate.’’ No particular

section of the CLIA regulations was

cited and no additional information on

the ‘‘consequences’’ at issue was

provided in the notice of denial. Indeed,

other than the above-cited two

sentences, there is no indication that the

Commonwealth was advised of the

specific basis for HCFA’s problems with

the manner in which the

Commonwealth defined the duties of

the proprietor/owner.

Section 493.1840(a)(8) allows HCFA

to initiate adverse actions to suspend,

limit or revoke any CLIA certificate if

the laboratory’s owner or operator,

within the preceding two year period,

owned or operated a laboratory that had

its CLIA certificate revoked. An

‘‘owner’’ is defined at § 493.2 as ‘‘any

person who owns any interest in a

laboratory except for an interest in a

laboratory whose stock and/or securities

are publicly traded.’’ Section 493.2

defines an ‘‘operator’’ as the ‘‘individual

or group of individuals who oversee all

facets of the operation of a laboratory

and who bear primary responsibility for

the safety and reliability of the results

of all specimen testing performed in that

laboratory.’’

By comparison, the Commonwealth

uses the term ‘‘proprietor’’ or ‘‘owner’’

to mean the person to whom a license

is issued for the operation of a
Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices 5441

10See May 22, 1996 Denial Letter.

laboratory. Reg. 83, Art. III, (51). The

‘‘supervisor’’ of the laboratory is

identified as the ‘‘[p]erson in charge of

ensuring that the operation and/or

administrative procedures are

performed in compliance with the

established standards of the

institution.’’ Id. at (58). The laboratory

‘‘director’’, in turn, is the ‘‘[p]erson in

charge of a facility in which any type of

clinical analysis, pathological study

and/or Blood Bank’s service is

provided.’’ Id. at (15).

While there apparently is

incongruence between the terms used in

the CLIA regulations and the

Commonwealth’s regulations, the initial

determination did not explain the basis

for HCFA’s concerns in anything but the

vaguest form. Perhaps because of this

failure to specify the nature of the

problem insofar as concerns

‘‘proprietors,’’ ‘‘owners,’’ and

‘‘operators,’’ the Commonwealth did not

address this issue in its Position Paper.

It is also noteworthy that HCFA did

not actively solicit additional guidance

on how the Commonwealth allocated

duties between proprietors, owners and

operators during the hearing.

Hence, because the Commonwealth

was not fully apprised of the nature of

HCFA’s concerns with regard to the

issue of the duties of proprietors,

owners and operators, I have elected to

disregard this issue in reaching a

decision in this reconsideration.

2. Ensuring Timely Correction of

Deficiencies. The Commonwealth was

informed by HCFA that one of the

grounds for the initial determination to

deny the request for exemption from

CLIA was that the application failed to

explain fully how the Commonwealth

enforced the timely correction of

deficiencies. More specifically, the

Commonwealth was advised:

(T)he ability to take enforcement action in

cases of immediate and serious jeopardy

before the laboratory receives a hearing must

be demonstrated. The Commonwealth must

provide information concerning the type of

sanction imposed, time frames for correction,

and the actions taken when deficiencies are

not corrected for * * * immediate and

serious threat to public health and safety;

condition level deficiencies, and deficiencies

below the condition level.10

Thus, HCFA’s evaluation of the

application for exemption indicated a

dearth of basic information necessary to

establish the existence of adequate

enforcement measures.

In its Position Paper, the

Commonwealth overlooks an

opportunity to educate us regarding this

important aspect of the basis for denial

and instead merely references sundry

regulations and laws, without

meaningful explanation on how the

laws and regulations respond to the

concerns identified in the initial denial.

(Position Paper, p. 34) However,

testimony was given during the Hearing

that may help explain how the

Commonwealth knits together these

various laws to fashion enforcement

proceedings. We will use this testimony

to attempt to respond to the particular

concerns identified by HCFA in its

initial determination.

As stated, HCFA generally noted that

the Commonwealth needed to

demonstrate the ability to take

prehearing enforcement action in cases

of immediate and serious jeopardy. To

respond to this deficiency, the

Commonwealth refers us to Regulation

83, Chapter 10, Art. VI, sec. 10, which

explains the procedures the Department

may use in cases where there is an

existing situation which is imminently

dangerous to the health, safety and well

being of the public. While this

regulation is imprecise, it does

demonstrate an ability to take

enforcement action in such cases, and

when read together with other parts of

Regulation 83, such as Chapter 2 and

Chapter 4, would seem sufficient to

respond to the first concern expressed

by HCFA.

Testimony offered at the hearing also

pointed to the UAPA as an important

element of the Commonwealth’s

enforcement authority. Section 2167 of

the UAPA allows an agency to take

immediate action in cases involving

threats to the public health. Witnesses

for the Commonwealth explained that

these proceedings are ex parte and an

order addressing the threat may be

issued by the Secretary of the

Department of Health after receipt of a

complaint. (Testimony, pp. 90–91). If a

laboratory ignores the Secretary’s order,

the Department of Law may petition the

court for an injunction directing the

laboratory to close. (Testimony, p. 91).

We note that the UAPA and the

relevant provisions of Regulation 83

were cited in the Crosswalk submitted

by the Commonwealth together with its

application. However, it is also apparent

that the testimony offered at the Hearing

helped explain how these various laws

should be read together. Based upon the

information I have reviewed, I must

partially reverse the determination of

HCFA insofar as concerns this aspect of

the initial determination. I find that the

Commonwealth has produced

documentation demonstrating the

ability to take prehearing enforcement

actions in cases of immediate and

serious jeopardy.

HCFA also found lacking the

Commonwealth’s submission of

documentation concerning sanctions,

time frames for corrections and actions

taken when deficiencies are not

corrected for all levels of deficiencies.

Again, because the Commonwealth

relies upon several regulations to

address enforcement and did not

prepare a Crosswalk that corresponded

exactly to the CLIA regulations,

appraising the sufficiency of the

Commonwealth’s laws has been

difficult. However, we believe that a

very close reading of the documentation

submitted with the initial application,

including sections not explicitly

identified by the Commonwealth,

provides some of the information

needed by HCFA.

Regulation 83, Chpt. 2, Art. VII sets

forth the principal sanctions:

suspension, revocation or limitation of

tests. Puerto Rico also has alternative

sanctions such as plans of correction,

explained at Regulation 83, Chpt. 4, Art.

III, sec. 1(f), and civil monetary

penalties, set forth at section 2201 of the

UAPA and Regulation 83, Chpt. 2, Art.

VIII. A civil suit, seeking immediate

closing of a laboratory, may be

commenced in cases of immediate

jeopardy and criminal prosecution may

be sought in cases involving intentional

violations. Reg. 83, Chpt. 2, Arts. IX and

X. Thus, with the exception of State

onsite monitoring, the Commonwealth

has in effect laws that correspond

generally to the CLIA regulations at

section 493.1806.

However, although these laws exist,

they nevertheless fail to address certain

key elements and are, in some instances,

less stringent than the CLIA regulations.

For example, the regulations do not

address the amount of time a laboratory

is given to make corrections. Although

Regulation 83, Chpt. 4, Art. III, Section

1(f) explains that deficiency reports are

issued ten days after an inspection

discloses deficiencies and indicates that

correction plans must be submitted by

the laboratories, the regulations do not

specify when the laboratory must

complete any noted corrections. Neither

do the regulations make clear that the

Commonwealth may send someone to

visit the laboratory at any time to

evaluate progress in correcting noted

deficiencies. See § 493.1820(a).

Similarly, while the Commonwealth

has in effect laws that allow for the

assessment of civil monetary penalties

for certain violations, the amounts are

markedly less than those authorized

under the CLIA regulations. As stated,

section 2201 of the UAPA allows the

imposition of an administrative fine of

up to $5,000 for each violation of the
5442 Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices

11See also § 493.513(d), which requires exempted

States to provide HCFA with certain information,

including license approvals, revocations, sanctions

and withdrawals.

agency’s regulations and has been cited

by the Commonwealth as the key

penalty provision for cases involving

immediate jeopardy. However, this must

be compared with 42 CFR

493.1834(d)(2) which allows HCFA to

impose a penalty amount from $3,050 to

$10,000 per day of noncompliance or

per violation for condition level

deficiencies that represent immediate

jeopardy.

Lastly, with the exception of

information provided concerning cases

of immediate jeopardy, the

Commonwealth cannot be said to have

submitted comprehensible

documentation of what actions are taken

when less severe deficiencies are not

corrected.

In summary, while I disagree with

HCFA’s initial determination that the

Commonwealth did not demonstrate an

ability to take enforcement action in

cases of immediate and serious

jeopardy, I concur with their assessment

that the Commonwealth did not

adequately explain certain key aspects

of their enforcement proceedings. I find

that the Commonwealth has not

demonstrated the existence of

regulations to ensure the timely

investigation of and correction of

deficiencies. I also find that the amount

of civil monetary penalties that the

Commonwealth may assess in cases of

immediate and serious jeopardy is

insufficient when compared to the CLIA

regulations. For these reasons, I find

that the Commonwealth has failed to

document the existence of regulations

equal to or more stringent than

§ 493.1820 of the CLIA regulations.

3. Laboratory Registry. Section

493.1850 of the regulations requires

HCFA to make available once a year

specific information that is useful in

evaluating the performance of

laboratories. The regulation explicitly

mandates that this information include

a list of laboratories convicted under

laws relating to fraud and abuse, false

billing, or kickbacks. In its initial

determination, HCFA found that the

Commonwealth did not evidence the

existence of a regulation or law that

would require it to make available to

physicians and the public, via HCFA, a

list of laboratories convicted of fraud

and abuse, false billing, or kickbacks,

under Puerto Rican law.11

The Commonwealth in its Position

Paper indicates that it does not have any

information about any laboratory

convicted under Puerto Rican laws

sanctioning fraud and abuse, false

billing or kickbacks. (Position Paper, p.

34). As concerns its future duty to report

pursuant to § 493.1850, the

Commonwealth ‘‘guarantees’’

submission of such information and the

future amendment of its regulations, if

necessary. (Position Paper, p. 34).

We are unsure of how one should

interpret the Commonwealth’s lack of

information in this regard. One

interpretation is that there have been no

laboratories in the Commonwealth of

Puerto Rico have been convicted of

fraud and abuse, false billing or

kickbacks. Another interpretation is that

the Secretary does not obtain

information or maintain a record of the

disposition of fraud and abuse, false

billing or kickback cases involving

laboratories.

In any event, to the extent that the

CLIA regulations specifically require

disclosure of this information to the

public, any State seeking exemption

from CLIA must show the existence of

a corresponding reporting mechanism.

As conceded by the Commonwealth, it

does not currently have regulations that

require it to collect and submit this data

to HCFA. Without such current

regulations, I have no alternative but to

concur with the initial determination

reached by HCFA. For the above-noted

reasons, I find that the Commonwealth

has failed to demonstrate the existence

of a regulation equal to or more

stringent than the CLIA regulation

requiring laboratory registry.

IV. Findings

After undertaking an exhaustive and

complete review of the documentation

submitted by the Commonwealth in

connection with its application for

exemption, HCFA determined that

Puerto Rico did not satisfy the

requirements of § 493.513(a)(1) and

could not be granted exemption from

CLIA. I have considered the record,

supplementary information provided by

the Commonwealth, the Position Paper

and testimony in preparing this

decision. I hereby make the following

findings:

1. Section 493.513 of the regulations

sets forth the general requirements for

States seeking exemption from CLIA

program requirements.

2. Subsection 493.513(a)(1) provides

that HCFA may grant a State exemption

from CLIA if the State has in effect laws

that provide for requirements equal to or

more stringent than CLIA conditionlevel requirements.

3. The application for exemption and

supporting documentation submitted by

the Commonwealth of Puerto Rico was

evaluated by HCFA using this standard.

4. In fourteen instances involving

condition-level requirements, HCFA

properly determined that the

Commonwealth was unable to

demonstrate the existence of laws

providing for requirements equal to or

more stringent than the CLIA

regulations. These deficiencies have

been thoroughly discussed in this

decision.

Legal Conclusion

For the reasons discussed herein, and

based upon the above-referenced

findings of fact, I conclude that the

initial determination reached by HCFA

to deny the Commonwealth of Puerto

Rico’s application for exemption from

CLIA was consistent with the applicable

laws and regulations. It is recommended

that the initial determination denying

the Commonwealth’s application for

CLIA exemption be affirmed.

Dated: September 27, 1996.

Richard W. Besdine,

Hearing Officer, Health Care Financing

Administration.

[FR Doc. 97–2761 Filed 2–4–97; 8:45 am]

BILLING CODE 4120–03–P

Health Resources and Services

Administration

National Vaccine Injury Compensation

Program; List of Petitions Received

AGENCY: Health Resources and Services

Administration, HHS.

ACTION: Notice.

SUMMARY: The Health Resources and

Services Administration (HRSA) is

publishing this notice of petitions

received under the National Vaccine

Injury Compensation Program (‘‘the

Program’’), as required by section

2112(b)(2) of the Public Health Service

(PHS) Act, as amended. While the

Secretary of Health and Human Services

is named as the respondent in all

proceedings brought by the filing of

petitions for compensation under the

Program, the United States Court of

Federal Claims is charged by statute

with responsibility for considering and

acting upon the petitions.

FOR FURTHER INFORMATION CONTACT: For

information about requirements for

filing petitions, and the Program

generally, contact the Clerk, United

States Court of Federal Claims, 717

Madison Place, N.W., Washington, D.C.

20005, (202) 219–9657. For information

on HRSA’s role in the Program, contact

the Director, National Vaccine Injury

Compensation Program, 5600 Fishers

Lane, Room 8A35, Rockville, MD 20857,

(301) 443–6593.