26722 Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations

assessing the impact of any proposed or

final rule on small entities. 5 U.S.C. 603

and 604. Alternatively, EPA may certify

that the rule will not have a significant

impact on a substantial number of small

entities. Small entities include small

business, small not-for-profit enterprises

and government entities with

jurisdiction over populations of less

than 50,000.

As discussed in section III.C. below,

findings of failure to submit required

SIP revisions do not by themselves

create any new requirements. Therefore,

I certify that today’s action does not

have a significant impact on small

entities.

C. Unfunded Mandates Act

Under sections 202, 203, and 205 of

the Unfunded Mandates Reform Act of

1995 (‘‘Unfunded Mandates Act’’)

signed into law on March 22, 1995, EPA

must undertake various actions in

association with proposed or final rules

that include a Federal mandate that may

result in estimated costs of $100 million

or more to the private sector, or to State,

local, or tribal governments in the

aggregate.

In addition, under the Unfunded

Mandates Act, before EPA establishes

any regulatory requirements that may

significantly or uniquely affect small

governments, including tribal

governments, EPA must have

developed, under section 203, a small

government agency plan.

EPA has determined that today’s

action is not a Federal mandate. The

CAA provision discussed in this notice

requires states to submit SIPs. This

notice merely provides findings that

Arizona has not met that requirement.

This notice does not, by itself, require

any particular action by any State, local,

or tribal government, or by the private

sector.

For the same reasons, EPA has

determined that this rule contains no

regulatory requirements that might

significantly or uniquely affect small

governments.

D. Submission to Congress and the

General Accounting Office

The Congressional Review Act, 5

U.S.C. 801 et seq., as added by the Small

Business Regulatory Enforcement

Fairness Act of 1996, generally provides

that before a rule may take effect, the

agency promulgating the rule must

submit a rule report, which includes a

copy of the rule, to each House of the

Congress and to the Comptroller General

of the United States. However, section

808 provides that any rule for which the

issuing agency for good cause finds (and

incorporates the finding and a brief

statement of reasons therefor in the rule)

that notice and public procedure

thereon are impracticable, unnecessary

or contrary to the public interest, shall

take effect at such time as the agency

promulgating the rule determines. 5

U.S.C. 808(2). As stated previously, EPA

has made such a good cause finding,

including the reasons therefor, and

established an effective date of April 27,

1998. EPA will submit a report

containing this rule and other required

information to the U.S. Senate, the U.S.

House of Representatives, and the

Comptroller General of the United

States prior to publication of the rule in

the Federal Register. This rule is not a

‘‘major rule’’ as defined by 5 U.S.C.

804(2).

E. Paperwork Reduction Act

This rule does not contain any

information collection requirements

which require OMB approval under the

Paperwork Reduction Act (44 U.S.C.

3501 et seq.).

F. Judicial Review

Under CAA Section 307(b)(1), a

petition to review today’s action may be

filed in the Court of Appeals for the

appropriate circuit by July 13, 1998.

Filing a petition for reconsideration by

the Administrator of this final rule does

not affect the finality of this rule for the

purposes of judicial review nor does it

extend the time within which a petition

for judicial review may be filed, and

shall not postpone the effectiveness of

such rule or action. This action may not

be challenged later in proceedings to

enforce its requirements. See section

307(b)(2) of the Act.

List of Subjects in 40 CFR Part 52

Environmental protection, Air

pollution control, Carbon monoxide,

Intergovernmental relations.

Authority: 42 U.S.C. 7401 et seq.

Dated: April 27, 1998.

Felicia Marcus,

Regional Administrator, Region IX.

[FR Doc. 98–12853 Filed 5–13–98; 8:45 am]

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

Centers for Disease Control and

Prevention

42 CFR Part 493

[HCFA–2239–F]

RIN 0938–AH82

CLIA Program; Simplifying CLIA

Regulations Relating to Accreditation,

Exemption of Laboratories Under a

State Licensure Program, Proficiency

Testing, and Inspection

AGENCY: Health Care Financing

Administration (HCFA), and Centers for

Disease Control and Prevention (CDC),

HHS.

ACTION: Final rule.

SUMMARY: This final rule responds to

selected comments received on a final

rule with a comment period

implementing the Clinical Laboratory

Improvement Amendments of 1988,

which was published in the Federal

Register on February 28, 1992, in the

areas of proficiency testing and

inspections for clinical laboratories. In

responding to these comments, we

accommodate, when possible, the

Administration’s regulatory reform

initiative by reducing duplicative

material, emphasizing outcome-oriented

results, and simplifying regulations. In

that regard, we also are streamlining our

regulations in the areas of State

exemption, and granting deemed status

to laboratories accredited by an

approved accreditation organization.

EFFECTIVE DATE: These regulations are

effective on June 15, 1998.

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
Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations 26723

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: Judy

Yost, (410) 786–3531.

SUPPLEMENTARY INFORMATION:

I. Background

On February 28, 1992, we published

in the Federal Register, at 57 FR 7002,

final regulations with an opportunity for

public comment, ‘‘Regulations

Implementing the Clinical Laboratory

Improvement Amendments of 1988

(CLIA),’’ that set forth requirements for

laboratories that are subject to CLIA.

CLIA requirements apply to any

laboratory 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. The

regulations at 42 CFR part 493 establish

uniform requirements for all

laboratories regardless of location, size,

or type. A laboratory must meet these

Federal requirements, or a laboratory

may meet the requirements if it is either

accredited by a private, nonprofit

accreditation organization approved by

HCFA, and holds a valid CLIA

certificate, or it is located in a State that

HCFA has granted an exemption from

CLIA requirements because the State

has in effect laws that provide for

requirements equal to or more stringent

than CLIA requirements.

On July 31, 1992, we published in the

Federal Register, at 57 FR 33992, a final

rule that established the criteria used to

approve accreditation organizations and

State licensure programs. These

regulations are found in subpart E of

part 493 and are based on statutory

requirements in section 353 (e) and (p)

of the Public Health Service Act.

II. Provisions of the Final Regulations

These regulations respond to public

comments received on the February 28,

1992 rule concerning the inspection of

laboratories and the regulatory use of

proficiency testing. In responding to the

concerns of the commenters, we

accommodate, whenever possible, the

Administration’s regulatory reform

commitment by:

(1) Eliminating duplicative material

and reorganizing regulations concerning

accreditation by a private, nonprofit

accreditation organization and

exemption from CLIA requirements

under an approved State licensure

program (subpart E of part 493); (2)

emphasizing education in proficiency

testing to improve laboratory

performance (subpart H of part 493);

and (3) focusing on an outcome-oriented

approach in laboratory inspections

(subpart Q of part 493).

A. Accreditation of a Laboratory by a

Private, Nonprofit Accreditation

Organization or Exemption From CLIA

Requirements Under an Approved State

Laboratory Program (Subpart E)

Based on the requirements in section

353(e) and (p) of the Public Health

Service Act and regulations in part 493,

subpart E, HCFA has approved six

accreditation organizations. They are:

American Association of Blood Banks,

American Osteopathic Association,

American Society for

Histocompatability and

Immunogenetics, College of American

Pathologists, Commission on Office

Laboratory Accreditation, and Joint

Commission on Accreditation of

Healthcare Organizations. We have also

approved three State licensure programs

for CLIA exemption of licensed

laboratories within the State:

Washington, New York, and Oregon.

The existing regulations in subpart E

contain duplicative information, which

we are eliminating by restructuring

subpart E and consolidating

requirements. The revised subpart better

reflects the process involved and better

organizes the information required from

organizations and States to obtain HCFA

approval. This restructuring does not

change the current requirements, but

only redesignates them into a more

customer-oriented document, making

them easier for users to understand. In

this process, we use new section

numbers, but retain all the requirements

in subpart E.

B. Participation in Proficiency Testing

for Laboratories Performing Tests of

Moderate Complexity (Including the

Subcategory of Provider-performed

Microscopy), High Complexity, or Any

Combination of These Tests (Subpart H)

Proficiency testing (PT) is the testing

of laboratory samples, the values of

which are unknown to the laboratory, to

assess the accuracy of the laboratory’s

results. PT serves as a test performance

indicator, as well as provides invaluable

feedback. Under the CLIA regulations,

laboratories test PT samples three times

a year for the tests the laboratory

performs, which are listed in subpart I

of part 493. Samples for these three

testing events are provided and graded

by HCFA-approved PT programs. A

laboratory’s performance is described as

satisfactory performance, unsatisfactory

performance, or unsuccessful

performance. Satisfactory performance

occurs when a laboratory attains a

passing score for all analytes,

subspecialties, or specialties.

Unsatisfactory performance occurs

when a laboratory fails to attain the

minimum satisfactory score for an

analyte, subspecialty, or specialty for a

testing event. Unsuccessful performance

occurs when a laboratory fails to attain

the minimum satisfactory score for an

analyte, subspecialty, or specialty for

two consecutive or two of three

consecutive testing events.

Comments Concerning Regulatory Use

of PT

In response to the concerns of

commenters received on the final rule

published February 28, 1992, we are

emphasizing our existing policy that

uses PT as an outcome indicator of

laboratory performance and for

educational purposes. We found that the

commenters’ recommendations were

consistent with our regulatory reform

initiative.

Comment: Many commenters

recommended that we use PT

performance more for educational

purposes than for punitive actions.

Commenters stated that PT is an

excellent mechanism for assisting

laboratories to identify and solve

problems, evaluate personnel, and

improve test performance; however,

while PT is a valuable educational tool,

it has limitations that should preclude

it from use as the sole indicator for

regulatory intervention.

Response: We agree with the

commenters. We allow a laboratory to

undertake education or training, or both,

to correct initial unsuccessful PT

performance for each laboratory

specialty in which it performs PT. An

educational focus for an initial

occurrence of unsuccessful PT affords

the laboratory further opportunity to

undertake training of its personnel, or to

obtain technical assistance, or both, to

identify, correct, and prevent the

problems that led to PT failures. We are

revising subpart H to clarify and

emphasize HCFA’s educational

approach. This approach will not

release the laboratory from its

responsibility to perform patient testing

accurately and reliably. It is, however,
26724 Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations

less punitive than some laboratories’

initial perception of the PT actions we

would impose, and provides an

incentive, as well as a mechanism for

laboratories to improve their

performance.

The enforcement provisions in

§ 493.1838 give a laboratory the

opportunity to train personnel or to

obtain technical assistance, or both,

when the laboratory has performed PT

unsuccessfully. We are adding a new

paragraph (c) to § 493.803, which sets

forth the educational emphasis of PT, to

respond to comments received on PT

requirements. These regulatory

additions unify commenters’

recommendations with the

Administration’s Reinventing

Government initiative by focusing on

education as a correction to the

problem, as opposed to punitive

measures.

Comment: Commenters recommended

that HCFA use PT performance as an

index of performance or a screening tool

to identify potential problems.

Commenters also suggested that we

impose stricter sanctions (that is, that

we remove from a laboratory’s

certificate the laboratory’s authorization

to test a specific analyte) when a

laboratory demonstrates an

unwillingness or inability to correct the

problems that caused the failure.

Response: We agree with the

commenters. We have also established

some exceptions at § 493.803(c) that

encompass the commenters’

suggestions. We would take more

assertive actions when there is an

immediate jeopardy to patient health

and safety, when a laboratory

demonstrates an inability or

unwillingness to provide evidence that

it has taken steps to correct its PT

problem(s), or if it has a history of

noncompliance with CLIA requirements

other than proficiency testing (for

example, a laboratory that has had

condition level deficiencies in quality

control).

C. Inspection—Subpart Q

We are revising part 493 subpart Q,

Inspections, in response to commenters’

concerns. We are also reconstructing

this subpart into a more concise format,

using succinct, easier to understand

language. Additionally, we are

redirecting the HCFA inspection process

to focus more on outcomes, rather than

a solely process-oriented review of a

laboratory. These actions also follow the

Administration’s Reinventing

Government initiative in that the onsite

survey is less process dependent.

1. Alternate Quality Assessment Survey

Comment: We received comments

requesting that we inspect laboratories

onsite every 2 years, but provide a

‘‘paper inspection’’ that the laboratory

would complete between biennial onsite

inspections.

Response: We believe that it would be

a prudent use of our resources, and a

sensible means of allowing greater

flexibility than the program currently

provides, to have an inspection scheme

that gears itself to the variations we see

in laboratory compliance. For those

laboratories that we believe pose

potential risks to public health and

safety, judging from their compliance

history, we continue to believe that

regular onsite inspections present the

most viable course of assuring ourselves

that these laboratories maintain

compliance with CLIA requirements. On

the other hand, for those laboratories

that have a sustained record of

maintaining compliance, the need to

have a constantly recurring onsite

presence is not as compelling.

We believe that the statute

specifically authorizes our focussed use

of limited inspection resources.

Specifically, section 353(g)(2) of the

Public Health Service Act calls for

inspections to be performed on a

biennial basis, ‘‘or with such other

frequency as the Secretary determines to

be necessary to assure compliance’’ with

CLIA standards. We believe that the use

of the Alternate Quality Assurance

Survey allows us to be in a position to

inspect onsite with less frequency than

we have before, while still assuring that

those laboratories that require the

closest supervision will continue to

receive it. This approach would further

the statutory mandate that we have a

schedule for inspections that enables us

to ensure facility compliance with

program requirements.

With input from our partners in the

State survey agencies and our regional

office surveyors, we will review and

evaluate information, such as the type

and number of deficiencies (if any) cited

at the last onsite inspection, proficiency

testing performance, and complaints

lodged against the laboratory. We

consider information of this type in

determining whether a laboratory may

be a candidate for this self-inspection

(the Alternate Quality Assessment

Survey). We believe that a selfinspection process will motivate

laboratories to improve their

performance. It is also an example of the

Reinventing Government initiative put

into practice.

A laboratory may receive the

Alternate Quality Assessment Survey in

lieu of an onsite inspection. Based on a

review of the completed Alternate

Quality Assessment Survey form and

information submitted by the laboratory,

should we conclude that, for any reason,

the laboratory is not performing in a

manner expected by the statute and

regulations, we will follow the Alternate

Quality Assessment Survey with an

onsite inspection to verify that the

laboratory is in compliance with CLIA

requirements. A laboratory will not

receive the Alternate Quality

Assessment Survey for two consecutive

certification cycles.

We will monitor and evaluate the

effectiveness of the Alternate Quality

Assessment Survey process through

verification inspections of

approximately 5 percent of the

laboratories receiving the self-survey

questionnaire. We will adjust the self

assessment process, as indicated.

2. Outcome-oriented Survey Process

Comment: Among the commenters’

recommendations were indications that

our February 28, 1992 regulations

implementing the CLIA requirements

may not be applicable to all functions of

all laboratories. We were reminded that

certain standards might not be required

for every type of testing performed; for

example, the requirements for specimen

preparation and storage of specimens

would not directly apply to most pointof-care testing and, typically, have

minimum impact on the quality of

testing in this setting. Although HCFA

surveyors have not held laboratories to

requirements that are not applicable to

a particular laboratory’s testing

activities, there was a concern from the

commenters that the surveyors would

interrupt direct patient care and spend

an inordinate amount of time

performing a line-by-line comparison of

regulations that would not apply to the

type of testing performed by the entity.

Response: In an effort to be responsive

to those concerns, we are enhancing our

inspection or survey process by focusing

on outcomes. The outcome-oriented

survey is the onsite inspection

mechanism that is used for all

laboratories. Onsite inspections are

performed for: initial surveys for newly

regulated laboratories; validation

inspections of accredited or CLIAexempt laboratories, laboratories that do

not qualify for the Alternate Quality

Assessment Survey; and for alternate

cycles for those laboratories completing

the Alternate Quality Assessment

Survey. The emphasis of the survey is

on the quality of the laboratory’s

performance and is based on a review of

the laboratory’s oversight and

monitoring of its preanalytical,
Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations 26725

analytical, and postanalytical testing

processes using the quality assurance

requirements in the regulations.

Surveyors will review laboratory

performance from the perspective of the

effect on patient care rather than a lineby-line comparison for regulatory

compliance. While we will look at

outcomes as indicators of compliance,

should we identify noncompliance with

requirements set forth in the CLIA rules,

we will cite deficiencies and, if

necessary, impose sanctions. Our

improvements to the survey mechanism

are also in line with the

Administration’s Reinventing

Government initiative by focusing on

outcomes, as opposed to process.

In summary, on commenters’

recommendations, we are providing to

laboratories an onsite survey process

that is less process dependent and more

outcome-oriented, as well as a selfevaluative assessment (the Alternate

Quality Assessment Survey), to motivate

laboratories toward self-monitoring of

their overall performance.

3. Specific Comments and Responses on

Issues Concerning Inspection of

Laboratories

We received 114 comments

concerning subpart Q, Inspections.

Many of the commenters raised

identical or closely related issues, and

we combined them, when appropriate.

Comment: We received numerous

comments regarding announced versus

unannounced inspections. Some

commenters believed that only a

physician office laboratory should have

announced inspections, especially when

direct patient care is provided. They

believed that it would be a waste of the

inspector’s time if, at the time of the

inspection, the laboratory was closed,

the director unavailable, or the

laboratory was not conducting testing.

Other commenters believed that the

option for announced inspections

should be provided to all laboratories.

These commenters believed that, even if

given advance notice of an inspection,

a laboratory would still not be able to

‘‘falsify’’ documentation or other data

that would not be readily identified by

a competent inspector. Another group of

commenters stated that follow-up

inspections should be unannounced.

One commenter believed that we should

set standards limiting agency discretion

to conduct unannounced inspections.

Still another commenter believed that

‘‘warrants’’ should be required when the

laboratory owner does not give advance

consent for his or her laboratory to be

inspected.

Response: We agree with commenters

who recommended announced

inspections for all laboratories. We have

instituted a policy of announced

inspections for all initial and

recertification inspections, which

allows a laboratory the latitude to

include multiple members of the staff in

the inspection process for the

educational value. Announced, routine

inspections are more efficient, in that

the laboratory can make previous testing

records more accessible before the

inspection, and these inspections are

also less intrusive when the laboratory

is a health care facility providing direct

patient care.

We are revising subpart Q by

eliminating the modifiers ‘‘announced

and unannounced’’ and keeping only

the unqualified term ‘‘inspections.’’

This is in accordance with section

353(g)(1) of the Public Health Service

Act, which clearly provides for either

announced or unannounced

inspections. This provision applies to

all laboratories, in keeping with the siteneutral intent of the CLIA statute.

However, we are maintaining our policy

that all complaint and follow-up

inspections are unannounced and are

conducted during routine hours of

operation. Because these inspections are

most probably for cause, laboratories are

evaluated during normal operating

conditions so that an appropriate

assessment can be made.

We disagree with the commenter who

believed that we should develop

standards limiting agency discretion to

conduct unannounced inspections. The

law allows the Secretary to determine

when announced or unannounced

inspections should be conducted and

does not call for standards to be

developed limiting this provision. We

believe that the survey procedures and

instructions contained in the HCFA

State Operations Manual (HCFA Pub. 7)

adequately outline situations in which

an announced or unannounced

inspection should be conducted.

We disagree with the commenter who

suggested that we require a ‘‘warrant’’

when the laboratory owner does not

give advance consent for the laboratory

to be inspected. The law provides us

with the authority to enter a laboratory

for the purpose of conducting an

inspection. If an owner, director, or any

employee of the laboratory refuses our

reasonable request for permission to

inspect the laboratory and its

operations, the laboratory may be

subject to revocation of its CLIA

certificate, as provided in section

353(i)(1)(E) of the Public Health Service

Act and § 493.1840 of the regulations.

Comment: A few commenters said the

word ‘‘will’’ should be changed to

‘‘may’’ in the following context: ‘‘HHS

will conduct announced or

unannounced surveys’’ at § 493.1776(a)

(now found at § 493.1775(b)).

Response: We agree with the

commenters. However, as previously

explained, we are removing the specific

words ‘‘announced’’ and

‘‘unannounced,’’ and the pertinent

portion of § 493.1775(b) now reads, ‘‘

* * * HCFA or a HCFA agent may

conduct an inspection at any time

during the laboratory’s hours of

operation * * *’’ to be consistent with

the rest of the subpart.

Comment: One commenter believed

that CLIA requires yearly inspections,

while other commenters recommended

that we conduct inspections every other

year onsite with a paper inspection in

alternate years.

Response: Section 353(g)(1) of the

Public Health Service Act requires

inspections on a biennial basis or with

such other frequency that the Secretary

determines necessary to ensure

compliance with the CLIA

requirements. We conduct complaint

inspections, as necessary, after we

determine that the complaint alleges a

violation of CLIA requirements. We

agree with the commenters’

recommendation for onsite inspections

to be alternated with a self-evaluative

survey. We have developed a selfassessment form, the Alternate Quality

Assessment Survey, to be used in

alternate cycles for laboratories with a

history of compliance because there is

less need to have a constantly recurring

presence in those laboratories.

Comment: Some commenters

suggested that inspections be conducted

by professional organizations. There

was concern that surveyors would not

be knowledgeable about specialty

testing or regulatory requirements, and

might inappropriately apply

requirements. Another group of

commenters believed that cytology

inspections should be conducted by a

qualified pathologist and

cytotechnologist.

Response: Inspections for laboratories

holding certificates of compliance are

performed by HCFA regional office

laboratory consultants or State survey

agency personnel, or both, and stress an

outcome-oriented focus. In addition to

mandatory participation at a HCFAsponsored laboratory surveyor training

program and one-on-one training with

an experienced surveyor, we also

provide written guidelines to assist

surveyors in evaluating laboratory

compliance with Federal regulations.

This training provides the surveyor with

comprehensive, detailed information

regarding the regulations, outcomeoriented survey process, and surveyor
26726 Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations

guidelines, all of which complement

their technical background. Training is

also provided at the State and Federal

regional levels on an on-going basis.

Moreover, we have a contract in place

with an organization of cytology

professionals, which provides

specialized reviews of selected cytology

laboratories. The individuals who

participate in these reviews are

qualified as general supervisors and

technical supervisors in cytology. This

contract has been in effect since 1989.

HCFA also has approved six

professional organizations as accrediting

bodies under CLIA. These organizations

sought deeming authority for their

programs, which were equal to, or more

stringent than, the CLIA requirements

taken as a whole. A laboratory may,

therefore, choose to apply for a

certificate of accreditation; in which

case, a HCFA-approved accreditation

organization would serve as its

inspecting agency for CLIA.

Comment: One organization believed

that it is inappropriate for a surveyor to

interview an employee during an

inspection, and if a disgruntled

employee makes false or specious

comments against his or her employer,

it may impugn the reputation of the

laboratory director.

Response: We disagree. Any

interviews conducted during the course

of an inspection are to assist the

surveyor in gathering information for

the determination of the laboratory’s

compliance with the applicable

requirements under part 493. Any

pertinent information received during

an inspection is verified, and

determination of a facility’s compliance

is based on all elements of the

inspection process, not just individual

interviews.

Comment: Another group of

commenters was concerned that patient

records will be reviewed during the

course of the inspection and believed

that patient privacy may be

compromised.

Response: We understand the

commenters’ concerns; however,

laboratory surveyors are health care

professionals who are familiar with the

need for patient privacy. Confidentiality

of patient and laboratory information is

also reinforced during surveyor training

sessions. Laboratory surveyors

appreciate and respect patient

confidentiality. Therefore, we do not

believe patient privacy would be

compromised.

Comment: A few commenters

believed that we should only conduct

inspections for cause. One commenter

believed that complaints should be

better defined. Another commenter

believed that complaints should be

verified before a complaint inspection is

conducted.

Response: Section 353(g)(2) of the

Public Health Service Act requires that

we conduct inspections biennially or

with such frequency as the Secretary

determines is necessary. For those

laboratories with a history of

compliance, there is less need to have

a constantly recurring onsite presence,

and we have developed a self-evaluative

survey, the Alternate Quality

Assessment Survey, to be used in

alternate cycles. We believe the use of

the Alternate Quality Assessment

Survey allows us to be in a position to

inspect onsite with less frequency than

we have before, while still ensuring that

those laboratories that require the

closest supervision will continue to

receive it.

A complaint is an allegation against a

laboratory by any individual for any

perceived or real violation of the CLIA

requirements. For example, there may

be a complaint that a laboratory is

operating without a certificate or that a

laboratory is performing testing outside

of the certificate it holds. Inspectors are

instructed to determine if the complaint

involves CLIA requirements or

regulations under the jurisdiction of

another agency. If the complaint

involves a violation of State or other

Federal law that is under the

jurisdiction of another agency (for

example, the Occupational Safety and

Health Administration), we refer the

complaint to the appropriate State or

agency for investigation. If the

complaint is an alleged violation of the

CLIA requirements, we may conduct an

unannounced onsite inspection focusing

on the alleged violations.

Comment: A commenter wanted the

phrase ‘‘including allegations that

individuals other than physicians are

performing microscopic exams’’ added

at § 493.1776(a)(2). Another group of

commenters believed that we should

conduct unannounced inspections to

substantiate which individuals are

performing testing.

Response: When a complaint alleges

that an individual performing tests is

not qualified, we investigate the

laboratory’s compliance with the CLIA

personnel qualification requirements. It

is our policy to conduct unannounced

complaint inspections. To clarify this

policy we are moving § 493.1776(a)(2) to

§ 493.1775(b) and also referencing this

in § 493.1773(f).

Comment: Some commenters objected

to ‘‘onsite proficiency testing’’ as part of

the inspection process as being

inappropriate based on the

complications involved in testing PT

samples and suggested that we delete

§ 493.1777(b)(1).

Response: We disagree with the

commenters. Section 493.1777(b)(1),

now § 493.1773(b)(1), provides the

surveyor with the authority to require a

laboratory to perform testing, which

may include analysis of PT samples

from a HCFA-approved PT program, as

part of the inspection. We are aware of

the complications referred to by the

commenters. Although the option of

requiring a laboratory to perform testing

on PT samples exists, it is not routinely

employed by surveyors. If it were

employed, it would be structured to

address complications expressed by the

commenters.

Comment: One commenter believed

that we should require onsite

(proficiency) testing during routine

inspections for laboratories holding a

certificate of waiver.

Response: Section 353(d)(2)(C) of the

Public Health Service Act specifically

exempts laboratories performing only

waived tests from routine inspections

and all quality standards including PT.

We, therefore, may not require this

testing or routinely inspect waived

testing.

Comment: A few commenters

suggested that we add the following

language to § 493.1775, ‘‘States may

coordinate the Medicare/Medicaid

compliance surveys for skilled nursing

facilities, nursing facilities, and

intermediate care facilities for the

mentally retarded with CLIA

compliance activities.’’

Response: We encourage coordination

of inspections under the Medicare,

Medicaid, and CLIA programs. Due to

separate laws and funding, resources,

expertise, and availability, we can do no

more than encourage inspectors from

different programs to coordinate

inspections to reduce the burden on

facilities. Thus, we are making no

change to the regulations.

Comment: Commenters also suggested

that we change § 493.1775(d) to read:

‘‘* * *payments for laboratory services

to the laboratory or * * * ‘‘ to ensure

that a suspension of Medicare payments

for laboratory services by a provider

could not result in the suspension of

payments for any non-laboratory

services.

Response: We are moving this

requirement from § 493.1775(d) to

§ 493.1773(g). As stated above, CLIA

and Medicare/Medicaid are separate

programs. Actions we take under the

CLIA program may result in a laboratory

being unable to perform certain tests.

We notify the Medicare and Medicaid

programs, as appropriate, of any action

we take to suspend, limit or revoke the
Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations 26727

CLIA certificate, which may have an

impact on the facility’s overall

participation in Medicare/Medicaid.

Comment: One commenter suggested

that we change § 493.1780(b)(4)(ii) to

ensure that inspection reports from

accreditation bodies are readily

available to inspectors.

Response: The current regulations

require that an accrediting organization

submit pertinent information to HCFA,

which includes inspection reports from

the accreditation organization’s surveys.

We find that performing validation

inspections without prior knowledge of

the organization’s findings offers a more

unbiased approach for our surveyors

than performing inspections with prior

knowledge. Therefore, inspection

reports from accreditation organizations

are not normally made available to

surveyors before they perform

validation inspections. However, these

reports are used in the comparability

review of the organization’s inspection.

Comment: Some commenters urged us

to approve the College of American

Pathologists as an accrediting

organization, so that laboratories that

are accredited by this organization will

meet CLIA requirements.

Response: HCFA approved the

College of American Pathologists as an

accreditation organization (see notice

published February 9, 1995 in the

Federal Register at 60 FR 7774). Five

other organizations have also been

approved as accreditation organizations:

American Association of Blood Banks;

American Osteopathic Association;

American Society for Histocompatibility

and Immunogenetics; Commission on

Office Laboratory Accreditation; and

Joint Commission on Accreditation of

Health Care Organizations.

Comment: Several commenters

indicated that it is possible for mobile

laboratories providing services in more

than one State to operate under one

certificate. They questioned which State

would have the responsibility to inspect

the laboratories.

Response: When a mobile laboratory

provides service in more than one State

under one certificate, the State in which

the laboratory’s home base is located

has the responsibility to ascertain

compliance with the regulations. This

may involve contacting other State

survey agencies and coordinating survey

activity or scheduling the survey to

coincide with testing performed in the

State in which the home base is located.

Comment: Another commenter

suggested that we inspect a mobile

laboratory when it reaches a specific

mileage limit.

Response: Section 353(g)(2) of the

Public Health Service Act requires that

we conduct inspections on a biennial

basis or with such other frequency as

the Secretary determines to be necessary

to assure compliance with CLIA

requirements and standards. While

there is latitude in determining

frequency of inspection, we believe the

assurance of accurate testing is

independent of mileage traveled.

Therefore, we will continue to inspect

mobile laboratories with the same

frequency as other types of laboratories.

Conforming Changes

To avoid the continued use of an

overly long term in the text of the

regulations, we are adding a definition

for the term, ‘‘State licensure program,’’

which means a State laboratory

licensure or approval program.

III. Waiver of Proposed Rulemaking

We ordinarily publish a notice of

proposed rulemaking in the Federal

Register and invite prior public

comment on proposed rules. The notice

of proposed rulemaking includes a

reference to the legal authority under

which the rule is proposed, and the

terms and substances of the proposed

rule or a description of the subjects and

issues involved. This procedure can be

waived, however, if an agency finds

good cause that a notice-and-comment

procedure is impracticable,

unnecessary, or contrary to the public

interest and incorporates a statement of

the finding and its reasons in the rule

issued.

With regard to all elements of this

regulation except one, we are

responding to comments we received in

previous rulemaking documents and, in

response to earlier rules. Accordingly, a

final rule is justified. The one exception

concerns the rewritten subpart E. But

here, since we are making no

substantive changes, but merely

condensing and reorganizing content,

we believe that it is unnecessary and not

in the public interest to delay the

effectiveness of this clarification, as

would happen were we to issue a

proposed rule.

Therefore, we find good cause to

waive the notice of proposed

rulemaking and to issue this final rule.

IV. Redesignation Table

The following table is a guide to

readers in identifying the source of

requirements in the final rule.

Existing section New section

493.501(a) introductory text ...................................................................... 493.551(a)

493.501(a)(1) ............................................................................................ 493.551(a)(1)

493.501(a)(2) ............................................................................................ 493.551(a)(2)

493.501(b) introductory text ...................................................................... 493.551(b)

493.501(b)(1) ............................................................................................ 493.551(a)(3)

493.501(b)(2) ............................................................................................ 493.551(a)(3)

493.501(b)(3) ............................................................................................ 493.551(b)(1)

493.501(b)(4) ............................................................................................ 493.551(b)(2)

493.501(c) introductory text ...................................................................... 493.553(a)

493.501(c)(1) ............................................................................................ 493.557(a)(1)

493.501(c)(2) ............................................................................................ 493.553(a)(1)

493.501(c)(3) ............................................................................................ 493.553(a)(2) (i)–(iv) & (vi)

493.501(c)(4) ............................................................................................ 493.553(a)(3)

493.501(c)(5) ............................................................................................ 493.557(a)(2)

493.501(c)(6) ............................................................................................ 493.557(a)(3) (i)–(iii)

493.501(c)(7) ............................................................................................ 493.553(a)(4)

493.501(c)(8) ............................................................................................ 493.553(a)(5)

493.501(c)(9) ............................................................................................ 493.553(a)(6)

493.501(c)(10) .......................................................................................... 493.557(a)(4)

493.501(c)(11) .......................................................................................... 493.557(a)(5)

493.501(c)(12) .......................................................................................... 493.553(a)(2)(v)

493.501(d) introductory text ...................................................................... 493.553(b)

493.501(d)(1) ............................................................................................ 493.553(b)(1)

493.501(d)(2) ............................................................................................ 493.553(b)(2)
26728 Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations

Existing section New section

493.501(d)(3) ............................................................................................ 493.553(b)(3)

493.501(d)(4) ............................................................................................ 493.553(c)

493.501(d)(5) ............................................................................................ 493.553(d)

493.501(d)(6) ............................................................................................ 493.561(a)(1)

493.501(d)(7) ............................................................................................ 493.561(b) (1)–(3)

493.501(d)(8) ............................................................................................ 493.561(a)(2)

493.501(e) introductory text ...................................................................... 493.559(a)

493.501(e)(1) ............................................................................................ 493.559(b)(1)

493.501(e)(2) ............................................................................................ 493.559(b)(4)

493.501(e)(3) ............................................................................................ 493.559(b)(2)(ii)

493.501(e)(4) ............................................................................................ 493.559(b)(5)

493.503(a) ................................................................................................. 493.551(b)(3)

493.503(b)(1) ............................................................................................ 493.551(b)(4)

493.503(b)(2) ............................................................................................ 493.551(b)(4)

493.503(b)(3) ............................................................................................ 493.551(b)(5)–(6)

493.503(b)(4) ............................................................................................ 493.551(b)(6)

493.504 ..................................................................................................... 493.551(c)

493.506(a) ................................................................................................. 493.559(b)(2)(i) & 493.557(a)(1)

493.506(b)(1) ............................................................................................ 493.555(a)

493.506(b)(2)(i) ......................................................................................... 493.557(a)(3) (i)–(iii)

493.506(b)(2)(ii) ........................................................................................ 493.555(b)

493.506(b)(2)(iii) ....................................................................................... 493.557(a)(6)

493.506(b)(2)(iv) ....................................................................................... 493.557(a)(7)

493.506(b)(2)(v) ........................................................................................ 493.557(a)(8)

493.506(b)(2)(vi) ....................................................................................... 493.557(a)(9)

493.506(b)(2)(vii) ...................................................................................... 493.557(a)(10)

493.506(b)(2)(viii) ...................................................................................... 493.557(a)(11)

493.506(b)(3)(i) ......................................................................................... 493.555(c)(1)

493.506(b)(3)(ii) ........................................................................................ 493.555(c)(2)

493.506(b)(3)(iii) ....................................................................................... 493.555(c)(3)(i)

493.506(b)(3)(iv) ....................................................................................... 493.555(c)(4)

493.506(b)(3)(v) ........................................................................................ 493.555(c)(5)

493.506(b)(3)(vi) ....................................................................................... 493.557(b)(12)(i)–(ii)

493.506(b)(3)(vii) ...................................................................................... 493.557(b)(13)

493.506(b)(3)(viii) ...................................................................................... 493.557(b)(14)

493.507(a) introductory text ...................................................................... 493.563(a)(1)

493.507(a)(1) ............................................................................................ 493.563(b)

493.507(a)(2) ............................................................................................ 493.563(c)

493.507(b) ................................................................................................. 493.565

493.507(c) ................................................................................................. 493.567

493.507(d) ................................................................................................. 493.569

493.507(e) ................................................................................................. 493.571

493.507(f) .................................................................................................. 493.563(e) + (d)

493.509(a) ................................................................................................. 493.573(a)

493.509(b) ................................................................................................. 493.573(b)

493.509(c) ................................................................................................. 493.573(c)

493.509(d) ................................................................................................. 493.573(d)

493.511(a)(1) ............................................................................................ 493.575(a)(1)

493.511(a)(2) ............................................................................................ 493.575(a)(3)

493.511(a)(3) ............................................................................................ 493.575(a)(4) & (a)(4)(i)

493.511(b) ................................................................................................. 493.575(b)(1)

493.511(c) ................................................................................................. 493.575(b)(2)

493.511(d) introductory text ...................................................................... 493.575(c)

493.511(d)(1) ............................................................................................ 493.575(c)(1)

493.511(d)(2) ............................................................................................ 493.575(c)(2)

493.511(d)(3)–(4) ...................................................................................... 493.575(c)(3)

493.511(d)(5) ............................................................................................ 493.575(c)(4)

493.511(e) ................................................................................................. 493.575(d)

493.511(f) .................................................................................................. 493.575(e)

493.511(g) ................................................................................................. 493.575(f)

493.511(h) ................................................................................................. 493.575(g)(1) & (g)(3)

493.511(i) .................................................................................................. 493.575(h)(1)

493.511(j) .................................................................................................. 493.575(k)

493.513(a) introductory text ...................................................................... 493.553(c) & 493.551(a)

493.513(a)(1)–(2) ...................................................................................... 493.551(a)(1)

493.513(a)(3) ............................................................................................ 493.551(a)(2)

493.513(a)(4) ............................................................................................ 493.557(b)(1)

493.513(a)(5) ............................................................................................ 493.557(b)(2)

493.513(a)(6) ............................................................................................ 493.557(b)(3)

493.513(a)(7) ............................................................................................ 493.557(b)(4)

493.513(a)(8) ............................................................................................ 493.557(b)(5)

493.513(b)(1)–(2) ...................................................................................... 493.551(a)(3)

493.513(c) introductory text ...................................................................... 493.553(a)

493.513(c)(1) ............................................................................................ 493.553(a)(1)
Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations 26729

Existing section New section

493.513(c)(2) ............................................................................................ 493.553(a)(2)(i)–(vi)

493.513(c)(3) ............................................................................................ 493.557(b)(1)

493.513(c)(4) ............................................................................................ 493.553(a)(3)

493.513(c)(5) ............................................................................................ 493.553(a)(4)

493.513(c)(6) ............................................................................................ 493.553(a)(5)

493.513(c)(7) ............................................................................................ 493.553(a)(6)

493.513(c)(8) ............................................................................................ 493.553(b)(6)

493.513(d)(1) ............................................................................................ 493.557(b)(7)

493.513(d)(2) ............................................................................................ 493.557(b)(8)(i)–(iii)

493.513(e) ................................................................................................. 493.553(b)(1)

493.513(f) .................................................................................................. 493.553(b)(2)

493.513(g) ................................................................................................. 493.553(b)(3)

493.513(h) ................................................................................................. 493.561(c)

493.513(i) .................................................................................................. 493.553(d)

493.513(j) .................................................................................................. 493.561(a)(1)

493.513(k) ................................................................................................. 493.559(a)

493.513(k)(1) ............................................................................................ 493.559(b)(1)

493.513(k)(2) ............................................................................................ 493.559(b)(4)

493.513(k)(3) ............................................................................................ 493.559(b)(3)

493.513(k)(4) ............................................................................................ 493.559(b)(5)

493.513(l) .................................................................................................. 493.557(b)(14)

493.513(m) ................................................................................................ 493.561(a)(2)

493.515 (a)(1) ........................................................................................... 493.555(a)

493.515(a) ................................................................................................. 493.555 introductory text

493.515(a)(2) ............................................................................................ 493.555(b)

493.515(a)(2)(ii) ........................................................................................ 493.557(b)(9)

493.515(a)(2)(iii) ....................................................................................... 493.557(b)(10)

493.515(a)(3) introductory text ................................................................. 493.555(c) introductory text

493.515(a)(3)(i) ......................................................................................... 493.555(c)(1)

493.515(a)(3)(ii) ........................................................................................ 493.555(c)(2)

493.515(a)(3)(iii) ....................................................................................... 493.555(c)(4)

493.515(a)(3)(iv) ....................................................................................... 493.557(b)(11)

493.515(a)(3)(v) ........................................................................................ 493.557(b)(12)

493.515(a)(3)(vi) ....................................................................................... 493.557(b)(13)

493.515(a)(3)(vii) ...................................................................................... 493.555(c)(3)(ii)

493.515(a)(3)(viii) ...................................................................................... 493.555(c)(5)

493.517(a) ................................................................................................. 493.563(a)(2)(i)–(ii)

493.517(a)(1) ............................................................................................ 493.563(b)(1)(2)

493.517(a)(2) ............................................................................................ 493.563(c)(1)–(2)

493.517(b)(1) ............................................................................................ 493.565(a)

493.517(b)(2) ............................................................................................ 493.565(b)

493.517(b)(3) ............................................................................................ 493.565(c)

493.517(c) ................................................................................................. 493.567(b)

493.517(d) ................................................................................................. 493.569(b)

493.517(e) ................................................................................................. 493.571(b) and (c)

493.517(f) .................................................................................................. 493.563(f)

493.519(a) ................................................................................................. 493.573(a)

493.519(b) ................................................................................................. 493.573(b)

493.519(c)(1) ............................................................................................ 493.573(c)(1)

493.519(c)(2) ............................................................................................ 493.573(c)(2)

493.519(d) introductory text ...................................................................... 493.573(d)(1)(ii)

493.519(d)(1)–(4) ...................................................................................... 493.573(d)(2)(i)–(iv)

493.521(a)(1) ............................................................................................ 493.575(a)(2)

493.521(a)(2) ............................................................................................ 493.575(a)(3)

493.521(a)(3) ............................................................................................ 493.575(a)(4) & (4)(ii)

493.521(b) ................................................................................................. 493.575(b)(1)

493.521(c) ................................................................................................. 493.575(b)(2)

493.521(d) ................................................................................................. 493.575(c)

493.521(e) ................................................................................................. 493.575(d)

493.521(f) .................................................................................................. 493.575(e)

493.521(g) ................................................................................................. 493.575(i)

493.521(h) ................................................................................................. 493.575(h)

493.521(i) .................................................................................................. 493.575(f)

493.521(j) .................................................................................................. 493.575(g)(2)–(3)

493.521(k) ................................................................................................. 493.575(j)(1)–(2)

493.521(l) .................................................................................................. 493.575(k)

493.1775(a) ............................................................................................... 493.1773(a); 493.1775(a)

493.1775(b)(1) .......................................................................................... 493.1773(b)(2)

493.1775(b)(2) .......................................................................................... 493.1773(b)(4)

493.1775(b)(3) .......................................................................................... 493.1773(b)(3)

493.1775(b)(4)(1)–(ii) ................................................................................ 493.1773(f); 493.1775(b)(1)–(4)

493.1775(b)(4)(iii)–(iv) .............................................................................. 493.1775(a)

493.1775(b)(5) .......................................................................................... 493.1773(b)(5)

493.1775(c) ............................................................................................... 493.1773(d)
26730 Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations

Existing section New section

493.1775(d) ............................................................................................... 493.1773(g)

493.1776(a) introductory text .................................................................... 493.1773(a); 493.1775(a) & (b)

493.1776(a)(1)–(4) .................................................................................... 493.1773(f); 493.1775(a)

493.1776(a)(4) (uncoded text) .................................................................. deleted; redundant

493.1776(b)(1) .......................................................................................... 493.1773(b)(2)

493.1776(b)(2) .......................................................................................... 493.1773(b)(4)

493.1776(b)(3) .......................................................................................... 493.1773(b)(3)

493.1776(b)(4) .......................................................................................... 493.1773(f); 493.1775(b)(1)–(4)

493.1776(b)(5) .......................................................................................... 493.1773(b)(5)

493.1776(c) ............................................................................................... 493.1773(d)

493.1776(d) ............................................................................................... 493.1773(g)

493.1777 introductory text ........................................................................ 493.1773(a), (f); 493.1777(a)–(c)

493.1777(a) ............................................................................................... 493.1777(a)–(b)

493.1777(b) ............................................................................................... 493.1773(b)

493.1777(c) ............................................................................................... 493.1773(c)

493.1777(d) ............................................................................................... deleted; redundant

493.1777(e) ............................................................................................... 493.1773(d)

493.1777(f) ................................................................................................ 493.1773(e)

493.1777(g) ............................................................................................... 493.1773(g)

493.1780(a) ............................................................................................... 493.1773(a); 493.1780(a)

493.1780(b) ............................................................................................... 493.1773(a), (f); 493.1780(b)

493.1780(c) ............................................................................................... 493.1773(b)

493.1780(d) ............................................................................................... 493.1773(c)

493.1780(e) ............................................................................................... deleted; redundant

493.1780(f) ................................................................................................ 493.1773(d)

493.1780(g) ............................................................................................... 493.1773(g); 493.1780(c)

V. Regulatory Impact Statement

A. General

Consistent with the Regulatory

Flexibility Act (RFA) (5 U.S.C. 601

through 612), we prepare a regulatory

flexibility analysis unless we certify that

a rule will not have a significant

economic impact on a substantial

number of small entities. For purposes

of the RFA, all clinical laboratories are

considered to be small entities.

Individuals and States are not included

in the definition of a small entity.

In addition, 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. Such an 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.

B. Provisions of the Final Regulations

This rule has been drafted in response

to comments pertaining to proficiency

testing and the CLIA inspection process.

As our responses to commenters’

concerns were developed, it became

apparent that we were also fulfilling the

Administration’s regulatory reform

initiative. This initiative directs us to

revise regulations that are outdated or

otherwise in need of reform. We have,

therefore, also included subpart E of

part 493 in this rule.

Subpart E

Subpart E of part 493 provides for the

accreditation of a laboratory by an

accreditation organization, and the

exemption of laboratories within a

particular State from CLIA requirements

when the accreditation organization or

State applies requirements that are

equal to, or more stringent than, the

CLIA requirements taken as a whole.

Subpart E contains requirements for

State licensure programs, accreditation

organizations, laboratories seeking

deemed status by virtue of accreditation

by a HCFA-approved accreditation

organization, and laboratories that

operate within a State that HCFA has

determined maintains requirements that

are equal to or more stringent than the

CLIA requirements. We are revising

subpart E by removing duplicative

information. We are reorganizing

subpart E to distinguish accreditation

organization and State licensure

program responsibilities from those of

laboratories. We are combining common

requirements for accreditation

organizations and State licensure

programs. These actions will

accommodate the Administration’s

regulatory reform initiative. We are

making no substantive changes to the

content or the intent. Therefore, we are

not imposing additional burden. The

relief established by reorganizing and

combining like requirements is not

quantifiable, but it should aid in the

submission of materials for approvals

and reapprovals.

Subpart H

The changes we are making in

§ 493.803(c) reflect HCFA’s policy of an

educational focus for proficiency

testing. We are clarifying existing

enforcement options in response to

comments received concerning PT

sanctions. In this rule, subpart H

provides that, if a laboratory is initially

unsuccessful in PT, it must obtain

technical assistance, or undertake

training of personnel, or both, rather

than having HCFA impose principal or

alternative sanctions. This affords the

laboratory an additional opportunity to

correct the problem that caused the PT

failure, encouraging quality testing in a

more positive manner. We believe that

a laboratory should have ample

opportunity to investigate the reason for

its initial failure, to obtain the necessary

technical assistance or training, or both,

to correct the problems that caused the

failure and implement a plan of action,

which should prevent reoccurrence.

This requirement also exists in subpart

R, Enforcement Procedures. Principal

and alternative sanctions may apply if

the laboratory refuses to correct its

problems, has repeated compliance

problems, or immediate jeopardy exists.

While this educational approach has

always been a viable option, based on

comments received on previous

rulemaking, we believe that it is

important to clarify that this option

exists and will be exercised. We are

revising the regulation accordingly.

We are not imposing any additional

burden with this clarification; we are
Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations 26731

only identifying which of our

enforcement actions or options we

implement in a particular circumstance.

Subpart Q

We are eliminating redundant

information by restructuring and

organizing all generic requirements for

an onsite inspection into one section of

the regulations. In addition we have

implemented the commenterrecommended laboratory self-inspection

process (the Alternate Quality

Assessment Survey). Although an onsite

inspection may not be performed, the

survey agency personnel must still

review and evaluate the self-inspection

responses submitted by the laboratory

and take any necessary action. While

travel and onsite time is eliminated for

inspections of these laboratories, the

laboratory surveyors, however, may

realize little or no reduction in the time

spent on the overall process. We expect

laboratories that perform the Alternate

Quality Assessment Survey to benefit

from the educational aspects realized by

performing this self evaluative survey

and minimized disruption to their

activities.

Our onsite survey process, which is

outcome-oriented, concentrates on a

review of each laboratory’s specific

testing activities and its impact on

patient health and safety. We are unable

to predict the long term effects because

they are dependent upon each

individual laboratory’s compliance and

testing activities. Although it is difficult

to quantify the financial impact due to

the variability from laboratory to

laboratory, we expect that our collective

efforts to streamline and clarify the

regulations may reduce the laboratory

costs associated with CLIA in many

cases, without diminishing quality.

C. Conclusion

For these reasons, we have

determined, and the Secretary certifies,

that this regulation does not result in a

significant impact on a substantial

number of small entities and does not

have a significant effect on the

operations of a substantial number of

small rural hospitals. Therefore, we are

not preparing analyses for either the

RFA or section 1102(b) of the Act.

D. OMB Review

In accordance with the provisions of

Executive Order 12866, this regulation

was reviewed by the Office of

Management and Budget.

E. Collection of Information

Requirements

This final rule contains information

collections that are subject to review by

the Office of Management and Budget

under the Paperwork Reduction Act of

1995. The title, description, and

respondent description of the

information collection requirements are

shown below with an estimate of the

annual reporting and recordkeeping

burden. Included in the estimate is the

time for reviewing instructions,

searching existing data sources,

gathering and maintaining the data

needed, and completing and reviewing

the collection of information.

Section 493.803 and subpart Q (newly

revised §§ 493.1771 through 493.1780

previously numbered §§ 493.1775

through 493.1780) are currently

approved under OMB approval number

0938–0612 with an expiration date of

April 30, 2001. Subpart E (newly

revised sections §§ 493.551, 493.553,

493.555, 493.557, 493.559, and 493.561,

which were previously contained in

§§ 493.501, 493.506, 493.513 and

493.515) is currently approved under

OMB approval number 0938–0686 with

an expiration of April 30, 1999.

Section 493.803 contains the

requirement that a laboratory must

successfully participate in a PT program

approved by HCFA for the specialties,

subspecialties, and analytes listed in the

regulation, if these tests are performed

by the laboratory. The burden associated

with this requirement is the testing of

PT specimens and recording the results.

Subpart Q sets forth conditions and

standards for inspection of laboratories.

The burden associated with inspections

of laboratories, or alternative

mechanisms to determine compliance,

consists of retrieving records and

documentation necessary for the

inspector to ascertain compliance,

participating in entrance and exit

conferences for onsite inspections,

responding to a statement of

deficiencies that may result from an

inspection, and documenting any

corrective action.

Subpart E sets forth the requirements

and process for a private, nonprofit

accreditation organization voluntarily

seeking approval under the CLIA

program and a State licensure program

voluntarily seeking exemption for its

laboratories within the State from the

CLIA program. The burden associated

with these sections is the compilation of

specific information that must be

submitted for evaluation as well as the

requirements for providing ongoing

information.

Description of Respondents

Respondents for § 493.803 and

subpart Q, §§ 493.1771 through

493.1780 fall in the categories of: small

businesses or organizations, businesses

or other for-profit, non-profit

institutions, State and local

governments, and Federal agencies.

Respondents for subpart E,

§§ 493.551, 493.553, 493.555, 493.557,

493.559, and 493.561 are private

nonprofit accreditation organizations

and State licensure programs.

ESTIMATED ANNUAL REPORTING AND RECORDKEEPING BURDEN

CFR section

Annual number of respondents

Annual frequency

Average burden per response in

hours

Annual burden

in hours

Subpart E 493.551 through 493.561 ............... 11 varies, as needed ........................................... 192 2112

Subpart H 493.803 .......................................... 63,600 3 events .......................................................... 1 190,800

Subpart Q 493.1771 through 493.1780 .......... 36,918 biennial ........................................................... 4 4,618

Persons interested in commenting on

these currently approved information

collections should send comments to

the following address: Health Care

Financing Administration, Office of

Information Services, Information

Technology Investment Management

Group, Room C2–26–17, 7500 Security

Boulevard, Baltimore, Maryland, 21244–

1850. Attn: HCFA–2239–F.

List of Subjects in 42 CFR Part 493

Grant programs-health, Health

facilities, Laboratories, Medicaid,

Medicare, Reporting and recordkeeping

requirements.

42 CFR chapter IV is amended as

follows:
26732 Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations

PART 493—LABORATORY

REQUIREMENTS

1. The authority citation for part 493

is revised to read as follows:

Authority: Sec. 353 of the Public Health

Service Act, secs. 1102, 1861(e), the sentence

following sections 1861(s)(11) through

1861(s)(16) of the Social Security Act (42

U.S.C. 263a, 1302, 1395x(e), the sentence

following 1395x(s)(11) through 1395x(s)(16)).

Subpart A—General Provisions

§ 493.2 [Amended]

2. Section 493.2 is amended by

adding in alphabetical order the

following definition of State licensure

program:

* * * * *

State licensure program means a State

laboratory licensure or approval

program.

* * * * *

Subpart E—Accreditation by a Private,

Nonprofit Accreditation Organization

or Exemption Under an Approved State

Laboratory Program

§§ 493.501 through 493.521 [Removed]

3. Sections 493.501 through 493.521

are removed.

4. In subpart E, new §§ 493.551,

493.553, 493.555, 493.557, 493.559,

493.561, 493.563, 493.565, 493.567,

493.569, 493.571, 493.573, and 493.575

are added to read as follows:

Sec.

493.551 General requirements for

laboratories.

493.553 Approved process (application and

reapplication) for accreditation

organizations and State licensure

programs.

493.555 Federal review of laboratory

requirements.

493.557 Additional submission

requirements.

493.559 Publication of approval of deeming

authority or CLIA exemption.

493.561 Denial of application or

reapplication.

493.563 Validation inspections—Basis and

focus.

493.565 Selection for validation

inspection—laboratory responsibilities.

493.567 Refusal to cooperate with

validation inspection.

493.569 Consequences of a finding of

noncompliance as a result of a validation

inspection.

493.571 Disclosure of accreditation, State

and HCFA validation inspection results.

493.573 Continuing Federal oversight of

private nonprofit accreditation

organizations and approved State

licensure programs.

493.575 Removal of deeming authority or

CLIA exemption and final determination

review.

§ 493.551 General requirements for

laboratories.

(a) Applicability. HCFA may deem a

laboratory to meet all applicable CLIA

program requirements through

accreditation by a private nonprofit

accreditation program (that is, grant

deemed status), or may exempt from

CLIA program requirements all State

licensed or approved laboratories in a

State that has a State licensure program

established by law, if the following

conditions are met:

(1) The requirements of the

accreditation organization or State

licensure program are equal to, or more

stringent than, the CLIA condition-level

requirements specified in this part, and

the laboratory would meet the

condition-level requirements if it were

inspected against these requirements.

(2) The accreditation program or the

State licensure program meets the

requirements of this subpart and is

approved by HCFA.

(3) The laboratory authorizes the

approved accreditation organization or

State licensure program to release to

HCFA all records and information

required and permits inspections as

outlined in this part.

(b) Meeting CLIA requirements by

accreditation. A laboratory seeking to

meet CLIA requirements through

accreditation by an approved

accreditation organization must do the

following:

(1) Obtain a certificate of accreditation

as required in subpart D of this part.

(2) Pay the applicable fees as required

in subpart F of this part.

(3) Meet the proficiency testing (PT)

requirements in subpart H of this part.

(4) Authorize its PT organization to

furnish to its accreditation organization

the results of the laboratory’s

participation in an approved PT

program for the purpose of monitoring

the laboratory’s PT and for making the

annual PT results, along with

explanatory information required to

interpret the PT results, available on a

reasonable basis, upon request of any

person. A laboratory that refuses to

authorize release of its PT results is no

longer deemed to meet the conditionlevel requirements and is subject to a

full review by HCFA, in accordance

with subpart Q of this part, and may be

subject to the suspension or revocation

of its certificate of accreditation under

§ 493.1840.

(5) Authorize its accreditation

organization to release to HCFA or a

HCFA agent the laboratory’s PT results

that constitute unsuccessful

participation in an approved PT

program, in accordance with the

definition of ‘‘unsuccessful

participation in an approved PT

program,’’ as specified in § 493.2 of this

part, when the laboratory has failed to

achieve successful participation in an

approved PT program.

(6) Authorize its accreditation

organization to release to HCFA a

notification of the actions taken by the

organization as a result of the

unsuccessful participation in a PT

program within 30 days of the initiation

of the action. Based on this notification,

HCFA may take an adverse action

against a laboratory that fails to

participate successfully in an approved

PT program.

(c) Withdrawal of laboratory

accreditation. After an accreditation

organization has withdrawn or revoked

its accreditation of a laboratory, the

laboratory retains its certificate of

accreditation for 45 days after the

laboratory receives notice of the

withdrawal or revocation of the

accreditation, or the effective date of

any action taken by HCFA, whichever is

earlier.

§ 493.553 Approval process (application

and reapplication) for accreditation

organizations and State licensure

programs.

(a) Information required. An

accreditation organization that applies

or reapplies to HCFA for deeming

authority, or a State licensure program

that applies or reapplies to HCFA for

exemption from CLIA program

requirements of licensed or approved

laboratories within the State, must

provide the following information:

(1) A detailed comparison of the

individual accreditation, or licensure or

approval requirements with the

comparable condition-level

requirements; that is, a crosswalk.

(2) A detailed description of the

inspection process, including the

following:

(i) Frequency of inspections.

(ii) Copies of inspection forms.

(iii) Instructions and guidelines.

(iv) A description of the review and

decision-making process of inspections.

(v) A statement concerning whether

inspections are announced or

unannounced.

(vi) A description of the steps taken

to monitor the correction of

deficiencies.

(3) A description of the process for

monitoring PT performance, including

action to be taken in response to

unsuccessful participation in a HCFAapproved PT program.

(4) Procedures for responding to and

for the investigation of complaints

against its laboratories.
Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations 26733

(5) A list of all its current laboratories

and the expiration date of their

accreditation or licensure, as applicable.

(6) Procedures for making PT

information available (under State

confidentiality and disclosure

requirements, if applicable) including

explanatory information required to

interpret PT results, on a reasonable

basis, upon request of any person.

(b) HCFA action on an application or

reapplication. If HCFA receives an

application or reapplication from an

accreditation organization, or State

licensure program, HCFA takes the

following actions:

(1) HCFA determines if additional

information is necessary to make a

determination for approval or denial of

the application and notifies the

accreditation organization or State to

afford it an opportunity to provide the

additional information.

(2) HCFA may visit the accreditation

organization or State licensure program

offices to review and verify the policies

and procedures represented in its

application and other information,

including, but not limited to, review

and examination of documents and

interviews with staff.

(3) HCFA notifies the accreditation

organization or State licensure program

indicating whether HCFA approves or

denies the request for deeming authority

or exemption, respectively, and the

rationale for any denial.

(c) Duration of approval. HCFA

approval may not exceed 6 years.

(d) Withdrawal of application. The

accreditation organization or State

licensure program may withdraw its

application at any time before official

notification, specified at § 493.553(b)(3).

§ 493.555 Federal review of laboratory

requirements.

HCFA’s review of an accreditation

organization or State licensure program

includes, but is not limited to, an

evaluation of the following:

(a) Whether the organization’s or

State’s requirements for laboratories are

equal to, or more stringent than, the

condition-level requirements for

laboratories.

(b) The organization’s or State’s

inspection process to determine the

comparability of the full inspection and

complaint inspection procedures and

requirements to those of HCFA,

including, but not limited to, inspection

frequency and the ability to investigate

and respond to complaints against its

laboratories.

(c) The organization’s or State’s

agreement with HCFA that requires it to

do the following:

(1) Notify HCFA within 30 days of the

action taken, of any laboratory that

has—

(i) Had its accreditation or licensure

suspended, withdrawn, revoked, or

limited;

(ii) In any way been sanctioned; or

(iii) Had any adverse action taken

against it.

(2) Notify HCFA within 10 days of

any deficiency identified in an

accredited or CLIA-exempt laboratory if

the deficiency poses an immediate

jeopardy to the laboratory’s patients or

a hazard to the general public.

(3) Notify HCFA, within 30 days, of

all newly—

(i) Accredited laboratories (or

laboratories whose areas of specialty/

subspecialty testing have changed); or

(ii) Licensed laboratories, including

the specialty/subspecialty areas of

testing.

(4) Notify each accredited or licensed

laboratory within 10 days of HCFA’s

withdrawal of the organization’s

deeming authority or State’s exemption.

(5) Provide HCFA with inspection

schedules, as requested, for validation

purposes.

§ 493.557 Additional submission

requirements.

(a) Specific requirements for

accreditation organizations. In addition

to the information specified in

§§ 493.553 and 493.555, as part of the

approval and review process, an

accreditation organization applying or

reapplying for deeming authority must

also provide the following:

(1) The specialty or subspecialty areas

for which the organization is requesting

deeming authority and its mechanism

for monitoring compliance with all

requirements equivalent to conditionlevel requirements within the scope of

the specialty or subspecialty areas.

(2) A description of the organization’s

data management and analysis system

with respect to its inspection and

accreditation decisions, including the

kinds of routine reports and tables

generated by the systems.

(3) Detailed information concerning

the inspection process, including, but

not limited to the following:

(i) The size and composition of

individual accreditation inspection

teams.

(ii) Qualifications, education, and

experience requirements that inspectors

must meet.

(iii) The content and frequency of

training provided to inspection

personnel, including the ability of the

organization to provide continuing

education and training to inspectors.

(4) Procedures for removal or

withdrawal of accreditation status for

laboratories that fail to meet the

organization’s standards.

(5) A proposed agreement between

HCFA and the accreditation

organization with respect to the

notification requirements specified in

§ 493.555(c).

(6) Procedures for monitoring

laboratories found to be out of

compliance with its requirements.

(These monitoring procedures must be

used only when the accreditation

organization identifies noncompliance.

If noncompliance is identified through

validation inspections, HCFA or a

HCFA agent monitors corrections, as

authorized at § 493.565(d)).

(7) A demonstration of its ability to

provide HCFA with electronic data and

reports in compatible code, including

the crosswalk specified in

§ 493.553(a)(1), that are necessary for

effective validation and assessment of

the organization’s inspection process.

(8) A demonstration of its ability to

provide HCFA with electronic data, in

compatible code, related to the adverse

actions resulting from PT results

constituting unsuccessful participation

in PT programs as well as data related

to the PT failures, within 30 days of the

initiation of adverse action.

(9) A demonstration of its ability to

provide HCFA with electronic data, in

compatible code, for all accredited

laboratories, including the area of

specialty or subspecialty.

(10) Information defining the

adequacy of numbers of staff and other

resources.

(11) Information defining the

organization’s ability to provide

adequate funding for performing

required inspections.

(12) Any facility-specific data, upon

request by HCFA, which includes, but is

not limited to, the following:

(i) PT results that constitute

unsuccessful participation in a HCFAapproved PT program.

(ii) Notification of the adverse actions

or corrective actions imposed by the

accreditation organization as a result of

unsuccessful PT participation.

(13) An agreement to provide written

notification to HCFA at least 30 days in

advance of the effective date of any

proposed change in its requirements.

(14) An agreement to disclose any

laboratory’s PT results upon reasonable

request by any person.

(b) Specific requirements for a State

licensure program. In addition to

requirements in §§ 493.553 and 493.555,

as part of the approval and review

process, when a State licensure program

applies or reapplies for exemption from

the CLIA program, the State must do the

following:
26734 Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations

(1) Demonstrate to HCFA that it has

enforcement authority and

administrative structures and resources

adequate to enforce its laboratory

requirements.

(2) Permit HCFA or a HCFA agent to

inspect laboratories in the State.

(3) Require laboratories in the State to

submit to inspections by HCFA or a

HCFA agent as a condition of licensure

or approval.

(4) Agree to pay the cost of the

validation program administered in that

State as specified in §§ 493.645(a) and

493.646(b).

(5) Take appropriate enforcement

action against laboratories found by

HCFA not to be in compliance with

requirements equivalent to CLIA

requirements.

(6) Submit for Medicare and Medicaid

payment purposes, a list of the

specialties and subspecialties of tests

performed by each laboratory.

(7) Submit a written presentation that

demonstrates the agency’s ability to

furnish HCFA with electronic data in

compatible code, including the

crosswalk specified in § 493.553(a)(1).

(8) Submit a statement acknowledging

that the State will notify HCFA through

electronic transmission of the following:

(i) Any laboratory that has had its

licensure or approval revoked or

withdrawn or has been in any way

sanctioned by the State within 30 days

of taking the action.

(ii) Changes in licensure or inspection

requirements.

(iii) Changes in specialties or

subspecialties under which any licensed

laboratory in the State performs testing.

(9) Provide information for the review

of the State’s enforcement procedures

for laboratories found to be out of

compliance with the State’s

requirements.

(10) Submit information that

demonstrates the ability of the State to

provide HCFA with the following:

(i) Electronic data and reports in

compatible code with the adverse or

corrective actions resulting from PT

results that constitute unsuccessful

participation in PT programs.

(ii) Other data that HCFA determines

are necessary for validation and

assessment of the State’s inspection

process requirements.

(11) Agree to provide HCFA with

written notification of any changes in its

licensure/approval and inspection

requirements.

(12) Agree to disclose any laboratory’s

PT results in accordance with a State’s

confidentiality requirements.

(13) Agree to take the appropriate

enforcement action against laboratories

found by HCFA not to be in compliance

with requirements comparable to

condition-level requirements and report

these enforcement actions to HCFA.

(14) If approved, reapply to HCFA

every 2 years to renew its exempt status

and to renew its agreement to pay the

cost of the HCFA-administered

validation program in that State.

§ 493.559 Publication of approval of

deeming authority or CLIA exemption.

(a) Notice of deeming authority or

exemption. HCFA publishes a notice in

the Federal Register when it grants

deeming authority to an accreditation

organization or exemption to a State

licensure program.

(b) Contents of notice. The notice

includes the following:

(1) The name of the accreditation

organization or State licensure program.

(2) For an accreditation organization:

(i) The specific specialty or

subspecialty areas for which it is

granted deeming authority.

(ii) A description of how the

accreditation organization provides

reasonable assurance to HCFA that a

laboratory accredited by the

organization meets CLIA requirements

equivalent to those in this part and

would meet CLIA requirements if the

laboratory had not been granted deemed

status, but had been inspected against

condition-level requirements.

(3) For a State licensure program, a

description of how the laboratory

requirements of the State are equal to,

or more stringent than, those specified

in this part.

(4) The basis for granting deeming

authority or exemption.

(5) The term of approval, not to

exceed 6 years.

§ 493.561 Denial of application or

reapplication.

(a) Reconsideration of denial. (1) If

HCFA denies a request for approval, an

accreditation organization or State

licensure program may request, within

60 days of the notification of denial, that

HCFA reconsider its original application

or application for renewal, in

accordance with part 488, subpart D.

(2) If the accreditation organization or

State licensure program requests a

reconsideration of HCFA’s

determination to deny its request for

approval or reapproval, it may not

submit a new application until HCFA

issues a final reconsideration

determination.

(b) Resubmittal of a request for

approval— accreditation organization.

An accreditation organization may

resubmit a request for approval if a final

reconsideration determination is not

pending and the accreditation program

meets the following conditions:

(1) It has revised its accreditation

program to address the rationale for

denial of its previous request.

(2) It demonstrates that it can provide

reasonable assurance that its accredited

facilities meet condition-level

requirements.

(3) It resubmits the application in its

entirety.

(c) Resubmittal of request for

approval—State licensure program. The

State licensure program may resubmit a

request for approval if a final

reconsideration determination is not

pending and it has taken the necessary

action to address the rationale for any

previous denial.

§ 493.563 Validation inspections—Basis

and focus.

(a) Basis for validation inspection—(1)

Laboratory with a certificate of

accreditation. (i) HCFA or a HCFA agent

may conduct an inspection of an

accredited laboratory that has been

issued a certificate of accreditation on a

representative sample basis or in

response to a substantial allegation of

noncompliance.

(ii) HCFA uses the results of these

inspections to validate the accreditation

organization’s accreditation process.

(2) Laboratory in a State with an

approved State licensure program. (i)

HCFA or a HCFA agent may conduct an

inspection of any laboratory in a State

with an approved State licensure

program on a representative sample

basis or in response to a substantial

allegation of noncompliance.

(ii) The results of these inspections

are used to validate the appropriateness

of the exemption of that State’s licensed

or approved laboratories from CLIA

program requirements.

(b) Validation inspection conducted

on a representative sample basis. (1) If

HCFA or a HCFA agent conducts a

validation inspection on a

representative sample basis, the

inspection is comprehensive, addressing

all condition-level requirements, or it

may be focused on a specific conditionlevel requirement.

(2) The number of laboratories

sampled is sufficient to allow a

reasonable estimate of the performance

of the accreditation organization or

State.

(c) Validation inspection conducted

in response to a substantial allegation of

noncompliance. (1) If HCFA or a HCFA

agent conducts a validation inspection

in response to a substantial allegation of

noncompliance, the inspection focuses

on any condition-level requirement that

HCFA determines to be related to the

allegation.
Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations 26735

(2) If HCFA or a HCFA agent

substantiates a deficiency and

determines that the laboratory is out of

compliance with any condition-level

requirement, HCFA or a HCFA agent

conducts a full CLIA inspection.

(d) Inspection of operations and

offices. As part of the validation review

process, HCFA may conduct an onsite

inspection of the operations and offices

to verify the following:

(1) The accreditation organization’s

representations and to assess the

accreditation organization’s compliance

with its own policies and procedures.

(2) The State’s representations and to

assess the State’s compliance with its

own policies and procedures, including

verification of State enforcement actions

taken on the basis of validation

inspections performed by HCFA or a

HCFA agent.

(e) Onsite inspection of an

accreditation organization. An onsite

inspection of an accreditation

organization may include, but is not

limited to, the following:

(1) A review of documents.

(2) An audit of meetings concerning

the accreditation process.

(3) Evaluation of accreditation

inspection results and the accreditation

decision-making process.

(4) Interviews with the accreditation

organization’s staff.

(f) Onsite inspection of a State

licensure program. An onsite inspection

of a State licensure program office may

include, but is not limited to, the

following:

(1) A review of documents.

(2) An audit of meetings concerning

the licensure or approval process.

(3) Evaluation of State inspection

results and the licensure or approval

decision-making process.

(4) Interviews with State employees.

§ 493.565 Selection for validation

inspection—laboratory responsibilities.

A laboratory selected for a validation

inspection must do the following:

(a) Authorize its accreditation

organization or State licensure program,

as applicable, to release to HCFA or a

HCFA agent, on a confidential basis, a

copy of the laboratory’s most recent full,

and any subsequent partial inspection.

(b) Authorize HCFA or a HCFA agent

to conduct a validation inspection.

(c) Provide HCFA or a HCFA agent

with access to all facilities, equipment,

materials, records, and information that

HCFA or a HCFA agent determines have

a bearing on whether the laboratory is

being operated in accordance with the

requirements of this part, and permit

HCFA or a HCFA agent to copy material

or require the laboratory to submit

material.

(d) If the laboratory possesses a valid

certificate of accreditation, authorize

HCFA or a HCFA agent to monitor the

correction of any deficiencies found

through the validation inspection.

§ 493.567 Refusal to cooperate with

validation inspection.

(a) Laboratory with a certificate of

accreditation. (1) A laboratory with a

certificate of accreditation that refuses

to cooperate with a validation

inspection by failing to comply with the

requirements in § 493.565—

(i) Is subject to full review by HCFA

or a HCFA agent, in accordance with

this part; and

(ii) May be subject to suspension,

revocation, or limitation of its certificate

of accreditation under this part.

(2) A laboratory with a certificate of

accreditation is again deemed to meet

the condition-level requirements by

virtue of its accreditation when the

following conditions exist:

(i) The laboratory withdraws any prior

refusal to authorize its accreditation

organization to release a copy of the

laboratory’s current accreditation

inspection, PT results, or notification of

any adverse actions resulting from PT

failure.

(ii) The laboratory withdraws any

prior refusal to allow a validation

inspection.

(iii) HCFA finds that the laboratory

meets all the condition-level

requirements.

(b) CLIA-exempt laboratory. If a CLIAexempt laboratory fails to comply with

the requirements specified in § 493.565,

HCFA notifies the State of the

laboratory’s failure to meet the

requirements.

§ 493.569 Consequences of a finding of

noncompliance as a result of a validation

inspection.

(a) Laboratory with a certificate of

accreditation. If a validation inspection

results in a finding that the accredited

laboratory is out of compliance with one

or more condition-level requirements,

the laboratory is subject to—

(1) The same requirements and survey

and enforcement processes applied to

laboratories that are not accredited and

that are found out of compliance

following an inspection under this part;

and

(2) Full review by HCFA, in

accordance with this part; that is, the

laboratory is subject to the principal and

alternative sanctions in § 493.1806.

(b) CLIA-exempt laboratory. If a

validation inspection results in a

finding that a CLIA-exempt laboratory is

out of compliance with one or more

condition-level requirements, HCFA

directs the State to take appropriate

enforcement action.

§ 493.571 Disclosure of accreditation,

State and HCFA validation inspection

results.

(a) Accreditation organization

inspection results. HCFA may disclose

accreditation organization inspection

results to the public only if the results

are related to an enforcement action

taken by the Secretary.

(b) State inspection results. Disclosure

of State inspection results is the

responsibility of the approved State

licensure program, in accordance with

State law.

(c) HCFA validation inspection

results. HCFA may disclose the results

of all validation inspections conducted

by HCFA or its agent.

§ 493.573 Continuing Federal oversight of

private nonprofit accreditation

organizations and approved State licensure

programs.

(a) Comparability review. In addition

to the initial review for determining

equivalency of specified organization or

State requirements to the comparable

condition-level requirements, HCFA

reviews the equivalency of requirements

in the following cases:

(1) When HCFA promulgates new

condition-level requirements.

(2) When HCFA identifies an

accreditation organization or a State

licensure program whose requirements

are no longer equal to, or more stringent

than, condition-level requirements.

(3) When an accreditation

organization or State licensure program

adopts new requirements.

(4) When an accreditation

organization or State licensure program

adopts changes to its inspection process,

as required by § 493.575(b)(1), as

applicable.

(5) Every 6 years, or sooner if HCFA

determines an earlier review is required.

(b) Validation review. Following the

end of a validation review period, HCFA

evaluates the validation inspection

results for each approved accreditation

organization and State licensure

program.

(c) Reapplication procedures. (1)

Every 6 years, or sooner, as determined

by HCFA, an approved accreditation

organization must reapply for continued

approval of deeming authority and a

State licensure program must reapply

for continued approval of a CLIA

exemption. HCFA provides notice of the

materials that must be submitted as part

of the reapplication procedure.

(2) An accreditation organization or

State licensure program that does not

meet the requirements of this subpart, as

determined through a comparability or
26736 Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations

validation review, must furnish HCFA,

upon request, with the reapplication

materials HCFA requests. HCFA

establishes a deadline by which the

materials must be submitted.

(d) Notice. (1) HCFA provides written

notice, as appropriate, to the following:

(i) An accreditation organization

indicating that its approval may be in

jeopardy if a comparability or validation

review reveals that it is not meeting the

requirements of this subpart and HCFA

is initiating a review of the accreditation

organization’s deeming authority.

(ii) A State licensure program

indicating that its CLIA exemption may

be in jeopardy if a comparability or

validation review reveals that it is not

meeting the requirements of this subpart

and that a review is being initiated of

the CLIA exemption of the State’s

laboratories.

(2) The notice contains the following

information:

(i) A statement of the discrepancies

that were found as well as other related

documentation.

(ii) An explanation of HCFA’s review

process on which the final

determination is based and a

description of the possible actions, as

specified in § 493.575, that HCFA may

impose based on the findings from the

comparability or validation review.

(iii) A description of the procedures

available if the accreditation

organization or State licensure program,

as applicable, desires an opportunity to

explain or justify the findings made

during the comparability or validation

review.

(iv) The reapplication materials that

the accreditation organization or State

licensure program must submit and the

deadline for that submission.

§ 493.575 Removal of deeming authority or

CLIA exemption and final determination

review.

(a) HCFA review. HCFA conducts a

review of the following:

(1) A deeming authority review of an

accreditation organization’s program if

the comparability or validation review

produces findings, as described at

§ 493.573. HCFA reviews, as

appropriate, the criteria described in

§§ 493.555 and 493.557(a) to reevaluate

whether the accreditation organization

continues to meet all these criteria.

(2) An exemption review of a State’s

licensure program if the comparability

or validation review produces findings,

as described at § 493.573. HCFA

reviews, as appropriate, the criteria

described in §§ 493.555 and 493.557(b)

to reevaluate whether the licensure

program continues to meet all these

criteria.

(3) A review of an accreditation

organization or State licensure program,

at HCFA’s discretion, if validation

review findings, irrespective of the rate

of disparity, indicate widespread or

systematic problems in the

organization’s accreditation or State’s

licensure process that provide evidence

that the requirements, taken as a whole,

are no longer equivalent to CLIA

requirements, taken as a whole.

(4) A review of the accreditation

organization or State licensure program

whenever validation inspection results

indicate a rate of disparity of 20 percent

or more between the findings of the

organization or State and those of HCFA

or a HCFA agent for the following

periods:

(i) One year for accreditation

organizations.

(ii) Two years for State licensure

programs.

(b) HCFA action after review.

Following the review, HCFA may take

the following action:

(1) If HCFA determines that the

accreditation organization or State has

failed to adopt requirements equal to, or

more stringent than, CLIA requirements,

HCFA may give a conditional approval

for a probationary period of its deeming

authority to an organization 30 days

following the date of HCFA’s

determination, or exempt status to a

State within 30 days of HCFA’s

determination, both not to exceed 1

year, to afford the organization or State

an opportunity to adopt equal or more

stringent requirements.

(2) If HCFA determines that there are

widespread or systematic problems in

the organization’s or State’s inspection

process, HCFA may give conditional

approval during a probationary period,

not to exceed 1 year, effective 30 days

following the date of the determination.

(c) Final determination. HCFA makes

a final determination as to whether the

organization or State continues to meet

the criteria described in this subpart and

issues a notice that includes the reasons

for the determination to the organization

or State within 60 days after the end of

any probationary period. This

determination is based on an evaluation

of any of the following:

(1) The most recent validation

inspection and review findings. To

continue to be approved, the

organization or State must meet the

criteria of this subpart.

(2) Facility-specific data, as well as

other related information.

(3) The organization’s or State’s

inspection procedures, surveyors’

qualifications, ongoing education,

training, and composition of inspection

teams.

(4) The organization’s accreditation

requirements, or the State’s licensure or

approval requirements.

(d) Date of withdrawal of approval.

HCFA may withdraw its approval of the

accreditation organization or State

licensure program, effective 30 days

from the date of written notice to the

organization or State of this proposed

action, if improvements acceptable to

HCFA have not been made during the

probationary period.

(e) Continuation of validation

inspections. The existence of any

validation review, probationary status,

or any other action, such as a deeming

authority review, by HCFA does not

affect or limit the conduct of any

validation inspection.

(f) Federal Register notice. HCFA

publishes a notice in the Federal

Register containing a justification for

removing the deeming authority from an

accreditation organization, or the CLIAexempt status of a State licensure

program.

(g) Withdrawal of approval-effect on

laboratory status—(1) Accredited

laboratory. After HCFA withdraws

approval of an accreditation

organization’s deeming authority, the

certificate of accreditation of each

affected laboratory continues in effect

for 60 days after it receives notification

of the withdrawal of approval.

(2) CLIA-exempt laboratory. After

HCFA withdraws approval of a State

licensure program, the exempt status of

each licensed or approved laboratory in

the State continues in effect for 60 days

after a laboratory receives notification

from the State of the withdrawal of

HCFA’s approval of the program.

(3) Extension. After HCFA withdraws

approval of an accreditation

organization or State licensure program,

HCFA may extend the period for an

additional 60 days for a laboratory if it

determines that the laboratory

submitted an application for

accreditation to an approved

accreditation organization or an

application for the appropriate

certificate to HCFA or a HCFA agent

before the initial 60-day period ends.

(h) Immediate jeopardy to patients.

(1) If at any time HCFA determines that

the continued approval of deeming

authority of any accreditation

organization poses immediate jeopardy

to the patients of the laboratories

accredited by the organization, or

continued approval otherwise

constitutes a significant hazard to the

public health, HCFA may immediately

withdraw the approval of deeming

authority for that accreditation

organization.
Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations 26737

(2) If at any time HCFA determines

that the continued approval of a State

licensure program poses immediate

jeopardy to the patients of the

laboratories in that State, or continued

approval otherwise constitutes a

significant hazard to the public health,

HCFA may immediately withdraw the

approval of that State licensure

program.

(i) Failure to pay fees. HCFA

withdraws the approval of a State

licensure program if the State fails to

pay the applicable fees, as specified in

§§ 493.645(a) and 493.646(b).

(j) State refusal to take enforcement

action. (1) HCFA may withdraw

approval of a State licensure program if

the State refuses to take enforcement

action against a laboratory in that State

when HCFA determines it to be

necessary.

(2) A laboratory that is in a State in

which HCFA has withdrawn program

approval is subject to the same

requirements and survey and

enforcement processes that are applied

to a laboratory that is not exempt from

CLIA requirements.

(k) Request for reconsideration. Any

accreditation organization or State that

is dissatisfied with a determination to

withdraw approval of its deeming

authority or remove approval of its State

licensure program, as applicable, may

request that HCFA reconsider the

determination, in accordance with

subpart D of part 488.

Subpart H—Participation in Proficiency

Testing for Laboratories Performing

Tests of Moderate Complexity

(Including the Subcategory), High

Complexity, or Any Combination of

These Tests

5. In § 493.803, paragraph (b) is

revised and a new paragraph (c) is

added to read as follows:

§ 493.803 Condition: Successful

participation.

* * * * *

(b) Except as specified in paragraph

(c) of this section, if a laboratory fails to

participate successfully in proficiency

testing for a given specialty,

subspecialty, analyte or test, as defined

in this section, or fails to take remedial

action when an individual fails

gynecologic cytology, HCFA imposes

sanctions, as specified in subpart R of

this part.

(c) If a laboratory fails to perform

successfully in a HCFA-approved

proficiency testing program, for the

initial unsuccessful performance, HCFA

may direct the laboratory to undertake

training of its personnel or to obtain

technical assistance, or both, rather than

imposing alternative or principle

sanctions except when one or more of

the following conditions exists:

(1) There is immediate jeopardy to

patient health and safety.

(2) The laboratory fails to provide

HCFA or a HCFA agent with satisfactory

evidence that it has taken steps to

correct the problem identified by the

unsuccessful proficiency testing

performance.

(3) The laboratory has a poor

compliance history.

Subpart Q—Inspection

6. In subpart Q, new §§ 493.1771 and

493.1773 are added to read as follows:

§ 493.1771 Condition: Inspection

requirements applicable to all CLIA-certified

and CLIA-exempt laboratories.

(a) Each laboratory issued a CLIA

certificate must meet the requirements

in § 493.1773 and the specific

requirements for its certificate type, as

specified in §§ 493.1775 through

493.1780.

(b) All CLIA-exempt laboratories must

comply with the inspection

requirements in §§ 493.1773 and

493.1780, when applicable.

§ 493.1773 Standard: Basic inspection

requirements for all laboratories issued a

CLIA certificate and CLIA-exempt

laboratories.

(a) A laboratory issued a certificate

must permit HCFA or a HCFA agent to

conduct an inspection to assess the

laboratory’s compliance with the

requirements of this part. A CLIAexempt laboratory and a laboratory that

requests, or is issued a certificate of

accreditation, must permit HCFA or a

HCFA agent to conduct validation and

complaint inspections.

(b) General requirements: As part of

the inspection process, HCFA or a

HCFA agent may require the laboratory

to do the following:

(1) Test samples, including

proficiency testing samples, or perform

procedures.

(2) Permit interviews of all personnel

concerning the laboratory’s compliance

with the applicable requirements of this

part.

(3) Permit laboratory personnel to be

observed performing all phases of the

total testing process (preanalytic,

analytic, and postanalytic).

(4) Permit HCFA or a HCFA agent

access to all areas encompassed under

the certificate including, but not limited

to, the following:

(i) Specimen procurement and

processing areas.

(ii) Storage facilities for specimens,

reagents, supplies, records, and reports.

(iii) Testing and reporting areas.

(5) Provide HCFA or a HCFA agent

with copies or exact duplicates of all

records and data it requires.

(c) Accessible records and data: A

laboratory must have all records and

data accessible and retrievable within a

reasonable time frame during the course

of the inspection.

(d) Requirement to provide

information and data: A laboratory must

provide, upon request, all information

and data needed by HCFA or a HCFA

agent to make a determination of the

laboratory’s compliance with the

applicable requirements of this part.

(e) Reinspection: HCFA or a HCFA

agent may reinspect a laboratory at any

time to evaluate the ability of the

laboratory to provide accurate and

reliable test results.

(f) Complaint inspection: HCFA or a

HCFA agent may conduct an inspection

when there are complaints alleging

noncompliance with any of the

requirements of this part.

(g) Failure to permit an inspection or

reinspection: Failure to permit HCFA or

a HCFA agent to conduct an inspection

or reinspection results in the suspension

or cancellation of the laboratory’s

participation in Medicare and Medicaid

for payment, and suspension or

limitation of, or action to revoke the

laboratory’s CLIA certificate, in

accordance with subpart R of this part.

7. Section 493.1775 is revised to read

as follows:

§ 493.1775 Standard: Inspection of

laboratories issued a certificate of waiver or

a certificate for provider-performed

microscopy procedures.

(a) A laboratory that has been issued

a certificate of waiver or a certificate for

provider-performed microscopy

procedures is not subject to biennial

inspections.

(b) If necessary, HCFA or a HCFA

agent may conduct an inspection of a

laboratory issued a certificate of waiver

or a certificate for provider-performed

microscopy procedures at any time

during the laboratory’s hours of

operation to do the following:

(1) Determine if the laboratory is

operated and testing is performed in a

manner that does not constitute an

imminent and serious risk to public

health.

(2) Evaluate a complaint from the

public.

(3) Determine whether the laboratory

is performing tests beyond the scope of

the certificate held by the laboratory.

(4) Collect information regarding the

appropriateness of tests specified as

waived tests or provider-performed

microscopy procedures.
26738 Federal Register / Vol. 63, No. 93 /Thursday, May 14, 1998 /Rules and Regulations

(c) The laboratory must comply with

the basic inspection requirements of

§ 493.1773.

§ 493.1776 [Removed]

8. Section 493.1776 is removed.

9. Section 493.1777 is revised to read

as follows:

§ 493.1777 Standard: Inspection of

laboratories that have requested or have

been issued a certificate of compliance.

(a) Initial inspection. (1) A laboratory

issued a registration certificate must

permit an initial inspection to assess the

laboratory’s compliance with the

requirements of this part before HCFA

issues a certificate of compliance.

(2) The inspection may occur at any

time during the laboratory’s hours of

operation.

(b) Subsequent inspections. (1) HCFA

or a HCFA agent may conduct

subsequent inspections on a biennial

basis or with such other frequency as

HCFA determines to be necessary to

ensure compliance with the

requirements of this part.

(2) HCFA bases the nature of

subsequent inspections on the

laboratory’s compliance history.

(c) Provider-performed microscopy

procedures. The inspection sample for

review may include testing in the

subcategory of provider-performed

microscopy procedures.

(d) Compliance with basic inspection

requirements. The laboratory must

comply with the basic inspection

requirements of § 493.1773.

10. Section 493.1780 is revised to read

as follows:

§ 493.1780 Standard: Inspection of CLIAexempt laboratories or laboratories

requesting or issued a certificate of

accreditation.

(a) Validation inspection. HCFA or a

HCFA agent may conduct a validation

inspection of any accredited or CLIAexempt laboratory at any time during its

hours of operation.

(b) Complaint inspection. HCFA or a

HCFA agent may conduct a complaint

inspection of a CLIA-exempt laboratory

or a laboratory requesting or issued a

certificate of accreditation at any time

during its hours of operation upon

receiving a complaint applicable to the

requirements of this part.

(c) Noncompliance determination. If a

validation or complaint inspection

results in a finding that the laboratory

is not in compliance with one or more

condition-level requirements, the

following actions occur:

(1) A laboratory issued a certificate of

accreditation is subject to a full review

by HCFA, in accordance with subpart E

of this part and § 488.11 of this chapter.

(2) A CLIA-exempt laboratory is

subject to appropriate enforcement

actions under the approved State

licensure program.

(d) Compliance with basic inspection

requirements. CLIA-exempt laboratories

and laboratories requesting or issued a

certificate of accreditation must comply

with the basic inspection requirements

in § 493.1773.

(Catalog of Federal Domestic Assistance

Program No. 93.778, Medical Assistance

Program, Catalog of Federal Domestic

Assistance Program No. 93.773, Medicare—

Hospital Insurance; and Program No. 93.774,

Medicare—Supplementary Medical

Insurance Program)

Dated: October 13, 1997.

Nancy-Ann Min DeParle,

Deputy Administrator, Health Care Financing

Administration.

Dated: September 18, 1997.

David Satcher,

Director, Centers for Disease Control and

Prevention.

Approved: February 2, 1998.

Donna E. Shalala,

Secretary.

[FR Doc. 98–12752 Filed 5–13–98; 8:45 am]

BILLING CODE 4120–01–P

DEPARTMENT OF JUSTICE

48 CFR Part 2802 and 2846

[Justice Acquisition Circular 98–1]

Amendment to the Justice Acquisition

Regulations (JAR Regarding:

Definitions

AGENCY: Justice Management Division,

Justice.

ACTION: Final rule, correction.

SUMMARY: This document contains

corrections to the final regulations

(Justice Acquisition Regulations) that

were published Thursday, April 2, 1998

(63 FR 16118–16136). The regulations

related to the reissuance of the JAR to

implement regulatory changes resulting

from the Federal Acquisition Reform

Act, the Federal Acquisition

Streamlining Act and the

recommendations of the National

Performance Review.

EFFECTIVE DATE: May 14, 1998.

FOR FURTHER INFORMATION CONTACT:

Janis Sposato, Procurement Executive,

Justice Management Division (202) 514–

3103.

SUPPLEMENTARY INFORMATION:

A. Background

The final regulations that are the

subject of these corrections superseded

the 1985 version of the JAR and all

amendments (Justice Acquisition

Circulars 85–1 through 97–1) issued

prior to the date of publication of that

final rule.

B. Regulatory Flexibility Act

The Department of Justice certifies

that this final rule will not have a

significant economic impact on a

substantial number of small entities

within the meaning of the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq.,

because the amendment sets forth only

corrections to internal departmental

procedures.

C. Paperwork Reduction Act

The final rule imposes no new

information collection requirements that

require approval by the Office of

Management and Budget (OMB) under

the Paperwork Reduction Act of 1980

(Pub. L. 96–511). All information

collection requirements have been

submitted to OMB. In those cases where

an OMB control number has been

assigned, the control number is

included in the regulation.

List of Subjects in 48 CFR Parts 2802

and 2846

Government procurement.

Stephen R. Colgate,

Assistant Attorney General for

Administration.

Accordingly, 48 CFR parts 2802 and

2846 are corrected by making the

following correcting amendments.

1. The authority citation for 48 CFR

Parts 2802 and 2846 continues to read

as follows:

Authority: 28 U.S.C. 510; 40 U.S.C. 486(c);

28 CFR 0.75(j) and 28 CFR 0.76(j).

PART 2802—DEFINITIONS OF WORDS

AND TERMS—[CORRECTED]

2. On page 16121, in the middle of the

first column, the citation set forth as

Subpart 2.1—Definitions in the table of

contents of part 2802 and in the

accompanying text which immediately

follows, is corrected to read as follows:

Subpart 2802.1—Definitions

PART 2802—QUALITY ASSURANCE—

[CORRECTED]

3. On page 16134, in the lower third

of the third column, under Part 2846, a

paragraph number and title (2846.610,

General) are added as set forth below, to

the table of contents and the text that

appears directly under Subpart 2846.6—

Material Inspection and Receiving

reports.