14584 Federal Register / Vol. 60, No. 52 / Friday, March 17, 1995 / Notices

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

[Docket No. 94N–0335]

Medical Devices; Mammography

Quality Standards Act of 1992;

Inspection Fees

AGENCY: Food and Drug Administration,

HHS.

ACTION: Notice.

SUMMARY: The Food and Drug

Administration (FDA) is announcing the

fees it will assess for inspections of

mammography facilities during fiscal

year 1995 (FY 95). The Mammography

Quality Standards Act of 1992 (MQSA)

requires FDA to assess and collect fees

from mammography facilities to cover

the costs of annual inspections required

by the MQSA. This notice explains

which facilities are subject to payment

of inspection fees, provides information

on the costs included in developing

inspection fees, and provides

information on the inspection, billing,

and collection processes.

DATES: Effective October 1, 1994, for all

inspections conducted under 42 U.S.C.

263b(g). Written comments by June 15,

1995.

ADDRESSES: Submit written comments

to the Dockets Management Branch

(HFA–305), Food and Drug

Administration, rm.1–23, 12420

Parklawn Dr., Rockville, MD 20857.

FOR FURTHER INFORMATION CONTACT: John

L. McCrohan, Center for Devices and

Radiological Health (HFZ–240), Food

and Drug Administration, 1350 Piccard

Dr., Rockville, MD 20850, 301–594–

3332, fax 301–594–3306.

SUPPLEMENTARY INFORMATION:

I. Background

The MQSA amended Title III of the

Public Health Services Act (the PHS

Act) (42 U.S.C. 262 et seq.) by adding a

new section 354 (42 U.S.C. 263b) to

require uniform national quality

standards for mammography facilities.

The MQSA requires all mammography

facilities, other than facilities of the

Department of Veterans Affairs, to be

accredited by an approved accreditation

body and certified by the Secretary of

Health and Human Services as meeting

quality standards. Facilities must obtain

a certificate by October 1, 1994, in order

to continue to legally provide

mammography services. See 58 FR

67558, December 21, 1993,

‘‘Mammography Facilities—

Requirements for Accrediting Bodies

and Quality Standards and Certification

Requirements,’’ interim rules and 59 FR

49808, September 30, 1994, ‘‘Quality

Standards and Certification

Requirements for Mammography

Facilities,’’ amending the interim rules.

The MQSA requires FDA to establish a

Federal certification and inspection

program for mammography facilities;

regulations and standards for

accreditation bodies; and standards for

equipment, personnel, quality

assurance, and recordkeeping and

reporting by mammography facilities.

The MQSA requires annual facility

inspections to determine compliance

with the quality standards. Section

354(r) of the PHS Act requires FDA to

assess and collect fees for inspections of

all mammography facilities, other than

Governmental entities as determined by

FDA, to cover the costs of inspections.

FDA is providing notice of the fees to be

assessed during FY 95 and additional

information relating to those fees.

Although the MQSA does not require

FDA to solicit comments on fee

assessment and collection, FDA is

inviting comments from interested

persons in order to have the benefit of

additional views and information.

II. Inspections under the

Mammography Quality Standards Act

of 1992

Section 354(g)(1) of the PHS Act

requires FDA, or a State operating under

a delegation of authority from FDA, to

conduct an annual inspection of each

mammography facility. The purpose of

the annual inspection is to determine

facility compliance with quality

standards established under the MQSA.

The quality standards to be enforced

during FY 95 were established by an

interim rule published at 58 FR 67565,

December 21, 1993, ‘‘Quality Standards

and Certification Requirements for

Mammography Facilities,’’ amended by

an interim rule published at 59 FR

49808, September 30, 1994, ‘‘Quality

Standards and Certification

Requirements for Mammography

Facilities.’’ Inspections will be

conducted by inspectors who have met

Federal training requirements and who

are certified by FDA.

Under ordinary circumstances,

inspections will be conducted during

the regular business hours of the facility

or at a mutually agreed time. FDA

normally will provide 5 working days

advance notice of each annual

inspection. If a significant deficiency is

identified during an inspection, FDA

will provide information on necessary

corrective action and in appropriate

cases, will schedule a followup

inspection after the facility has had a

reasonable time to correct the

deficiency. FDA normally will provide

5 working days advance notice of each

followup inspection. FDA may make

unannounced inspections or may

provide shorter notice if prompt action

is necessary to protect the public health

(see 42 U.S.C. 263b(g)(4)).

III. Costs Included in FY 1995

Inspection Fees

Section 354(r) of the PHS Act requires

FDA to assess and collect fees from

persons who own or lease

mammography facilities, or their agents,

to cover the cost of annual and followup

inspections conducted by FDA or a

State acting under a delegation from

FDA. Section 354(r) limits FDA’s

discretion in setting inspection fees in

three ways: (1) Fees must be set so that,

for a given fiscal year, the aggregate

amount of fees collected will equal the

aggregate costs of inspections

conducted; (2) a facility’s liability for

fees must be reasonably based on the

proportion of the inspection costs which

relate to the facility; and (3)

Governmental entities, as determined by

FDA, are exempt from payment of fees.

FDA has determined that the

following categories of costs are

recoverable under section 354(r) of the

PHS Act and has included them in the

fees to be assessed in FY 95:

• Personnel costs of annual and

followup inspections of mammography

facilities, including administration and

support.

• Purchase of equipment,

development of instrument calibration

procedures, calibration of instruments

used in the inspections, and

modification of training facilities and

laboratories to support MQSA

operations.

• Design, programming, and

maintenance of data systems necessary

to schedule and track inspections and to

collect data during inspections.

• Training and certification of

inspectors (both FDA and State

inspectors).

• Costs of billing facilities for fees due

for annual and followup inspections

and collecting facility payments.

• Tracking, coordination, and

direction of inspections.

• Overhead and support attributable

to facility inspections.

FDA has calculated the fixed and

variable amounts of these costs. Because

facilities and most scientific equipment

are durable and can be used for a period

of years, it is not appropriate to recover

the full costs of such expenditures in

the year of purchase. To do so would

result in the MQSA inspection fee

varying widely from one year to the

next. Instead, these costs will be
Federal Register / Vol. 60, No. 52 / Friday, March 17, 1995 / Notices 14585

recovered over the useful life of the

asset. FDA has used these data on fixed

and variable costs to determine fees for

two categories of inspection:

• Annual inspection of each

mammography facility. The recoverable

portions of all fixed costs of the

inspection program and appropriate

variable costs are recovered in the

annual inspection fee. This fee will vary

depending on how many mammography

units are used by a facility. All

mammography facilities, except

Governmental entities, will be subject to

this fee.

• Followup inspections. If the annual

inspection of a facility identifies a

deficiency that necessitates a followup

inspection, that facility will be assessed

an additional fee to recover the costs of

that additional inspection. Only variable

costs directly related to followup

inspections are recovered.

Governmental entities and all facilities

that do not require a followup

inspection are not subject to this fee.

IV. Inspection Fees to be Assessed

During FY 95

After consulting with the National

Mammography Quality Advisory

Committee, FDA has determined that,

for FY 95 (October 1, 1994 to September

30, 1995), a facility’s inspection fees

will be based on the number of

mammography units used by the

facility. Based on information submitted

by States during contract negotiations

and a 1993 survey by the National

Cancer Institute, FDA estimates that

there are 13,252 mammography units

and 10,666 facilities subject to

inspection in FY 1995. Most facilities

(83 percent) have only a single

mammography unit and fewer than 5

percent of facilities have more than two

units.

FDA has determined that the

following fees will be assessed for

facility inspections conducted in fiscal

year 1995:

Type of Inspection Fee

Annual ....................... $1,178 for the first

unit, plus $152 for

each additional

unit.

Followup .................... $670 for each followup inspection.

The fee schedule is subject to change

each fiscal year to ensure that the

aggregate amount of fees collected

during any fiscal year equals the

aggregate amount of costs for such fiscal

year for inspection of facilities

FDA reviewed and considered several

methodologies for setting annual

inspection fees for FY 95, including fee

structures that would do one or more of

the following: (1) Account for

differences in facility size (the adopted

methodology); (2) establish a flat fee that

would not vary by facility size; (3)

account for regional variations in

inspection costs; (4) eliminate separate

followup inspection fees by increasing

the annual inspection fee. FDA decided

to charge separately for annual and

followup inspections because FDA

believes it is more appropriate and

equitable for the costs of followup

inspections to be borne entirely by the

facilities that require such inspections.

In addition, this approach eliminated

the need for FDA to attempt to estimate

the number of followup inspections that

will be conducted. FDA chose to use a

uniform, national fee structure because,

at this time, the agency lacks sufficient

information to adopt any other

approach.

For followup inspections, FDA

considered a flat fee (the adopted

methodology) and an hourly rate that

would vary the fee by the length of the

inspection. FDA has chosen to adopt a

flat fee for followup inspections because

this approach eliminates concerns about

variations among inspectors and

differential treatment of facilities.

The methodology adopted by FDA to

determine inspection fees does not pass

on the costs of inspecting Governmental

entities to other facilities. The entire

cost of inspecting Governmental entities

will be borne by FDA and paid out of

appropriated funds.

The agency invites comments on

alternative methods of determining

inspection fees under the MQSA and

may consider altering its methodology

in the future, after actual inspection

experience provides more accurate data

about differences among facilities and

variations in costs by State, region, or

other factors.

V. Facilities Subject to Payment of

Inspection Fees

Under the MQSA, all certified

mammography facilities except

Governmental entities, as determined by

FDA, are subject to payment of

inspection fees (see 42 U.S.C. 263b(r)).

FDA has developed a definition that

will be used to determine whether a

facility qualifies as a ‘‘Governmental

entity’’ for the purpose of determining

whether a facility is exempt from

payment of inspection fees under 42

U.S.C. 263b(r). A Governmental entity is

a mammography facility subject to

inspection under section 354(g)(1) of the

Public Health Service Act (42 U.S.C.

263b(g)(1), that meets either of the

following criteria: (1) Is operated by any

Federal department, State, district,

territory, possession, Federallyrecognized Indian tribe, city, county,

town, village, municipal corporation or

similar political organization or subpart

thereof, or (2) provides services under

the Breast and Cervical Cancer Mortality

Prevention Act of 1990, 42 U.S.C. 300k

et seq., and at least 50 percent of the

mammography screening examinations

provided during the preceding 12

months were funded under that statute.

In making these determinations, FDA

reviewed the legislative history of the

Mammography Quality Standards Act of

1992. There is nothing in the legislative

history to indicate that Congress

intended the exemption for

Governmental entities to be read

expansively. Nor is there anything in

the legislative history to suggest that

Congress intended FDA to distinguish

among mammography facilities with

respect to this exemption for any

particular policy reason, such as the

type of organization operating the

facility (e.g., facilities that qualify as a

charitable organization under section

501(c)(3) of the Internal Revenue Code),

location (e.g., rural facilities), or size

(e.g., facilities that handle relatively few

patients). Accordingly, FDA has

interpreted the exemption provision in

a manner that will recoup the costs of

inspections from as many facilities as

possible. This approach will reduce the

likelihood that fiscal constraints will

undermine the agency’s ability to

perform adequate inspections required

by the law.

FDA determined that the definition of

Governmental entity under the MQSA

should include facilities that are highly

dependent on funding provided under

the Breast and Cervical Cancer Mortality

Prevention Act of 1990 (BCCMPA) (see

42 U.S.C. 300k et seq.). That statute

authorizes grants to States for programs

to screen women for breast and cervical

cancer as a preventive health measure

(see 42 U.S.C. 300k). Low income

women are given priority for screening

services, including free services to any

woman with income below the official

poverty line (see 42 U.S.C. 300n).

Advisory committee discussions raised

concern that assessing an inspection fee

on certain facilities receiving these

grants would be at variance with, and

could undermine, the initiative that

Congress legislated through BCCMPA,

and that the Department of Health and

Human Services implemented, to

provide mammography screening to

under-served populations. In response

to this concern, FDA decided to include

in its definition of Governmental entity,

those facilities with BCCMPA grants

that provide at least 50 percent of their

mammography screening services to the
14586 Federal Register / Vol. 60, No. 52 / Friday, March 17, 1995 / Notices

population targeted by BCCMPA. FDA

believes relatively few (less than 100)

facilities will qualify as Governmental

entities because of their dependence on

BCCMPA grants. These facilities pursue

the same public health objectives as the

MQSA and are largely dependent on

Federal payments. Assessing an

inspection fee would do little more than

shift the costs of one Federal program to

another Federal program while

subjecting the Federal government to

the transaction costs involved with such

transfers.

The agency invites comments on

alternative ways to define Governmental

entities under the MQSA and may

consider altering its determination in

the future, after actual inspection

experience provides more accurate data

about other types of facilities that might

be included in the category which is

exempt from inspection fees under 42

U.S.C. 263b(r).

Prior to the first annual inspection of

a facility, FDA will contact the facility

and provide an opportunity for the

facility to attest that it qualifies as a

Governmental entity. Facilities that FDA

finds to be Governmental entities will

not be billed for inspections.

VI. Billing and Collection Procedures

Within 30 days following inspection,

FDA will mail a bill to the inspected

facility (Governmental entities will not

receive bills). The bill will set forth the

type of inspection conducted (annual or

followup), the fee to be paid, and the

date payment is due (30 days after

billing date). Inspection fees will be

billed to and collected from the party

that operates the facility. If the facility

is owned or controlled by an entity

other than the operator, it is up to the

parties to establish, through contract or

otherwise, how the costs of facility

inspections will be allocated.

If full payment is not received by the

due date, a second bill will be sent. At

that time, interest will begin to accrue

at the prevailing rate set by the

Department of the Treasury (currently,

the prevailing rate is 13 percent), a 6

percent late payment penalty will be

assessed in accordance with 45 CFR

30.13, and a $20 administrative fee will

be assessed for each 30-day period that

a balance remains due. If payment is not

received within 30 days of a third and

final bill, FDA may initiate action to

collect unpaid balances (with interest

and penalties), including the use of

collection agencies and reporting of

delinquencies to commercial credit

reporting agencies.

VII. Review and Appeals Procedures

FDA will review each declaration that

a facility qualifies as a Governmental

entity. If FDA disallows a facility’s

claim that it is a Governmental entity,

a bill will be sent to the facility with

payment due within 30 days.

If FDA determines that a facility is not

a Governmental entity, but the facility

believes it qualifies for exemption under

the definition of Governmental entity

set forth above, the facility may appeal

FDA’s determination by explaining and

certifying the basis for its belief in a

letter directed to the FDA Ombudsman,

c/o Mammography Quality Assurance

Program, Food and Drug

Administration, P.O. Box 6057,

Columbia, MD 21045–6057, postmarked

within 30 days of FDA’s notice to the

facility that the facility does not qualify

as a Governmental entity. The FDA

Ombudsman will review a facility’s

claim that it is a Governmental entity

and will normally reach a decision

within 60 days. If the Ombudsman

determines that a facility does not

qualify as a Governmental entity, the

Ombudsman shall provide a statement

of the grounds for that determination.

The Ombudsman’s decision will

constitute the agency’s final decision on

the matter. During the time required for

the Ombudsman’s review, FDA’s efforts

to collect the fee will be suspended.

VIII. Request for Comments

Although MQSA does not require

FDA to solicit comments on fee

exemption, assessment and collection,

FDA is inviting comments from

interested persons in order to have the

benefit of additional views and

information. FDA may consider altering

its methodology of defining

Governmental entities, and assessing

and collecting fees under MQSA in

future years, after actual inspection

experience provides more accurate data

about differences among facilities and

variations in costs by State, region, or

other factors.

Interested persons may on or before

June 15, 1995 submit to the Dockets

Management Branch (address above)

written comments regarding this notice.

Two copies of any comments are to be

submitted, except that individuals may

submit one copy. Comments are to be

identified with the docket number

found in brackets in the heading of this

document. Received comments and a

full explanation of the costs included

and the methodology employed in

determining these fees are on file with

the Dockets Management Branch

(address above) and may be seen in that

office between 9:00 a.m. and 4:00 p.m.,

Monday through Friday.

Dated: March 13, 1995.

William B. Schultz,

Deputy Commissoner for Policy.

[FR Doc. 95–6614 Filed 3–16–95; 8:45 am]

BILLING CODE 4160–01–F