Medicare, Medicaid, and CLIA Programs; Clinical Laboratory Improvement Amendments of 1988 Exemption of Permit-Holding Laboratories in the State of New York, 78368-78370 [E8-30452]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 73, Number 246 (Monday, December 22, 2008)]
[Notices]
[Pages 78368-78370]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-30452]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2283-N]
RIN 0938-AP20


Medicare, Medicaid, and CLIA Programs; Clinical Laboratory 
Improvement Amendments of 1988 Exemption of Permit-Holding Laboratories 
in the State of New York

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

ACTION: Notice.

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SUMMARY: This notice announces that CMS has granted exemption from CLIA 
requirements to laboratories located within the State of New York that 
possess a valid permit under Article Five of Title V of the Public 
Health Law of the State of New York and its implementing regulations at 
10 N.Y. Comp. Codes R. & Regs., Title V, Part 58.

DATES: Effective Date: The exemption granted by this notice is 
effective, unless revoked, for 6 years from the date of publication of 
this notice.

FOR FURTHER INFORMATION CONTACT: Val Coppola (410) 786-3531.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Federal Law

    Section 353 of the Public Health Service Act (the Act), as amended 
by the Clinical Laboratory Improvement Amendments of 1988 (CLIA) (42 
U.S.C. 263a) generally requires any laboratory that performs tests on 
human specimens for the diagnosis, prevention or treatment of any 
disease or impairment of, or assessment of the health of human beings 
to possess a certificate to perform that category of tests issued by 
the Secretary of the Department of Health and Human Services (HHS). 
Under sections 1861(s) of the Social Security Act, the Medicare program 
will only pay for laboratory services if the laboratory meets the 
certification requirements under section 353 of the Public Health 
Service Act. Section 1902(a)(9)(C) of the Social Security Act requires 
that State Medicaid plans pay only for laboratory services furnished by 
laboratories in compliance with section 353 of the Act. Subject to 
specified exceptions, laboratories therefore must have a current and 
valid CLIA certificate to be eligible for payment from the Medicare or 
Medicaid programs. Regulations implementing section 353 of the Act are 
contained in 42 CFR part 493.
    Section 353(p) of the PHS Act provides for the exemption of 
laboratories from CLIA requirements in States that enact legal 
requirements that are equal to or more stringent than CLIA's statutory 
and regulatory requirements.
    Section 353(p) of the Act is implemented in subpart E of 
regulations at 42 CFR part 493. Sections 493.551 and 493.553 provide 
that we may exempt from CLIA requirements, for a period not to exceed 6 
years, State licensed or approved laboratories in a State if the State 
licensure program meets specified conditions. Section 493.559 provides 
that we will publish a notice in the Federal Register when we grant 
approval to an approved State laboratory licensure program. It also 
provides that the notice will include the following:
     The basis for granting the exemption.
     A description of how the laboratory requirements are equal 
to or more stringent than those of CLIA.
     The term of approval, not to exceed 6 years.

B. New York State Law

    This title is generally applicable to all clinical laboratories 
operating within the state of New York except those operated by the 
Federal Government and those operated by a licensed

[[Page 78369]]

physician, osteopath, dentist, midwife, nurse practitioner or 
podiatrist who performs laboratory tests or procedures, personally or 
through his or her employees, solely as an adjunct to the treatment of 
his or her own patients. This notice is a repeat of New York State's 
laboratory licensure program's CMS approval under CLIA, and announces 
the beginning of a new period of exemption for its permitted 
laboratories.

II. Notice of Approval of CLIA Exemption to the New York State 
Laboratories

    By this notice, we grant CLIA exemption to all laboratories located 
in the State of New York that possess a valid and appropriate permit to 
perform laboratory testing under New York's ``Clinical Laboratory 
Evaluation Program.''

III. Evaluation of the New York Laboratory Licensure (Permit) Program, 
the Clinical Laboratory Evaluation Program (CLEP)

    The State of New York applied for exemption of its CLEP permit 
holding laboratories from CLIA program requirements. The State of New 
York submitted all of the applicable information and attestations 
required by Sec.  493.551, Sec.  493.553, and Sec.  493.557 for State 
licensure programs seeking exemption of their licensed laboratories 
from CLIA program requirements. Examples of the documents and 
information that were submitted and reviewed are: A comparison of its 
laboratory licensure requirements with comparable CLIA condition-level 
requirements and descriptions of its: inspection and proficiency 
testing monitoring processes, data management and analysis system, 
investigative and response procedures for complaints received against 
laboratories, and policies regarding inspections.

IV. CMS and the Centers for Disease Control and Prevention (CDC) 
Analysis of New York's Application and Supporting Documentation

    In order to determine whether we should grant a CLIA exemption to 
laboratories licensed by a State, we, with staff from CDC, review the 
application and additional documentation that the State submits to CMS 
and conducted a detailed and in-depth comparison of the CLEP State 
licensure (permit) program and CLIA requirements to determine whether 
the State program meets or exceeds the requirements at subpart E of 
part 493.
    In summary, the State generally must demonstrate that its State 
licensure program meets the following requirements:
     Has State laws in effect that provide for laboratory 
licensure/permit program with requirements that are equal to or more 
stringent than CLIA condition-level requirements for laboratories.
     Has a State licensure program with requirements that are 
equal to or more stringent than the CLIA condition-level requirements 
such that a State program licensed laboratory would meet the CLIA 
condition-level requirements if it were inspected against those 
requirements.
     Is shown to meet the requirements of Sec.  493.553, Sec.  
493.555, and Sec.  493.557(b) and is approved by CMS under Sec.  
493.551. For example, among other things, a program would need to:

--Demonstrate that it has enforcement authority and administrative 
structures and resources adequate to enforce its laboratory 
requirements.
--Permit CMS or CMS agents to inspect laboratories within the State.
--Require laboratories within the State to submit to inspections by CMS 
or CMS agents as a condition of licensure.
--Agree to pay the cost of the validation program administered by CMS 
and the cost of the State's pro rata share of the general overhead to 
develop and implement CLIA as specified in Sec.  493.645(a), Sec.  
493.646(b), and Sec.  493.557(b).
--Take appropriate enforcement action against laboratories found by CMS 
or CMS agents not to be in compliance with requirements comparable to 
condition-level requirements, as specified in Sec.  493.557(b).

    As specified in our regulations at Sec.  493.555 and Sec.  
493.557(b), our review of a State laboratory program includes (but is 
not necessarily limited to) an evaluation of the following:
     Whether the State's requirements for laboratories are 
equal to or more stringent than the CLIA condition-level requirements.
     The State's inspection process requirements to determine 
the following:

--The comparability of the full inspection and complaint inspection 
procedures to those of CMS.
--The State's enforcement authority and procedures for laboratories 
found to be out of compliance with its requirements.

--The State's ability to electronically provide CMS with reports and 
data about adverse actions and corrective actions resulting from 
unsuccessful proficiency testing participation and with other data we 
determine to be necessary for validation review and assessment of the 
State's inspection process requirements.

     The State's agreement with CMS to ensure that the 
agreement obligates the State to do the following:

--Notify CMS within 30 days of the action taken against any CLIA-exempt 
laboratory that has had its licensure or approval withdrawn or revoked 
or been in any way sanctioned.
--Notify CMS within 10 days of any deficiency identified in a CLIA-
exempt laboratory in cases when the deficiency poses an immediate 
jeopardy to the laboratory's patients or a hazard to the general 
public.
--Notify each laboratory licensed by the State within 10 days of CMS' 
withdrawal of the exemption.
--Provide CMS with written notification of any changes in its licensure 
(or approval) and inspection requirements.
--Disclose to CMS or a CMS agent any laboratory's PT results in 
accordance with a State's confidentiality requirements.
--Take the appropriate enforcement action against laboratories found by 
CMS not to be in compliance with CLIA condition-level requirements in a 
validation survey and report these enforcement actions to CMS.
--Notify CMS of all newly licensed laboratories, including changes in 
the specialties and subspecialties for which any laboratory performs 
testing, within 30 days.
--Provide CMS, as requested, inspection schedules for validation 
purposes.

    In keeping with the process described above, CMS, with the 
assistance of CDC, reviewed and evaluated the application and 
supporting materials that were submitted by CLEP to verify that the 
CLEP permit holding laboratories will meet or exceed the requirements 
of the following subparts of part 493: Subpart H, Participation in 
Proficiency Testing for Laboratories Performing Nonwaived Testing; 
Subpart J, Facility Administration for Nonwaived Testing; Subpart K, 
Quality Systems for Nonwaived Testing, Subpart M, Personnel for 
Nonwaived Testing; Subpart Q, Inspection; and Subpart R, Enforcement 
Procedures.
    We found that the CLEP requirements mapped to all the applicable 
CLIA condition-level requirements. The New York State licensure 
program's inspection process and proficiency testing monitoring 
processes are equal to or more stringent than those of the CLIA 
program. Other materials that were submitted demonstrated compliance 
with the other above-

[[Page 78370]]

referenced requirements of subpart E of Part 493. As a result, CMS 
concluded that the submitted documents supported exempting permit 
holding laboratories under the CLEP from the CLIA program requirements. 
Furthermore, a review of CMS' validation inspections conducted by the 
CMS Regional Office in New York, New York supported that conclusion.
    The Federal validation inspections of CLEP permit holding 
laboratories, as specified in Sec.  493.563, were conducted on a 
representative sample basis as well as in response to any substantial 
allegations of noncompliance (complaint inspections). The outcome of 
those validation inspections has been and will continue to be CMS' 
principal tool for verifying that the laboratories located within the 
State that hold valid permits are in compliance with CLIA requirements.
    The CMS Regional Office in New York has conducted validation 
inspections of a representative sample (approximately 5 percent) of the 
laboratories inspected by the New York State Office of Laboratory 
Quality Assurance (LQA). For some of these validation inspections, CMS 
surveyors simply accompanied New York State's inspectors, each 
inspecting against his or her agency's respective regulations. Analysis 
of the validation data revealed no significant differences between the 
State and Federal findings. The validation surveys verified that the 
CLEP inspection process covers all CLIA conditions applicable to each 
laboratory being inspected, and also verified that the CLEP licensure 
(permit) requirements meet or exceed CLIA condition-level requirements. 
The CMS validation surveys found the State inspectors highly skilled 
and qualified. The CLEP inspected laboratories in timely fashion, that 
is, all laboratories were inspected within the required 24-month cycle. 
All parameters monitored by CMS' New York Regional Office to date 
indicate that the State of New York is meeting all requirements for 
approval of CLIA exemption.
    This Federal monitoring will continue as an on-going process.

V. Conclusion

    Based on review of the documents submitted by the New York State 
laboratory licensure program, CLEP, pursuant to the requirements of 
subpart E of part 493, as well as the outcome of the validation 
inspections conducted by the CMS Regional Office in New York, we find 
that the State of New York laboratory licensure program meets the 
requirements of 42 CFR 493.551(a), and that as a result, we may exempt 
from CLIA program requirements all State licensed (permitted) or 
approved laboratories.
    Approval of the CLIA exemption for laboratories located within and 
permitted by the State of New York is subject to removal if we 
determine that the outcome of a comparability review or a validation 
review inspection is not acceptable, as described under Sec.  493.573 
and Sec.  493.575, or if the State of New York fails to pay the 
required fee every 2 years as required under Sec.  493.646.

VI. Laboratory Data

    In accordance with our regulations at Sec.  493.557(b)(8), the 
State of New York will continue to agree to provide us with changes to 
a laboratory's specialties or subspecialties based on the State's 
survey. The State of New York also will provide us with changes in a 
laboratory's certification status.

VII. Required Administrative Actions

    CLIA is a user-fee funded program. The registration fee paid by 
laboratories is intended to cover the cost of the development and 
administration of the program. However, when a State's application for 
exemption is approved, we do not charge a fee to laboratories in the 
State. The State's share of the costs associated with CLIA must be 
collected from the State, as specified in Sec.  493.645.
    Accordingly, the State of New York must pay for the following:
     Costs of Federal inspection of laboratories in the State 
to verify that New York State's CLEP requirements are enforced in an 
appropriate manner. The average Federal hourly rate is multiplied by 
the total hours required to perform Federal validation surveys within 
the State.
     Costs incurred for Federal investigations and surveys 
triggered by complaints that are substantiated. We will bill the State 
of New York on a semiannual basis.
     The State of New York's proportionate share of the costs 
associated with establishing, maintaining, and improving the CLIA 
computer system, a portion of those services from which the State of 
New York received direct benefit or contributed to the CLIA program in 
the State. Thus, the State of New York is being charged for a portion 
of CMS' direct and indirect costs as well as a portion of the costs 
incurred by the CDC and the Food and Drug Administration (FDA) in 
carrying out their responsibilities under CLIA.
    In order to estimate the State of New York's proportionate share of 
the general overhead costs to develop and implement CLIA, we determined 
the ratio of laboratories in the State to the total number of 
laboratories nationally. Approximately 1.5 percent of the registered 
laboratories are in the State of New York. We determined that a 
corresponding percentage of the applicable CDC, FDA, and CMS costs 
should be borne by the State of New York.
    The State of New York has agreed to pay us the State's pro rata 
share of the overhead costs and anticipated costs of actual validation 
and complaint investigation surveys. A final reconciliation for all 
laboratories and all expenses will be made. We will reimburse the State 
for any overpayment or bill it for any balance.

VIII. Approval

    In light of the foregoing, CMS grants approval of the State of New 
York's laboratory licensure program (CLEP) under Subpart E. All 
laboratories located within the State of New York and hold valid CLEP 
permits are CLIA-exempt for all specialties and subspecialties.

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

    Dated: November 7, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
 [FR Doc. E8-30452 Filed 12-19-08; 8:45 am]
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