[Federal Register Volume 60, Number 177 (Wednesday, September 13, 1995)]
[Proposed Rules]
[Pages 47534-47543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22378]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 493

[HSQ-225-P]
RIN 0938-AG99


Public Health Service; CLIA Program; Categorization of Waived 
Tests

AGENCY: Health Care Financing Administration (HCFA) and Public Health 
Service (PHS), HHS.

ACTION: Proposed rule.

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SUMMARY: In this rule we are proposing criteria we would use to 
determine whether to categorize specific laboratory tests as waived 
from certain requirements of the Clinical Laboratories Improvement 
Amendments of 1988. We also propose revisions to requirements that 
laboratories performing waived tests must meet.

DATES: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on 
November 13, 1995.

ADDRESSES: Mail written comments (1 original and 3 copies) to the 
following address:

Centers for Disease Control and Prevention, Public Health Service, 
Department of Health and Human Services, Attention: HSQ-225-P, 4770 
Buford Hwy., NE., MS F11, Atlanta, Georgia 30341-3724.

    If you prefer, you may deliver your written comments (1 original 
and 3 copies) to the following address:

CDC/Washington, Room 714-B, Hubert H. Humphrey Building, 200 
Independence Avenue, SW., Washington, DC 20201.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code HSQ-225-P. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 309-G of 
the Department's offices at 200 Independence Avenue, SW., Washington, 
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. 
(phone: (202) 690-7890).
    For comments that relate to information collection requirements, 
mail a copy of comments to:

Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 

[[Page 47535]]
20503, Attn: Allison Herron Eydt, HCFA Desk Officer.

    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 $8.00. 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.

FOR FURTHER INFORMATION CONTACT: Rosemary Bakes-Martin, (404) 488-7655, 
for questions regarding the criteria for waived test categorization and 
the requirements for data submission; and Judy Yost, (410) 786-3531, 
for certificate and inspection issues.

SUPPLEMENTARY INFORMATION:

I. Background

    Under section 353 of the Public Health Service (PHS) Act (42 U.S.C. 
263a), as amended by the Clinical Laboratory Improvement Amendments of 
1988 (CLIA), all laboratories that examine human specimens for the 
diagnosis, prevention or treatment of any disease or impairment of, or 
the assessment of the health of, human beings must meet certain 
requirements to perform the examination. On February 28, 1992 (57 FR 
7002), we published regulations to implement CLIA at 42 CFR part 493. 
Many of the requirements are based on the complexity of the tests 
performed. There are currently three test categories: waived, moderate 
complexity and high complexity.
     In accordance with the law, HHS established a Clinical Laboratory 
Improvement Advisory Committee (CLIAC) to advise and make 
recommendations on technical and scientific aspects of the regulations. 
The CLIAC is composed of individuals involved in the provision of 
laboratory services, use of laboratory services, development of 
laboratory testing devices or methodologies, and others as approved by 
HHS. In addition, HHS has designated four CLIAC subcommittees that 
focus on the following areas: cytology; personnel; proficiency testing, 
quality control and quality assurance; and test categorization.
    We received approximately 16,000 letters from professional 
organizations and individuals that provided approximately 71,000 
comments in response to publication of the February 28, 1992 
regulations. Through this proposed rule, we are responding to the 
approximately 1,100 comments concerning the categorization of waived 
tests, specifically the subjectiveness of the waived criteria and the 
failure of tests to be granted waiver status.
    These commenters were responding to our regulations at Sec. 493.15 
that merely excerpt the statutory language without elaboration and list 
nine tests or examinations that meet the statutory criteria and are 
waived. That section further provides that revisions to the list of 
waived tests approved by HHS will be published in the Federal Register 
in a notice with opportunity for public comment. As currently defined 
in the regulation, waived tests are simple laboratory examinations and 
procedures that--
    (1) Are cleared by the Food and Drug Administration (FDA) for home 
use;
    (2) Employ methodologies that are so simple and accurate as to 
render the likelihood of erroneous results negligible; or
    (3) Pose no reasonable risk of harm to the patient if the test is 
performed incorrectly.
    The specified tests that are listed in the regulation are:
    (1) Dipstick or tablet reagent urinalysis (non-automated) for 
bilirubin, glucose, hemoglobin, ketone, leukocytes, nitrite, pH, 
protein, specific gravity, and urobilinogen;
    (2) Fecal occult blood;
    (3) Ovulation tests--visual color comparison tests for human 
luteinizing hormone;
    (4) Urine pregnancy tests--visual color comparison tests;
    (5) Erythrocyte sedimentation rate--non-automated;
    (6) Hemoglobin--copper sulfate--non-automated;
    (7) Blood glucose by glucose monitoring devices cleared by the FDA 
specifically for home use;
    (8) Spun microhematocrit; and
    (9) Hemoglobin by single analyte instruments with self-contained or 
component features to perform specimen/reagent interaction, providing 
direct measurement and readout.
    After evaluating the comments concerning waived tests, we sought 
advice in February 1993 from the CLIAC concerning the criteria for 
waiver and the process for considering whether specific tests should be 
placed in the waived category. The CLIAC agreed that the criteria 
should be better defined and recommended that the Centers for Disease 
Control and Prevention (CDC) clarify the criteria and process for 
categorizing waived tests and suggested that a moratorium be placed on 
adding tests to the waived category until the criteria were better 
defined. In response to the CLIAC recommendation, CDC initially 
established a moratorium on considering tests for waiver while we were 
developing the notice of proposed rulemaking to revise the CLIA 
regulations for waived categorization.
    In response to public concern, on December 19, 1994, the moratorium 
was lifted, and CDC notified all manufacturers and producers of 
moderate complexity test systems that it will consider for waiver any 
test that meets the statutory criteria and for which the manufacturer 
or producer applies for waiver in accordance with the CLIA regulations 
published February 28, 1992. CDC enclosed guidelines (included in this 
rule as proposed test system characteristics and field studies) that 
can be used to verify the accuracy and precision of testing devices and 
demonstrate that the test meets the statutory criteria for waiver. The 
guidelines were included to assist applicants in applying for waiver; 
however, all requests will be considered as long as they include valid 
scientific studies to verify that the test meets the statutory criteria 
for waiver.

II. The Revision Process

    Under the statute, waived tests are defined as ``* * * simple 
laboratory examinations and procedures that, as determined by the 
Secretary, have an insignificant risk of an erroneous result * * *.'' 
The statute contains additional language to describe the types of 
examinations and procedures to be included in the waived category; that 
is, tests that have ``* * * been approved by the FDA for home use, 
employ methodologies that are so simple and accurate as to render the 
likelihood of erroneous results negligible, or the Secretary has 
determined pose no reasonable risk of harm to the patient if performed 
incorrectly.'' The law also specifies that waived tests are exempt from 
the CLIA health and safety standards, including personnel, patient test 
management, quality control, proficiency testing, quality assurance, 
and routine inspections requirements.
    In the preamble of the CLIA regulations published February 28, 
1992, in the Federal Register (57 FR 7002), we stated that FDA 
clearance of a test for home use could not be used as a sole criterion 
for qualifying as a 

[[Page 47536]]
waived test. We have continued to review the section of the statute 
pertaining to waived tests and believe now that the better view of the 
statute is that the waived criteria set out at 42 U.S.C. 263a(d)(3)(A), 
(B), and (C) were intended by the Congress to represent the kinds of 
tests that are ``simple laboratory examinations and procedures which * 
* * have an insignificant risk of an erroneous result.'' Therefore, any 
test system cleared by the FDA for home use will, upon receipt of a 
request for waiver from the manufacturer, be waived under CLIA.
    With regard to the other two criteria for waiver, we believe that a 
critical factor to be considered is the implicit statutory mandate that 
waived testing be easily performed and provide accurate results. 
Therefore, in order for a test to be categorized as waived, it must 
both: (1) Be simple; and (2) have an insignificant risk of an erroneous 
result. In this rule, we are proposing to clarify the statutory 
criteria by specifying performance characteristics and studies designed 
to demonstrate that any test system categorized as waived would be 
simple, easy to perform, and essentially error-free. We believe that 
conformance to these criteria would reduce the possibility of the test 
producing an erroneous result and, thus, assist in determining whether 
the test system could pose a reasonable risk of harm to a patient if 
performed incorrectly.
    We are proposing that, to be exempt from CLIA and categorized as 
waived, in accordance with the law, all test systems either be cleared 
by the FDA for home use or meet the requirements in CLIA to ensure that 
the test procedure is simple and not prone to error.
    In response to the CLIAC recommendation, CDC developed a protocol 
to follow when requesting that tests be placed in the waived category. 
The protocol describes basic specifications for verifying that the test 
system meets the performance characteristics defined by the criteria. 
CDC proposed that, upon request of HHS as specified in Sec. 493.2001, 
the CLIAC would review applications for waiver, in accordance with the 
waived criteria, and make recommendations to HHS concerning waiver 
status.
    The proposed clarifications to the criteria for waiver addressing 
simplicity and accuracy and the proposed process to follow when 
requesting waived categorization were presented to the CLIAC test 
categorization subcommittee and subsequently to the full committee. The 
CLIAC endorsed the clarifications as well as the process for requesting 
waived categorization and recommended that the CLIA regulations be 
revised to incorporate the changes.
    The CLIAC further recommended that all tests currently on the 
waived list be subject to the new clarifications to the criteria to 
determine if they should remain in the waived category. The committee 
thought that the method previously used to place tests in the waived 
category was too subjective and was concerned that some of the tests 
may not be sufficiently error-free to justify their continued waived 
status.

III. Proposed revisions

Clarified Criteria

    In this regulation, we propose to delete Sec. 493.15, which 
contains the current criteria for waived tests and a process to 
announce revisions to the list. In its place, we would: Clarify the 
waived criteria (outlined below), incorporate the clarification into 
our regulations at a new Sec. 493.7, and place the remaining 
provisions, appropriately revised to reflect the new procedures, at 
Sec. 493.9.
    Following the recommendation from the CLIAC that we clarify the 
criteria for waiver, a number of resources, such as FDA protocols for 
defining tests suitable for home use and the National Committee for 
Clinical Laboratory Standards protocols for method evaluations, were 
used as reference materials. Since one of the main concerns of 
commenters on our previous CLIA rulemaking centered around the 
subjectiveness and ambiguity of applying the statutory criteria to 
categorize the tests as waived, we used information from these sources 
to clarify what we mean by ``simple'' and ``not prone to error'' as a 
mechanism to define the statutory phrase ``have an insignificant risk 
of an erroneous result''. We believe that test systems must possess 
certain characteristics that would make them easier to use and they 
also must be able to demonstrate a level of accuracy and precision that 
would ensure the correct test result is generated regardless of the 
user's level of expertise.
    Below we have listed test system properties that we believe 
illustrate simplicity and ease of use. The test system:
     Uses direct unprocessed specimens, requires no specimen 
manipulation before analysis or analyst intervention during analysis, 
and provides direct readout of results. Quantitative tests must be 
fully automated while qualitative tests are limited to simple reagent 
impregnated devices that produce only a positive or negative result;
     Contains fail-safe mechanisms rendering no results when 
the results are outside of the reportable range or when the test system 
malfunctions;
     Requires no invasive test system troubleshooting, or 
electronic or mechanical maintenance; and
     Contains instructions written at a comprehension level no 
higher than seventh grade. Instructions would have to include step-by-
step system operation and maintenance procedures; reagent preparation 
and storage; and calibrator and control preparation, storage, frequency 
of assay, and action to be taken if control or calibrator results are 
out of range.
    We would consider a test for waiver if the test system has these 
characteristics. However, we are interested in receiving comments on 
alternative test system characteristics or approaches to define the 
statutory criterion related to test system simplicity.
    The test system characteristics that we are proposing are designed 
to limit the amount of operator intervention or interpretive skill 
required to perform the test. Limiting operator intervention should 
prevent analysts without previous laboratory training or experience 
from inadvertently disrupting the analytic process and thus introducing 
human error into the testing procedure. The requirement for a fail-safe 
mechanism would prevent untrained operators from unknowingly accepting 
or utilizing incorrect results. In view of the fact that no previous 
training or experience is required before performing waived tests, test 
systems in the waived category should not require invasive 
troubleshooting or electronic or mechanical maintenance since these 
processes rely on the use of interpretive skills to make judgement 
decisions. We also believe that an ``easy to use'' test system must 
have instructions that are written at a comprehension level that would 
provide reasonable assurance that all likely users, regardless of 
background, training, or experience, would be able to read and 
understand the step-by-step procedures required to correctly perform 
testing. We are suggesting that a seventh grade comprehension level is 
appropriate to define the waived criteria because waived tests will not 
be subject to any personnel requirements and because waived tests must 
be simple and capable of providing accurate test results when performed 
by non-professional testing personnel. Inasmuch as the considerations 
for waiver are similar to those for FDA clearance of home-use products, 
and FDA requires that package inserts for 

[[Page 47537]]
home-use tests be written at the seventh grade comprehension level, we 
are proposing that waived test system instructions be written at the 
same comprehension level.

Submission Requirements

    To define test systems that are simple, easy to use, and not error 
prone, we are proposing that field studies be conducted to 
scientifically assess the accuracy and precision of the test. In this 
regulation, we are proposing basic criteria for manufacturers and 
producers to use in configuring these field studies.
    The studies are designed to ensure that the test system generates 
consistent results regardless of the environment in which the testing 
is performed.
    Specifically, we are proposing that these studies:
     Evaluate among-operator imprecision;
     Evaluate within-site imprecision at a minimum of three 
sites; and
     Evaluate among-site imprecision.
    We are proposing to place no restrictions on the number of study 
participants or sites except for specifying that the within-site 
studies should be performed at a minimum of three sites. We believe it 
is appropriate to provide this flexibility in study design, which 
allows applicants to determine the number of participants and sites 
that are adequate to produce measures of performance that are both 
statistically valid and defensible. Also, the appropriateness of the 
number of study participants and sites might vary depending upon the 
analyte or test method.
    Additionally, in this rule, we are proposing that the studies prove 
the test system's clinical reliability by demonstrating accuracy at all 
relevant medical decision points. To verify the credibility of the 
data, we are proposing in this rule that the number of participants and 
sites and the sampling process be adequate to produce measures of 
performance that are both statistically valid and defensible (estimates 
must support valid confidence limits for all statistical parameters). 
We are proposing that the studies be performed at non-laboratory sites 
to ensure that all users, professionals as well as lay persons, can 
perform waived testing with the same competence. We are proposing that 
the study participants have no previous laboratory experience or 
training to ensure that individuals used for study purposes have 
education, training and experience that is at a level no higher than 
that of the lowest trained persons anticipated to perform the test. We 
welcome comments and suggestions on the types of studies proposed in 
this rule and comments on our proposals for data submission.
    Because waived tests would not be subject to any quality control 
requirements and we would not routinely conduct inspections of 
laboratories performing only waived tests, we propose to require the 
laboratory to notify the producer or manufacturer of the test system of 
any performance that does not meet the specifications as outlined in 
the test system instructions and would require the producer or 
manufacturer to include in the test system instructions the address and 
phone number of the person to contact. If the manufacturer or producer 
of the test system does not resolve the problem, we would require the 
laboratory to notify PHS of the problem.
    We also would require that test system instructions include a 
statement to inform the laboratory that if the laboratory modifies or 
alters the test system instructions in any way (for example, changes in 
specimen type or sample amount), the test no longer meets the 
requirements for waiver and is considered to be high complexity and, 
thus, must meet all the applicable CLIA requirements in 42 CFR part 
493.

Review Process

    To ensure that tests categorized as waived are simple, accurate and 
essentially error-free, we would require that waived tests meet the 
clarified criteria. Once the final rule responding to the comments 
received to this proposed rule is published, we plan to evaluate 
requests for waiver, in accordance with the data submittal requirements 
and process for requesting waived categorization that would be included 
under Sec. 493.7, and to apply the new requirements to currently waived 
tests. However, it should be noted that when the CLIA regulations are 
revised to incorporate changes to the waiver process, we expect that 
the review process for waived categorization of devices having similar 
test methodologies could be simplified. For example, if a test system 
employs the same methodology as a device that has been granted waiver 
in accordance with the final regulations, submission of studies showing 
accuracy and precision equivalency between the applicant test system 
and the waived test should be sufficient. These studies must reflect 
data that are adequate to produce measures of performance that are 
statistically valid and defensible and estimates must support valid 
confidence limits for all parameters.
    In this rule, we are proposing that, after waiver has been granted, 
any change or modification by the maunfacturer or producer to the test 
system that could affect the test accuracy or reliability (that is, 
procedural changes that would now require operator intervention during 
the analytic process or method changes that require performance studies 
to reevaluate test validity) be resubmitted for evaluation and review. 
Changes to a test system that would not affect test performance, such 
as those made to improve component appearance or durability, would not 
have to be resubmitted.
    The Department's purpose in issuing this proposed rule is to 
clarify the criteria for determining which tests should be waived. In 
this regard, there may be alternative formulations that would result in 
more, or fewer, waived tests. In this proposed rule, we specifically 
request comments concerning:
     Which proposed criteria might be modified (and how), as 
well as comments in support of the provisions contained in this 
proposed rule;
     The impact on patient access to care if these criteria are 
finalized;
     The health implications of any recommended changes, 
including not only the possibility of erroneous test results but also 
likely effects on patient health if additional testing is discouraged 
or encouraged (for example, by providing such testing in a doctor's 
office); and
     The potential that these criteria may or may not have for 
driving new technology toward more safe and accurate testing.
    In addition, we are interested in receiving comments and 
suggestions about how we might include in the waived categorization 
process considerations related to the benefits to the public of 
categorizing tests as waived. Although the statute does not specify 
this as a criterion for waiver, we recognize this as a significant 
factor affecting access to care.
    After the comments to this rule are evaluated and a final rule is 
published, we plan to follow the CLIAC recommendation that PHS 
reevaluate tests that were previously categorized as waived against any 
new regulatory criteria. If changes to the previously waived tests are 
necessary, we plan to publish a notice in the Federal Register 
soliciting comments on the proposed changes.

Waived Test List

    In this rule, we propose to delete the generic list of waived tests 
from 

[[Page 47538]]
Sec. 493.15. However, at Sec. 493.7(c)(3), we would retain the 
provision, currently at Sec. 493.15(d), to publish the names of the 
tests that are waived in a Federal Register notice with an opportunity 
for public comment. In addition, for consistency with the test 
categorization provisions in Sec. 493.17(c)(1)(ii), we would make 
waived categorization effective on the date of notification to the 
applicant. Any entity that is notified of approval of its waiver 
application must be aware, however, that we may rescind this waiver 
approval and recategorize the test should comments we receive convince 
us that our initial waiver decision was inappropriate.

Summary of Proposed Changes to the Regulation

    We propose to remove Sec. 493.15 in its entirety. The criteria 
currently in Sec. 493.15(b) for determining whether a given test can be 
categorized as waived would now be in a new Sec. 493.7 and in greater 
detail. The requirements applicable to certificate of waiver 
laboratories (formerly at Sec. 493.15(e)) would be expanded and placed 
in a new Sec. 493.9.
    In Sec. 493.9, we would continue to require laboratories to follow 
the manufacturer's or producer's instructions when performing waived 
tests and to meet the requirements in subpart B of part 493. In line 
with the clarifications provided to the statutory criteria for 
categorizing tests as waived, we also would state that if a laboratory 
does not follow the manufacturer's or producer's instructions or makes 
a modification in the test system, the laboratory would no longer meet 
the requirements for certificate of waiver and the modified test, as 
performed by the laboratory, would be considered high complexity until 
otherwise categorized. If a laboratory or manufacturer desires official 
categorization of the modified test, it must submit a written request 
to PHS. Categorization of the modified product should occur within 30 
days after PHS receives the request. In addition, laboratories would be 
required to report to PHS any performance problems not resolved by the 
producer or manufacturer of the test.
    We would also make technical conforming changes to the following 
sections and headings because of our revisions concerning waived tests: 
Secs. 493.2; 493.20(c); 493.25(d); 493.35 (a) and (d); 493.37(b)(1) and 
(g); 493.39 introductory paragraph and paragraph (a); 493.45 (a)(2) and 
(a)(3); 493.47(a)(2); 493.49 introductory paragraph and (b)(2)(iv); 
493.53(a); 493.1775(b)(4)(iii) through (v), and (c).
IV. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the DATES 
section of this preamble, and, if we proceed with a subsequent 
document, we will respond to the comments in the preamble to that 
document.

V. Collection of Information Requirements

    The proposed rule contains information collections that are subject 
to review by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1980. 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 493.7: This section outlines the criteria a manufacturer 
must follow in order to have a test considered to be a ``waived'' test. 
These include but are not limited to test system characteristics, 
instructions, field studies and the evaluation of data.
    Section 493.9: This section outlines the requirements for 
laboratories performing waived tests. These include following the 
manufacturers' instructions and reporting to PHS performance problems 
not resolved by the manufacturer.
    Sections 493.35, 493.39, 493.49, 493.53: Sections 493.35 through 
493.63 are currently approved under OMB approval number 0938-0612 with 
an expiration date of February 28, 1998. The information is gathered on 
form number HCFA-R-26. These sections outline the requirements for a 
laboratory to follow to submit application forms for CLIA 
certification. The requirements include laboratory notification to HHS 
of changes to the types of tests performed or changes in ownership, 
name, location or director.
    Section 493.1775: Section 493.1775 is currently approved under OMB 
approval number 0938-0612 with an expiration date of February 28, 1998. 
This section sets forth conditions and standards for inspection of 
laboratories. The burden associated with inspections consists of 
retrieving the records and documentation requested by the inspector, 
participating in the entrance and exit interviews, responding to the 
statement of deficiencies that may result from the inspection and 
documenting any corrective actions taken that are appropriate to the 
plan of correction for the deficiencies cited.
    When OMB approves those provisions not currently approved we will 
publish a notice in the Federal Register to that affect.

Description of Respondents

    Section 493.7: Small businesses or organizations, businesses or 
other for profit, non-profit institutions, who manufacture laboratory 
tests.
    Sections 493.9, 493.35, 493.39, 493.49, 493.53; 493.1775: Small 
businesses or organizations, businesses or other for profit, non-profit 
institutions, state and local governments, federal agencies.

                               Estimated Annual Reporting and Recordkeeping Burden                              
----------------------------------------------------------------------------------------------------------------
                                                      Annual No.                                        Annual  
                    CFR sections                          of         Annual     Average burden per    burden per
                                                      responses    frequency         response           hours   
----------------------------------------------------------------------------------------------------------------
493.35, 493.39, 493.49, 493.53.....................       28,700            1  .25 hr..............        7,175
493.1775...........................................     1,280(a)            1  4 hrs...............        2,560
493.7..............................................           20            1  168 hrs.............        3,360
493.9..............................................          <20          (b)  (b).................         (b) 
----------------------------------------------------------------------------------------------------------------
a Based on receiving complaints on 2 percent of waived laboratories (64,000) resulting in the survey of 1,280   
  waived laboratories with complaints in a two year period.                                                     
b Laboratories are responsible for following manufacturers' instructions when performing waived tests. Whenever 
  a problem is encountered by the laboratory that is not resolved by the manufacturer, the laboratory must      
  notify PHS. This should be an infrequent occurrence (manufacturers generally resolve problems identified by   
  laboratories).                                                                                                


[[Page 47539]]

    The agency has submitted a copy of the proposed rule to OMB for its 
review of these information collections. Interested persons are invited 
to send comments regarding this burden estimate or any other aspect of 
this collection of information, including any of the following 
subjects: (1) The necessity and utility of the proposed information 
collection for the proper performance of the agency's functions; (2) 
the accuracy of the estimated burden; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) the 
use of automated collection techniques or other forms of information 
technology to minimize the information collection burden. Comments 
should be sent to HCFA, HSQB, MPAS, C2-26-17, 7500 Security Boulevard, 
Baltimore, Maryland 21244-1850 and to the OMB official whose name 
appears in the ADDRESSES section of this preamble.

VI. Regulatory Impact Statement

    We generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612) unless the Secretary certifies that a rule would not have 
a significant economic impact on a substantial number of small 
entities. For purposes of the RFA, all laboratories and manufacturers 
and producers of laboratory test systems are considered to be small 
entities. Individuals and States are not included in the definition of 
a small entity.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 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.
    As a result of our evaluation of comments received on the test 
categorization portion of the February 28, 1992 regulations 
implementing CLIA and as a result of additional consultation with the 
CLIAC, we are proposing to clarify the criteria and process used to 
categorize laboratory tests as waived. Manufacturers and producers of 
laboratory test systems specifically suggested that the types of 
information and data to be submitted when requesting waived 
categorization be more clearly defined in order to ensure that the 
criteria are applied accurately and uniformly to all laboratory tests. 
The proposed expansion of the waived criteria and development of a 
process protocol would provide for consistent application of detailed 
standards in order to ensure that tests categorized as waived are 
either cleared by the FDA for home use or are simple to use, produce 
accurate results when testing is performed, and preclude any reasonable 
risk of harm to patients as a result of testing errors. Of course, 
manufacturers and producers would be required to submit specific 
information and data demonstrating that their test system meets the 
criteria for waived categorization. In some cases, manufacturers or 
producers of test systems might have to conduct additional studies to 
obtain the information required; however, much of the data is similar 
to that currently required by the FDA for clearance of products. In 
accordance with the law, this rule would provide that any test system 
cleared by the FDA for home use will, upon application by the 
manufacturer, be waived from CLIA. We anticipate that manufacturers and 
producers ultimately will benefit in the form of increased sales and 
distribution of tests categorized as waived.
    Currently, almost one-half of all laboratories hold certificates of 
waiver. These laboratories would obviously benefit from an improved 
test categorization process that yields more waived tests. Any increase 
in the number of waived tests would benefit laboratories by reducing 
the regulatory burden, since laboratories limiting their services to 
waived test performance are not subject to the CLIA health and safety 
standards (including proficiency testing, quality control, personnel, 
recordkeeping and quality assurance requirements). Certificate of 
waiver laboratories are required only to register and follow 
manufacturers' and producers' instructions for test performance. In 
addition, increasing the number of waived tests would enable 
laboratories to provide an expanded test menu without incurring the 
higher fees associated with a regular CLIA certificate. The 
availability of an expanded test menu at less cost also may encourage 
new entities to begin providing services, thereby increasing access to 
health care, particularly in underserved and rural areas. Consumers of 
laboratory services would benefit from an enhanced range of laboratory 
services that have been determined to be safe and produce accurate 
results.
    We have developed these clarifications to the waived criteria in an 
effort to improve the process of approving tests for waiver. We believe 
that using the better defined criteria would result in more tests being 
waived if for no other reason than because the improved waiver process 
should drive the technology toward simpler tests that would then be 
widely available (because of waived status). However, we realize that 
the number of tests waived could vary depending upon the revisions to 
the waiver process. Depending on how many more or fewer tests receive a 
waiver, there could be significant effects on patient health (due to 
more or less patient access to testing, as well as more or fewer test 
errors) and impact on manufacturers, producers and laboratories. We 
request comments on alternatives that might produce higher benefits or 
lower costs, taking into account all effects. We particularly solicit 
comments that can provide quantitative estimates of likely effects on 
patient health resulting from different waived criteria and, hence, 
waived tests.
    As indicated above, we believe that over time the effect of this 
rule will be to expand the universe of waived tests, to the benefit of 
patients, laboratories, manufacturers, and producers. However, we are 
unable to quantify these likely long run effects because they depend on 
market decisions, research results, and technological change that 
cannot be predicted.
    In the short run, we would not expect substantial effects. 
Currently there are nine waived tests and about 250 individual test 
systems or products representing nine analytes or specific types of 
procedures that have been approved as waived tests. Assuming that the 
final rule does not depart substantially from the proposed criteria, 
the great majority of individual tests would continue to be eligible 
for the waiver category. We expect that laboratories would continue to 
have a wide range of products/test systems available and would 
therefore not lose waiver status. At most, only a few products might 
not meet the clarified waived criteria and any such test system's 
manufacturer or producer would have the option of improving test 
accuracy.
    This proposed rule would clarify the process and criteria for 
categorizing waived tests and possibly result in changes in the list of 
waived tests. Proper realignment of the fee schedule, if necessary, 
would follow implementation of this rule.
    For these reasons, we are not preparing analyses for either the RFA 
or section 1102(b) of the Act because we have determined, and the 
Secretary certifies that this proposed rule will not have a significant 
economic impact on a substantial number of small entities or 

[[Page 47540]]
the operations of a substantial number of small rural hospitals. We do 
request comments, however, on possible adverse effects on affected 
entities and will consider these carefully in formulating the final 
rule.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 493

    Grant programs-health, Health facilities, Laboratories, Medicaid, 
Medicare, Reporting and recordkeeping requirements.

    42 CFR part 493 would be amended as set forth below:

PART 493--LABORATORY REQUIREMENTS

    1. The authority citation for part 493 continues to read as 
follows:

    Authority: Sec. 353 of the Public Health Service Act, secs. 
1102, 1861(e), the sentence following 1861(s)(11), 1861(s)(12), 
1861(s)(13), 1861(s)(14), 1861(s)(15), and 1861(s)(16) of the Social 
Security Act (42 U.S.C. 263a, 1302, 1395x(e), the sentence following 
1395x(s)(11), 1395x(s)(12), 1395x(s)(13), 1395x(s)(14), 
1395x(s)(15), and 1395x(s)(16)).

    2. In Sec. 493.2, in the definition of ``CLIA certificate'' the 
introductory text is republished and paragraph (2) and (5) are revised 
to read as follows:


Sec. 493.2  Definitions.

* * * * *
    CLIA certificate means any of the following types of certificates 
issued by HCFA or its agent:
* * * * *
    (2) Certificate for provider-performed microscopy (PPM) procedures 
means a certificate issued or reissued before the expiration date, 
pending an appeal, in accordance with Sec. 493.47, to a laboratory in 
which a physician, midlevel practitioner or dentist performs no tests 
other than PPM procedures and, if desired, tests approved by PHS as 
waived under Sec. 493.7.
* * * * *
    (5) Certificate of waiver means a certificate issued or reissued 
before the expiration date, pending an appeal, in accordance with 
Sec. 493.37, to a laboratory to perform only the tests approved by PHS 
as waived under Sec. 493.7.
* * * * *
    3. A new Sec. 493.7 is added to read as follows:


Sec. 493.7  Waived tests.

    (a) Requirement. For a test to be included in the waived category, 
the test system must meet the descriptive criteria specified in 
paragraph (b) of this section.
    (b) Criteria. Test systems must be simple laboratory examinations 
and procedures that have an insignificant risk of an erroneous result. 
Test systems cleared by the FDA for home use meet the criteria 
specified in this section and will be approved for waiver following 
submission of the manufacturer's or producer's request for waiver 
approval.
    (1) For quantitative tests, methods must be simple (easy to use) 
and accurate as evidenced by the following items:
    (i) Test systems that have the following characteristics:
    (A) Are fully automated or self-contained.
    (B) Use only direct unprocessed specimens.
    (C) Require no specimen manipulation before the analytic phase of 
operation.
    (D) Require no operator intervention during the analytic phase.
    (E) Provide a direct readout of results; that is, require no 
calculations or conversions.
    (F) Contain fail-safe mechanisms that render no result when the 
test system malfunctions and initiate fail-safe mechanisms rendering no 
test result when the result is outside the reportable range.
    (G) Require no invasive test system troubleshooting to be performed 
by testing personnel and include no electronic or mechanical 
maintenance to be performed by testing personnel.
    (ii) Test system instructions that are written at a comprehension 
level no higher than the seventh grade (as demonstrated by accepted 
academic standards) and that address the following items:
    (A) Analytical skills required of personnel performing the test.
    (B) Attributes or limitations of the physical environment or 
conditions for test performance.
    (C) Requirements for specimen collection, handling, storage and 
preservation.
    (D) Reportable range for patient results.
    (E) Reference range (normal values).
    (F) Step-by-step protocols that include, as appropriate, the 
following items:
    (1) Instrument or test system operation and test performance 
instructions.
    (2) Test system maintenance procedures.
    (3) Preparation and storage of reagents, calibrators, controls or 
other materials used in testing.
    (4) Control procedures, including the type of materials, suggested 
concentrations, and frequency of assay.
    (5) Calibration procedures, including the number and type of 
materials and frequency of assay.
    (6) Acceptable ranges for any control or calibration material 
included with the test system.
    (7) Action to be taken when calibration or control results do not 
meet the acceptable range of values.
    (8) Description of course of action to be taken when the test 
system becomes inoperable.
    (iii) Field studies that meet the following criteria:
    (A) Are performed at nonlaboratory sites.
    (B) Include study participants who have no previous laboratory 
experience or training. The number of participants and sites selected 
must be adequate to produce measures of performance that are both 
statistically valid and defensible.
    (C) Demonstrate that the manufacturer's or producer's written 
instructions are the only protocols required to perform the test 
accurately and reliably.
    (D) Demonstrate that the test system produces accurate results 
under the testing conditions and within the physical environment 
specifications defined in the test system instructions.
    (E) For those tests that employ calibration, demonstrate that 
calibration is stable over the calibration frequency interval or that a 
fail-safe mechanism rendering no result is initiated when the test 
system is out of calibration.
    (iv) Data from field studies that meet the following criteria:
    (A) Are generated from protocols that address the points described 
in paragraph (b)(1)(iii) of this section.
    (B) Are adequate to produce measures of performance that are both 
statistically valid and defensible (estimates must support valid 
confidence limits for all statistical parameters).
    (C) Evaluate performance at all medical decision points and 
relevant upper and lower limits of the reportable range using at least 
three concentrations of the analyte being tested.
    (D) Evaluate among-operator imprecision using test results of all 
study participants.
    (E) Evaluate within-site imprecision using test results generated 
at each site by an adequate number of participants to produce measures 
of performance that are statistically valid and defensible. Testing 
must be performed at a minimum of three independent study sites.
    (F) Evaluate among-site imprecision at an adequate number of sites 
to produce 

[[Page 47541]]
measures of performance that are statistically valid and defensible.
    (G) Demonstrate that the total amount of imprecision, which 
includes all components contributing to imprecision as demonstrated by 
studies described in paragraphs (b)(1)(iv) (D), (E) and (F) of this 
section, is less than one-fourth of the reference range for the analyte 
divided by the mean of the reference interval.
    (v) Method accuracy studies demonstrating that the test system is 
not affected by systematic error when--
    (A) Using reference materials assayed by study participants that 
produce data that prove there is no statistically significant 
difference between the test results and the value of the reference 
materials;
    (B) Using patient samples instead of reference materials, proving 
that there is no statistically significant difference between test 
results obtained on patient and reference materials due to the effects 
of the sample matrix; and
    (C) Using patient samples containing substances that commonly cause 
interference, confirming there is no introduction of error due to the 
presence of these substances.
     (2) For qualitative tests, methods must be simple (easy to use) 
and accurate as evidenced by the following items:
    (i) Test systems that have the following characteristics:
    (A) Use only direct unprocessed specimens.
    (B) Require no specimen manipulation before performing the testing 
procedure.
    (C) Contain no procedural steps beyond adding a sample to a reagent 
impregnated device.
    (D) Require no specimen manipulation during the procedure.
    (E) Require a well-defined distinct endpoint that is limited to 
positive or negative interpretation.
    (F) Contain fail-safe mechanisms that render no result when the 
test system malfunctions.
    (ii) Test system instructions that are written at a comprehension 
level no higher than the seventh grade (as demonstrated by accepted 
academic standards) and that address the following items, as 
appropriate:
    (A) Analytical skills required of personnel performing the test.
    (B) Attributes or limitations of the physical environment or 
conditions for test performance:
    (C) Requirements for specimen collection, handling, storage and 
preservation.
    (D) Patient result reporting.
    (E) Reference range (normal values).
    (F) Step-by-step protocols that include, as appropriate, the 
following items:
     (1) Test performance instructions.
     (2) Preparation and storage of reagents, calibrators, controls or 
other materials used in testing.
    (3) Control procedures, including the type of materials and 
frequency of assay.
     (4) Calibration procedures, including the number and type of 
materials and frequency of assay.
     (5) Acceptable ranges for any control or calibration material 
included with the test system.
    (6) Action to be taken when calibration or control results do not 
meet the acceptable range of values.
     (7) The correct interpretation of test endpoints.
    (8) Description of course of action to be taken when test endpoints 
cannot be determined.
    (iii) Field studies that meet the following requirements:
    (A) Are performed at nonlaboratory sites.
    (B) Include study participants who have no previous laboratory 
experience or training. The number of participants and sites selected 
must be adequate to produce measures of performance that are both 
statistically valid and defensible.
    (C) Demonstrate that the manufacturer's or producer's written 
instructions are the only protocols required to perform the test 
accurately and reliably.
    (D) Demonstrate that the test system produces accurate results 
under the testing conditions and within the physical environment 
specifications defined in the test system instructions.
    (E) For those tests that employ calibration, demonstrate that 
calibration is stable over the calibration frequency interval or that a 
fail-safe mechanism rendering no result is initiated when the test 
system is out of calibration.
    (iv) Data from field studies that meet the following requirements:
    (A) Are generated from protocols that address the points described 
in paragraph (b)(2)(iii) of this section.
    (B) Are adequate to produce measures of performance that are both 
statistically valid and defensible.
    (C) Confirm that study participants are able to read the test 
endpoint with the same precision as laboratory professionals.
    (D) Confirm that the performance of study participants is 
essentially the same as laboratory professionals when testing samples 
at or near the cutoff and at sufficient distance above and below the 
cutoff to confirm precision at all analytical decision points.
    (E) Demonstrate minimal among-operator imprecision using results of 
all study participants.
    (F) Demonstrate minimal within-site imprecision using test results 
generated at each site by an adequate number of participants to produce 
measures of performance that are statistically valid and defensible. 
Testing must be performed at a minimum of three independent study 
sites.
    (G) Using results generated by study participants, on aliquots of a 
single testing material, demonstrate minimal among-site imprecision at 
an adequate number of sites to produce measures of performance that are 
statistically valid and defensible.
    (v) Method accuracy studies demonstrating that there is no 
statistically significant difference between observed values and 
expected values at the cutoff point when--
    (A) The test values are compared to a quantitative result such as 
the value of a reference material or the presence or absence of a 
particular biologic component;
    (B) Confirming that there are no significant equivocal test results 
on either side of the cutoff;
    (C) Comparing results between study participants and laboratory 
professionals on samples with values at the cutoff;
    (D) The test is performed on patient samples instead of reference 
materials, confirming there is no introduction of error due to sample 
matrix; and
    (E) Samples contain substances that commonly cause interference, 
confirming there is no introduction of error due to these substances.
    (c) Waiver process--(1) Process for requesting waived status. (i) 
Requests for waiver of tests must be submitted to PHS.
    (ii) PHS reviews requests for waiver that meet the criteria 
specified in paragraph (b) of this section and the submission 
requirements under paragraph (c)(2) of this section.
    (iii) The Clinical Laboratory Improvement Advisory Committee 
(CLIAC), as specified in subpart T of this part, conducts reviews upon 
request of HHS and makes recommendations to HHS concerning the waiver 
of tests.
     (iv) Any change or modification to a test system by the 
manufacturer or producer that could affect the accuracy or reliability 
of the waived test must be resubmitted to PHS for evaluation and 
review. Until this review is completed and status is determined, the 
modified test is considered uncategorized and, in accordance with 
Sec. 493.17(c)(4), is considered high complexity. 

[[Page 47542]]

    (v) A request for reconsideration of a test denied waived status is 
accepted for review if the request is based on information not 
previously submitted.
     (2) Submission requirements--(i) Requests for waiver must meet the 
criteria described in paragraph (b) of this section. In the event that 
a request does not include complete information, the request is not 
reviewed and the manufacturer or producer of the test system is 
notified.
    (ii) Data collection protocols and data submitted must be complete 
and data submitted must be statistically valid and meet the criteria 
described under paragraph (b) of this section.
    (iii) Test system instructions must be complete and must include, 
as applicable, the items defined in paragraph (b)(1)(ii) of this 
section for quantitative tests and under paragraph (b)(2)(ii) of this 
section for qualitative tests. In addition, test system instructions 
must include the following statements:
    (A) ``Any modification by the laboratory to the test system or the 
PHS-approved test system instructions will result in the test no longer 
meeting the requirements for waived categorization. A modified test is 
considered to be high complexity and is subject to all applicable CLIA 
requirements contained in 42 CFR part 493.''
    (B) ``The laboratory must notify the manufacturer or producer of 
this test system of any performance, perceived or validated, that does 
not meet the performance specifications as outlined in the 
instructions.'' The name, address and phone number(s) of the 
manufacturer's or producer's contact person(s) must follow this 
statement.
     (iv) Using the criteria specified in paragraph (b) of this 
section, each test categorized as waived before [date of publication of 
final rule] will be reevaluated by PHS.
    (3) Notification of decision--(i) PHS determines whether a 
laboratory test meets the criteria listed under paragraph (b) of this 
section for a waived test.
     (ii) PHS notifies the applicant of the waived categorization 
determination, whether denied or granted.
    (iii) Waived categorization is effective as of the date of 
notification to the applicant.
    (iv) PHS publishes additions and revisions periodically to the 
tests categorized as waived in the Federal Register in a notice with an 
opportunity for public comment. PHS reserves the right to reevaluate 
and recategorize a test based upon the comments it receives in response 
to the Federal Register notice.

    4. A new Sec. 493.9 is added to read as follows:


Sec.  493.9  Laboratories performing waived tests.

    (a) A laboratory may qualify for a certificate of waiver under 
section 353 of the PHS Act if it restricts its test performance to one 
or more tests approved by PHS as waived under Sec. 493.7.
    (b) Laboratories issued a certificate of waiver must meet the 
following requirements:
    (1) Follow the manufacturer's or producer's instructions for 
performing the test. If a laboratory does not follow the manufacturer's 
or producer's test system instructions, the laboratory no longer meets 
the requirements for a certificate of waiver and the modified test, as 
performed by the laboratory, is considered high complexity until 
otherwise categorized.
    (2) Report to PHS any performance problems not resolved by the 
manufacturer or producer of the test.
    (3) Meet the requirements in subpart B of this part.


Sec. 493.15  [Removed]

    5. Section 493.15 is removed.
    6. In Sec. 493.20, paragraph (c) is revised to read as follows:


Sec. 492.20  Laboratories performing tests of moderate complexity.

* * * * *
    (c) If the laboratory also performs waived tests, compliance with 
subparts H, J, K, M, and P of this part is not applicable to the waived 
tests. However, the laboratory must comply with the requirements in 
Secs. 493.9(b) and 493.1775.

    7. In Sec. 493.25 paragraph (d) is revised to read as follows:
Sec. 493.25  Laboratories performing tests of high complexity.

* * * * *
    (d) If the laboratory also performs waived tests, the requirements 
of subparts H, J, K, M, and P are not applicable to the waived tests. 
However, the laboratory must comply with the requirements in 
Secs. 493.9(b) and 493.1775.
    8. In Sec. 493.35, paragraphs (a) and (d) are revised to read as 
follows:


Sec. 493.35  Application for a certificate of waiver.

    (a) Filing of application. Except as specified in paragraph (b) of 
this section, a laboratory performing only one or more tests approved 
by PHS as waived under Sec. 493.7 must file a separate application for 
each laboratory location.
* * * * *
    (d) Access requirements. Laboratories that perform one or more 
tests approved by PHS as waived under Sec. 493.7 and no other tests 
must meet the following conditions:
    (1) Make records available and submit reports to HHS as HHS may 
reasonably require to determine compliance with this section and 
Sec. 493.9(b).
    (2) Agree to permit announced and unannounced inspections by HHS in 
accordance with subpart Q of this part under the following 
circumstances:
    (i) When HHS has substantive reason to believe that the laboratory 
is being operated in a manner that constitutes an imminent and serious 
risk to human health.
    (ii) To evaluate complaints from the public.
    (iii) On a random basis to determine whether the laboratory is 
performing tests not approved by PHS as waived under Sec. 493.7.
    (iv) To collect information regarding the appropriateness of tests 
approved by PHS as waived under Sec. 493.7.
* * * * *
    9. In Sec. 493.37, the introductory text of paragraph (b) is 
republished and paragraphs (b)(1) and (g) are revised to read as 
follows:


Sec. 493.37  Requirements for a certificate of waiver.

* * * * *
    (b) Laboratories issued a certificate of waiver--(1) Are subject to 
the requirements of this subpart and Sec. 493.9(b); and
* * * * *
    (g) A laboratory with a certificate of waiver that wishes to 
perform examinations or tests not approved by PHS as waived under 
Sec. 493.7 must meet the requirements set forth in subpart C or subpart 
D of this part, as applicable.
    10. In Sec. 493.39, the introductory text and paragraph (a) are 
revised to read as follows:


Sec. 493.39  Notification requirements for laboratories issued a 
certificate of waiver.

    Laboratories performing one or more tests approved by PHS as waived 
under Sec. 493.7 and no others must notify HHS or its designee--
    (a) Before performing and reporting results for any test not 
approved by PHS as a waived under Sec. 493.7 for which the laboratory 
does not have the appropriate certificate as required in subpart C or 
subpart D of this part, as applicable; and
* * * * *
    11. In Sec. 493.45, the introductory text of paragraph (a) is 
republished, 

[[Page 47543]]
paragraph (a)(3) is removed, and paragraph (a)(2) is revised to read as 
follows:


Sec. 493.45  Requirements for a registration certificate.

* * * * *
    (a) A registration certificate is required--
* * * * *
    (2) For all laboratories that have been issued a certificate of 
waiver or certificate for PPM procedures that intend to perform tests 
of moderate or high complexity, or both, in addition to those tests 
approved by PHS as waived under Sec. 493.7 or specified as PPM 
procedures.
* * * * *
    12. In Sec. 493.47, paragraph (a) is revised to read as follows:


Sec. 493.47  Requirements for a certificate for provider-performed 
microscopy (PPM) procedures.

    (a) A certificate for PPM procedures is required--
    (1) Initially for all laboratories performing test procedures 
specified as PPM procedures; and
    (2) For all certificate of waiver laboratories that intend to 
perform only test procedures specified as PPM procedures in addition to 
those tests approved by PHS as waived under Sec. 493.7.
* * * * *
    13. In Sec. 493.49, the introductory text of paragraphs (b) and 
(b)(2) are republished and the introductory text of the section and 
paragraph (b)(2)(iv) are revised to read as follows:


Sec. 493.49  Requirements for a certificate of compliance.
    A certificate of compliance may include any combination of tests 
categorized as high complexity or moderate complexity or approved by 
PHS as waived under Sec. 493.7. Moderate complexity tests may include 
those specified as PPM procedures.
* * * * *
    (b) Laboratories issued a certificate of compliance--
* * * * *
    (2) Must permit announced or unannounced inspections by HHS in 
accordance with subpart Q of this part--
* * * * *
    (iv) To collect information regarding the appropriateness of tests 
approved by PHS as waived under Sec. 493.7 or tests categorized as 
moderate complexity (including the subcategory) or high complexity.
* * * * *
    14. In Sec. 493.53, the introductory text is republished and 
paragraph (a) is revised to read as follows:


Sec. 493.53  Notification requirements for laboratories issued a 
certificate for provider-performed microscopy (PPM) procedures.

    Laboratories issued a certificate for PPM procedures must notify 
HHS or its designee--
    (a) Before performing and reporting results for any test of 
moderate or high complexity, or both, in addition to tests specified as 
PPM procedures or any test or examination that is not approved by PHS 
as waived under Sec. 493.7 for which it does not have a registration 
certificate as required in subpart C or subpart D, as applicable, of 
this part; and
* * * * *
    15. In Sec. 493.1775, the introductory text of paragraphs (b) and 
(b)(4) is republished and paragraph (b)(4)(iv) is redesignated as 
(b)(4)(v), a new (b)(4)(iv) is added, and paragraphs (b)(4)(iii) and 
(c) are revised to read as follows:


Sec. 493.1775  Condition: Inspection of laboratories issued a 
certificate of waiver.

* * * * *
    (b) The laboratory may be required, as part of this inspection, 
to--
* * * * *
    (4) Permit HHS or its designee upon request to review all 
information and data necessary to--
* * * * *
    (iii) Determine whether the laboratory is performing tests not 
approved by PHS as waived under Sec. 493.7;
    (iv) Determine whether the laboratory is performing the test in 
accordance with the manufacturer's or producer's instructions; and
* * * * *
    (c) The laboratory must provide upon reasonable request all 
information and data needed by HHS or its designee to make a 
determination of compliance with the requirements of part 493. 
Requirements for the purposes of this section are located in subparts A 
and B or subpart D, if applicable, of this part.
* * * * *
    Authority: Sec. 353 of the Public Health Service Act (42 U.S.C. 
263a).

    Dated: May 18, 1995.
Philip R. Lee,
Assistant Secretary for Health.

Bruce C. Vladeck,
Administrator, Health Care Financing Administration.

    Dated: June 2, 1995.
Donna E. Shalala,
Secretary.
[FR Doc. 95-22378 Filed 9-12-95; 8:45 am]
BILLING CODE 4120-01-P