[Federal Register Volume 63, Number 9 (Wednesday, January 14, 1998)]
[Notices]
[Pages 2245-2248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-881]


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 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.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the new 
fees the agency will assess for inspections of mammography facilities 
starting on February 13, 1998. The Mammography Quality Standards Act of 
1992 (the MQSA) requires FDA to assess and collect fees from 
mammography facilities to cover the costs of annual inspections 
required by the MQSA. Because these costs have increased since 
inspections began in 1995, FDA is raising the fees accordingly. 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. This is the first increase in inspection fees 
under the MQSA since the initial fee was established in 1995.


[[Page 2246]]


DATES: Effective February 13, 1998, for all inspections conducted under 
42 U.S.C. 263b(g). Submit written comments by March 16, 1998.

ADDRESSES: Submit written comments to the Dockets Management Branch 
(HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-123, 
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. The MQSA requires FDA 
to establish and operate: (1) A Federal certification and inspection 
program for mammography facilities, (2) regulations and standards for 
accreditation bodies, and (3) 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. The original notice on the 
MQSA fees was published in the Federal Register of March 17, 1995 (60 
FR 14584), and was effective with the initiation of the inspection 
program in January 1995. An updated resource review has demonstrated 
that the recoverable costs of the MQSA inspection program have 
increased since 1995, and that the annual amount of fees collected 
under the current fee schedule has been well below the level authorized 
by Congress. Accordingly, the fees have been recalculated so that the 
aggregate amount of fees collected will equal the aggregate costs of 
the inspections conducted, as mandated by the MQSA.
    Therefore, FDA is providing notice of the increased fees to be 
assessed starting on February 13, 1998, 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, as the agency continues to evaluate 
its fee assessment procedures.

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 final quality standards were 
recently published in the Federal Register on October 28, 1997 (62 FR 
55852). 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 1998 Inspection Fee

    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 (FY), 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 that 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 beginning February 13, 1998. These 
categories represent the same costs that have been assessed in fees 
since the beginning of the inspection program. Facilities are not being 
assessed for any new costs associated with inspections.
     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 the 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.
    Because most scientific equipment is 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 recovered over the useful life of the asset. FDA 
has not and will not recover compliance costs (e.g. taking legal and 
administrative enforcement actions) in the fee.
    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.
    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 
(unless it is a governmental entity). Facilities that do not require a 
followup inspection are not subject to this fee.

[[Page 2247]]

IV. Inspection Fees to be Assessed Starting February 13, 1998

    The costs of the MQSA inspection program have grown since its 
startup year, while the inspection fee has been held constant since its 
inception in FY95. Beyond the inflationary increases that are to be 
expected over the course of 3 years, the increased costs in the 
inspection program are attributable to two major areas: The actual rate 
of inspections and the full-scale implementation costs of the data 
systems. These costs account for the major difference between the costs 
of the startup phase of the program in FY95 and the full-scale 
operation in FY98, and they are largely responsible for the fee 
increase.
    Although state inspectors, under contract with FDA, technically 
began inspections in January 1995, the first round of inspections 
actually extended well into FY96, when the bulk of the inspector cadre 
was hired and trained. Thus, the FY98 costs of the inspection program 
are almost $4 million higher than the FY95 costs, because roughly 
10,000 facilities will be inspected in FY98, more than twice as many as 
the 4,900 inspections conducted in FY95. In addition, FY98 costs 
reflect the full-scale oversight and scientific support necessary to 
manage a national inspection program that now utilizes 250 inspectors 
to inspect 10,000 facilities annually. Between FY95 and FY98, the State 
contracts and associated costs have grown 64 percent and this State 
activity accounts for 72 percent of the total FY98 inspection program 
budget.
    The data systems component of the inspection program has increased 
by almost $800,000 over FY95 levels, and it accounts for 8 percent of 
the total FY98 inspection program budget. The development, 
implementation, and support of this integrated system required 
increased investment in data systems over the FY95 levels. In FY95, 
only the rudimentary components of the system were operational. The 
data system is now in the final stages of development and 
implementation. It includes the inspector laptop with customized 
inspection software and a communications system that integrates the 
field and headquarters components of the inspection program. The 
overall system enables electronic communication between the inspector 
and headquarters for communicating inspection results, initiating and 
tracking inspection followup, and conducting ongoing inspector/
headquarters education regarding the inspection program.
    The remaining 20 percent of the FY98 inspection program budget 
covers training, equipment calibration, inspection administration, 
billing, and the fee assessment.
    FDA reviewed the past methodology for calculating the inspection 
fee, which accounted for differences in facility size. A similar method 
was adopted for calculating the 1998 fee. A facility's inspection fee 
will be based on the number of mammography units used by the facility. 
FDA data on inspected facilities indicates that there are roughly 
10,112 total mammography facilities and approximately 12,720 
mammography units. The number of mammography facilities identified as 
Government entities is around ten percent.
    The total recoverable aggregate costs of the MQSA inspection 
program is estimated to be $12.8 million in FY 1998. This is below the 
$14 million authorized by Congress for collections in FY 1998. To 
recover the costs of the inspection program, the facility portion of 
the fee is $1,345 and the unit portion is $204, and these must be added 
according to the number of units at each facility. This new fee of 
$1,549 for a facility with one unit compares to the current fee of 
$1,178 for a facility with one unit.
    The following fees will be assessed starting February 13, 1998, for 
facility inspections conducted after that date:

           Table 1.--Annual Inspection Fee by Number of Units           
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           Number of Units                            Fee               
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1...................................             $1,549                 
2...................................             $1,753                 
3...................................             $1,957                 
4...................................             $2,161                 
5...................................             $2,365                 
6...................................             $2,569                 
7...................................             $2,773                 
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  Followup Inspection Fee...............................................
                                                                        
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Fee.................................               $878                 
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    FDA will continue to charge separately for annual and followup 
inspections. 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. FDA has again chosen to adopt a flat fee 
for followup inspections over an hourly rate that would vary the fee by 
the length of the inspection. This approach eliminates concerns about 
variations among inspectors and differential treatment of facilities.
    The fee schedule is subject to change each year to ensure that the 
aggregate amount of fees collected during any year equals the aggregate 
amount of costs for that year's facility inspections. FDA notes, 
however, that the initial fees established in FY 1995 remained constant 
for a period of 3 years. The agency expects this new fee schedule to 
remain constant through FY 1999. FDA will monitor the adequacy of the 
fee on an annual basis.
    FDA continues to use a uniform, national fee structure. 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 has been and will 
continue to be borne by appropriated funds.

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 will continue to use the definition that was previously 
developed and applied to determine whether a facility qualifies as a 
governmental entity for the purpose of

[[Page 2248]]

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 PHS 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, Federally-recognized 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. eq., and at 
least 50 percent of the mammography screening examinations provided 
during the preceding 12 months were funded under that statute. The 
first notice of fees for facilities provides additional background 
relating to this definition (see 52 FR 14585).

VI. Billing and Collection Procedures

    Within 30 days following inspection, FDA mails a bill to the 
inspected facility (governmental entities do not receive bills). The 
bill sets 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 are 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 is 
sent. At that time, interest begins to accrue at the prevailing rate 
set by the Department of the Treasury (currently, the prevailing rate 
is 13.75 percent), a 6 percent late payment penalty is assessed in 
accordance with 45 CFR 30.13, and a $20 administrative fee is 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.
    Any questions or concerns about the billing and collection 
procedures may be addressed to Billing Inquiries c/o Mammography 
Quality Assurance Program, FA, P.O. Box 6057, Columbia, MD 21045-6057, 
1-800-838-7715.

VII. Review and Appeals Procedures Regarding Qualifications as a 
Governmental Entity

    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 previously, 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, FA, 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 
and all time-related penalties held in abeyance.

VIII. Request for Comments

    Although the 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. 
FDA may consider altering its methodology of defining governmental 
entities, and assessing and collecting fees under the MQSA in future 
years. Each year's inspection experience provides additional data about 
differences among facilities and variations in costs by State, region, 
or other factors.
    Interested persons may, on or before March 16, 1998, 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 a.m. and 4 p.m., Monday through Friday.

    Dated: December 23, 1997.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 98-881 1-13-98; 8:45 am]
BILLING CODE 4160-01-F