[Federal Register Volume 67, Number 207 (Friday, October 25, 2002)]
[Notices]
[Pages 65585-65588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-25947]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2159-N]
RIN 0938-ZA34


Medicare, Medicaid, and CLIA Programs; Clinical Laboratory 
Improvement Amendments of 1988 Continuance of Approval of the Joint 
Commission on Accreditation of Healthcare Organizations (JCAHO) as an 
Accrediting Organization

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

ACTION: Notice.

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SUMMARY: This notice announces the continued approval of the Joint 
Commission on Accreditation of Healthcare Organizations (JCAHO) as an 
accreditation organization for clinical laboratories under the Clinical 
Laboratory Improvement Amendments of 1988 (CLIA) program. We have 
determined that the accreditation process of this organization provides 
reasonable assurance that the laboratories accredited by JCAHO meet the 
conditions required by the CLIA statute and its implementing 
regulations. Consequently, laboratories that voluntarily become 
accredited by JCAHO, in lieu of direct Federal oversight, and continue 
to meet JCAHO requirements would meet the CLIA condition level 
requirements for laboratories and, therefore, are not subject to 
routine inspection by State survey agencies to determine their 
compliance with CLIA requirements. These laboratories are, however, 
subject to Federal validation and complaint investigation surveys.

EFFECTIVE DATE: This notice is effective for the period October 25, 
2002, through October 25, 2005.

FOR FURTHER INFORMATION CONTACT: Kathleen Todd, (410) 786-3385.

SUPPLEMENTARY INFORMATION:

I. Background and Legislative Authority

    On October 31, 1988, the Congress enacted the Clinical Laboratory 
Improvement Amendments of 1988 (CLIA), Pub. L. 100-578. CLIA replaced 
in its entirety section 353(e)(2) of the Public Health Service Act, as 
enacted by the Clinical Laboratories Improvement Act of 1967. On July 
31, 1992, we published a final rule in the Federal Register (57 FR 
33992) implementing the accreditation provisions of CLIA. Under this 
rule, we may approve a private, nonprofit organization as an approved 
accreditation organization to accredit clinical laboratories under the 
CLIA program if the organization meets certain requirements. An 
organization's requirements for accrediting a laboratory must be equal 
to, or more stringent than, the applicable CLIA program requirements in 
42 CFR part 493 (Laboratory Requirements). Therefore, a laboratory 
accredited by an approved accreditation organization that meets and 
continues to meet all of the accreditation organization's requirements 
would be considered to meet CLIA condition level requirements if it 
were inspected against CLIA regulations. The regulations in 42 CFR part 
493, subpart E (Accreditation by a Private, Nonprofit Accreditation 
Organization or Exemption Under an Approved State Laboratory Program) 
specify the requirements an accreditation organization must meet to be 
an approved accreditation organization. We approve an accreditation 
organization for a period not to exceed 6 years.
    In general, the approved accreditation organization must, among 
other conditions and requirements, meet the following conditions:
    [sbull] Use inspectors qualified to evaluate laboratory performance 
and agree to inspect laboratories with the frequency determined by us.
    [sbull] Apply standards and criteria that are equal to, or more 
stringent than, those condition level requirements established by us 
when taken as a whole.
    [sbull] Provide reasonable assurance that these standards and 
criteria are continuously met by its accredited laboratories.
    [sbull] Provide us with the name of any laboratory that has had its 
accreditation denied, suspended, withdrawn, limited, or revoked within 
30 days of the action taken.
    [sbull] Notify us at least 30 days before implementing any proposed 
changes in its standards.
    [sbull] If we withdraw our approval, we will notify the accredited 
laboratory of the withdrawal within 10 days of the withdrawal. A 
laboratory can be accredited if, among other conditions and 
requirements, it meets the standards of an approved accreditation 
organization and authorizes the accreditation organization to submit 
records and other information to us as required.
    In addition to requiring the publication of criteria for approving 
an accreditation organization and withdrawing this approval, CLIA 
regulations require us to perform an annual evaluation by inspecting a 
sufficient number of laboratories accredited by an approved 
accreditation organization, as well as by any other means that we 
determine appropriate.

II. Notice of Continued Approval of the Joint Commission on 
Accreditation of Healthcare Organizations as an Accreditation 
Organization

    In this notice, we approve JCAHO as an organization that may 
continue to accredit laboratories for purposes of establishing their 
compliance with CLIA. The Centers for Disease Control and Prevention 
(CDC) and CMS have examined the JCAHO application and all subsequent 
submissions to determine equivalency with the requirements under 42 CFR 
part 493, subpart E that an accreditation organization must meet to be 
granted approved status under CLIA. We have determined that JCAHO 
complied with the applicable CLIA requirements and grant JCAHO approval 
as an accreditation organization under 42 CFR part 493, subpart E, as 
of October 25, 2002, through October 25, 2005, for all specialty and 
subspecialty areas under CLIA.
    As a result of this determination, any laboratory that is 
accredited by JCAHO during this time period for an approved specialty 
or subspecialty is deemed to meet the applicable CLIA condition level 
requirements for the laboratories found in 42 CFR part 493 and, 
therefore, is not subject to routine inspection by a State survey 
agency to determine its compliance with CLIA requirements. The 
accredited laboratory, however, is subject to validation and complaint 
investigation surveys performed by us, or by any other Federal, State, 
or local public agency, or nonprofit organization under an agreement 
with the Secretary.

III. Evaluation of Joint Commission on Accreditation of Healthcare 
Organizations

    The following describes the process used to determine that JCAHO, 
as a private, nonprofit organization, provides reasonable assurance 
that laboratories it accredits will meet the applicable requirements of 
CLIA.

A. Requirements for Approving an Accreditation Organization Under 
Clinical Laboratory Improvement Amendments of 1988

    To determine whether we should grant approved status to JCAHO as a 
private, nonprofit organization for accrediting laboratories under CLIA 
for all specialty or subspecialty areas of human specimen testing it 
requested, we conducted a detailed and in-depth comparison of JCAHO's 
requirements

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for its laboratories to those of CLIA. In summary, we evaluated whether 
JCAHO meets the following requirements:
    [sbull] Provides reasonable assurance to us that it requires the 
laboratories it accredits to meet requirements that are equal to, or 
more stringent than, the CLIA condition level requirements (for the 
requested specialties and subspecialties) and would, therefore, meet 
the condition level requirements of CLIA if those laboratories had not 
been granted deemed status and had been inspected against condition 
level requirements.
    [sbull] Meets the applicable requirements of 42 CFR part 493, 
subpart E.
    As specified in the regulations of 42 CFR part 493, subpart E, the 
review of a private, nonprofit accreditation organization seeking 
approved status under CLIA includes, but is not limited to, an 
evaluation of the following:
    [sbull] Whether the organization's requirements for its accredited 
laboratories are equal to, or more stringent than, the condition level 
requirements of the CLIA regulations.
    [sbull] The organization's inspection process to determine the 
following:

--The composition of the inspection teams, qualifications of the 
inspectors, and the ability of the organization to provide continuing 
education and training to all of its inspectors.
--The comparability of the organization's full inspection and complaint 
inspection requirements to the Federal requirements including, but not 
limited to, inspection frequency, and the ability to investigate and 
respond to complaints against its accredited laboratories.
--The organization's procedures for monitoring laboratories that it 
finds out of compliance with its requirements.
--The ability of the organization to provide us with electronic data 
and reports that are necessary for effective validation and assessment 
of the organization's inspection process.
--The ability of the organization to provide us with electronic data 
related to the adverse actions resulting from unsuccessful proficiency 
testing (PT) participation in CMS-approved PT programs, as well as data 
related to the PT failures, within 30 days of the initiation of the 
action.
--The ability of the organization to provide us with electronic data 
for all its accredited laboratories and the area of specialty and 
subspecialty testing.
--The adequacy of the numbers of staff and other resources.
--The organization's ability to provide adequate funding for performing 
the required inspections.

    [sbull] Whether the organization has an agreement with us that 
requires it, among other conditions and requirements, to meet the 
following:

--Notify us of any laboratory that has had its accreditation denied, 
limited, suspended, withdrawn, or revoked by the accreditation 
organization, or that has had any other adverse action taken against it 
by the accreditation organization, within 30 days of the date the 
action is taken.
--Notify us within 10 days of a deficiency identified in an accredited 
laboratory if the deficiency poses an immediate jeopardy to the 
laboratory's patients or a hazard to the general public.
--Notify us of all newly accredited laboratories, or laboratories whose 
areas of specialty or subspecialty are revised, within 30 days.
--Notify each laboratory accredited by the organization within 10 days 
of our withdrawal of approval of the organization as an accreditation 
organization.
--Provide us with inspection schedules, on request, for the purpose of 
conducting onsite validation inspections.
--Provide our agent, the State survey agency, or us with any facility-
specific data that includes, but is not limited to, PT results that 
constitute unsuccessful participation in an approved PT program and 
notification of the adverse actions or corrective actions imposed by 
the accreditation organization as a result of unsuccessful PT 
participation.
--Provide us with written notification at least 30 days in advance of 
the effective date of any proposed changes in its requirements.
    --Provide upon the request by any person, on a reasonable basis 
(under State confidentiality and disclosure requirements, if 
applicable), any laboratory's PT results with the explanatory 
information needed to assist in the interpretation of the results.

    Laboratories that are accredited by an approved accreditation 
organization must, among other conditions and requirements, meet the 
following requirements:
    [sbull] Authorize the organization to release to us all records and 
information required.
    [sbull] Permit inspections as required by the CLIA regulations at 
42 CFR part 493, subpart Q (Inspection).
    [sbull] Obtain a certificate of accreditation under Sec.  493.55 
(Application for registration certificate and certificate of 
accreditation).

B. Evaluation of the Joint Commission on Accreditation of Healthcare 
Organizations Request for Continued Approval as an Accreditation 
Organization Under the Clinical Laboratory Improvement Amendments of 
1988

    We have examined JCAHO's assurance that it requires the 
laboratories it accredits to be, and that the organization is in 
compliance with, the following subparts of part 493:
1. Subpart E--Accreditation by a Private, Nonprofit Accreditation 
Organization or Exemption Under an Approved State Laboratory Program
    JCAHO has requested continued approval to accredit all specialties 
and subspecialties and has submitted the following:
    [sbull] Description of its PT monitoring process, inspection 
process, policies, and data management and analysis system.
    [sbull] List of its inspection team size, composition, and 
education and experience.
    [sbull] Investigative and complaint response procedures.
    [sbull] Our notification agreements.
    [sbull] Procedures for the removal or withdrawal of accreditation 
from a laboratory.
    [sbull] Current list of accredited laboratories with an announced 
or unannounced inspection process.
    We have determined that JCAHO has complied with the requirements 
under CLIA for approval as an accreditation organization under this 
subpart.
    Our evaluation identified JCAHO requirements pertaining to waived 
testing that are more stringent than the CLIA requirements. The JCAHO 
waived testing requirements include the following:
    [sbull] Defining the extent that waived test results are used in 
patient care.
    [sbull] Identifying the personnel responsible for performing and 
supervising waived testing.
    [sbull] Assuring that personnel performing waived testing have 
adequate, specific training and orientation to perform the testing and 
can demonstrate satisfactory levels of performance.
    [sbull] Making certain that policies and procedures governing 
waived testing-related processes are current and readily available.
    [sbull] Conducting defined quality control checks.
    [sbull] Maintaining quality control and test records.
    The CLIA requirements at Sec.  493.15 only require that a 
laboratory follow

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manufacturer's instructions and obtain a certificate of waiver.
2. Subpart H--Participation in Proficiency Testing for Laboratories 
Performing Tests of Moderate or High Complexity, or Both
    JCAHO's requirements for PT are equivalent to those of CLIA.
3. Subpart J--Patient Test Management for Moderate or High Complexity 
Testing, or Both
    JCAHO's requirements in Patient Test Management are equivalent to 
those of CLIA.
4. Subpart K--Quality Control for Tests of Moderate or High Complexity, 
or Both
    The quality control (QC) requirements of JCAHO have been evaluated 
against the applicable requirements of CLIA and its implementing 
regulations. We have determined that JCAHO's requirements, when taken 
as a whole, are more stringent than the CLIA requirements. The specific 
areas that are more stringent are the following:
    [sbull] Requirements that laboratories must meet JCAHO's QC 
requirements for all waived testing performed.
    [sbull] A requirement for mycobacteriology that laboratories 
perform daily QC of flourochrome acid-fast stains.
    [sbull] Specific requirements for embryo laboratories that include 
standards for cryopreservation of specimens, embryo transfer 
procedures, and QC of the culture media used.
    [sbull] Requirements for autopsy pathology that include appropriate 
refrigeration for cadaver storage when a delay occurs in performing an 
autopsy and requiring that provisional anatomic diagnoses are recorded 
in the clinical record within 3 days after the autopsy is performed.
5. Subpart M--Personnel for Moderate and High Complexity Testing
    We have found that JCAHO's personnel requirements, when taken as a 
whole, are equal to the CLIA requirements.
6. Subpart P--Quality Assurance for Moderate or High Complexity Testing 
or Both
    We have determined that JCAHO's requirements are equal to the CLIA 
requirements of this subpart.
7. Subpart Q--Inspections
    JCAHO will continue to perform on-site inspections on a biennial 
basis. Therefore, we have determined that JCAHO's inspections are 
equivalent to CLIA.
8. Subpart R--Enforcement Procedures for Laboratories
    JCAHO meets the requirements of subpart R to the extent that it 
applies to accreditation organizations. JCAHO policy stipulates the 
action it takes when laboratories it accredits do not comply with its 
requirements. JCAHO will deny, revoke, or limit accreditation of a 
laboratory as appropriate and report the action to us within 30 days. 
JCAHO also provides an appeal process for laboratories that have had 
accreditation denied, revoked, suspended, or limited.
    We have determined that JCAHO's laboratory enforcement and appeal 
policies are equivalent to the requirements of this subpart as they 
apply to accreditation organizations.

IV. Federal Validation Inspections and Continuing Oversight

    The Federal validation inspections of JCAHO accredited laboratories 
may be conducted on a representative sample basis or in response to 
substantial allegations of noncompliance (complaint inspections). The 
outcome of those validation inspections, performed by our agent, or the 
State survey agency, or us, will be our principal means for verifying 
that the laboratories accredited by JCAHO remain in compliance with 
CLIA requirements. This Federal monitoring is an ongoing process.

V. Removal of Approval as an Accrediting Organization

    Our regulations provide, in part, that we may remove the approval 
of an accreditation organization, such as that of JCAHO, for cause, 
before the end of the effective date of approval. If validation 
inspection outcomes and the comparability or validation review produce 
findings as described in Sec.  493.573 (Continuing Federal oversight of 
private nonprofit accreditation organizations and approved State 
licensure programs), we will conduct a review of an approved 
accreditation organization's program. In addition, we will conduct a 
review, when the validation review findings, irrespective of the rate 
of disparity (as defined in Sec.  493.2), indicate widespread or 
systemic problems in the organization's accreditation processes that 
provide evidence that the organization's requirements, taken as a 
whole, are no longer equivalent to the CLIA requirements, taken as a 
whole. If validation inspection results over a 1-year period indicate a 
rate of disparity of 20 percent or more between the findings of the 
organization and those of CMS, we will conduct a review under Sec.  
493.575(a)(4).
    If we determine that JCAHO has failed to adopt or maintain 
requirements that are equal to or more stringent than the CLIA 
requirements, or systematic problems exist in its inspection process, a 
probationary period as determined by us, not to exceed 1 year, may be 
given to JCAHO to adopt equal or more stringent requirements. We will 
make a final determination as to whether or not JCAHO retains its 
approved status as an accreditation organization under CLIA.
    If approved status is withdrawn, an accreditation organization such 
as JCAHO may resubmit its application if it revises its program to 
address the rationale for the denial, demonstrates that it can 
reasonably assure that its accredited laboratories meet CLIA condition 
level requirements, and resubmits its application for approval as an 
accreditation organization in its entirety. However, if an approved 
accreditation organization requests reconsideration of an adverse 
determination in accordance with subpart D (Reconsideration of Adverse 
Determinations--Deeming Authority for Accreditation Organizations and 
CLIA Exemption of Laboratories Under State Programs) of part 488 
(Survey, Certification, and Enforcement Procedures) of our regulations, 
it may not submit a new application until we issue a final 
reconsideration determination.
    Should circumstances result in JCAHO having its approval withdrawn, 
we will publish a notice in the Federal Register explaining the basis 
for removing its approval.

VI. Regulatory Impact Statement

    We have examined the impacts of this notice as required by 
Executive Order 12866 (September 1993, Regulatory Planning and Review), 
the Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-
354), section 1102(b) of the Social Security Act, the Unfunded Mandates 
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). Since this 
notice announces the continued approval of JCAHO as an accreditation 
organization for clinical laboratories under the CLIA program and has 
no economic impact

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on the Medicare, Medicaid, and CLIA programs, we have determined this 
requirement does not apply to this notice.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $6 to $29 
million in any 1 year. For purposes of the RFA, JCAHO, a private, 
nonprofit organization, is considered to be a small entity. Individuals 
and States are not included in the definition of a small entity.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $110 million. We have determined that this notice will not 
have a consequential effect on the governments mentioned or on the 
private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. We have determined that this notice will not have a 
substantial effect on State or local governments.
    We are not preparing analyses for either the RFA or section 1102(b) 
of the Act because we have determined, and we certify, that this notice 
will not have a significant economic impact on a substantial number of 
small entities or a significant impact on the operations of a 
substantial number of small rural hospitals.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.

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

    Dated: June 14, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 02-25947 Filed 10-24-02; 8:45 am]
BILLING CODE 4120-01-P