[Federal Register Volume 86, Number 59 (Tuesday, March 30, 2021)]
[Notices]
[Pages 16599-16601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06499]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-3411-N]


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

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Notice.

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SUMMARY: This notice announces that laboratories located in and 
licensed by the State of New York that possess a valid permit under the 
New York State Public Health Law are exempt from the requirements of 
the Clinical Laboratory Improvement Amendments of 1988 (CLIA) for a 
period of 6 years.

DATES: The exemption granted by this notice is effective from March 26, 
2021 to March 26, 2027.

FOR FURTHER INFORMATION CONTACT: Penny Keller, (410) 786-2035.

SUPPLEMENTARY INFORMATION:

I. Background and Legislative Authority

    Section 353 of the Public Health Service Act (PHSA), as amended by 
the Clinical Laboratory Improvement Amendments of 1988 (CLIA) (Pub. L. 
100-578, enacted on October 31, 1988), generally provides that no 
laboratory may perform tests on human specimens for the diagnosis, 
prevention, or treatment of any disease or impairment of, or assessment 
of the health of, human beings unless it has a certificate to perform 
that category of tests issued by the Secretary of the Department of 
Health and Human Services (HHS). Under section 1861(s)(17)(A) of the 
Social Security Act (the Act), the Medicare program will only pay for 
laboratory services if the laboratory has a CLIA certificate. Section 
1902(a)(9)(C) of the Act generally requires that state Medicaid plans 
pay only for laboratory services furnished by CLIA-certified 
laboratories. Thus, although subject to specified exemptions and 
exceptions, laboratories generally must have a current and valid CLIA 
certificate to test human specimens for the purposes noted above to be 
eligible for payment for those tests from the Medicare or Medicaid 
programs. Regulations implementing section 353 of the PHSA are 
contained in 42 CFR part 493.
    Section 353(p) of the PHSA provides for the exemption of 
laboratories from CLIA requirements in states that enact legal 
requirements that are equal to or more stringent than CLIA's statutory 
and regulatory requirements. Section 353(p) of the PHSA is implemented 
in subpart E of our regulations at 42 CFR part 493. Sections 493.551 
and 493.553 provide that we may exempt from CLIA requirements, for a 
period not to exceed 6 years, all state-licensed or -approved 
laboratories in a state if the state licensure program meets the 
specified conditions. Section 493.559 provides that we will publish a 
notice in the Federal Register when we grant an exemption to an 
approved state licensure program. It also provides that the notice will 
include the following:
     The basis for granting the exemption.
     A description of how the state's laboratory requirements 
are equal to or more stringent than those of CLIA.
     The term of approval, not to exceed 6 years.

A. State of New York's Application for CLIA Exemption of Its 
Laboratories

    The State of New York has applied for exemption of its Clinical 
Laboratory Evaluation Program (CLEP) permit-holding laboratories from 
CLIA program requirements. New York State law is generally applicable 
to all clinical laboratories operating within the State of New York 
except those operated by the Federal Government and those operated by a 
licensed physician,

[[Page 16600]]

osteopath, dentist, midwife, nurse practitioner or podiatrist who 
performs laboratory tests or procedures, personally or through his or 
her employees, solely as an adjunct to the treatment of his or her own 
patients. The State of New York submitted all of the applicable 
information and attestations required by Sec. Sec.  493.551, 493.553, 
and 493.557(b) for state licensure programs seeking exemption of their 
licensed laboratories from CLIA program requirements. (Please note that 
although the CLEP issues ``permits'' rather than ``licenses'' or 
``certificates,'' for the purposes of this notice, we will hereinafter 
refer to the CLEP as a ``state licensure program.'') Examples of 
documents and information submitted include a comparison of its 
laboratory licensure requirements with comparable CLIA condition-level 
requirements (that is, a crosswalk) and a description of the following: 
its inspection process; its proficiency testing (PT) monitoring 
process; its data management and analysis system; its investigative and 
response procedures for complaints received against laboratories; and 
its policy regarding announced and unannounced inspections.

B. CMS Analysis of New York's Application and Supporting Documentation

    To determine whether we should grant a CLIA exemption to 
laboratories licensed by a state, we review the application and 
additional documentation that the state submits to us and conduct a 
detailed and in-depth comparison of the CLEP state licensure program 
and CLIA's statutory and regulatory requirements to determine whether 
the state program meets the requirements at subpart E of part 493.
    In summary, the state generally must demonstrate that:
     It has state laws in effect that provide for a state 
licensure program that has requirements that are equal to or more 
stringent than CLIA condition-level requirements for laboratories.
     It has implemented a state licensure program with 
requirements that are equal to or more stringent than the CLIA 
condition-level requirements such that a laboratory licensed by the 
state program would meet the CLIA condition-level requirements if it 
were inspected against those requirements.
     The requirements under that state licensure program meet 
or exceed the requirements of Sec. Sec.  493.553, 493.555, and 
493.557(b) and is suitable for approval by us under Sec.  493.551. For 
example, among other things, the program would need to:
    ++ Demonstrate that it has enforcement authority and administrative 
structures and resources adequate to enforce its laboratory 
requirements.
    ++ Permit us or our agents to inspect laboratories within the 
state.
    ++ Require laboratories within the state to submit to inspections 
by us or our agents as a condition of state licensure.
    ++ Agree to pay any costs associated with our activities to 
validate its state licensure program as well as the state's pro rata 
share of the general overhead to develop and implement CLIA as 
specified in Sec. Sec.  493.645(a), 493.646(b), and 493.557(b).
    ++ Take appropriate enforcement action against laboratories found 
by us or our agents to be out of compliance with requirements 
comparable to CLIA condition-level requirements, as specified in Sec.  
493.557(b).
    As specified in our regulations at Sec. Sec.  493.555 and 
493.557(b), our review of a state licensure program includes (but is 
not necessarily limited to) an evaluation of the following:
     Whether the state's requirements for laboratories are 
equal to or more stringent than the CLIA condition-level requirements.
     The state's inspection process requirements to determine 
the following:
    ++ The comparability of the full inspection and complaint 
inspection procedures to those of CMS.
    ++ The state's enforcement procedures for laboratories found to be 
out of compliance with its requirements.
     The ability of the state to provide us with electronic 
data and reports with the adverse or corrective actions resulting from 
PT results that constitute unsuccessful participation in CMS-approved 
PT programs and with other data we determine to be necessary for 
validation review and assessment of the state's inspection process 
requirements.
     The state's agreement with us to ensure that the agreement 
obligates the state to do the following:
    ++ Notify us within 30 days of the action taken against any CLIA-
exempt laboratory that has had its licensure or approval withdrawn or 
revoked or been in any way sanctioned.
    ++ Notify us within 10 days of any deficiency identified in a CLIA-
exempt laboratory in cases when the deficiency poses an immediate 
jeopardy to the laboratory's patients or a hazard to the general 
public.
    ++ Notify each laboratory licensed by the state under its approved 
state licensure program within 10 days of a withdrawal of our approval 
of the state's licensure program, and the resulting loss of the 
laboratory's exemption from CLIA based on its licensure under that 
program.
    ++ Provide us with written notification of any changes in the 
state's licensure (or approval) and inspection requirements.
    ++ Disclose to us or our agent any laboratory's PT results in 
accordance with the state's confidentiality requirements.
    ++ Take appropriate enforcement action against laboratories that we 
or our agents find to be out of compliance with CLIA condition-level 
requirements in a validation survey, and report these enforcement 
actions to us.
    ++ Notify us of all newly licensed laboratories, and any changes in 
the specialties and subspecialties for which any laboratory performs 
testing, within 30 days.
    ++ Provide us, as requested, inspection schedules for validation 
purposes.
    In keeping with the process described above, we evaluated the 
application and supporting materials that were submitted by the State 
of New York to verify that CLEP permit-holding laboratories will meet 
or exceed the requirements of the following subparts of part 493: 
Subpart H, Participation in Proficiency Testing for Laboratories 
Performing Nonwaived Testing; subpart J, Facility Administration for 
Nonwaived Testing; subpart K, Quality Systems for Nonwaived Testing, 
subpart M, Personnel for Nonwaived Testing; subpart Q, Inspection; and 
subpart R, Enforcement Procedures.
    We found that the State of New York's CLEP requirements mapped to 
all the CLIA condition-level requirements. Its inspection and 
proficiency testing monitoring processes were adequate. Other materials 
that were submitted demonstrated compliance with the other above-
referenced requirements of subpart E of part 493. As a result, we 
concluded that the submitted documents supported exempting CLEP permit-
holding laboratories from the CLIA program requirements. Furthermore, a 
review of our validation inspections conducted by our branch location 
in New York supported this conclusion.
    The Federal validation inspections of CLIA-exempt laboratories, as 
specified in Sec.  493.563, were conducted on a representative sample 
basis, as well as in response to any substantial allegations of 
noncompliance (that is, complaint inspections). The outcome of those 
validation inspections has been, and will continue to be our principal 
tool for verifying that the laboratories

[[Page 16601]]

located within the state that hold valid permits are in compliance with 
CLIA requirements.
    Our branch location in New York has conducted validation 
inspections of a representative sample (approximately 5 percent) of the 
laboratories inspected by the New York State Office of Laboratory 
Quality Assurance (LQA). The validation inspections were primarily of 
the concurrent type; that is, our surveyors accompanied New York 
State's inspectors, each inspecting against his or her agency's 
respective regulations. Analysis of the validation data revealed no 
significant differences between the State and Federal findings. The 
validation surveys verified that the State of New York CLEP inspection 
process covers all CLIA conditions applicable to each laboratory being 
inspected and also verified that the CLEP requirements meet or exceed 
CLIA condition-level requirements. Our validation surveys found the 
State inspectors highly skilled and qualified. The LQA inspected 
laboratories in a timely fashion; that is, all laboratories were 
inspected within the required 24-month cycle. All parameters monitored 
by our branch location in New York, to date, indicate that the State of 
New York is meeting all requirements for approval of CLIA exemption. 
This Federal monitoring will continue as an ongoing process.

C. Conclusion

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

D. Laboratory Data

    In accordance with our regulations at Sec.  493.557(b)(8), the 
approval of this exemption for laboratories located within and 
permitted by the State of New York is conditioned on the State of New 
York's continued compliance with the assertions made in its 
application, especially the provision of information to us about 
changes to a laboratory's specialties or subspecialties based on the 
State's survey, and changes to a laboratory's certification status, 
such as a change from a CLIA certificate of compliance to a CLIA 
certificate of waiver.

E. Required Administrative Actions

    CLIA is a user-fee funded program. The registration fee paid by 
laboratories is intended to cover the cost of the development and 
administration of the program. However, when a state's application for 
exemption is approved, we do not charge a fee to laboratories in the 
state. The state's share of the costs associated with CLIA must be 
collected from the state, as specified in Sec.  493.645(a).
    The State of New York must pay for the following:
     Costs of Federal inspections of laboratories in the State 
to verify that New York State's laboratory licensure program 
requirements are equivalent to or more stringent than those in the CLIA 
program, and that they are enforced in an appropriate manner. The 
average Federal hourly rate is multiplied by the total hours required 
to perform Federal validation surveys within the State.
     Costs incurred for Federal surveys, including 
investigations of complaints that are substantiated. We will bill the 
State of New York on a semiannual basis.
     The State of New York's proportionate share of the costs 
associated with establishing, maintaining, and improving the CLIA 
computer system, based on the portion of those services from which the 
State of New York received direct benefit or which contributed to the 
CLIA program in the State. Thus, the State of New York is being charged 
for a portion of our direct and indirect costs of administering the 
CLIA program. Such costs will be incurred by CMS, the Centers for 
Disease Control and Prevention (CDC), the Food and Drug Administration 
(FDA) and contractors working on behalf of these respective agencies.
    To estimate the State of New York's proportionate share of the 
general overhead costs to develop and implement CLIA, we determined the 
ratio of laboratories in the State to the total number of laboratories 
nationally. Approximately 1.5 percent of the registered laboratories 
are in the State of New York. We determined that a corresponding 
percentage of the applicable CMS, CDC, FDA, and their respective 
contractor costs should be borne by the State of New York.
    The State of New York has agreed to pay the State's pro rata share 
of the anticipated overhead costs and costs of actual validation 
(including complaint investigation surveys). A final reconciliation for 
all laboratories and all expenses will be made. We will reimburse the 
State for any overpayment or bill it for any balance.

II. Approval

    In light of the foregoing, we grant approval of the State of New 
York's laboratory licensure program (CLEP) under subpart E. All 
laboratories that are located within the State of New York and hold 
valid CLEP permits are CLIA-exempt for all specialties and 
subspecialties until March 26, 2027.

III. Collection of Information Requirements

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. Consequently, there is no need for review by the Office 
of Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).
    The Acting Administrator of the Centers for Medicare & Medicaid 
Services (CMS), Elizabeth Richter, having reviewed and approved this 
document, authorizes Lynette Wilson, who is the Federal Register 
Liaison, to electronically sign this document for purposes of 
publication in the Federal Register.

    Dated: March 25, 2021.
Lynette Wilson,
Federal Register Liaison, Centers for Medicare & Medicaid Services.
[FR Doc. 2021-06499 Filed 3-26-21; 4:15 pm]
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