[Federal Register Volume 89, Number 63 (Monday, April 1, 2024)]
[Notices]
[Pages 22406-22408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06802]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-3441-N]


Medicare, Medicaid, and CLIA Programs; Clinical Laboratory 
Improvement Amendments of 1988 Exemption of Laboratories Licensed by 
the State of Washington

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

ACTION: Notice.

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SUMMARY: This notice announces that laboratories located in and 
licensed by the State of Washington that possess a valid license under 
the Medical Test Site law, chapter 70.42 of the Revised Code of 
Washington, are exempt from the requirements of the Clinical Laboratory 
Improvement Amendments of 1988 (CLIA) for a period of 4 years.

DATES: The exemption granted by this notice is effective from April 1, 
2024 to April 1, 2028.

FOR FURTHER INFORMATION CONTACT: Mary Hasan, (410) 786-6480.

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), which was 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 an 
appropriate CLIA certificate for the testing they conduct. Under 
section 1902(a)(9)(C) of the Act, State Medicaid plans will generally 
only pay 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 by the Medicare or Medicaid 
programs. Regulations implementing section 353 of the PHSA are 
contained in 42 CFR part 493.
    Section 353(p)(2) 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)(2) of the PHSA is 
implemented in subpart E of our regulations at 42 CFR part 493. 
Sections 493.551(a) and 493.553 provide that CMS may exempt from CLIA 
requirements, for a period not to exceed 6 years, all State-licensed or 
State-approved laboratories in a State if the State licensure program 
meets the specified conditions. Section 493.559(a) provides that CMS 
will publish a notice in the Federal Register when CMS grants an 
exemption to an approved State licensure program. Section 493.559(b) 
provides that the notice will include the following:
     The name of the State licensure program.
     A description of how the laboratory requirements of the 
State are equal to or more stringent than those of part 493.
     The basis for granting the exemption.
     The term of approval, not to exceed 6 years.

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

    The State of Washington has applied for exemption of its 
laboratories from CLIA program requirements. The State of Washington 
submitted all the applicable information and attestations required by 
Sec. Sec.  493.551(a), 493.553, and

[[Page 22407]]

493.557(b) for State licensure programs seeking exemption of their 
licensed laboratories from CLIA program requirements. Examples of 
documents and information submitted include: a comparison of its 
laboratory licensure requirements with the 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 Washington's Application and Supporting 
Documentation

    To determine whether CMS should grant a CLIA exemption to 
laboratories licensed by a State, CMS reviews the application and 
additional documentation that the State submits to us and conducts a 
detailed and in-depth comparison of the State licensure program and 
CLIA's statutory and regulatory requirements to determine whether the 
State licensure program meets the requirements in 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 CMS under Sec.  
493.553(b)(3). 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 CMS or CMS agents to inspect laboratories within the 
State.
    ++ Require laboratories within the State to submit to inspections 
by CMS or CMS agents as a condition of licensure.
    ++ Agree to pay any costs associated with our activities to 
validate its State licensure program as specified in Sec.  
493.557(b)(4) as well as the State's pro rata share of the general 
overhead to develop and implement CLIA as specified in Sec.  
493.649(a).
    ++ Take appropriate enforcement action against laboratories found 
by CMS or CMS agents to be out of compliance with requirements 
equivalent to CLIA 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, including, but not limited to, 
inspection frequency and the ability to investigate and respond to 
complaints against its laboratories.
    ++ The State's enforcement procedures for laboratories found to be 
out of compliance with its requirements.
     The ability of the State to provide CMS 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 CMS determines to be necessary for 
validation review and assessment of the State's inspection process 
requirements.
     The State's agreement with CMS that requires the State to 
do the following:
    ++ Notify CMS within 30 days of the action taken against any CLIA-
exempt laboratory that has had its licensure or approval suspended, 
withdrawn, revoked, or limited; been in any way sanctioned; or had any 
adverse action taken against it.
    ++ Notify CMS within 10 days of any deficiency identified in a 
CLIA-exempt laboratory in cases when the deficiency poses an immediate 
jeopardy to the laboratory's patients or a hazard to the general 
public.
    ++ Notify each laboratory licensed by the State 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 CMS with written notification of any changes in the 
State's licensure (or approval) and inspection requirements.
    ++ Disclose to CMS or CMS' agent any laboratory's PT results in 
accordance with the State's confidentiality requirements.
    ++ Take appropriate enforcement action against laboratories that 
CMS or CMS agents find to be out of compliance with CLIA condition-
level requirements and report these enforcement actions to CMS.
    ++ Notify CMS within 30 days of all newly licensed laboratories, 
including the specialty and subspecialty areas of testing, and notify 
CMS of any changes in the specialties and subspecialties for which any 
licensed laboratory in the State performs testing.
    ++ Provide CMS with inspection schedules, as requested, for 
validation purposes.
    In keeping with the process described above, CMS evaluated the 
application and supporting materials that were submitted by Washington 
State to verify that the laboratories licensed through its program 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.
    CMS found that Washington State's laboratory licensure program 
requirements mapped to all the CLIA condition-level requirements. The 
State licensure program's inspection process and PT 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, CMS concluded that the submitted 
documents supported exempting laboratories licensed under that program 
from the CLIA program requirements. Furthermore, a review of our 
validation inspections conducted by the CMS office in Seattle, 
Washington, 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 (complaint inspections). The outcome of those validation 
inspections has been and will continue to be our principal tool for 
verifying that the laboratories located in, and licensed by, the State 
are in compliance with CLIA requirements.

[[Page 22408]]

    The CMS office in Seattle, Washington, has conducted validation 
inspections of a representative sample of the laboratories inspected by 
the Washington State Office of Laboratory Quality Assurance (LQA). The 
validation inspections were primarily of the concurrent type; that is, 
our surveyors accompanied Washington 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 Washington inspection process covers all CLIA conditions 
applicable to each laboratory being inspected and also verified that 
the State laboratory licensure requirements meet or exceed CLIA 
condition-level requirements. The 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 the CMS office 
in Seattle, Washington, to date, indicate that the State of Washington 
is meeting all requirements for approval of CLIA exemption. This 
Federal monitoring will continue as an on-going process.

C. Conclusion

    Based on review of the documents submitted by the Washington State 
licensure program under the requirements of subpart E of part 493, as 
well as the outcome of the validation inspections conducted by the CMS 
office in Seattle, Washington, CMS finds that the State of Washington's 
licensure program meets the requirements of Sec.  493.553(a), and that, 
as a result, CMS may exempt all State-licensed laboratories from CLIA 
program requirements.
    Approval of the CLIA exemption for laboratories located within and 
licensed by the State of Washington laboratory licensure program is 
subject to removal if CMS determines 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 Washington fails to pay the required fee every 2 years as 
required under Sec.  493.649.

D. Laboratory Data

    The approval of this exemption for laboratories located within and 
licensed by the State of Washington is conditioned on the State of 
Washington's continued compliance with the assertions made in its 
application, including the provision of information to us in accordance 
with our regulations at Sec.  493.557(b)(8) about changes to a 
laboratory's specialties or subspecialties based on the State's survey, 
and changes to a laboratory's certification status.

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, CMS does 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.  493.649.
    The State of Washington must pay for the following:
     Costs of Federal inspections of laboratories in the State 
to verify that standards are being enforced in an appropriate manner.
     Costs incurred for investigations of complaints against 
State of Washington laboratories if the complaint is substantiated.
     The State's pro rata share of general overhead to 
administer the laboratory certification program under section 353 of 
the PHS Act.
    To estimate the State of Washington's proportionate share of the 
general overhead costs to develop and implement CLIA, CMS determined 
the ratio of laboratories in the State to the total number of 
laboratories nationally. Approximately 1.9 percent of the registered 
laboratories are in the State of Washington. CMS determined that a 
corresponding percentage of the applicable CMS, CDC, FDA, and their 
respective contractor costs should be borne by the State of Washington.
    The State of Washington has agreed to pay the State's pro rata 
share of the anticipated overhead costs and costs of actual validation 
(including complaint investigation surveys) as specified in Sec.  
493.655(b). A final reconciliation for all laboratories and all 
expenses will be made. CMS will reimburse the State for any overpayment 
or bill it for any balance.

II. Approval

    In light of the foregoing, CMS grants approval of the State of 
Washington's laboratory licensure program under subpart E. All 
laboratories located in and licensed by the State of Washington under 
the Medical Test Site law, chapter 70.42 of the Revised Code of 
Washington, are CLIA-exempt for all specialties and subspecialties 
until April 1, 2028.
    The Administrator of the Centers for Medicare & Medicaid Services 
(CMS), Chiquita Brooks-LaSure, having reviewed and approved this 
document, authorizes Trenesha Fultz-Mimms, who is the Federal Register 
Liaison, to electronically sign this document for purposes of 
publication in the Federal Register.

Trenesha Fultz-Mimms,
Federal Register Liaison, Centers for Medicare & Medicaid Services.
[FR Doc. 2024-06802 Filed 3-29-24; 8:45 am]
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