Public Health Service; CLIA Program; Categorization of Waived Tests

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.............................................. 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