Subpart R--Enforcement Procedures
Source: 57 FR 7237, Feb. 28, 1992, unless otherwise noted.
Sec. 493.1800 Basis and scope.
(a) Statutory basis. (1) Section 1846 of the Act--
(i) Provides for intermediate sanctions that may be imposed on
laboratories that perform clinical diagnostic tests on human specimens
when those laboratories are found to be out of compliance with one or
more of the conditions for Medicare coverage of their services; and
(ii) Requires the Secretary to develop and implement a range of such
sanctions, including four that are specified in the statute.
(2) The Clinical Laboratories Improvement Act of 1967 (section 353
of the Public Health Service Act) as amended by CLIA '88--
(i) Establishes requirements for all laboratories that perform
clinical diagnostic tests on human specimens;
(ii) Requires a Federal certification scheme to be applied to all
such laboratories; and
(iii) Grants the Secretary broad enforcement authority, including--
[[Page 988]]
(A) Use of intermediate sanctions;
(B) Suspension, limitation, or revocation of the certificate of a
laboratory that is out of compliance with one or more requirements for a
certificate; and
(C) Civil suit to enjoin any laboratory activity that constitutes a
significant hazard to the public health.
(3) Section 353 also--
(i) Provides for imprisonment or fine for any person convicted of
intentional violation of CLIA requirements;
(ii) Specifies the administrative hearing and judicial review rights
of a laboratory that is sanctioned under CLIA; and
(iii) Requires the Secretary to publish annually a list of all
laboratories that have been sanctioned during the preceding year.
(b) Scope and applicability. This subpart sets forth--
(1) The policies and procedures that CMS follows to enforce the
requirements applicable to laboratories under CLIA and under section
1846 of the Act; and
(2) The appeal rights of laboratories on which CMS imposes
sanctions.
Sec. 493.1804 General considerations.
(a) Purpose. The enforcement mechanisms set forth in this subpart
have the following purposes:
(1) To protect all individuals served by laboratories against
substandard testing of specimens.
(2) To safeguard the general public against health and safety
hazards that might result from laboratory activities.
(3) To motivate laboratories to comply with CLIA requirements so
that they can provide accurate and reliable test results.
(b) Basis for decision to impose sanctions. (1) CMS's decision to
impose sanctions is based on one or more of the following:
(i) Deficiencies found by CMS or its agents in the conduct of
inspections to certify or validate compliance with Federal requirements,
or through review of materials submitted by the laboratory (e.g.,
personnel qualifications).
(ii) Unsuccessful participation in proficiency testing.
(2) CMS imposes one or more of the alternative or principal
sanctions specified in Secs. 493.1806 and 493.1807 when CMS or CMS's
agent finds that a laboratory has condition-level deficiencies.
(c) Imposition of alternative sanctions. (1) CMS may impose
alternative sanctions in lieu of, or in addition to principal sanctions,
(CMS does not impose alternative sanctions on laboratories that have
certificates of waiver because those laboratories are not inspected for
compliance with condition-level requirements.)
(2) CMS may impose alternative sanctions other than a civil money
penalty after the laboratory has had an opportunity to respond, but
before the hearing specified in Sec. 493.1844.
(d) Choice of sanction: Factors considered. CMS bases its choice of
sanction or sanctions on consideration of one or more factors that
include, but are not limited to, the following, as assessed by the State
or by CMS, or its agents:
(1) Whether the deficiencies pose immediate jeopardy.
(2) The nature, incidence, severity, and duration of the
deficiencies or noncompliance.
(3) Whether the same condition level deficiencies have been
identified repeatedly.
(4) The accuracy and extent of laboratory records (e.g., of remedial
action) in regard to the noncompliance, and their availability to the
State, to other CMS agents, and to CMS.
(5) The relationship of one deficiency or group of deficiencies to
other deficiencies.
(6) The overall compliance history of the laboratory including but
not limited to any period of noncompliance that occurred between
certifications of compliance.
(7) The corrective and long-term compliance outcomes that CMS hopes
to achieve through application of the sanction.
(8) Whether the laboratory has made any progress toward improvement
following a reasonable opportunity to correct deficiencies.
(9) Any recommendation by the State agency as to which sanction
would be appropriate.
[[Page 989]]
(e) Number of alternative sanctions. CMS may impose a separate
sanction for each condition level deficiency or a single sanction for
all condition level deficiencies that are interrelated and subject to
correction by a single course of action.
(f) Appeal rights. The appeal rights of laboratories dissatisfied
with the imposition of a sanction are set forth in Sec. 493.1844.
[57 FR 7237, Feb. 28, 1992; 57 FR 35761, Aug. 11, 1992, as amended at 60
FR 20051, Apr. 24, 1995]
Sec. 493.1806 Available sanctions: All laboratories.
(a) Applicability. CMS may impose one or more of the sanctions
specified in this section on a laboratory that is out of compliance with
one or more CLIA conditions.
(b) Principal sanction. CMS may impose any of the three principal
CLIA sanctions, which are suspension, limitation, or revocation of any
type of CLIA certificate.
(c) Alternative sanctions. CMS may impose one or more of the
following alternative sanctions in lieu of or in addition to imposing a
principal sanction, except on a laboratory that has a certificate of
waiver.
(1) Directed plan of correction, as set forth at Sec. 493.1832.
(2) State onsite monitoring as set forth at Sec. 493.1836.
(3) Civil money penalty, as set forth at Sec. 493.1834.
(d) Civil suit. CMS may bring suit in the appropriate U.S. District
Court to enjoin continuation of any activity of any laboratory
(including a CLIA-exempt laboratory that has been found with
deficiencies during a validation survey), if CMS has reason to believe
that continuation of the activity would constitute a significant hazard
to the public health.
(e) Criminal sanctions. Under section 353(1) of the PHS Act, an
individual who is convicted of intentionally violating any CLIA
requirement may be imprisoned or fined.
[57 FR 7237, Feb. 28, 1992, as amended at 58 FR 5237, Jan. 19, 1993]
Sec. 493.1807 Additional sanctions: Laboratories that participate in
Medicare.
The following additional sanctions are available for laboratories
that are out of compliance with one or more CLIA conditions and that
have approval to receive Medicare payment for their services.
(a) Principal sanction. Cancellation of the laboratory's approval to
receive Medicare payment for its services.
(b) Alternative sanctions. (1) Suspension of payment for tests in
one or more specific specialties or subspecialties, performed on or
after the effective date of sanction.
(2) Suspension of payment for all tests in all specialties and
subspecialties performed on or after the effective date of sanction.
Sec. 493.1808 Adverse action on any type of CLIA certificate: Effect on
Medicare approval.
(a) Suspension or revocation of any type of CLIA certificate. When
CMS suspends or revokes any type of CLIA certificate, CMS concurrently
cancels the laboratory's approval to receive Medicare payment for its
services.
(b) Limitation of any type of CLIA certificate. When CMS limits any
type of CLIA certificate, CMS concurrently limits Medicare approval to
only those specialties or subspecialties that are authorized by the
laboratory's limited certificate.
Sec. 493.1809 Limitation on Medicaid payment.
As provided in section 1902(a)(9)(C) of the Act, payment for
laboratory services may be made under the State plan only if those
services are furnished by a laboratory that has a CLIA certificate or is
licensed by a State whose licensure program has been approved by the
Secretary under this part.
[57 FR 7237, Feb. 28, 1992; 57 FR 35761, Aug. 11, 1992]
Sec. 493.1810 Imposition and lifting of alternative sanctions.
(a) Notice of noncompliance and of proposed sanction: Content. If
CMS or its agency identifies condition level noncompliance in a
laboratory, CMS or
[[Page 990]]
its agent gives the laboratory written notice of the following:
(1) The condition level noncompliance that it has identified.
(2) The sanction or sanctions that CMS or its agent proposes to
impose against the laboratory.
(3) The rationale for the proposed sanction or sanctions.
(4) The projected effective date and duration of the proposed
sanction or sanctions.
(5) The authority for the proposed sanction or sanctions.
(6) The time allowed (at least 10 days) for the laboratory to
respond to the notice.
(b) Opportunity to respond. During the period specified in paragraph
(a)(6) of this section, the laboratory may submit to CMS or its agent
written evidence or other information against the imposition of the
proposed sanction or sanctions.
(c) Notice of imposition of sanction--(1) Content. CMS gives the
laboratory written notice that acknowledges any evidence or information
received from the laboratory and specifies the following:
(i) The sanction or sanctions to be imposed against the laboratory.
(ii) The authority and rationale for the imposing sanction or
sanctions.
(iii) The effective date and duration of sanction.
(2) Timing. (i) If CMS or its agent determines that the
deficiencies pose immediate jeopardy, CMS provides notice at least 5
days before the effective date of sanction.
(ii) If CMS or its agent determines that the deficiencies do not
pose immediate jeopardy, CMS provides notice at least 15 days before
the effective date of the sanction.
(d) Duration of alternative sanctions. An alternative sanction
continues until the earlier of the following occurs:
(1) The laboratory corrects all condition level deficiencies.
(2) CMS's suspension, limitation, or revocation of the laboratory's
CLIA certificate becomes effective.
(e) Lifting of alternative sanctions--(1) General rule. Alternative
sanctions are not lifted until a laboratory's compliance with all
condition level requirements is verified.
(2) Credible allegation of compliance. When a sanctioned laboratory
submits a credible allegation of compliance, CMS's agent determines
whether--
(i) It can certify compliance on the basis of the evidence presented
by the laboratory in its allegation; or
(ii) It must revisit to verify whether the laboratory has, in fact,
achieved compliance.
(3) Compliance achieved before the date of revisit. If during a
revisit, the laboratory presents credible evidence (as determined by
CMS or its agent) that it achieved compliance before the date of
revisit, sanctions are lifted as of that earlier date.
Sec. 493.1812 Action when deficiencies pose immediate jeopardy.
If a laboratory's deficiencies pose immediate jeopardy, the
following rules apply:
(a) CMS requires the laboratory to take immediate action to remove
the jeopardy and may impose one or more alternative sanctions to help
bring the laboratory into compliance.
(b) If the findings of a revisit indicate that a laboratory has not
eliminated the jeopardy, CMS suspends or limits the laboratory's CLIA
certificate no earlier than 5 days after the date of notice of
suspension or limitation. CMS may later revoke the certificate.
(c) In addition, if CMS has reason to believe that the continuation
of any activity by any laboratory (either the entire laboratory
operation or any specialty or subspecialty of testing) would constitute
a significant hazard to the public health, CMS may bring suit and seek
a temporary injunction or restraining order against continuation of that
activity by the laboratory, regardless of the type of CLIA certificate
the laboratory has and of whether it is State-exempt.
Sec. 493.1814 Action when deficiencies are at the condition level but
do not pose immediate jeopardy.
If a laboratory has condition level deficiencies that do not pose
immediate jeopardy, the following rules apply:
[[Page 991]]
(a) Initial action. (1) CMS may cancel the laboratory's approval to
receive Medicare payment for its services.
(2) CMS may suspend, limit, or revoke the laboratory's CLIA
certificate.
(3) If CMS does not impose a principal sanction under paragraph
(a)(1) or (a)(2) of this section, it imposes one or more alternative
sanctions. In the case of unsuccessful participation in proficiency
testing, CMS may impose the training and technical assistance
requirement set forth at Sec. 493.1838 in lieu of, or in addition to,
one or more alternative sanctions.
(b) Failure to correct condition level deficiencies. If CMS imposes
alternative sanctions for condition level deficiencies that do not pose
immediate jeopardy, and the laboratory does not correct the condition
level deficiencies within 12 months after the last day of inspection,
CMS--
(1) Cancels the laboratory's approval to receive Medicare payment
for its services, and discontinues the Medicare payment sanctions as of
the day cancellation is effective.
(2) Following a revisit which indicates that the laboratory has not
corrected its condition level deficiencies, notifies the laboratory that
it proposes to suspend, limit, or revoke the certificate, as specified
in Sec. 493.1816(b), and the laboratory's right to hearing; and
(3) May impose (or continue, if already imposed) any alternative
sanctions that do not pertain to Medicare payments. (Sanctions imposed
under the authority of section 353 of the PHS Act may continue for more
than 12 months from the last date of inspection, while a hearing on the
proposed suspension, limitation, or revocation of the certificate of
compliance, registration certificate, certificate of accreditation, or
certificate for PPM procedures is pending.)
(c) Action after hearing. If a hearing decision upholds a proposed
suspension, limitation, or revocation of a laboratory's CLIA
certificate, CMS discontinues any alternative sanctions as of the day
it makes the suspension, limitation, or revocation effective.
[57 FR 7237, Feb. 28, 1992, as amended at 60 FR 20051, Apr. 24, 1995]
Sec. 493.1816 Action when deficiencies are not at the condition level.
If a laboratory has deficiencies, that are not at the condition
level, the following rules apply:
(a) Initial action. The laboratory must submit a plan of correction
that is acceptable to CMS in content and time frames.
(b) Failure to correct deficiencies. If, on revisit, it is found
that the laboratory has not corrected the deficiencies within 12 months
after the last day of inspection, the following rules apply:
(1) CMS cancels the laboratory's approval to receive Medicare
payment for its services.
(2) CMS notifies the laboratory of its intent to suspend, limit, or
revoke the laboratory's CLIA certificate and of the laboratory's right
to a hearing.
Sec. 493.1820 Ensuring timely correction of deficiencies.
(a) Timing of visits. CMS, the State survey agency or other CMS
agent may visit the laboratory at any time to evaluate progress, and at
the end of the period to determine whether all corrections have been
made.
(b) Deficiencies corrected before a visit. If during a visit, a
laboratory produces credible evidence that it achieved compliance before
the visit, the sanctions are lifted as of that earlier date.
(c) Failure to correct deficiencies. If during a visit it is found
that the laboratory has not corrected its deficiencies, CMS may propose
to suspend, limit, or revoke the laboratory's CLIA certificate.
(d) Additional time for correcting lower level deficiencies not at
the condition level. If at the end of the plan of correction period all
condition level deficiencies have been corrected, and there are
deficiencies, that are not at the condition level, CMS may request a
revised plan of correction. The revised plan may not extend beyond 12
months from the last day of the inspection that originally identified
the cited deficiencies.
(e) Persistence of deficiencies. If at the end of the period covered
by the plan of correction, the laboratory still has deficiencies, the
rules of Secs. 493.1814 and 493.1816 apply.
[[Page 992]]
Sec. 493.1826 Suspension of part of Medicare payments.
(a) Application. (1) CMS may impose this sanction if a laboratory--
(i) Is found to have condition level deficiencies with respect to
one or more specialties or subspecialties of tests; and
(ii) Agrees (in return for not having its Medicare approval
cancelled immediately) not to charge Medicare beneficiaries or their
private insurance carriers for the services for which Medicare payment
is suspended.
(2) CMS suspends Medicare payment for those specialities or
subspecialties of tests for which the laboratory is out of compliance
with Federal requirements.
(b) Procedures. Before imposing this sanction, CMS provides notice
of sanction and opportunity to respond in accordance with Sec. 493.1810.
(c) Duration and effect of sanction. This sanction continues until
the laboratory corrects the condition level deficiencies or CMS cancels
the laboratory's approval to receive Medicare payment for its services,
but in no event longer than 12 months.
(1) If the laboratory corrects all condition level deficiencies,
CMS resumes Medicare payment effective for all services furnished on or
after the date the deficiencies are corrected.
(2) [Reserved]
[57 FR 7237, Feb. 28, 1992; 57 FR 35761, Aug. 11, 1992]
Sec. 493.1828 Suspension of all Medicare payments.
(a) Application. (1) CMS may suspend payment for all Medicare-
approved laboratory services when the laboratory has condition level
deficiencies.
(2) CMS suspends payment for all Medicare covered laboratory
services when the following conditions are met:
(i) Either--
(A) The laboratory has not corrected its condition level
deficiencies included in the plan of correction within 3 months from the
last date of inspection; or
(B) The laboratory has been found to have the same condition level
deficiencies during three consecutive inspections; and
(ii) The laboratory has chosen (in return for not having its
Medicare approval immediately cancelled), to not charge Medicare
beneficiaries or their private insurance carriers for services for which
Medicare payment is suspended.
(3) CMS suspends payment for services furnished on and after the
effective date of sanction.
(b) Procedures. Before imposing this sanction, CMS provides notice
of sanction and opportunity to respond in accordance with Sec. 493.1810.
(c) Duration and effect of sanction. (1) Suspension of payment
continues until all condition level deficiencies are corrected, but
never beyond twelve months.
(2) If all the deficiencies are not corrected by the end of the 12
month period, CMS cancels the laboratory's approval to receive Medicare
payment for its services.
Sec. 493.1832 Directed plan of correction and directed portion of a
plan of correction.
(a) Application. CMS may impose a directed plan of correction as an
alternative sanction for any laboratory that has condition level
deficiencies. If CMS does not impose a directed plan of correction as
an alternative sanction for a laboratory that has condition level
deficiencies, it at least imposes a directed portion of a plan of
correction when it imposes any of the following alternative sanctions:
(1) State onsite monitoring.
(2) Civil money penalty.
(3) Suspension of all or part of Medicare payments.
(b) Procedures--(1) Directed plan of correction. When imposing this
sanction, CMS--
(i) Gives the laboratory prior notice of the sanction and
opportunity to respond in accordance with Sec. 493.1810;
(ii) Directs the laboratory to take specific corrective action
within specific time frames in order to achieve compliance; and
(iii) May direct the laboratory to submit the names of laboratory
clients for notification purposes, as specified in paragraph (b)(3) of
this section.
(2) Directed portion of a plan of correction. CMS may decide to
notify clients
[[Page 993]]
of a sanctioned laboratory, because of the seriousness of the
noncompliance (e.g., the existence of immediate jeopardy) or for other
reasons. When imposing this sanction, CMS takes the following steps--
(i) Directs the laboratory to submit to CMS, the State survey
agency, or other CMS agent, within 10 calendar days after the notice of
the alternative sanction, a list of names and addresses of all
physicians, providers, suppliers, and other clients who have used some
or all of the services of the laboratory since the last certification
inspection or within any other timeframe specified by CMS.
(ii) Within 30 calendar days of receipt of the information, may send
to each laboratory client, via the State survey agency, a notice
containing the name and address of the laboratory, the nature of the
laboratory's noncompliance, and the kind and effective date of the
alternative sanction.
(iii) Sends to each laboratory client, via the State survey agency,
notice of the recission of an adverse action within 30 days of the
rescission.
(3) Notice of imposition of a principal sanction following the
imposition of an alternative sanction. If CMS imposes a principal
sanction following the imposition of an alternative sanction, and for
which CMS has already obtained a list of laboratory clients, CMS may
use that list to notify the clients of the imposition of the principal
sanction.
(c) Duration of a directed plan of correction. If CMS imposes a
directed plan of correction, and on revisit it is found that the
laboratory has not corrected the deficiencies within 12 months from the
last day of inspection, the following rules apply:
(1) CMS cancels the laboratory's approval for Medicare payment of
its services, and notifies the laboratory of CMS's intent to suspend,
limit, or revoke the laboratory's CLIA certificate.
(2) The directed plan of correction continues in effect until the
day suspension, limitation, or revocation of the laboratory's CLIA
certificate.
Sec. 493.1834 Civil money penalty.
(a) Statutory basis. Sections 1846 of the Act and 353(h)(2)(B) of
the PHS Act authorize the Secretary to impose civil money penalties on
laboratories. Section 1846(b)(3) of the Act specifically provides that
incrementally more severe fines may be imposed for repeated or
uncorrected deficiencies.
(b) Scope. This section sets forth the procedures that CMS follows
to impose a civil money penalty in lieu of, or in addition to,
suspending, limiting, or revoking the certificate of compliance,
registration certificate, certificate of accreditation, or certificate
for PPM procedures of a laboratory that is found to have condition level
deficiencies.
(c) Basis for imposing a civil money penalty. CMS may impose a
civil money penalty against any laboratory determined to have condition
level deficiencies regardless of whether those deficiencies pose
immediate jeopardy.
(d) Amount of penalty--(1) Factors considered. In determining the
amount of the penalty, CMS takes into account the following factors:
(i) The nature, scope, severity, and duration of the noncompliance.
(ii) Whether the same condition level deficiencies have been
identified during three consecutive inspections.
(iii) The laboratory's overall compliance history including but not
limited to any period of noncompliance that occurred between
certifications of compliance.
(iv) The laboratory's intent or reason for noncompliance.
(v) The accuracy and extent of laboratory records and their
availability to CMS, the State survey agency, or other CMS agent.
(2) Range of penalty amount.
(i) For a condition level deficiency that poses immediate jeopardy,
the range is $3,050-$10,000 per day of noncompliance or per violation.
(ii) For a condition level deficiency that does not pose immediate
jeopardy, the range is $50-$3,000 per day of noncompliance or per
violation.
(3) Decreased penalty amounts. If the immediate jeopardy is removed,
but the deficiency continues, CMS shifts the penalty amount to the
lower range.
(4) Increased penalty amounts. CMS may, before the hearing, propose
to increase the penalty amount for a laboratory that has deficiencies
which, after imposition of a lower level penalty
[[Page 994]]
amount, become sufficiently serious to pose immediate jeopardy.
(e) Procedures for imposition of civil money penalty--(1) Notice of
intent. (i) CMS sends the laboratory written notice, of CMS's intent
to impose a civil money penalty.
(ii) The notice includes the following information:
(A) The statutory basis for the penalty.
(B) The proposed daily or per violation amount of the penalty.
(C) The factors (as described in paragraph (d)(1) of this section)
that CMS considered.
(D) The opportunity for responding to the notice in accordance with
Sec. 493.1810(c).
(E) A specific statement regarding the laboratory's appeal rights.
(2) Appeal rights. (i) The laboratory has 60 days from the date of
receipt of the notice of intent to impose a civil money penalty to
request a hearing in accordance with Sec. 493.1844(g).
(ii) If the laboratory requests a hearing, all other pertinent
provisions of Sec. 493.1844 apply.
(iii) If the laboratory does not request a hearing, CMS may reduce
the proposed penalty amount by 35 percent.
(f) Accrual and duration of penalty--(1) Accrual of penalty. The
civil money penalty begins accruing as follows:
(i) 5 days after notice of intent if there is immediate jeopardy.
(ii) 15 days after notice of intent if there is not immediate
jeopardy.
(2) Duration of penalty. The civil money penalty continues to accrue
until the earliest of the following occurs:
(i) The laboratory's compliance with condition level requirements is
verified on the basis of the evidence presented by the laboratory in its
credible allegation of compliance or at the time or revisit.
(ii) Based on credible evidence presented by the laboratory at the
time of revisit, CMS determines that compliance was achieved before the
revisit. (In this situation, the money penalty stops accruing as of the
date of compliance.)
(iii) CMS suspends, limits, or revokes the laboratory's certificate
of compliance, registration certificate, certificate of accreditation,
or certificate for PPM procedures.
(g) Computation and notice of total penalty amount--(1) Computation.
CMS computes the total penalty amount after the laboratory's compliance
is verified or CMS suspends, limits, or revokes the laboratory's CLIA
certificate but in no event before--
(i) The 60 day period for requesting a hearing has expired without a
request or the laboratory has explicitly waived its right to a hearing;
or
(ii) Following a hearing requested by the laboratory, the ALJ issues
a decision that upholds imposition of the penalty.
(2) Notice of penalty amount and due date of penalty. The notice
includes the following information:
(i) Daily or per violation penalty amount.
(ii) Number of days or violations for which the penalty is imposed.
(iii) Total penalty amount.
(iv) Due date for payment of the penalty.
(h) Due date for payment of penalty. (1) Payment of a civil money
penalty is due 15 days from the date of the notice specified in
paragraph (g)(2) of this section.
(2) CMS may approve a plan for a laboratory to pay a civil money
penalty, plus interest, over a period of up to one year from the
original due date.
(i) Collection and settlement--(1) Collection of penalty amounts.
(i) The determined penalty amount may be deducted from any sums then or
later owing by the United States to the laboratory subject to the
penalty.
(ii) Interest accrues on the unpaid balance of the penalty,
beginning on the due date. Interest is computed at the rate specified in
Sec. 405.378(d) of this chapter.
(2) Settlement. CMS has authority to settle any case at any time
before the ALJ issues a hearing decision.
[57 FR 7237, Feb. 28, 1992, as amended at 60 FR 20051, Apr. 24, 1995; 61
FR 63749, Dec. 2, 1996]
Sec. 493.1836 State onsite monitoring.
(a) Application. (1) CMS may require continuous or intermittent
monitoring of a plan of correction by the State
[[Page 995]]
survey agency to ensure that the laboratory makes the improvements
necessary to bring it into compliance with the condition level
requirements. (The State monitor does not have management authority,
that is, cannot hire or fire staff, obligate funds, or otherwise dictate
how the laboratory operates. The monitor's responsibility is to oversee
whether corrections are made.)
(2) The laboratory must pay the costs of onsite monitoring by the
State survey agency.
(i) The costs are computed by multiplying the number of hours of
onsite monitoring in the laboratory by the hourly rate negotiated by
CMS and the State.
(ii) The hourly rate includes salary, fringe benefits, travel, and
other direct and indirect costs approved by CMS.
(b) Procedures. Before imposing this sanction, CMS provides notice
of sanction and opportunity to respond in accordance with Sec. 493.1810.
(c) Duration of sanction. (1) If CMS imposes onsite monitoring, the
sanction continues until CMS determines that the laboratory has the
capability to ensure compliance with all condition level requirements.
(2) If the laboratory does not correct all deficiencies within 12
months, and a revisit indicates that deficiencies remain, CMS cancels
the laboratory's approval for Medicare payment for its services and
notifies the laboratory of its intent to suspend, limit, or revoke the
laboratory's certificate of compliance, registration certificate,
certificate of accreditation, or certificate for PPM procedures.
(3) If the laboratory still does not correct its deficiencies, the
Medicare sanction continues until the suspension, limitation, or
revocation of the laboratory's certificate of compliance, registration
certificate, certificate of accreditation, or certificate for PPM
procedures is effective.
[57 FR 7237, Feb. 28, 1992, as amended at 60 FR 20051, Apr. 24, 1995]
Sec. 493.1838 Training and technical assistance for unsuccessful
participation in proficiency testing.
If a laboratory's participation in proficiency testing is
unsuccessful, CMS may require the laboratory to undertake training of
its personnel, or to obtain necessary technical assistance, or both, in
order to meet the requirements of the proficiency testing program. This
requirement is separate from the principal and alternative sanctions set
forth in Secs. 493.1806 and 493.1807.
Sec. 493.1840 Suspension, limitation, or revocation of any type of CLIA
certificate.
(a) Adverse action based on actions of the laboratory's owner,
operator or employees. CMS may initiate adverse action to suspend,
limit or revoke any CLIA certificate if CMS finds that a laboratory's
owner or operator or one of its employees has--
(1) Been guilty of misrepresentation in obtaining a CLIA
certificate;
(2) Performed, or represented the laboratory as entitled to perform,
a laboratory examination or other procedure that is not within a
category of laboratory examinations or other procedures authorized by
its CLIA certificate;
(3) Failed to comply with the certificate requirements and
performance standards;
(4) Failed to comply with reasonable requests by CMS for any
information or work on materials that CMS concludes is necessary to
determine the laboratory's continued eligibility for its CLIA
certificate or continued compliance with performance standards set by
CMS;
(5) Refused a reasonable request by CMS or its agent for permission
to inspect the laboratory and its operation and pertinent records during
the hours that the laboratory is in operation;
(6) Violated or aided and abetted in the violation of any provisions
of CLIA and its implementing regulations;
(7) Failed to comply with an alternative sanction imposed under this
subpart; or
(8) Within the preceding two-year period, owned or operated a
laboratory that had its CLIA certificate revoked. (This provision
applies only to the owner or operator, not to all of the laboratory's
employees.)
[[Page 996]]
(b) Adverse action based on improper referrals in proficiency
testing. If CMS determines that a laboratory has intentionally referred
its proficiency testing samples to another laboratory for analysis, CMS
revokes the laboratory's CLIA certificate for at least one year, and may
also impose a civil money penalty.
(c) Adverse action based on exclusion from Medicare. If the OIG
excludes a laboratory from participation in Medicare, CMS suspends the
laboratory's CLIA certificate for the period during which the laboratory
is excluded.
(d) Procedures for suspension or limitation--(1) Basic rule. Except
as provided in paragraph (d)(2) of this section, CMS does not suspend
or limit a CLIA certificate until after an ALJ hearing decision (as
provided in Sec. 493.1844) that upholds suspension or limitation.
(2) Exceptions. CMS may suspend or limit a CLIA certificate before
the ALJ hearing in any of the following circumstances:
(i) The laboratory's deficiencies pose immediate jeopardy.
(ii) The laboratory has refused a reasonable request for information
or work on materials.
(iii) The laboratory has refused permission for CMS or a CMS agent
to inspect the laboratory or its operation.
(e) Procedures for revocation. (1) CMS does not revoke any type of
CLIA certificate until after an ALJ hearing that upholds revocation.
(2) CMS may revoke a CLIA certificate after the hearing decision
even if it had not previously suspended or limited that certificate.
(f) Notice to the OIG. CMS notifies the OIG of any violations under
paragraphs (a)(1), (a)(2), (a)(6), and (b) of this section within 30
days of the determination of the violation.
Sec. 493.1842 Cancellation of Medicare approval.
(a) Basis for cancellation. (1) CMS always cancels a laboratory's
approval to receive Medicare payment for its services if CMS suspends
or revokes the laboratory's CLIA certificate.
(2) CMS may cancel the laboratory's approval under any of the
following circumstances:
(i) The laboratory is out of compliance with a condition level
requirement.
(ii) The laboratory fails to submit a plan of correction
satisfactory to CMS.
(iii) The laboratory fails to correct all its deficiencies within
the time frames specified in the plan of correction.
(b) Notice and opportunity to respond. Before canceling a
laboratory's approval to receive Medicare payment for its services, CMS
gives the laboratory--
(1) Written notice of the rationale for, effective date, and effect
of, cancellation;
(2) Opportunity to submit written evidence or other information
against cancellation of the laboratory's approval.
This sanction may be imposed before the hearing that may be
requested by a laboratory, in accordance with the appeals procedures set
forth in Sec. 493.1844.
(c) Effect of cancellation. Cancellation of Medicare approval
terminates any Medicare payment sanctions regardless of the time frames
originally specified.
Sec. 493.1844 Appeals procedures.
(a) General rules. (1) The provisions of this section apply to all
laboratories and prospective laboratories that are dissatisfied with any
initial determination under paragraph (b) of this section.
(2) Hearings are conducted in accordance with procedures set forth
in subpart D of part 498 of this chapter, except that the authority to
conduct hearings and issue decisions may be exercised by ALJs assigned
to, or detailed to, the Departmental Appeals Board.
(3) Any party dissatisfied with a hearing decision is entitled to
request review of the decision as specified in subpart E of part 498 of
this chapter, except that the authority to review the decision may be
exercised by the Departmental Appeals Board.
(4) When more than one of the actions specified in paragraph (b) of
this section are carried out concurrently, the laboratory has a right to
only one hearing on all matters at issue.
[[Page 997]]
(b) Actions that are initial determinations. The following actions
are initial determinations and therefore are subject to appeal in
accordance with this section:
(1) The suspension, limitation, or revocation of the laboratory's
CLIA certificate by CMS because of noncompliance with CLIA
requirements.
(2) The denial of a CLIA certificate.
(3) The imposition of alternative sanctions under this subpart (but
not the determination as to which alternative sanction or sanctions to
impose).
(4) The denial or cancellation of the laboratory's approval to
receive Medicare payment for its services.
(c) Actions that are not initial determinations. Actions that are
not listed in paragraph (b) of this section are not initial
determinations and therefore are not subject to appeal under this
section. They include, but are not necessarily limited to, the
following:
(1) The finding that a laboratory accredited by a CMS-approved
accreditation organization is no longer deemed to meet the conditions
set forth in subparts H, J, K, M, and Q of this part. However, the
suspension, limitation or revocation of a certificate of accreditation
is an initial determination and is appealable.
(2) The finding that a laboratory determined to be in compliance
with condition-level requirements but has deficiencies that are not at
the condition level.
(3) The determination not to reinstate a suspended CLIA certificate
because the reason for the suspension has not been removed or there is
insufficient assurance that the reason will not recur.
(4) The determination as to which alternative sanction or sanctions
to impose, including the amount of a civil money penalty to impose per
day or per violation.
(5) The denial of approval for Medicare payment for the services of
a laboratory that does not have in effect a valid CLIA certificate.
(6) The determination that a laboratory's deficiencies pose
immediate jeopardy.
(7) The amount of the civil money penalty assessed per day or for
each violation of Federal requirements.
(d) Effect of pending appeals--(1) Alternative sanctions. The
effective date of an alternative sanction (other than a civil money
penalty) is not delayed because the laboratory has appealed and the
hearing or the hearing decision is pending.
(2) Suspension, limitation, or revocation of a laboratory's CLIA
certificate--(i) General rule. Except as provided in paragraph
(d)(2)(ii) of this section, suspension, limitation, or revocation of a
CLIA certificate is not effective until after a hearing decision by an
ALJ is issued.
(ii) Exceptions. (A) If CMS determines that conditions at a
laboratory pose immediate jeopardy, the effective date of the suspension
or limitation of a CLIA certificate is not delayed because the
laboratory has appealed and the hearing or the hearing decision is
pending.
(B) CMS may suspend or limit a laboratory's CLIA certificate before
an ALJ hearing or hearing decision if the laboratory has refused a
reasonable request for information (including but not limited to billing
information), or for work on materials, or has refused permission for
CMS or a CMS agent to inspect the laboratory or its operation.
(3) Cancellation of Medicare approval. The effective date of the
cancellation of a laboratory's approval to receive Medicare payment for
its services is not delayed because the laboratory has appealed and the
hearing or hearing decision is pending.
(4) Effect of ALJ decision. (i) An ALJ decision is final unless, as
provided in paragraph (a)(3) of this section, one of the parties
requests review by the Departmental Appeals Board within 60 days, and
the Board reviews the case and issues a revised decision.
(ii) If an ALJ decision upholds a suspension imposed because of
immediate jeopardy, that suspension becomes a revocation.
(e) Appeal rights for prospective laboratories--(1) Reconsideration.
Any prospective laboratory dissatisfied with a denial of a CLIA
certificate, or of approval for Medicare payment for its
[[Page 998]]
services, may initiate the appeals process by requesting reconsideration
in accordance with Secs. 498.22 through 498.25 of this chapter.
(2) Notice of reopening. If CMS reopens an initial or reconsidered
determination, CMS gives the prospective laboratory notice of the
revised determination in accordance with Sec. 498.32 of this chapter.
(3) ALJ hearing. Any prospective laboratory dissatisfied with a
reconsidered determination under paragraph (e)(1) of this section or a
revised reconsidered determination under Sec. 498.30 of this chapter is
entitled to a hearing before an ALJ, as specified in paragraph (a)(2) of
this section.
(4) Review of ALJ hearing decisions. Any prospective laboratory that
is dissatisfied with an ALJ's hearing decision or dismissal of a request
for hearing may file a written request for review by the Departmental
Appeals Board as provided in paragraph (a)(3) of this section.
(f) Appeal rights of laboratories--(1) ALJ hearing. Any laboratory
dissatisfied with the suspension, limitation, or revocation of its CLIA
certificate, with the imposition of an alternative sanction under this
subpart, or with cancellation of the approval to receive Medicare
payment for its services, is entitled to a hearing before an ALJ as
specified in paragraph (a)(2) of this section and has 60 days from the
notice of sanction to request a hearing.
(2) Review of ALJ hearing decisions. Any laboratory that is
dissatisfied with an ALJ's hearing decision or dismissal of a request
for hearing may file a written request for review by the Departmental
Appeals Board, as provided in paragraph (a)(3) of this section.
(3) Judicial review. Any laboratory dissatisfied with the decision
to impose a civil money penalty or to suspend, limit, or revoke its CLIA
certificate may, within 60 days after the decision becomes final, file
with the U.S. Court of Appeals of the circuit in which the laboratory
has its principal place of business, a petition for judicial review.
(g) Notice of adverse action. (1) If CMS suspends, limits, or
revokes a laboratory's CLIA certificate or cancels the approval to
receive Medicare payment for its services, CMS gives notice to the
laboratory, and may give notice to physicians, providers, suppliers, and
other laboratory clients, according to the procedures set forth at
Sec. 493.1832. In addition, CMS notifies the general public each time
one of these principal sanctions is imposed.
(2) The notice to the laboratory--
(i) Sets forth the reasons for the adverse action, the effective
date and effect of that action, and the appeal rights if any; and
(ii) When the certificate is limited, specifies the specialties or
subspecialties of tests that the laboratory is no longer authorized to
perform, and that are no longer covered under Medicare.
(3) The notice to other entities includes the same information
except the information about the laboratory's appeal rights.
(h) Effective date of adverse action. (1) When the laboratory's
deficiencies pose immediate jeopardy, the effective date of the adverse
action is at least 5 days after the date of the notice.
(2) When CMS determines that the laboratory's deficiencies do not
pose immediate jeopardy, the effective date of the adverse action is at
least 15 days after the date of the notice.
[57 FR 7237, Feb. 28, 1992; 57 FR 35761, Aug. 11, 1992]
Sec. 493.1846 Civil action.
If CMS has reason to believe that continuation of the activities of
any laboratory, including a State-exempt laboratory, would constitute a
significant hazard to the public health, CMS may bring suit in a U.S.
District Court to enjoin continuation of the specific activity that is
causing the hazard or to enjoin the continued operation of the
laboratory if CMS deems it necessary. Upon proper showing, the court
shall issue a temporary injunction or restraining order without bond
against continuation of the activity.
Sec. 493.1850 Laboratory registry.
(a) Once a year CMS makes available to physicians and to the
general public specific information (including information provided to
CMS by the OIG) that is useful in evaluating the performance of
laboratories, including the following:
[[Page 999]]
(1) A list of laboratories that have been convicted, under Federal
or State laws relating to fraud and abuse, false billing, or kickbacks.
(2) A list of laboratories that have had their CLIA certificates
suspended, limited, or revoked, and the reason for the adverse actions.
(3) A list of persons who have been convicted of violating CLIA
requirements, as specified in section 353(1) of the PHS Act, together
with the circumstances of each case and the penalties imposed.
(4) A list of laboratories on which alternative sanctions have been
imposed, showing--
(i) The effective date of the sanctions;
(ii) The reasons for imposing them;
(iii) Any corrective action taken by the laboratory; and
(iv) If the laboratory has achieved compliance, the verified date of
compliance.
(5) A list of laboratories whose accreditation has been withdrawn or
revoked and the reasons for the withdrawal or revocation.
(6) All appeals and hearing decisions.
(7) A list of laboratories against which CMS has brought suit under
Sec. 493.1846 and the reasons for those actions.
(8) A list of laboratories that have been excluded from
participation in Medicare or Medicaid and the reasons for the exclusion.
(b) The laboratory registry is compiled for the calendar year
preceding the date the information is made available and includes
appropriate explanatory information to aid in the interpretation of the
data. It also contains corrections of any erroneous statements or
information that appeared in the previous registry.
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