Medicare Program; Clinical Laboratory Improvement Amendments of 1988 (CLIA) Fees
Notice with comment period.
RIN Number: "RIN 0938-AT56"
Citation: "83 FR 67723"
Document Number: "CMS-3356-NC"
Page Number: "67723"
"Notices"
Agency: "
SUMMARY: This notice with comment period announces the increase of certain fees established under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). The Public Health Service Act (PHSA) requires the Secretary to impose certificate fees to cover the general costs of administering the CLIA program, as well as additional fees, including Inspection fees for non-accredited laboratories. We are increasing these fees to cover the cost of administering the CLIA program as required by statute. We seek public comment regarding this increase, which we believe is necessary to meet the statutory requirements.
DATES:
Comments: To be assured consideration, comments must be received at one of the addresses provided below, no later than
ADDRESSES: In commenting, refer to file code CMS-3356-NC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):
1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the "Submit a comment" instructions.
2. By regular mail. You may mail written comments to the following address ONLY:
3. By express or overnight mail. You may send written comments to the following address ONLY:
FOR FURTHER INFORMATION CONTACT: For policy related questions, please contact
For the Budget and Financial Impact, please contact
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to view public comments.
I. Background
A. CLIA Fees On
The regulations provide for a methodology for determining fee amounts (
B. CLIA Budget Process
With the exception of the "CLIA Program; Fee Schedule Revision" notice published in the
We routinely monitor incoming CLIA Fee collections and compare them on a monthly basis with the corresponding amounts of obligations and expenditures for all costs required to support the operation of the CLIA program, including state survey agency (SA) awards, CMS administrative costs, other federal agency costs, and contract support. Over the past several years, we have observed that the total amount of incurred obligations in a given fiscal year has outpaced the corresponding amount of CLIA Fees collected over the same timeframe, leading to decreases in the level of budgetary resources available to support program operations. Factors contributing to the increased obligations incurred by the CLIA program include an increase in the amount of time it takes to perform surveys in laboratories that are using more complex testing platforms and laboratory developed tests, as well as the overall inflation of the economy. Based on our observations, we performed a retrospective comparative analysis of federal fiscal year (FY)-end CLIA Fee collections and incurred obligations over the prior six FYs (FY 2012 through FY 2017). As shown in Table 1, the amount of incurred obligations in each fiscal year has exceeded the corresponding amount of collected CLIA Fees.
Table 1-CMS Comparative Analysis FYs 2012 Through 2017 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Certificate Fees Collected$ 36,343,753 $ 42,169,869 $ 41,173,724 $ 41,185,755 $ 42,369,451 $ 41,544,575 Compliance Fees Collected 13,213,680 13,040,589 12,823,731 12,466,102 13,468,981 12,527,235 Sequester fn1 0 (2,760,521) (3,887,817) (3,916,586) (3,795,483) (3,730,969) Total, CLIA Fees 49,557,433 52,449,907 50,109,639 49,735,271 52,042,948 50,340,842 Collected fn2 Total, CLIA Obligations 54,539,917 54,169,837 57,360,315 56,404,651 56,778,918 59,680,186 fn2 fn3 Total, CLIA (4,982,484) (1,719,930) (7,250,677) (6,669,380) (4,735,970) (9,339,344) (Shortfall)/Surplus fn1 Sequester is a reduction in budget authority authorized by Public Law 112-25, the Budget Control Act of 2011. fn2 Collections and obligations data taken from FY-endHealthcare Integrated General Ledger Accounting System (HIGLAS) reporting. Exempt State Fees are categorized as Certificate Fees, because the state surveys their own laboratories and State Fees charged go to the state. fn3 CLIA obligations include FY-end obligations for CMS administration (payroll, travel, training, supplies, contracts), other federal agencies (CDC , FDA,Treasury , DHHS/OGC), and SA awards (surveys, PT, etc.).
Over the past few years, we have been diligent in controlling administrative costs, including use of carryover funds, in an attempt to avoid a fee increase. For example, we have controlled costs by enhancing monitoring and control over funds awarded to SAs for surveys, reducing federal travel and training expenses, as well as imposing strict oversight of incurred contract costs. Despite these efforts, a portion of CLIA's administrative obligations and expenditures remains fixed and cannot be further reduced without significant disruption in program operations (for example, limiting planned regulatory and enforcement actions). Taking into account annual inflation in the overall economy, we anticipate that program costs and concurrent obligations will continue to increase, further contributing to a projected shortfall in collections. Moreover, our ability to continue using carryover funds is limited since we have used this carryover to supplement shortfalls in new collections over a number of years.
We project that without a fee increase, the CLIA program would cease to be self-sustaining at some point in FY 2020, as shown in Table 2.
Table 2-CMS Projections FYs 2018 Through 2020 FY 2018 FY 2019 FY 2020 Prior Year Carryover (SOY) fn1$ 43,494,763 $ 29,469,649 $ 14,464,636 Projected CLIA Fee Collections 51,900,306 51,900,306 51,900,306 Projected Sequester (6.6%, 6.2%) (3,425,420) (3,217,819) (3,217,819) Budgetary Resources 91,969,649 78,152,136 63,147,123 Projected Obligations 62,500,000 63,687,500 65,024,938 Projected Carryover (EOY) fn2 29,469,649 14,464,636 (1,877,815) fn1 Start of year balances. fn2 End of year balances.
Based on these projections, absent a fee increase, our ability to maintain effective program operations may be jeopardized, potentially comprising public health and safety. As a result, we need to increase currently assessed CLIA Fees to ensure effective program operations.
C. CLIA RFI Feedback
In
One commenter raised concerns related to increases to the CLIA Fees, linking them to the recent changes to the Clinical Laboratory Fee Schedule (CLFS) (see 81 FR 41036). While we appreciate this commenter's concerns, we note that changes to the CLFS are issued by Medicare and are separate and distinct from changes to CLIA Fees.
As a result of the feedback received from the 2018
II. CLIA Fees Increase
For the reasons discussed in section I. of this notice with comment period, we are increasing the following CLIA Fees: Certificate Fees (collected under
As shown in Table 1, we must close the
See Table in Original Document.
For Certificate Fees, the driver used in our calculations is one half of the projected laboratory population for FY 2018 (123,172 CLIA laboratories), broken out by state and laboratory schedule code. We used one half of the projected laboratory population to determine an average annual collection because all CLIA laboratories are billed on a biennial basis. For Compliance Fees, the driver used in our calculations is the projected number of surveys budgeted for FY 2018 (10,058 total surveys). For Additional Fees for accredited laboratory validation inspections, the driver used in our calculations is the projected number of validation surveys budgeted for FY2018 (about 407). Using this methodology, we project increased CLIA Fee collections at
We have projected that we need to increase the CLIA Fees described previously by at least 18.6 percent (
The total of fees collected by HHS must be sufficient to cover the general costs of administering the CLIA program, and as indicated in Table 4, upon publication of the final notice, we project that the 20 percent increase will be sufficient to fund the CLIA program into FY 2022.
Table 4-CMS Projections FYs 2018 Through 2021 FY 2018 FY 2019 FY 2020 FY 2021 Prior Year Carryover (SOY) fn1$ 43,494,763 $ 29,469,649 $ 20,855,892 $ 14,052,629 Projected CLIA Fee Collections 51,900,306 58,714,011 62,070,016 62,070,016 Projected Sequester (6.6%, 6.2%) (3,425,420) (3,640,269) (3,848,341) (3,848,341) Budgetary Resources 91,969,649 84,543,392 79,077,566 72,274,303 Projected Obligations 62,500,000 63,687,500 65,024,938 66,390,461 Projected Carryover (EOY) fn2 29,469,649 20,855,892 14,052,629 5,883,842 fn1 Start of year balances. fn2 End of year balances.
With this notice, we are increasing all currently assessed CLIA Fees by 20 percent to close the gap between current obligations and current collections, and to account for a small increase in costs for the current fiscal year. Fees for the issuance of registration certificates would not be increased as these increases would not have substantial impact.
The 20 percent increase would apply to the following CLIA fee types:
1. Certificate Fees--collected under
2. Compliance Fees collected under
As discussed in section I. of this notice with comment period, current Compliance Fees were established in 1992 based on estimates as to the average time a survey would take, the cost of the surveyor salary per hour, as well as the size of the laboratory. Based on FY 2017 available compliance fee collections, we estimate that current Compliance Fee collections cover approximately 55 percent of current and future compliance determination costs. Following the application of a uniform 20 percent increase to Compliance Fees across all schedules, in combination with the aforementioned increase to Certificate Fees, the new Compliance Fees will continue to satisfy
3. Additional Fees collected under
While we recognize that the 20 percent increase to CLIA Fees across all schedule codes can be perceived as a major increase for laboratories, we intend for this approach to be a one-time adjustment to address the projected shortfall to ensure the program can remain self-sustaining into FY 2022. We will continue to review our obligations and collections and may make future adjustments as needed to avoid shortfalls. We considered multiple options prior to this notice with comment period, including limiting the increase to varying percentages and timeframes across a single fee type, specifically Compliance Fees. For example, we considered the following options:
* Update the existing Compliance Fees by updating the hours for all classifications (schedules) of laboratories and the hourly rates for all states and territories.
* A one-time 70 percent increase in Compliance Fees alone to meet projected obligations, with a phased-in two 35 percent Compliance Fee increases over a two biennial survey cycles.
As discussed previously, in regard to the estimates established in 1992, we are proposing the one-time 20 percent increase across most CLIA Fees, including Certificate (excluding CoR fees) and Compliance Fees based on our comparison of FY 2017 obligations and collections (see Table 1). Analysis indicates that the difference between collections and obligations results primarily from inflationary increases incurred since Compliance Fees were set in 1992 and since Certificate Fees user fees were last increased in 1997. Furthermore, analysis shows that the relative proportions of the certification and compliance work to total program obligations has remained virtually consistent over time, at about 34 percent for compliance and 66 percent for certification. We believe the original methodology for calculating CLIA fees was reasonable at the time, with the exception of excluding adjustments for inflation, which has remained relatively constant. Therefore, we determined that a one-time 20 percent increase across most currently assessed fees is the most appropriate approach. The 20 percent increase also meets our policy objectives to keep any increase reasonably limited, given the elapsed time since the CLIA Fees were last updated.
III. Collection of Information Requirements
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the
IV. Response to Comments
Because of the large number of public comments we normally receive on
V. Regulatory Impact Statement
A. Statement of Need
As discussed in section I. of this notice with comment period, when CLIA was enacted, and its implementing regulations were finalized in 1992, CLIA Fees were established based on estimates as to the average time a survey would take; cost of the surveyor salary per hour; as well as the size of the laboratory (schedules A, B, etc.). As discussed in section III. of this notice with comment period, we are increasing certain CLIA Fees based on our analysis of the overall level of collections relative to the costs of maintaining the CLIA program, which project a shortfall to begin in calendar year 2020.
B. Overall Impact
We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866 defines a "significant regulatory action" as an action that is likely to result in a rule: (1) Having an annual effect on the economy of
This notice with comment period is not economically significant within the meaning of section 3(f)(1) of the Executive Order since the estimated cost alone is not likely to exceed the
The RFA requires agencies to analyze options for regulatory relief of small entities if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, we assume that the great majority of clinical laboratories are small entities, either by virtue of being nonprofit organizations or by meeting the
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. We do not expect this notice with comment period will have a significant impact on small rural hospitals. Laboratories in small rural hospitals are already subject to CLIA Fees. We are requesting public comments in this area to assist us in making this determination.
C. Anticipated Effects
This notice with comment period impacts approximately 251,010 CLIA certified laboratories.
Table 5-Current and New National Average of Compliance Fee Update Laboratory classification Current New (schedules) average average (c) (n) LVA$ 300 $ 360 A 994 1,192 B 1,325 1,591 C 1,657 1,988 D 1,947 2,336 E 2,237 2,684 F 2,527 3,032 G 2,817 3,380 H 3,107 3,728 I 3,397 4,076 J 3,673 4,408
Table 5 reflects the national average of compliance fees for each classification of laboratories (schedules) that requires inspection. Specifically, Table 5 represents the national average for each schedule for the current Compliance Fees (noted with a "c") as paid biennially by laboratories that hold a CoC and the national average for each schedule for the new Compliance Fees (noted with a "n") that will be paid biennially by laboratories that hold a CoC. As discussed section II. of this notice with comment period, Table 5 reflects a total increase of 20 percent across all schedules.
Table 6-Current and New National Average of Additional Fees for Accredited Laboratories Update Laboratory classification Current New (schedules) average average (c) (n) LVA$ 15 $ 18 A 50 60 B 60 80 C 83 99 D 97 117 E 112 134 F 126 152 G 141 169 H 155 186 I 170 204 J 184 220
Table 6 shows the national average of Additional Fees for each schedule of accredited laboratory. Specifically, Table 6 represents the national average fees for each schedule for the current Additional Fees (noted with a "c") as paid biennially by laboratories that hold a CoA and the national average for the new Additional Fees (noted with a "n") that will be paid biennially by laboratories that hold a CoA. As discussed in section II. of this notice with comment period, Table 6 reflects a total increase of 20 percent across all schedules.
Table 7-CLIA Biennial Certificate Fees Type of CLIA certificate Laboratory schedule Current fee New fee Certificate of Waiver (CoW) Not applicable$ 150.00 $ 180.00 PPM Not applicable 200.00 240.00 CoC and CoA LVA 150.00 180.00 CoC and CoA A 150.00 180.00 CoC and CoA B 150.00 180.00 CoC and CoA C 430.00 516.00 CoC and CoA D 440.00 528.00 CoC and CoA E 650.00 780.00 CoC and CoA F 1,100.00 1,320.00 CoC and CoA G 1,550.00 1,860.00 CoC and CoA H 2,040.00 2,448.00 CoC and CoA I 6,220.00 7,464.00 CoC and CoA J 7,940.00 9,528.00
Table 7 depicts the current and new Certificate Fees, which reflects the 20 percent increase across all schedules, with the exception of fees for the issuance of a CoR.
D. Regulatory Reform Analysis Under E.O. 13771
Executive Order 13771, titled Reducing Regulation and Controlling Regulatory Costs, was issued on
E. Conclusion
Although the effect of the changes will increase laboratory costs, implementation of these changes will be negligible in terms of workload for laboratories as these fee increases are operational and technical in nature and do not require additional time to be spent by laboratory employees.
We have determined that this notice with comment period would not have a significant economic impact on a substantial number of small entities or a significant impact in the operations of a substantial number of small rural hospitals and for these reasons, we are not preparing analyses for either the RFA or section 1102(b) of the Act.
In accordance with the provisions of Executive Order 12866, this notice with comment period was reviewed by the
Dated:
Administrator,
Dated:
Alex M. Azar II,
Secretary,
[FR Doc. 2018-28359 Filed 12-28-18;
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