CMS Proposes Additional Changes to Regulations Impacting CLIA Certified Laboratories, ASCs, Long-Term Care Facilities and ICF/IIDs

This article is Part I in a series discussing the proposed rule to revise certain Conditions of Participation, Conditions for Coverage and regulations under the Clinical Laboratory Improvement Amendments of 1998 published on February 7, 2013. This first installment provides an overview of the changes applicable to CLIA certified laboratories and several other changes applicable to other types of health care providers. Part II will address changes applicable to hospital providers, and Part III will address changes impacting rural health care providers, including critical access hospitals, rural health clinics and federally qualified health centers.

Executive Summary

On February 7, 2013, the Centers for Medicare and Medicaid Services (“CMS”) released a proposed rule (“Proposed Rule”) that would revise the Conditions of Participation (“CoPs”) and Conditions for Coverage (“CfCs”) for a variety of health care providers and suppliers, as well as certain regulations under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”). The Proposed Rule is the latest in a series of rulemaking initiatives implementing the President’s Executive Order 13563 (“EO 13563”) calling for the removal or revision of obsolete, duplicative or unnecessary regulatory provisions in order to reduce burdens for these providers. Two other final rules implementing EO 13563 were published on May 16, 2012 and made effective on July 16, 2012. These are summarized here and here. A copy of the Proposed Rule can be found here.

The deadline for submitting comments to the Proposed Rule is 5 P.M. on April 8, 2013. Commenters should refer to file code CMS-3267-P and should submit comments in accordance with the instructions described in the Proposed Rule.

The Proposed Revisions – CLIA

The regulations governing CLIA certification require that laboratories conducting moderate or high-complexity testing enroll in CMS-approved Proficiency Testing (“PT”) programs to measure laboratory performance. Laboratories are prohibited from treating PT samples differently than their patient specimens; however, pursuant to the regulations, PT samples may not be sent to any other laboratory for testing, even if it is the laboratory’s standard operating procedure to send patient specimens for reflex or confirmatory testing based on an abnormality in the initial result or the need to substantiate the result. This has created confusion for some laboratories because, effectively, the regulations create directives that, under certain circumstances, conflict. Although laboratories have been notified that intentionally referring PT samples to other laboratories is prohibited and may result in loss of CLIA certification, CMS notes that there continue to be instances where laboratories refer their PT samples for reflex or confirmatory testing to an outside lab based on standard operating procedure, resulting in revocation of the laboratory’s CLIA certification, even when the referral was not “intentionally” noncompliant. Therefore, CMS proposes to add a statement to §493.801(b) to explicitly state that the requirement to treat PT samples “in the same manner as patient specimens” does not mean that PT samples can be referred to another laboratory for testing, even if that is the standard operating procedure for patient specimens.

CMS also proposes to carve out a narrow exception to the interpretation of “intentional” referral. “Intentional” has been interpreted consistently by CMS to mean general intent or intention to act, as opposed to having improper intent. Under the exception, if CMS determines that a PT sample was referred to another laboratory for reflex or confirmatory testing that, had the specimen been a patient specimen, would have been in full conformance with standard operating procedure, and the referral is not a repeat referral, the referral would not be considered “intentional.” Instead, the referral would be considered “improper” and subject to alternative sanctions under 42 C.F.R. §493.1804(c), which may include civil monetary penalties, a directed plan of correction, temporary suspension of Medicare or Medicaid payments or other specified sanctions, not amounting to decertification. However, CMS is clear that this exception is meant to be a “one-time exception” and that subsequent referrals will be treated as “intentional.”

The Proposed Revisions – Ambulatory Surgery Centers

In the Proposed Rule, CMS recommends changes to limit requirements for ambulatory surgery centers (“ASCs”) related to the provision of radiology services. While only permitted to provide a specific range of approved procedures and limited radiology services as part of the procedures, ASCs must have procedures in place for obtaining radiology services from Medicare-approved facilities. In addition, ASCs are subject to the hospital CoP requirements for their radiology services. In the Proposed Rule, CMS acknowledges that some of these requirements, including mandatory radiologist supervision of services, are difficult for the ASCs to meet and may be overly aggressive given the limited scope of radiology services ASCs provide.

Therefore, CMS proposes to remove the requirement that ASCs have procedures for obtaining radiological services from a Medicare-approved facility and replace it with a requirement that ASCs only provide radiology services that are integral to the procedures they offer. In addition, rather than requiring ASCs to meet all hospital CoPs for radiology services, CMS proposes that ASCs only be required to comply with the CoPs at §§482.26(b), (c)(2) and (d)(2) related to personnel and patient safety, use of the equipment by qualified personnel and record requirements. Finally, CMS proposes that MD/DOs qualified by education and experience in accordance with state law and ASC policy, other than radiologists, also be allowed to supervise the provision of radiologic services.

The Proposed Revisions – Long-Term Care Facilities

On August 13, 2008, CMS published a final rule requiring that any buildings housing long-term care facilities have automatic sprinkler systems installed throughout by August 13, 2013. In the Proposed Rule, CMS proposes a new provision to allow long-term care facilities to apply for a temporary extension, not to exceed two years, if all of the following conditions apply:

The facility is in the process of replacing its current building or undergoing major modifications in all unsprinklered living areas that require movement of a room, corridor, partition or structural walls or supports to improve the living conditions of residents, in addition to the installation of the sprinkler system;
The facility demonstrates that it has made the necessary financial commitments to complete the replacement/modification;
The facility has submitted construction/modification plans to the state and local authorities for approval prior to applying for the extension; and
The facility agrees to complete interim steps to improve fire safety while the construction is being completed, as determined by CMS.

CMS would determine the length of the extension based on the need and particular circumstances evidenced by the information submitted by the facility. In addition, CMS proposes an additional provision that would allow for a single extension renewal, not to exceed one additional year, if CMS finds there are circumstances beyond the facility’s control that would prevent the facility from being compliant by the end of the first waiver period.

The Proposed Revisions – Intermediate Care Facilities for Individuals Who Are Intellectually Disabled

A CMS-promulgated final rule made effective on July 16, 2012 eliminated the requirement for time-limited agreements (i.e., Medicaid Agreements limited to 12 months) for Intermediate Care Facilities for Individuals who are Intellectually Disabled (“ICF/IIDs”) to make it consistent with nursing facility requirements that permit provider agreements to remain in effect until the facilities no longer comply with the relevant conditions of participation. The Proposed Rule seeks to eliminate regulations that are inconsistent with this change and specifically proposes deleting the references to time-limited certification in 42 C.F.R. §442.105 and 42 C.F.R. § 442.110 to ensure consistency and standardization of the survey process of ICF/IIDs with nursing facilities and providers subject to open-ended certification periods.

Practical Takeaways

The Proposed Rule has the potential to impact a number of different types of providers and each to varying degrees. Each affected provider should carefully consider the details of CMS’s proposals in light of its specific operations and may want to evaluate current practices given the direction of the Proposed Rule. For example, we recommend that:

CLIA certified laboratories review their policies and procedures on PT samples and reeducate staff regarding the outside lab referral prohibition for PT samples, even in cases where referral would normally be appropriate for patient specimens. Updating laboratory policy and procedure manuals regarding PT samples may also be appropriate.
ASCs, long-term care facilities and ICF/IIDs consider how the provisions of the Proposed Rule would impact the services they provide or their ability to comply with existing requirements.
All providers potentially affected by the Proposed Rule consider whether they would benefit from submission of comments.

If you have any questions, would like additional information about this topic or need help preparing and submitting comments, please contact: