05.1301 Conditions for coverage of services of independent laboratories; general.

a) Introduction. The Conditions for verage of Services of Independent Doratories and related policies set th herein, state the specific requirents that must be met by an independ; laboratory in order for its services qualify for reimbursement under the plementary medical insurance part of Health Insurance for the Aged prom. The services of a qualified indedent laboratory for which reimbursent may be made under the supplentary medical insurance program ate only to diagnostic tests performed a laboratory which is independent of hysician's office or a hospital which ets the conditions of participation in program. Diagnostic laboratory tests, purposes of section 1861 (s) (10) and ) of the Act and for purposes of this >part M, do not include diagnostic ay tests. (See Subpart R of this Part for definition of diagnostic laboray tests.)

b) Definition of independent labora7. An independent laboratory perning diagnostic tests is one which is ependent both of the attending or sulting physician's office and of a pital which meets the conditions of ticipation in the program. A labora7 which: (1) Is located in a hospital ch meets the conditions of participaà in the program or, if outside the pital, is operated by or under the suvision of the hospital or its organized lical staff and (2) serves the hosl's patients, is not an independent oratory. Services furnished by out-ofpital laboratories under the direcI of a physician, such as a patholo, are considered to be subject to the ditions where the physician holds self and the facilities of his office out other physicians as being available harily for the performance of diagic tests. A laboratory maintained by hysician for performing diagnostic s primarily for his own patients ld be exempt from the conditions, à though such laboratory does diagic tests on referral from other phyns. Diagnostic tests furnished by of-hospital physicians whose priy practice is directly attending pats and/or consultation, even though ducted partly through diagnostic prores, are considered physicians' servrather than clinical laboratory serv

ices. As such, the office in which these services are provided is exempt from the conditions. Consultation is a deliberation of two or more physicians with respect to the diagnosis or treatment in any particular case. Consultation, as distinguished from providing clinical laboratory services, includes history taking, examination of the patient and, in each case, transmitting to the attending physician an opinion concerning diagnosis and/or treatment. Section 1861 (s) of the Act, which includes the provision for the coverage in the medical insurance program of diagnostic tests performed in an independent laboratory, provides that, as a condition for coverage of such tests, an independent laboratory, in any State in which State or local law provides for licensing laboratories, be licensed pursuant to such law or be approved by the agency of the State or locality responsible for such licensure as meeting the standards established for licensing. As a further condition, the statute requires that the independent laboratory meet such standards as the Secretary finds necessary to assure the health and safety of individuals with respect to whom these tests are performed.

(c) State agency certification. The law makes provision for the designation of State health agencies, or other State agencies, to assist the Secretary in determining whether there is compliance with the conditions for coverage of services of independent laboratories. The designated State agencies will certify to the Secretary those laboratories which they find meet the conditions. Services provided in a laboratory that is determined by the Secretary to be in substantial compliance with the conditions relating to health and safety and which meet the statutory licensure requirement would be reimbursable under the medical insurance program.

(d) Certifications and determinations. Certifications and determinations as to whether an independent laboratory is in substantial compliance with the conditions will be made upon the filing of an application by the laboratory on a form prescribed by the Secretary. [33 F.R. 488, Jan. 13, 1968]

§ 405.1302 Conditions for coverage of services; general.

The services of an independent laboratory will be reimbursable under the program only if the laboratory meets the statutory requirement of section 1861

(s) (10) of the Act and there has been a determination by the Secretary of substantial compliance on the part of the laboratory with all the other conditions. These additional conditions (established in the interest of health and safety) are requirements which are essential to the maintenance of quality of care and the adequacy of the services and facilities which the laboratory provides. Variation in the type and size of laboratories and the nature and scope of services offered will be reflected in differences in the details of organization, staffing, and facilities. However, the test will be whether there is substantial compliance with each of the conditions.

§ 405.1303 Standards; general.

As a basis for a determination as to whether or not there is substantial compliance with the prescribed conditions in the case of any particular independent laboratory, a series of standards, almost all interpreted by explanatory factors, is listed under each condition. Reference to these standards will enable the State agency surveying a facility to document the activities of the laboratory, to establish the nature and extent of its deficiencies, if any, and to assess the facility's need for improvement in relation to the prescribed conditions. In substance, the application of the standards, together with the explanatory factors, will indicate the extent and degree to which an independent laboratory is complying with each condition.

§ 405.1304 State agencies.

(a) Under the provisions of title XVIII of the Social Security Act, State agencies, operating under agreements with the Secretary, will be used by the Secretary in determining whether independent laboratories meet the conditions. Pursuant to this agreement, State agencies will certify to the Secretary findings as to whether independent laboratories are in substantial compliance with the conditions. Such certifications will include findings as to whether each of the conditions is substantially met. The Secretary, on the basis of such certification from the State agency, will determine whether or not the level of facilities and services of the laboratory represent the required achievement of substantial compliance with the conditions and will transmit to the laboratory a written notice of the determination.

(b) Any payment for diagnostic tests of the type described in section 1861(s) (3) of the Act performed in a laboratory which is independent of a physician's office or a hospital, if made prior to a determination that the laboratory is in compliance with the conditions set forth in this subpart, is not to be considered as establishing the compliance of such laboratory with such conditions.

§ 405.1305 Principles for the evaluation of independent laboratories to determine whether they are in substantial compliance with the conditions. Independent laboratories will be considered in substantial compliance with the conditions upon acceptance by the Secretary of findings, adequately documented and certified to by the State agency, showing that:

(a) The laboratory meets the specific statutory requirement of section 1861 (s) (10) of the Act and is found to be operating in accordance with all the conditions with no significant deficiencies,

or

(b) The laboratory meets the specific statutory requirement of section 1861 (s) (10) of the Act but is found to have deficiencies with respect to one or more conditions, but

(1) It is making reasonable plans and efforts to correct the deficiencies, and

(2) Notwithstanding the deficiencies it is rendering adequate service without hazard to the health and safety of individuals being served, taking into account special procedures or precautionary measures which have been or are being instituted.

§ 405.1306

Time limitations on certification of substantial compliance.

(a) All initial certifications by the State agency to the effect that an independent laboratory is in substantial compliance with the conditions will be for a period of 1 year, beginning with July 1, 1966, or, if later, with the date on which the laboratory is first found to be in substantial compliance with the conditions. The Secretary's determination will remain in effect until such time as notice of revision or termination is given. State agencies may visit or resurvey laboratories where necessary to ascertain continued compliance or to accommodate to periodic or cyclical survey programs. A State may, at any time, rind and certify to the Secretary that a laboratory is no longer in compliance.

›) If a laboratory is certified by State agency and determined by the retary to be in substantial compliance er the provisions of § 405.1305(b), the wing information will be incorpod into the finding and into the notice he laboratory of the determination of rage of its services under the medical rance program:

> A statement of the deficiencies ch were found, and

› A description of progress which been made and further action which ing taken to remove the deficiencies,

› A scheduled time for a resurvey he laboratory to be conducted not than the ninth month (or earlier, nding on the nature of the dencies) of the period of certification. › After a previous period or part eof for which the laboratory was cer1 with a finding of significant defiies, there is a lack of progress rd a removal of deficiencies which State agency finds are adverse to the h and safety of individuals being d.

.R. 16137, Dec. 16, 1966, as amended at R. 489, Jan. 13, 1968; 33 F.R. 2384, 31, 1968]

3.1307 Certification of noncompli

ance.

e State agency will certify that a atory is not in compliance with the tions or, where a determination of liance has been made, that а atory is no longer in compliance e:

The laboratory is not in comce with the statutory requirement of n 1861(s) (10) of the Act; or

The laboratory has deficiencies of character as to seriously limit the ity of the laboratory to render adeservice or to place health and of individuals in jeopardy, and tate agency concludes after discuswith the laboratory that there is no prospect of such significant imment as to establish substantial iance, or

After a previous period or part of for which the laboratory was cerwith a finding of significant defies, there is a lack of progress d a removal of deficiencies which ate agency finds are adverse to the 1 and safety of individuals being

§ 405.1308 Criteria for determining substantial compliance.

Findings made by a State agency as to whether an independent laboratory is in substantial compliance with the conditions require a thorough evaluation of the laboratory. The State evaluation will take into consideration:

(a) The degree to which each standard, as well as the total set of standards relating to a condition, is met;

(b) When there is a deficiency, whether the deficiency creates a serious hazard to health and safety; and

(c) Whether the laboratory is making reasonable plans and efforts to correct the deficiency within a reasonable period.

§ 405.1309

Documentation of findings.

The findings of the State agency with respect to each of the conditions should be adequately documented. Where the State agency certifies to the Secretary that a laboratory is not in compliance with the conditions, such documentation should include a report of any discussions concerning the deficiencies, a report of the laboratory's responses with respect to such discussions, and the State agency's assessment of the prospects for such improvements as to enable the laboratory to achieve substantial compliance with the conditions.

§ 405.1310 Condition-compliance with State and local laws.

The laboratory is in conformity with all applicable State and local laws.

(a) Standard. Licensure. The laboratory, in any State in which State or applicable local law provides for the licensing of laboratories (1) is licensed pursuant to such law, or (2) is approved, by the agency of the State or locality responsible for licensing laboratories, as meeting the standards established for such licensing.

(b) Standard. Licensed staff. The director and the staff of the laboratory are licensed or registered in accordance with applicable laws.

(c) Standard. Fire and safety. The laboratory is in conformity with laws relating to fire and safety, and to other relevant matters.

ical examinations are performed on materials derived from the human body, to provide information for the diagnosis, prevention or treatment of a disease or assessment of a medical condition. § 405.1312 Condition-clinical laboratory; laboratory director.

The clinical laboratory is under the direction of a quanfied person.

(a) Standard. Administration. The laboratory has a director who administers the technical and scientific operation of the laboratory including the reporting of findings of laboratory tests. The factors explaining the standard are as follows:

(1) The director serves the laboratory full-time, or on a regular part-time basis. If he serves on a regular part-time basis. (i) he does not individually serve as director of more than three laboratories (hospital or independent) or, (ii) he provides an associate, qualified under the standard in paragraph (b) of this section to serve as assistant director in each laboratory. Such assistant director does not serve more than three laboratories.

(2) Commensurate with the laboratory workload, the director spends an adequate amount of time in the laboratory to direct and supervise the technical performance of the staff and is readily available for personal or telephone consultation.

(3) The director is responsible for the proper performance of all tests made in the laboratory.

(4) The director is responsible for the employment of qualified laboratory personnel and their in-service training.

(5) If the director is to be continuously absent for more than 1 month, arrangements are made for a qualified substitute director.

(b) Standard. Laboratory director— qualification. The laboratory director meets the requirements of subparagraphs (1), (2), (3), or (4), or (4) and (5) of this paragraph:

(1) He is a physician certified in anatomical and/or clinical pathology by the American Board of Pathology or the American Osteopathic Board of Pathology or possesses qualifications which are equivalent to those required for such certification (board eligible).

(2) He is a physician who (i) is certified by the American Board of Pathology or the American Osteopathic Board of Pathology in at least one of the laboratory specialties, or (ii) is certified by the

American Board of Microbiology, the American Board of Clinical Chemistry, or other national accrediting board acceptable to the Secretary in one of the laboratory specialties, or (iii) subsequent to graduation has had 4 or more years of general laboratory training and experience of which at least two were spent acquiring proficiency in one of the laboratory specialties in a clinical laboratory-with a director at the doctoral level of a hospital, a health department, university, or medical research institution, or in a State which regulates clinical laboratory personnel, in a clinical laboratory acceptable to that State.

(3) He holds an earned doctoral degree from an accredited institution with a chemical, physical, or biological science as his major subject ("accredited," as used herein, refers to accreditation by a nationally recognized accrediting agency or association, as determined by the U.S. Commissioner of Education) and (i) is certified by the American Board of Microbiology, the American Board of Clinical Chemistry, or other nationa accrediting board acceptable to the Secretary in one of the laboratory specialties, or (ii) subsequent to graduation, has had 4 or more years of general clinical laboratory training and experience, of which at least 2 years were spent acquiring proficiency in one of the laboratory specialties in a clinical laboratory-with a director at the doctoral level of a hospital, a health department, university, or medical research institution, or in a State which regulates clinical laboratory personnel, in a clinical laboratory acceptable to that State.

(4) For a period ending June 30, 1971, an exception to the requirements in subparagraph (1), (2), or (3) of this paragraph may be made if the conditions described in (i) and (ii) below are met:

(i) the director was responsible for the direction of a clinical laboratory for 12 months within the 5 years preceding July 1, 1966, and, in addition, meets one of the following requirements:

(a) The director holds a master's degree from an accredited institution with a chemical, physical, or biological science as his major subject and subsequent to graduation has had at least 4 years of pertinent clinical laboratory experience.

(b) The director holds a bachelor's degree from an accredited institution with a chemical, physical, or biological science as his major subject and subsequent to graduation has had at least 6 years of

Fertinent clinical laboratory experience. (c) The director has achieved a satisactory grade through an examination conducted by or under the sponsorship of the U.S. Public Health Service. Such xamination shall be offered annually or nore often if in the Secretary's opinion he need arises, except that such examination shall no longer be conducted subequent to July 1, 1970 (see § 405.1314 b)). For a period ending July 31, 1967, he State agency will give interim certiication of compliance with respect to a linical laboratory if such laboratory otherwise meets the requirements and f the director has indicated his intenion, in writing, to take the examination. All such interim certifications and the determinations based on them shall terninate no later than July 31, 1967; and

(ii) the State agency has evidence of successful participation of the laboratory which he directs in State-operated or State-approved proficiency testing programs meeting standards prescribed by the Secretary and covering all the specialties or subspecialties in which the aboratory performs tests for individuals enrolled under the supplementary medical insurance plan (see Subpart B of this Part 405); except that for a period ending July 31, 1968, in a State where proficiency testing programs covering some or all specialties are not yet available, the State agency will give interim certification of compliance with respect to a clinical laboratory which otherwise meets the requirements, if the laboratory successfully participates in the proficiency testing programs (if any) which the State has in operation or has approved in specialties (including the subspecialty of serology) in which the laboratory performs tests, all such interim certifications terminating no later than July 31, 1968. With respect to any period after July 31, 1968, where the Secretary determines that a State does not have, or that it appears that a State will not have, acceptable proficiency testing programs available, the Secretary will approve a testing program or programs for purposes of this paragraph, and the laboratory in such State successfully participates in the proficiency testing pron(s) approved by the Secretary in gram specialties (including the subspecialty of serology) in which the laboratory performs tests.

(5) The director who qualified under subparagraph (4) of this paragraph may continue to qualify under the program

after June 30, 1971, if: (i) The laboratory which he directs is otherwise qualified; (ii) the laboratory which he directs successfully participates in a performance evaluation program conducted by the State, meeting standards prescribed by the Secretary; and (iii) as part of the participation in the performance evaluation program, the laboratory which he directs successfully participates for at least 2 consecutive years in the 3-year period between July 1, 1968, and July 1, 1971, and annually thereafter, in a State-operated or State-approved proficiency testing program meeting standards prescribed by the Secretary, or a program approved by the Secretary as prescribed in subparagraph (4) of this paragraph in all the specialties or subspecialties in which the laboratory performs tests for individuals enrolled under the supplementary medical insurance plan (see Subpart B of this Part 405), except that if the director first qualifies under subparagraph (4) of this paragraph after July 1, 1968, but before July 1, 1971, the 3-year period for purpose of this subparagraph (5) shall begin on the date he first qualified and, if otherwise acceptable, the laboratory he directs shall be deemed qualified subject to satisfactory participation in the performance evaluation program in subdivision (ii) and this subdivision (iii) of this subparagraph within the 3-year period beginning with the date the director so qualified.

[31 F.R. 16137, Dec. 16, 1966, as amended at 33 F.R. 489, Jan. 13, 1968]

The clinical laboratory is supervised by qualified personnel.

(a) Standard. Supervision. The laboratory has one or more supervisors who, under the general direction of the laboratory director, supervise technical personnel and reporting of findings, perform tests requiring special scientific skills, and, in the absence of the director, are held responsible for the proper performance of all laboratory procedures. A laboratory director is considered to be qualified as a general supervisor; therefore, depending upon the size and functions of the laboratory, the laboratory director may also serve as the laboratory supervisor. The factors explaining the standard are as follows:

(1) There are two categories of required supervisors. A general supervi