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Veterans Administration
Office of General Counsel
Washington DC, 20420
O.G.C. Adv. 27-91
July 24, 1991
Re: Applicability of the Clinical Laboratory Improvement Act to VA
Laboratories.
QUESTION PRESENTED: Does the Department of Health and Human Services, have any legal
authority, either in the Clinical Laboratory Improvement Act of 1988,
or in any other statute, to assert jurisdiction over the operations
of VA's clinical laboratories?
COMMENTS:
1. The Clinical Laboratory Improvement Act of 1988,
Pub.L.No.
100-578, codified at 42 U.S.C. 263a (CLIA '88), directs the U.S.
Department of Health and Human Services (HHS) to adopt standards
under which clinical laboratories subject to CLIA'88 will operate. In
explanatory materials which accompany proposed regulations currently
under consideration--though not in the proposed regulations themselves--HHS, through the Health Care Financing Administration
(HCFA) states that "Federal hospital laboratories," including
laboratories operated by VA hospitals, are subject to CLIA '88 and,
therefore, will be subject to the standards HCFA ultimately imposes.
See 55 Fed.Reg. 20896, 20900 (May 21, 1990). Further, "catch-all"
language in the regulations preamble, Id. at 20896, and the broad
definition of the term "laboratory" contained in the proposed
regulations appear to indicate that HCFA assert jurisdiction over VA
laboratories in non-hospital settings and nursing homes. For the
reasons discussed below, it is our view that neither CLIA '88, nor
any other statute or source of legal authority generally applies to
HHS (or HCFA) authority to regulate VA clinical laboratories.
The Language of the Statute Does Not Authorize, or Direct, HHS
jurisdiction over (indecipherable).
2. The Clinical Laboratory improvement Act of 1988 reads, in
pertinent part: (indecipherable) person may solicit or accept
materials derived from the human body for laboratory examination or
other procedure unless there is in effect for (indecipherable)
laboratory a certificate issued by the Secretary under this section
(indecipherable) applicable to the category of examinations or
procedures which includes (indecipherable) such examination or
procedure.
3. The CLIA statute applies to -and only to- "persons" who operate
laboratories. The statute defines "laboratory," purely in terms of
the scientific procedures performed at the site, not in terms of the
identity of the site's proprietor. See 42 U.S.C. (indecipherable).
Thus the scope of HHS' statutory jurisdiction, as reflected in the
language of the statute itself turns entirely on the breadth of
(indecipherable) person." In other words, one must determine whether
"Federal hospital laboratories" are "persons" under the statute.
4. CLIA '88 does not define "person." Thus, an explicit indication
of whether Congress did--or did not--intend to include government
agencies within CLIA's licensing and standards requirements is
lacking. We recognize, of course, that the term "person," as it is
used in the law, is not necessarily limited to natural persons.
However, as the term is used in Federal statutes like CLIA '88, the
term "person" does not extend to government agencies absent an
explicit statement to that effect.
5. A review of Federal statutes which, like CLIA '88, are
concerned with the public health and welfare indicates unmistakably
that when Congress intends to include Federal agencies within the
scope of "persons" regulated by another Federal agency, it says so
explicitly. See, e.g., 42 U.S.C. 2014(s), defining "person[s]" who
are subject to Nuclear Regulatory Commission jurisdiction under the
Atomic Energy Act to include "any... Government agency other than the
Commission [itself]...." See also 42 U.S.C. 7911(5), including
"government entities" among the "person[s]" who will be subjected to
remedial action" if they improperly dispose of uranium mill tailings;
42 U.S.C. 9601(21) including "United States Government... bodies"
among the "person[s]" subject to the Comprehensive Environmental
Response, Compensation, and Liability Act; 33 U.S.C. 1402(e),
defining "person[s]" who may not dump waste into the oceans--and who
are subject to the enforcement jurisdiction of the Environmental
Protection Agency--to include "any officer, employee, agent,
department, agency or instrumentality of the Federal government."
Compare 15 U.S.C. 1261(e), which lists "individual[s], partnership[s],
corporation[s], and association[s]"--and only those
entities--as "person[s]" subject to Consumer Product Safety
Commission jurisdiction; 42 U.S.C. 6903 which separately defines, for
purposes of the Solid Waste Disposal Act, "persons" including "State[s], ...[and] political
subdivision[s] of State[s]" and Federal
agencies". In short, a "side by side" comparison of the above (and
other) statutes against CLIA '88 reveals clearly that when Congress
intends to include Federal agencies among the listing of "persons" to
be regulated by another agency, the Congress says so in the pertinent
statute. The Congress did not so provide in CLIA '88.
6. By the above discussion, however, we do not suggest that CLIA
'88 must be compared to other statutes in order to discover the
limited breadth of statutory jurisdiction which the Congress intended
to confer on HHS. One need only consider how CLIA read before and
after its 1988 amendments to conclude that laboratories operated by
Federal hospitals are not subject to HHS jurisdiction. It is
undisputed that VA's clinical laboratories were not subject to HHS
(or predecessor) jurisdiction under CLIA'67. See 55 Fed.Reg. 34289
(August 22, 1990), where HHS states explicitly that "laboratories in
Federal clinics" are "new entities affected by CLIA," thus affirming
what 25 years of HHS practice, as ratified by the Congress, had
revealed: that VA laboratories were not subject to HHS regulation
under CLIA '67. Read against that background, the language of CLIA
'67 is highly revealing. It stated that "[n]o person may solicit or
accept in interstate commerce... specimen[s] for laboratory
examination... unless there is in effect a license..." In other
words, all CLIA '88 did was to expand the universe of CLIA '67
"persons" from those who operate across State lines to those who do
not. If VA laboratories were not included among interstate commerce
"persons" under CLIA '67 -and they are not- it follows that they also
are not included within CLIA '88 "persons."
7. Further evidence of the limited scope of "persons" subject to
CLIA '88 can be gleaned from a reading of CLIA '88 as a whole. It is
axiomatic that parts of statutes are to be read in a fashion which
renders a harmonious whole. A single reference is made to Federal
agencies within CLIA '88 at section 353(o). There, the statute
authorizes HHS "pursuant to agreement, [to] use the services or
facilities of any federal or State or local public agency" in
furtherance of the objectives of CLIA. Apart from serving as a clear
indication of the Congress' capability, as in the above statutes, of
specifically citing Federal agencies if and when (unlike here) it
intends to refer to them, section 353(o) authorizes HHS to contract
for VA assistance in the enforcement of CLIA. It would require a
non-harmonious reading of CLIA '88 to conclude that the statute
simultaneously regulates, and "deputizes," VA.
8. Similarly, CLIA 88's requirement that licensees be charged
fees, see 42 U.S.C. 263a(m), demonstrates a Congressional intent to
regulate private sector laboratories only. Congress imposed this
requirement with the full understanding that such costs will be
"passed through" to consumers of health care services. See H.R.Rep.
No. 899, 100th Cong., 1st Sess.37 (1988) ("Subsection (m)... would
require that the Secretary charge fees.... The Committee understands
that consumers bear the ultimate costs of regulation...") While there
may be a deductible charged in some circumstances, VA does not charge
a veteran patient for its services and thus does not "pass through"
costs to the consumer. Under the reading of CLIA espoused by HHS,
CLIA fees must be charged by HHS, and CLIA costs (in the form of fee
payments to HHS) must be borne and absorbed by VA. Congress could
have anticipated, and required, such a scheme. But the House Report
which accompanies CLIA '88 indicates that the Congress did not
anticipate such a (indecipherable) here. See H.R.Rep. No. 899, id. at
21 ("No costs to the federal government w[ill] result" from CLIA
'88.) HHS regulation of VA is out of harmony with the Congress'
intent that costs not be borne by the Federal Government, for such an
assertion of jurisdiction will result in nonrecoverable costs to the
Federal government. If VA pays a license fee to HHS, costs will be
sustained from VA's appropriation; if HHS waives the fee, costs will
be sustained from HHS' appropriation. Either way, cost will result to
the Federal government in contradiction of Congressional intent.
9. To sum up, the language of CLIA'88 does not support the
contention that HHS jurisdiction has been newly extended to VA (and
other Federal) laboratories. To the contrary, the statute admits to
only one interpretation: just as CLIA '67 did not regulate VA
laboratory operations (even when VA operated across State lines),
CLIA '88 does not regulate VA laboratory operations (whether they be
inter--or intrastate in scope). In light of the above indicators of
contrary legislative intent from within the statute it is clear that
the absence of a specific ban on HHS jurisdiction is not a sufficient
basis for HHS to attempt to assert jurisdiction. At the very least,
the above indicators illustrate statutory ambiguity which makes
reference to the legislative history appropriate. The legislative
history of CLIA '88 demonstrates that jurisdiction over VA laboratory
operations is not conferred to HHS by CLIA '88.
Legislative history of CLIA '88 affirms that VA laboratories are
not subject to HHS Jurisdiction.
10. We examined the following pieces of the legislative record
associated with the enactment of CLIA 88:
xxxxxA. Senate debate on, and passage
of, H.R. 5471 as approved by the House. 134 Cong.Rec. S15512-Sl5516
(daily ed. Oct.11, 1988) (statements of Senators Adams, Mikulski and
Cohen);
xxxxx B. House of Representatives
debate on, and passage of, H.R. 5471. 134 Cong.Rec. H9866-H9872
(daily ed. Oct.6, 1988) (statements of Reps. Dingell, Waxman, Wyden
and Madigan);
xxxxx C. Placement of House-passed
H.R. 5150 (H.R. 5471's predecessor) on Senate calendar, 134 Cong.Rec.
23736, Sept.14, 1988;
xxxxx D. House debate on, and passage
of, H.R. 5150. 134 Cong.Rec. 23603-23608, Sept.13, 1988 (statements
of Messrs. Dingell, Neilson and Wyden); and E. H.R.Rep. No. 899, id.,
reprinted in 1988 U.S.Code Cong. & Admin.News 3828.
Nowhere in that extensive record is it stated -or even hinted-
that Congress intended, through enactment of CLIA '88, to extend HHS
jurisdiction to clinical laboratories operated by VA or other Federal
hospitals. (To the contrary, the legislative history of CLIA '88 is
rich with evidence that Congress intended to extend HHS jurisdiction
to two classifications of laboratories, neither of which includes VA
laboratories.)
11. First and foremost, CLIA '88 was designed to bring within HHS
jurisdiction small and intrastate laboratories -which had come to be
known as cytology "mills"- that had previously been unregulated. See,
e.g., H.R.Rep. No.899, id. at 14 ("CLIA currently exempts
laboratories which do not send specimens in interstate commerce. Such
'intrastate' laboratories, if they (indecipherable) participate in
Medicare, are able to avoid all Federal regulations." See also, 134 Cong.Rec. H9872 (daily ed. Oct.6, 1988) (statement of Rep.
Dingell)
("Patients can soon take comfort in knowing that physicians' offices
and other previously unregulated laboratories would now have to meet
quality standards.") Thus, certain types of laboratories which had
not been regulated in the past -"laboratories which operate in
intrastate commerce only;" "laboratories whose operations are small
or infrequent;" and "laboratories located in physicians' offices," H.R.Rep. No. 899. id. at 14--were brought within the HHS fold. VA
hospital laboratories, of course, were not then -and are not now-
small, intrastate or physician office laboratories which had not, in
the words of Rep. Dingell, "had to meet quality standards prior to
enactment of CLIA '88. Nor are they "sweat shop" cytology which had
been subject to no quality control and which had received extreme
notoriety due to repeated misdiagnoses of cervical cancer. Like
laboratories found in any reputable hospital, VA laboratories had
been subject to -and were meeting- the quality standards prescribed
by the Joint Commission on the Accreditation of Health Care
Organizations (JCAHO), the College of American Pathologists (CAP) and
other accreditation organizations prior to enactment of CLIA '88.
12. Second, CLIA '88 was intended to extend HCFA jurisdiction to a
class of laboratories which, under CLIA '67, were only arguably
subject to HHS jurisdiction: laboratories within health care
facilities which were rare, or non-existent, when CLIA was originally
enacted in 1967. Such "inadequately regulated" laboratories -those
"operated by such organized medical practices as health maintenance
organizations, ambulatory surgery centers, and emergency medical
centers," and those "operating out of vans or in shopping malls," H.R.Rep. 899, id. at 15--were thus brought within the ambit of HHS
regulation through enactment of CLIA '88. See also 134 Cong.Rec.
H9872 (daily ed. Oct.6, 1988) (statement of Rep. Dingell) ("No
question will remain about the obligation of health maintenance
organizations, ambulatory surgery centers, skilled nursing
facilities, or others to meet the same standards as independent
laboratories doing the same tests.") VA laboratories are not within
these new classes of non-traditional clinical laboratory. They
existed when CLIA was originally enacted in 1967.
13. In summary, the purpose of CLIA '88, as illuminated by
explicit evidence within the legislative history, was to (1) extend
HCFA jurisdiction to previously-exempt intrastate laboratories, and
to (2) clarify that non-hospital laboratories were subject to HHS
jurisdiction. Had the Congress also intended either to extend HHS
jurisdiction to Federal hospital laboratories, or to clarify that
such laboratories should have been, despite contrary past practice,
subjected to HHS regulation under CLIA '67, Congress would have said
so. The most casual observer of events leading up to enactment of
CLIA '88 would concede that Congress displayed no reluctance to
criticize HHS past administration of CLIA.
14. That the intent of CLIA was limited to the above two stated
purposes is confirmed by a consideration of the process by which CLIA
'88 was enacted. At no time during consideration of the bill which
was to become CLIA '88, or during consideration of a predecessor
bill, was the proposed legislation referred to Congressional
committees having jurisdiction over legislation affecting "Federal
hospital laboratories," i.e., the House and Senate Veterans Affairs
Committees in the case of VA hospital laboratories, and the House and
Senate Armed Services Committees in the case of DOD hospital
laboratories. Had the Congress intended for HHS to regulate VA (and
DOD), one must assume that it would have so referred the proposed
legislation. See e.g., Rule X.1, cl.1, Rules of the House of
Representatives ("All bills [and] resolutions relating to subjects
within the jurisdiction of any standing committee shall be referred
to such committees...") Further, the views of the affected
Departments, VA and DOD, would have been requested and offered. One
cannot argue that the Congress intended, through enactment of CLIA
'88, to extend HHS jurisdiction to VA (and DOD) laboratories without
resting that argument on an unacceptable premise: that Congress
violated its own rules.
15. Finally, it must be remembered that CLIA was not amended in a
vacuum. The purpose of CLIA '88 was to remedy defects in CLIA
'67--defects which had resulted in grievous harm to patients,
particularly women. When those amendments were under consideration,
VA laboratories were accredited. They had not been subjected to the
excessive productivity demands which had caused the cytology "mills"
to "cut corners." Most importantly, VA laboratories had long had in
place quality assurance mechanisms which caught shortcomings before
they grew to the endemic proportions witnessed in the cytology
"mills." In short, there was no need to extend CLIA to VA
laboratories since they have long been accredited, and have long had
mechanisms in place to assure quality.
No Other Statute Confers Jurisdiction Over VA Operations to
HHS,
and HHS has no jurisdiction except by statute.
16. In materials accompanying its proposed regulations, HHS
asserts that it has gained authority to regulate VA laboratories from
CLIA '88. As is demonstrated above, that argument must fail given
both the language, and purposes, of the 1988 amendments to CLIA. It
is immediately apparent that no other statute can -or does- serve as
the basis for HHS jurisdiction. Unquestionably, no such authority has
been cited by HHS, either in its proposed rulemaking, 55 Fed.Reg.
20896 (May 21, 1990) or elsewhere. No such authority exists.
17. Most revealing are these facts: (1) prior to enactment of CLIA
'88, HHS had never claimed jurisdiction over VA; (2) the only time
HHS has ever attempted to assert jurisdiction -in this rulemaking-
HHS cites CLIA '88, and CLIA '88 alone, as the legal authority for
the action, see 55 Fed.Reg. 20896, 20900 (May 21, 1990) ("The
laboratories subject to CLIA '88 certification... include... Federal
hospitals..."); and (3) HHS admits in the rulemaking that VA
laboratories are only "newly affected" by CLIA, 55 Fed.Reg. 34289
(Aug. 22, 1990), thereby affirming that VA was not previously
"affected" by HHS' regulatory jurisdiction as a result of any other
statutory provision.
18. Despite the foregoing, we have surveyed the field for statutes
which might serve as a non-CLIA basis for HHS jurisdiction. The
search has proved futile. For example, HHS clearly has very broad
rulemaking authority with respect to administration of social
security programs, including Medicare. 42 U.S.C. 405(a) ("The
Secretary [of HHS] shall have full power and authority to make rules
and regulations... not inconsistent with the provisions of this
subchapter, which are necessary and appropriate to carry out such
provisions...") That broad grant of authority, however, is limited to
the Secretary's role in administering programs under "this subchapter"--i.e., Social Security programs. This authority is
considerable; it has allowed HHS in effect, to regulate indirectly
the practices of almost every hospital in the nation by conditioning
Medicare/Medicaid participation to adherence to HHS-promulgated
standards. But the Medicare/Medicaid power is entirely derivative;
despite the breadth of HHS' section 405(a) authority, it is
conditioned on hospitals' acceptance of HHS funding. VA hospitals, of
course, do not -and cannot- accept such funding. See 42 U.S.C. s
1395f(c).
19. Outside of the indirect power wielded by HHS through its use
of the Medicare/Medicaid "carrot," HHS' regulatory authority -its
"stick"- is limited. To state basic principles first; the regulatory
power possessed by HHS (and all Executive branch agencies, including
VA) is a delegated quasi-legislative power. That is, it flows from,
and exists only as granted by, statute. Thus, HHS possesses no
"inherent" authority to regulate VA or anyone else; its power over VA
(and others) is defined by, and is limited as specific statute. HHS
has cited no statutory authority (other than CLIA '88) as
justification for its attempt to assert jurisdiction over VA. It will
locate none.
20. If such power were to exist, we believe it would be located in
one of two places: in Chapter 6A of Title 42, U.S.Code, particularly
sections 241-280c, specifying HHS' General Powers and Duties; or in
non-codified statutes, most notably in appropriations statutes. VA's
research of authorities has located no pertinent provision.
21. Within Chapter 6A of title 42, for example, HHS is granted
broad authority to provide health care services, see 42 U.S.C.
248-261a; to conduct and promote health-related research and analysis
through, and independent of, the National Institutes of Health, see
e.g., 42 U.S.C. 241, 242a-242k; 242m-242q; 281--290a; and to make,
and condition, grants to the States, and other entities, for
health-related purposes, see 42 U.S.C. 243-247e, 273--274c, 280b.
Chapter 6A, however, confers no general or overriding power to HHS to
regulate the nation's health care system. Nor does it grant to HHS
power to regulate other Federal health care providers, e.g., VA.
22. Indeed, the direct regulatory powers which are delegated to
HHS are surprisingly sparse. Apart from the considerable regulatory
powers which flow to HHS indirectly through Medicare and Medicaid,
and powers which flow directly to HHS from CLIA, HHS' regulatory
authorities appear to be limited to the following: HHS can "make and
enforce... regulations as... are necessary to prevent the
introduction, transmission or spread of communicable diseases, 42 U.S.C. 264-272; and it can regulate intra- and interstate traffic in
biological products, 42 U.S.C. 262-263. Finally, Chapter 6A contains
an outright statutory ban on commercial trafficking in human organs
for transplantation, 42 U.S.C. 274e, a ban which can be construed to
vest in HHS power to establish implementing regulations.
23. By contrast, statutes applicable to VA are quite explicit in
granting to VA the broadest of legal authority to operate its own
"free-standing" medical system. See 38 U.S.C. 210(b) granting the
Secretary of Veterans Affairs "responsibility for the proper
execution and administration of all laws administered by the [VA] and
for the control, direction, and management of the [VA]." See also, 38 U.S.C. 4101(a) ("[VA] shall... provide a complete medical and
hospital service, as provided in this title and in regulations
prescribed by the [VA] pursuant thereto, for the medical care and
treatment of Veterans.")
24. The other potential wellspring of HHS jurisdiction,
non-codified statutes, is similarly dry. See Pub.L. No.101-517, 104
stat. 2190 (1990) (HHS FY91 Appropriations). See also Pub.L.
No.101-302, 104 Stat. 213 (1990) (Dire Emergency Supplemental
Appropriations for FY90); Pub.L. No.101-508, 104 Stat. 1388 (199O)
(Omnibus Budget Reconciliation Act of 1990). In short, HHS has no
statutory authority over clinical laboratories except as specified in
CLIA '88. VA's position that CLIA'88 does not grant to HHS
jurisdiction over VA's laboratories, of course, is detailed above.
25. One final point on the potential assertion that HHS has some
sort of overriding "inherent" authority over the nation's health care
providers, including VA. Both the courts, and the Attorney General,
have heard -and rejected- such arguments before. See e.g., Trailer
Marine Transport Corp. v. Federal Maritime Commission, 602 F.2d 379
(D.C.Cir.1979), and Alaska Steamship Co. v. Federal Maritime
Commission, 399 F.2d 623 (9th Cir.1962) (both rejecting the
contention that the Federal Maritime Commission has inherent tariff
authority over the marine "leg" of combination water/land route, and
holding that the Interstate Commerce Commission has statutory
jurisdiction over both segments of such routes). (See also, Proposed
Tax Assessment Against the United States Postal Service and the IRS);
Disclosure of Information Collected Under the Export Administration
Act, 5 OLC 255 (Aug.24, 1981) (resolving a dispute between the
Department of Commerce and law enforcement and intelligence agencies
concerning the interagency release of information gained through the
export license process); Rebates in Violation of Shipping Act
(indecipherable) of Conspiracy Statute (18 U.S.C. 371), 2 OLC 5 (Jan.
19, 1978). Indeed, the argument of "inherent" authority was rejected
even when the party claiming such authority, the President of the
United States, had a constitutional basis for the claim. See United
States v. Nixon, 418 U.S. 683 (1974). In all of these cases, the
question has come down to statutory construction--i.e., how are the
powers parsed by the relevant statutes. Here, VA is granted the
authority, by statute, to set standards for VA hospitals, 38 U.S.C.
210(b), 4101(a). HHS is delegated no such power.
HELD:
The Department of Health and Human Services has no statutory
basis, either in the Clinical Laboratory Improvement Act of 1988, or
elsewhere, for asserting jurisdiction over the operations of VA's
clinical laboratories.
VETERANS ADMINISTRATION GENERAL COUNSEL
O.G.C. Adv. 27-91
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