Memorandum of Understanding
The Food and Drug Administration
The Centers for Disease Control and Prevention
The Health Care Financing Administration
Transfer of Clinical Laboratory Improvement Act (CLIA) Complexity Categorization Functions from the Center for Disease Control and Prevention (CDC) to the Food and Drug Administration (FDA).
The responsibility for carrying out CLIA is vested in the Secretary by Section 353 of the Public Health Service Act, as amended. This agreement is made pursuant to the authority to enter into intra-agency agreements and is granted by 31 U.S.C. 1535.
Under CLIA regulations issued in 1992, the FDA was assigned responsibility to categorize the complexity of laboratory tests. However, this responsibility was delegated to the CDC in 1994. Manufacturers and Congress have expressed concern that having both the CDC and FDA participate in product reviews creates “confusion, and duplication of effort.” The issue is whether to transfer this function from the CDC back to the FDA.
IV. Scope of Agreement
The CDC, FDA, and HCFA have reached consensus on a proposal for transferring the CLIA complexity categorization function (test categorization and waiver) from the CDC to the FDA beginning in mid to late FY 1999. The FDA resources will come from transfer of the CDC CLIA user fee allocation for test categorization and waiver and will include initial startup costs, administrative and operational funds, and the FTEs associated with this activity. The goal in developing this proposal has been to make the transfer as budget neutral as possible.
In order to effect the transfer of the CLIA complexity categorization function from the CDC to the FDA, the undersigned agree to the following terms:
• Implementation Schedule. The CLIA complexity categorization function (test categorization and waiver) will be transferred from the CDC to the FDA beginning within 30 days from the date of this agreement. The agencies estimate that the transfer of the categorization function to FDA can be completed and FDA test categorization take effect within nine months from the date of this agreement, and the transfer of the waiver function to FDA can be completed and FDA waiver classification take effect within 11 months from the date of this agreement.
• Full Time Equivalents (FTEs). In FY 1998 the CDC FTE ceiling for CLIA functions was 69 and the CDC was actually reimbursed for 65 FTEs. In accordance with this agreement, the CDC will transfer 11 CLIA FTEs to the FDA; this will result in an offsetting decrease of 11 CDC CLIA FTEs. Therefore, subsequent to the transfer, the CDC FTE ceiling will be 58 (69 - 11), and the CDC will be reimbursed for the work of 54 (65 - 11) FTEs. Any future increases in the CDC CLIA ceiling and reimbursement for actual FTE usage will be determined under the annual-budget process. In addition, the CDC will transfer 3 non-CLIA FTEs to the FDA; this will result in a further offsetting decrease of 3 CDC non-CLIA FTEs. In summary, in order to transfer the CLIA complexity categorization function from the CDC to the FDA, the CDC total FTEs will decrease by 14, and the FDA total FTEs will increase by 14.
• Funding. Sufficient funds to support performance of the CLIA complexity categorization function will be shifted from the CDC to the FDA and will include additional amounts for startup cost in the first year of the transfer.
Ongoing Funding. On an ongoing basis, the overall dollars to fund the functions performed by both the CDC and the FDA would be equal to the originally projected budget figure for the CDC. For FY 1999, the total projected budget for CLIA functions is $9.86 million. On the basis that the FDA would perform and be funded for the CLIA complexity categorization function for the full FY 1999, and the CDC would no longer perform this function in FY 1999, the budget projection for FY 1999 is $1.48 million for the FDA and $8.38 million for the CDC. However, these amounts will need to be prorated based on the length of the transition period and when the actual transfer of function is started and completed. The allocation of funds between the CDC and the FDA would continue in subsequent years at the same proportions, reflecting the continuing functions performed by the CDC and the FDA and assuming the current activity levels.
Startup Funding.The originally projected total FY 1999 funding of $9.86 million for the CDC and the FDA does not include startup costs. Startup costs to be paid to the FDA will not exceed $0.388 million. Startup funding will be in addition to ongoing funding. Therefore, if startup costs were funded in FY 1999, the combined total FY 1999 CLIA budget for the CDC and the FDA, including startup costs, would be $10.248 million ($9.86 million plus $0.388 million).
• Budget Process. With respect to the functions performed by the CDC and the FDA, in order to ensure that sufficient funds are available, allocated appropriately, and accounted for, and the levels and functions of the FTEs are accounted for and reported, the undersigned will work together to develop a budget, expenditure, and claims process including FTEs and functions.
V. Duration of Agreement
The MOA is effective from the date of signatures of all parties and will continue unless the conditions of the agreement and responsibilities change. At that time, a new MOA will be negotiated and signed by the parties.
Full implementation of the MOA will not duplicate any existing agreements.
VII. Agency Contacts
Centers for Disease Control & Prevention
Robert Martin, Dr.P.H.
Director, Division of Laboratory Systems
Public Health Practice Program Office
4770 Buford Highway, NE, Mailstop: G25
Atlanta, GA 30341
Food and Drug Administration
Joseph L. Hackett, Ph.D.
Associate Director, Division of Clinical Laboratory Devices
Office of Device Evaluation
Center for Devices and Radiological Health
2098 Gaither Road
Rockville, MD 20850
Health Care Financing Administration
Director, Division of Outcomes and Improvement
Center for Medicaid and State Operations
7500 Security Boulevard
Baltimore, MD 21244
VIII. Privacy Act
Approved and Accepted
Signed by: Edward L. Baker, M.D., M.P.H.
Date: February 3, 1999
Approved and Accepted
Signed by: Ms. Sally K. Richardson
Date: February 9, 1999
Approved and Accepted
Signed by: D. Bruce Burlington, M.D.
Date: February 27, 1999