submittal of results to the accrediting body.

(c) Letter of exemption; issuance. The Secretary may issue a letter of exemption to a laboratory upon application by such laboratory, certifying to or providing on a form prescribed by the Secretary

(1) Its accreditation by an approved accreditation body; the procedures to which such accreditation is applicable; and the date or dates of such accreditation.

(2) Its agreement to permit inspection by the Secretary, make records available and submit reports as may be required by the Secretary.

(3) Such other relevant information as the Secretary may require.

§ 74.47 Accreditation;

stringency

of

standards; failure to demonstrate; applicability of licensing require

ments.

(a) Standards of accrediting body; equivalence or greater stringency; failure to demonstrate: If the Secretary at any time, on the basis of (1) a review of the standards applied by an accrediting body, (2) evidence of violations of such standards, (3) inspections, or (4) other relevant factors, determines that the standards applied by an accrediting body are not equal to or more stringent than the provisions of section 353 of the Act and the rules and regulations issued thereunder or that the provision of any such body for requirements, practices, and procedures for assuring that such standards continue to be met by accredited hospitals and laboratories is inadequate, the Secretary shall give notice thereof to such accrediting body and shall provide a reasonable period for revision of standards, requirements, practices, and procedures and for submittal to the Director of satisfactory evidence (1) that it has adopted and effectively applied equivalent or more stringent standards to hospitals and laboratories in determining whether to accredit such hospitals and laboratories and (2) that there is adequate provision for assuring that such standards continue to be met by the accredited hospitals or laboratories. Upon expiration of such period and notice to such body of the determination that it has not submitted satisfactory evidence, which notice shall contain a specification of the basis for the determination, the provisions of section 353 of the Act requiring licensing shall

apply effective 30 days after the date of receipt of such notice by such accreditation body.

(b) Accreditation: inspection. No exemption shall be granted unless the Secretary has received an agreement on forms prescribed by the Secretary signed by the owner or authorized representative of such laboratory to permit inspections as prescribed in this part for licensed laboratories.

(c) Accredited laboratories shall be subject to such provisions of the regulations in this part, including but not limited to those relating to proficiency testing and availability of records, as the Secretary may direct: other than the provisions relating to licensing.

[33 FR 20043, Dec. 31, 1968, as amended at 38 FR 10722, May 1, 1973]

Subpart G-General Provisions

§ 74.50

Records: maintenance, availability, retention.

Records of observations shall be made, concurrently with the performance, of each step in the examination of specimens. Records shall reflect the actual results of all control procedures. All pertinent laboratory records shall be made available for such inspection, examination, and copying as the Secretary may direct. All records shall be retained for a period of at least 2 years after the date of submittal of report except as otherwise prescribed in this part or authorized by the Secretary.

§ 74.51 Reports to the Secretary.

Laboratories shall submit to the Secretary such reports of operations as the Secretary, from time to time, may require.

§ 74.52 Personnel records.

Personnel records shall be maintained on a current basis. They shall include a complete resume of each employee's training, experience, duties, and date or dates of employment.

§ 74.53 Specimen records.

Daily accession records shall contain the following information:

(a) The laboratory number or other identification.

(b) The name and other identification of the person from whom the specimen was taken, if available.

(c) The name of the licensed physician or other person or laboratory who or which submitted the specimen.

(d) The date the specimen was collected by the physician, or other authorized person if available.

(e) The date the specimen was received in the laboratory.

(f) The condition of unsatisfactory specimens and packages when received (e.g., broken, leaked, hemolyzed, or turbid).

(g) The type of test perforined.

(h) The result of the laboratory test and the date the test was completed. § 74.54 Laboratory report and record.

(a) The laboratory report shall be sent promptly to the physician or other person who requested the test and a suitable record of each report shall be preserved by the laboratory for not less than 2 years. The name of the laboratory actually performing the examination shall be indicated in the report to the person submitting the specimen.

(b) Tissue pathology and cytology reports shall utilize an established nomenclature.

(c) Reports of quantitative analyses shall include the units of concentration or activity and, where requested or indicated, the usual range of values for good health.

(d) A list of analytical methods employed by the laboratory and documentation of usual range of values for good health shall be made available to the person or laboratory submitting the specimen.

§ 74.55 Equipment and facilities.

The laboratory equipment maintenance program shall assure satisfactory operation of all equipment. Space, facilities, and equipment shall be adequate to properly perform the services offered by the laboratory. Workbench space shall be ample for the type and volume of work being done, and well lighted to facilitate accuracy and precision. There shall be freedom from unnecessary chemical, radiological, biological, and other hazards which may contaminate or otherwise adversely affect examination of specimens and, where applicable, provision shall be made for sterilization of contaminated material.

§ 74.56 Inspection.

The Secretary may conduct an inspection of every licensed laboratory at least annually and may conduct other inspections from time to time. Inspections shall be made at any time during the perform

ance of procedures and services and may include observation of complete examinations of specimens by personnel and methods ordinarily and routinely employed by the laboratory, examination of personnel files, procedural manuals, and records of tests including quality control and calibration. Inspections may be made with or without notice.

§ 74.57 Change in ownership.

The Director shall be notified of any change in the ownership of a licensed laboratory, other than a transfer of stock, within 10 days of any such change. § 74.58 Change in director or super

visor.

Changes in directors and in supervisors for any reason shall be reported to the Director within 30 days of the effective date of change.

Subpart H-Revocation, Suspension, and Limitation of Licenses and Letters of Exemption; Notice

§ 74.60 Revocation, suspension, and limitation of licenses and letters of exemption.

A laboratory license or letter of exemption may be revoked, suspended, or limited, whenever the Secretary, after reasonable notice and opportunity for hearing to the owner or operator of the laboratory as provided herein finds, in the case of a license, that such owner, or operator, or any employee of the laboratory has committed any of the actions specified in section 353 (e) of the Act, or in the case of a letter of exemption, that the laboratory is no longer eligible for such letter of exemption.

§ 74.61 Contents of notice.

(a) General. A notice issued pursuant to section 74.60 shall contain a statement of the proposed action and of the grounds upon which the action is proposed to be taken.

(b) Suspension. Where it is proposed to suspend a license or letter of exemption, (1) the period of such proposed suspension or the action which will be required to end the suspension shall be stated in the notice, and (2) the notice shall provide that if the appropriate remedial action is not taken within the period of suspension prescribed, the license or letter will be revoked.

(c) Limitation. Where it is proposed to limit a license or letter of exemption,

AUTHORITY: The provisions of this Subpart A issued under 80 Stat. 379; 5 U.S.C. 301.

SOURCE: The provisions of this Subpart A appear at 37 F.R. 6474, Mar. 30, 1972; 37 F.R. 7322, Apr. 13, 1972, unless otherwise noted. Subpart A-Authorization for Issuance of Prepaid Medical Service Contracts by Carriers

§ 75.1 Statutory provisions.

The applicable statutory provision, Title IV of Public Law 91-515 (84 Stat. 1309), reads as follows:

SECTION 401. (a) The Secretary of Health, Education, and Welfare may, in accordance with the provisions of this section, authorize any carrier, which is a party to a contract entered into under Chapter 89 of title 5, United States Code (relating to health benefits for Federal employees), or under the Retired Federal Employees Health Benefits Act, or which participates in the carrying out of any such contract, to issue in any State contracts entitling any person as a beneficiary to receive comprehensive medical services (as defined in paragraph (b) of this section) from a group practice unit or organization (as defined in paragraph (c) of this section) with which such carrier has contracted or otherwise arranged for the provision of such services.

means

(b) As used in this paragraph, the term "comprehensive medical services" comprehensive preventive, diagnostic, and therapeutic medical services (as defined in regulations of the Secretary), furnished on a prepaid basis; and may include, at the option of a carrier, such other health services including mental health services, and equipment and supplies, furnished on such terms and conditions with respect to copayment and other matters, as may be authorized in regulations of the Secretary.

(c) As used in this paragraph:

(1) The term "group practice unit or organization" means a nonprofit agency, co

operative, or other organization undertaking to provide, through direct employment of, or other arrangements with the members of a medical group, comprehensive medical services (or such services and other health services) to members, subscribers, or other persons under contract of carriers.

(2) The term "medical group" means a partnership or other association or group of persons who are licensed to practice medicine in a State (or of such persons and persons licensed to practice dentistry or optometry) who (1) as their principal professional activity and as a group responsibility, engage in the coordinated practice of their profession primarily in one or more group practice facilities, (ii) pool their income from practice as members of the group and distribute it among themselves according to a prearranged plan, or enter into an employment arrangement with a group practice unit or organization for the provision of their services, (iii) share common overhead expenses (if and to the extent such expenses are paid by members of the group), medical and other records, and substantial portions of the equipment and professional, technical and administrative staff, and (iv) include within the group at least such professional personnel, and make available at least such health services, as may be specified in regulations of the Secretary.

(d) Nothing in this section shall preclude any State or State agency from regulating the amounts charged for contracts issued pursuant to paragraph (a) of this section or the manner of soliciting and issuing such contracts, or from regulating any carrier issuing such contracts in any manner not inconsistent with the provisions of this section.

All terms not defined herein shall have the same meaning given them in the Act. As used in this subpart:

(a) "Act" means Title IV of Public Law 91-515, 84 Stat. 1309.

(b) "Secretary" means the Secretary of Health, Education, and Welfare, and the officer or employee to whom the authority involved has been delegated.

(c) "Eligible carrier" means any carrier which is a party to a contract entered into under 5 U.S.C. Ch. 89 or which participates in the carrying out of any such contract by direct assumption of liability, reinsurance, or otherwise.

(d) "Comprehensive medical services" means that combination of preventive, diagnostic, and therapeutic medical and health services which the Secretary finds, on the basis of information submitted to him by an eligible carrier, is reasonably calculated to assure the protection, maintenance, and support of health and the satisfactory diagnosis

and treatment of illness and injury of persons enrolled under the contract proposed to be issued by such carrier, taking into consideration such factors as the nature and size of the population to be served, the geographic area to be served, the availability of resources, and other related elements.

(e) The term "nonprofit" as applied to any agency, cooperative, or other organization under section 401 (c) (1) means an agency, cooperative, or other organization no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual. However, in the case of an organization the purposes of which include the provision of personal health services to its members or subscribers or their dependents under a plan of such organization for the provision of such services to them (which plan may include the provision of other services or Insurance benefits to them), the net earnings may be distributed through the provision of such health services (or such other services or insurance benefits) to such members or subscribers or dependents under such plan.

§ 75.3 Application for authorization.

(a) Any eligible carrier may submit an application to the Secretary for an authorization pursuant to § 75.4.

(b) Such application shall be in writing, executed by an officer of the carrier authorized for such purpose, and shall set forth the following:

(1) The name, address, and home office of the carrier.

(2) The status of the carrier as a contractor under 5 U.S.C. Ch. 89, or as a participant in carrying out any such contract.

(3) A full description of the medical services proposed to be furnished on a prepaid basis and a statement designed to show that such services constitute comprehensive medical services as defined herein.

(4) A full description of health services to be furnished at the option of the carrier, such as dental, mental health, hospital, optometric, or nursing home services, or equipment and other supplies, and the terms and conditions upon which such services and supplies are to be furnished.

(5) Identification of the group practice unit or organization, and medical groups considered to meet the requirements of the Act and of this part, and of

other organizations and facilities, proposed to be utilized in the provision of services under the contract, together with a description of the services or resources to be provided by each such group, organization or facilities under arrangements made by the carrier.

(6) The method which will be used for monitoring and evaluating the quality and utilization of services provided under the contract.

(7) A copy of the proposed contract to be issued to persons enrolled in the plan which shall not exclude an individual because of race, color, sex, religion, or national origin and which shall set forth a detailed statement of benefits offered, including out-of-area benefits.

(8) Identification of the State in which the carrier proposes to issue contracts, and a citation to the provisions of State law or other legal requirements of the State which in the opinion of legal counsel restricts the issuance of such contracts by the carrier, or which restricts the operation of any group practice unit or organization with which the carrier has contracted or proposes to contract insofar as such requirement operates to prevent such group from arranging with the carrier for payment on a prepaid basis for services provided to persons under contract of such carrier or from providing such services through a medical group together with a copy of the opinion of such counsel.

(9) An agreement to furnish such reports as the Secretary may reasonably require as to operations under the authorization.

(10) An agreement that the carrier will require any individual, agency, organization, or other entity with which it contracts or otherwise arranges for the provision of services, pursuant to an authorization under the Act, to provide such services without discrimination on account of race, color, sex, religion, or national origin.

(11) An agreement to report promptly any change in the contract or benefits provided thereunder, and insofar as practicable, at least 90 days before such change becomes effective.

(12) An agreement to provide such other information as the Secretary may reasonably require.

and of this part, authorize an eligible carrier to issue in one or more States contracts entitling any person as a beneficiary to receive comprehensive medical services furnished on a prepaid basis either from a group practice unit or organization with which such carrier has contracted or otherwise arranged for the provision of such services, if he finds that such authorization is necessary, by reason of the laws of the State with respect to which the application is made, to permit the carrier to issue such contracts.

(b) The issuance of such an authorization shall preclude the application of any law, regulation or other requirement of the State with respect to which the authorization is issued which, except as authorized in section 401(d) of the Act, prohibits, restricts, or limits

(1) The issuance of any contract by the carrier in accordance with such authorization, including, but not limited to restrictions on the provision of medical care or services on a prepaid, capitation basis or on the number of plans operating in a given geographical area, prohibitions on the issuance of such contracts by an out-of-State corporation or a corporation for profit or requirements that a percentage or given number of professional personnel or medical facilities in any area participate or be allowed to participate in the provision of services as a condition to the operation of the plan in such area, or that the members of the carrier's governing board meet specified qualifications or conditions as to their appointment, or

(2) The operation of any group practice unit or organization with which the carrier has contracts insofar as such requirement operates to prevent such group from arranging with the carrier

for payment on a prepaid basis for services provided to persons under contract of such carrier or from providing such services through a medical group.

(c) An authorization issued under this section, unless suspended or terminated as provided herein, shall be valid so long as the carrier maintains its status as an eligible carrier and for such additional period as the Secretary finds necessary to permit the carrier to liquidate any obligations for service it may have incurred and to permit beneficiaries under the plan to make other arrangements for coverage.

(d) An authorization may be suspended or terminated upon reasonable notice to the carrier, with opportunity for hearing if the carrier fails to comply with any assurance, representation, or agreement contained in its application, or fails to meet any requirement of the Act or regulations for the provision of services under contracts issued pursuant to this part.

§ 75.5 Services to be provided by medical group.

(a) A medical group utilized in the provision of medical services under a contract issued in accordance with this part shall include at least a general practitioner and representatives of each of the following medical specialties: General surgery, obstetrics and gynecology, internal medicine, pediatrics, and ear-nose-throat, provided that, for good cause shown in the application, services in the medical specialties may be provided under contract or other suitable arrangements by a nonmember of the

group.

(b) The medical group shall make available health services constituting comprehensive medical services as defined herein.