[Federal Register: December 28, 2007 (Volume 72, Number 248)]
[Proposed Rules]
[Page 73708-73720]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de07-32]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare and Medicaid Services
42 CFR Parts 422, 423, and 498
Office of the Inspector General
42 CFR Part 1005
Office of the Secretary
45 CFR Parts 16, 81, 160 and 1303
RIN 0991-AB42
Revisions to Procedures for the Departmental Appeals Board and
Other Departmental Hearings
AGENCY: Office of the Secretary, Centers for Medicare and Medicaid
Services, HHS.
ACTION: Notice of Proposed Rulemaking.
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SUMMARY: The Department of Health and Human Services (Department)
proposes to amend Departmental regulations governing administrative
review by the Departmental Appeals Board (DAB) and certain other
administrative review regulations to ensure that the final
administrative decision of the Department reflects the considered
opinion of the Secretary of Health and Human Services (Secretary).
Current regulations at 45 CFR Part 16 governing the review of grant
disputes do not specifically require the DAB to follow published
guidance issued by the Secretary or a Departmental component. The DAB
decision is currently the final administrative decision of the
Department on such disputes and currently there is no Secretarial
review of this final decision. Similarly, the DAB currently provides
the final agency review of the imposition of civil monetary penalties
(CMPs) for which administrative appeal is available under 45 CFR Part
160, Subpart E, enforcement sanctions under 42 CFR Part 422 and 423,
determinations subject to reconsideration and appeal under 42 CFR Part
498 and the imposition by the Inspector General of the Department
(I.G.) or the Centers for Medicare and Medicaid Services (CMS) of
exclusions, CMPs and assessments subject to appeal under 42 CFR Part
1005. As in 45 CFR Part 16, the decisions of the DAB under these
processes are considered the final agency action on matters, though
they are not subject to Secretarial review.
This proposed rule would amend DAB regulations to require that the
DAB follow published guidance that is not inconsistent with applicable
statutes and regulations and would permit the Secretary an opportunity
to review DAB decisions to correct errors in the application of law, or
deviations from published guidance, in such disputes. This proposed
rule would make technical changes to the regulations at 45 CFR Part 16.
This proposed rule would also amend hearing and appeal procedures at 45
CFR Part 160, Subpart E and at 42 CFR Parts 422, 423 and 498 to include
a parallel statement regarding the treatment of published guidance.
Similarly, this proposed rule would amend the procedures at 45 CFR Part
81 to provide a similar statement regarding the treatment of published
guidance by hearing examiners and reviewing authorities. In addition,
this proposed rule would amend the hearing and appeal procedures at 45
CFR Part 160, Subpart E and 42 CFR Parts 422, 423, 498 and 1005 to
provide a parallel opportunity for Secretarial review of DAB decisions.
Finally, this proposed rule would revise the procedures for Head Start
grantee appeals by applying the current 60-day time limit for ``final
decisions'' to the Board's decision.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on January 28, 2008.
ADDRESSES: You may submit comments either by E-mail to
randolph.pate@hhs.gov or by mail to: Randy Pate, 200 Independence Ave.,
SW., Room 415F, Washington, DC 20201.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
FOR FURTHER INFORMATION CONTACT: Randy Pate, 202-690-7858.
SUPPLEMENTARY INFORMATION:
I. Background
HHS was the first federal grantor agency to offer a structured
process of administrative dispute resolution for its grantees on a
large scale, when, in 1973, it established what was then called the
Departmental Grant Appeals Board. The name was changed to the
Departmental Appeals Board (DAB) when, as noted below, the jurisdiction
was significantly expanded. The name ``Departmental Appeals Board'' is
now used to refer to two entities: (1) the decision-making body
consisting of Board Members, appointed by the Secretary, who issue
decisions made by panels of three Board Members; and (2) in general,
the larger organization, which is located in the Office of the
Secretary and which includes not only the Board, but also
[[Page 73709]]
Administrative Law Judges (ALJs), Administrative Appeals Judges who
serve on the Medicare Appeals Council, and organizational divisions
that support the Board Members and Judges, and perform other
organizational functions. Below, we use the term ``Board'' to refer to
the decision-making body and the acronym ``DAB'' to refer to the larger
organization.
The current rules for the Board, at 45 CFR Part 16, were issued on
August 31, 1981, at 46 FR 43818. Those rules set out a fair, quick and
flexible process for appeal from final written decisions. The rules
provide a framework which has been used by the Department for
resolution of an increasing range of disputes.
The basic jurisdiction of the Board over grant disputes is
described in Appendix A to the current regulations at 45 CFR Part 16.
This jurisdiction is exercised by the Board Members, with support from
the Appellate Division of the DAB. The Board also has appellate
jurisdiction over disputes that are heard by Administrative Law Judges
(ALJs) who, in most cases, are assigned to the DAB and supported by the
Civil Remedies Division of the DAB. These ALJ hearings are conducted
pursuant to separate regulatory provisions, but ALJ decisions are
subject to review by the Board. In 1988, the Secretary delegated to the
DAB responsibility for adjudicating civil money penalties and
exclusions imposed under a wide range of fraud and abuse authorities.
In 1993, the Secretary delegated to the DAB responsibility for hearing
appeals in provider and supplier participation, enrollment and
enforcement cases brought by CMS. Also, when the Social Security
Administration (SSA) became an independent agency in 1995, the
Secretary delegated to the Board Chair the Medicare Appeals Council
function of hearing appeals in Medicare coverage, payment and
entitlement cases.
The DAB has final review authority over the reconsideration and
appeal process for determinations under 42 CFR Part 498. These are
procedures for reviewing certain specified initial determinations,
which include those that affect participation in the Medicare and
Medicaid programs, impose sanctions on certain providers, and impose
enforcement remedies on laboratories under both Medicare and the
Clinical Laboratories Improvement Amendments of 1988. Under these
procedures, providers or suppliers generally have a right to a hearing
before an ALJ, and a review of the ALJ decision by the Board. When this
process was first established, by final rule published at 33 FR 7317
(May 17, 1968), the final review was vested in the Appeals Council of
the Social Security Administration, which was then a component agency
of this Department. Final review authority was transferred to the DAB
after the SSA became an independent agency. 61 FR 32347 (June 24,
1996).
The DAB has final review authority under 42 CFR Part 1005 over
disputes concerning the imposition of exclusions, CMPs, and assessments
relating to health care fraud and abuse under sections 1128 and 1128A
of the Social Security Act as well as other disputes. CMS and the I.G.
have been delegated the authority by the Secretary to administer these
health care fraud and abuse authorities, as described in 42 CFR Parts
402, 1001, 1003, and 1005. As provided in 42 CFR Part 1005, disputes
concerning the exercise of these authorities are heard by an ALJ, and
the decision of the ALJ may be appealed to the DAB. Under these
regulations, the scope of ALJ and DAB review is limited.
The DAB has review authority concerning Medicare Local Coverage
Determinations (LCDs) and National Coverage Determinations (NCDs)
pursuant to section 1869(f)(1) of the Social Security Act and to
regulations at 42 CFR Part 426. Challenges to LCDs are heard initially
by ALJs, with a statutory right of appeal to the Board, and challenges
to NCDs are heard by the DAB directly. This proposed rule would not
affect the LCD or NCD review authority.
Under 45 CFR Part 150, ALJs of the DAB provide hearings concerning
the imposition of civil money penalties by CMS against health insurance
issuers and non-federal governmental plans for failure to comply with
requirements of title XXVII of the Public Health Service Act and with
regulations at 45 CFR Parts 146 and 148 (``HIPAA portability
requirements''). This proposed rule would not affect these hearings,
which are subject to review by the CMS Administrator.
On February 16, 2006, at 71 FR 8389, the Department issued final
rules located in 45 CFR Part 160, Subpart E, providing for Board final
review authority over disputes involving the imposition of civil money
penalties for violation of the Administrative Simplification provisions
of Title II of the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) and its implementing regulations. These provisions
contain standards for certain financial and administrative
transactions, code sets, unique health identifiers and the security and
privacy of certain health information. The authority for civil money
penalties is contained in section 1176 of the Social Security Act, 42
U.S.C. 1320d-5, which at subparagraph (a)(2) provides an opportunity
for administrative appeals, by incorporating by reference section 1128A
of the Social Security Act, which includes the administrative hearing
and appeals requirements set forth in section 1128A(c), 42 U.S.C.
1320a-7a.
On December 5, 2007, at 72 FR 68700, CMS issued final regulations
at 42 CFR Parts 422 and 423 providing for appeals of civil money
penalties imposed on Medicare Advantage organizations and Medicare
prescription drug sponsors (based on a proposed rule issued May 25,
2007 at 72 FR 29368). These regulations provided for an opportunity for
a hearing before an ALJ and review of the ALJ determination by the
Board.
The DAB also exercises additional hearing and appeal
responsibilities based on procedural delegations of authority. Such
delegations can be made on a case-by-case basis, through a general
delegation of authority over a class of disputes, or through other
arrangements between the DAB and the Secretary or the head of the
appropriate HHS operating division or other agency responsible for
administering the program.
As the DAB's jurisdiction has increased, the issues for DAB review
have grown in complexity and significance. In addition, the volume of
cases has grown considerably. The DAB has responded to the challenges
posed with considerable diligence and sophistication. In particular,
Board members have developed great expertise in dispute resolution,
hearing procedures, and many aspects of the subject Departmental
programs.
The procedures used by the Board for grant disputes are broadly
modeled after adversary judicial proceedings and have been successful
in resolving factual disputes based on a record. Current rules,
however, lack sufficient safeguards to avoid putting the DAB in a
situation where it is prompted to substitute its judgment on
interpretive issues for that of the Secretary or the delegated
component with interpretive authority. While the Board has considerable
expertise in Departmental programs, however, under the current rules,
the Board does not have access to the full range of policy
considerations that the Secretary and the relevant component may have
in interpreting applicable statutes and regulations.
Similar considerations apply in the Board's appellate review of ALJ
decisions concerning civil money penalties under 45 CFR Part 160,
Subpart E, enforcement sanctions under
[[Page 73710]]
42 CFR Parts 422 and 423, review of initial determinations under 42 CFR
Part 498, or review of ALJ decisions concerning civil remedies.
Current regulations at 42 CFR Parts 422, 423, and 498 do not
specifically articulate the applicability of statutes, regulations, or
published guidance. And the current procedures at 45 CFR Part 160,
Subpart E, 42 CFR Part 498 and 42 CFR Part 1005 contain no provision
for Secretarial review.
As a result, these hearing procedures do not provide sufficient
safeguards to ensure that the decisions accurately reflect the
considered views of the Secretary.
In addition to the Departmental hearing procedures discussed above,
under 45 CFR Part 81, there are procedures governing administrative
hearings pursuant to Title VI of the Civil Rights Act of 1964 and 45
CFR Part 80. These hearings are conducted by hearing examiners who are
authorized, under Sec. 81.62, either to make initial decisions or to
recommend findings and propose decisions. These decisions are
reviewable by a reviewing authority, under Sec. 81.104, and by the
Secretary, under Sec. 81.106.
The hearing regulations in 45 CFR Part 81 do not clearly articulate
the applicability of statutes, regulations or published guidance.
Although the regulations can be read to imply that presiding officers
and reviewing authorities will be bound by applicable statutes,
regulations and guidance, there is no clear articulation of this
standard. As a result, there is a possibility that decisions of
presiding officers and reviewing authorities will not accurately
reflect applicable law or policy.
II. Provisions of This Proposed Rule
This rule proposes substantive changes in the general DAB
procedures at 45 CFR Part 16, and in the hearing and appeal procedures
at 45 CFR Parts 81 and 160, Subpart E, 42 CFR Part 1005 and 42 CFR Part
498. The rule proposes to clarify that, in cases heard by the Board
under the authority of 45 CFR Part 16, the Board must follow published
guidance issued by the Secretary or relevant component to the extent
the guidance is not inconsistent with applicable statutes and
regulations. The rule proposes to provide an opportunity for
Secretarial review (including, where the Secretary deems appropriate,
remand) of Board decisions under 45 CFR Part 16. The rule would also
amend 45 CFR Part 16 in several places to update the DAB's title,
update the current mailing address, and remove certain outdated
regulatory references. And the rule would amend Appendix A to 45 CFR
Part 16 to clarify that the Board's authority to hear disputes may
arise from a procedural delegation of authority directly from the
Secretary or other responsible official. The rule additionally proposes
to make conforming amendments to articulate the applicability of
statutes, regulations and published guidance in hearing and appeals
procedures under 45 CFR Part 81 and Part 160, Subpart E, and under 42
CFR Part 498. We would also provide an opportunity for Secretarial
review of decisions under 45 CFR Part 160, Subpart E, and 42 CFR Parts
498 and 1005.
We anticipate that, unless there are statutory reasons to the
contrary, future areas of DAB jurisdiction will incorporate similar
review procedures. We also intend that each of the provisions of this
DAB proposed rule will remain in force if any of the provisions are
invalidated for any reason.
Any final rule based on this proposed rule would be effective
prospectively only, and would not affect final decisions that have been
issued by the Board prior to the effective date. The final rule would
affect cases that are still under Board review as of the effective date
of the final rule.
We address each of the modifications in this proposed rule
individually below:
A. Applicability of statutes, regulations and published guidance (45
CFR Sec. 16.14)
Current regulations at 45 CFR Sec. 16.14 provide that the Board
``shall be bound by all applicable laws and regulations.'' This
provision, however, does not address the weight to be afforded
interpretations of statutes and regulations that have been adopted by
the Secretary either directly or through the Departmental component
with delegated authority to administer the program whose decision is
the subject of Board review.
In this proposed rule, we clarify that the Board should follow
published guidance of the Secretary or relevant component, to the
extent not inconsistent with applicable statutes and regulations. This
requirement would parallel the standard included at 45 CFR Sec.
160.508(c)(1) of the final regulations recently issued governing
appeals involving the imposition of civil money penalties for
violations of the Administrative Simplification provisions under HIPAA
and its implementing regulations. As we indicated in that rulemaking,
by ``published guidance'' we mean to include guidance that has been
publicly disseminated. 71 FR 8416. In this case, this includes, for
example, guidance issued through manual provisions, State Medicaid
Directors letters, or posting on the CMS Web site. While this would not
include written statements that are issued to particular grantees, or
in briefs filed by the respondent agency in litigation, we expect that
the Board would give weight to such statements in the absence of
contrary published guidance or conflicts with other agency statements,
as an initial exercise of the interpretative authority delegated to the
agency and an expression of the agency's policy expertise. This is
particularly true with respect to issues of first impression. When
there is no published guidance on an issue, or when there is ambiguity
in the published guidance, we would expect the Board to review relevant
unpublished issuances for direction in interpreting such an issue.
By ``relevant component'' we mean the Departmental component
delegated responsibility for interpreting and administering the
provision at issue. This would not necessarily be the component that is
a party in the proceeding before the Board. For example, the issuances
of a component operating a grant program would not be controlling with
respect to interpretations of cost allocation requirements, since
responsibility for interpreting such requirements is delegated to the
Departmental Division of Cost Allocation. To make this clear, we are
also providing that the Board will be bound by Secretarial delegations
of authority.
This clarification would help to ensure that the decisions of the
Board reflect the considered judgment of the Department on such issues.
The proposed provision would explain that it is not the role of the
Board to weigh the relative strengths of an interpretation adopted
after due consideration of relevant factors by the Department or its
components. The strength of regulatory and policy interpretations are
necessarily considered in their adoption. It is the role of the
Department and its components to craft regulations and adopt policy
interpretations. In that process, the Department necessarily
contemplates various policy alternatives and litigation risks. Those
considerations are legitimately left to the discretion of the
Department and its components rather than an adjudicative body like the
Board. Because the Board was created as an adjudicator, separate and
apart from the policy-making components of the Department, its role is
important but limited. As the
[[Page 73711]]
Supreme Court has recognized, where a separate administrative
adjudicatory body is created, its role is limited to finding facts and
resolving individual disputes, but it is not authorized to develop new
interpretive policies. Having the DAB substitute its policy views would
limit the ability of the Department to determine the level of
acceptable risk in light of program priorities and goals, and
ultimately would limit Departmental flexibility in performing its
functions.
We anticipate that this change would have greater effect in
statutory entitlement programs than it would in discretionary grant
programs. In certain discretionary grant programs, the requirements are
neither statutory nor regulatory but are largely set by the grant award
terms and conditions. These requirements are akin to contractual
obligations. In these discretionary grant programs, the issue of notice
to the grantee of a purported requirement may be the key issue in
resolving disputes. The adequacy of the notice may depend on the
specific grant documents applicable to the grant award. By contrast, in
statutory entitlement programs, requirements are set in statute and
regulation, and disputes focus on statutory and regulatory
interpretation. In those instances, the DAB would be required to follow
published guidance of the Secretary or the relevant component on the
interpretive issue. Notice to the grantee generally would not be
determinative in a statutory program since the applicable statute or
regulation gives grantees notice of the scope of interpretive
flexibility.
B. Secretarial Review of DAB Decisions Concerning Disputes (45 CFR
16.21)
The original rules of the Board provided for the relevant
constituent component of the Department to review, modify, or reverse
Board decisions before they became final decisions of the Secretary. 45
CFR 16.10 (1973); 38 FR 9907 (Apr. 20, 1973). In 1978, HHS's rules were
modified so that the Board decisions would be ``final administrative
decisions with respect to reconsideration of disallowances arising
under various Federal-State public assistance programs.'' 43 FR 9264,
9264 (March 6, 1978). When the current Board grant review regulations
were originally proposed on January 6, 1981, 46 FR 1644, there was a
provision for Secretarial review of Board decisions. In the final
rules, adopted on August 31, 1981, 46 FR 43816, that provision was
omitted. The preamble to the final rule stated that numerous comments
had been submitted on this issue, and that ``[t]he Department continues
to study whether Board decisions should be `final' or should be subject
to Secretarial review.'' The preamble indicated that the omission of
the provision for Secretarial review did not reflect a final decision
on this issue, but was an interim measure ``to avoid further delay in
implementing these procedures.''
Now, with over 20 years of experience, we are again proposing to
authorize Secretarial review of Board decisions. This change is
intended to ensure consistency in decision making and to ensure that
the Secretary's policies are correctly implemented. Further, this
proposed change is consistent with the rules originally establishing
the Board for adjudication of grant disputes. While we intend that the
instances of Secretarial review will be limited, the availability of
such review is essential to ensure the accuracy of DAB decisions in
reflecting the proper application of relevant statutes, regulations and
interpretive policy. Such accuracy is important because Board decisions
are binding on the Department in the case at hand, are considered final
federal agency action for purposes of judicial review, and may have
some precedential value for future adjudications. In cases of first
impression, these decisions may be the first articulation of
Departmental interpretation and implementation of policies with respect
to applicable statutes and regulations. Only through review of DAB
decisions can the Department exercise its full authority to interpret
and implement statutory and regulatory provisions and ensure that the
Secretary's policies are appropriately implemented. The Secretary's
views will continue to be ultimately subject to federal court review.
We are proposing a clear time frame for the Secretary to determine
whether to undertake review, so as not to unduly delay the
administrative review process and the availability of judicial review.
We believe 30 days should be sufficient time for the Secretary to
determine whether review is warranted. We have not proposed any process
for either party to request Secretarial review, and we do not
anticipate that the Secretary or the delegated official performing the
review would consider external requests for review.
We anticipate that Secretarial review will ordinarily be completed
within a 45-day time frame after acceptance of review. In light of the
varying complexity and significance of Board cases, however, we are not
proposing to limit the time for Secretarial consideration. For example,
additional time may be required in cases involving a voluminous record,
or when additional development of the record is necessary.
After undertaking review, the Secretary would be authorized to
affirm or reverse a Board decision, or to remand a case back to the
Board for further consideration of identified errors in the application
of statutes, regulations or interpretive policy. In cases where
Secretarial review is undertaken, the original DAB decision would be
regarded as a proposed decision, and would be set aside to the extent
inconsistent with the Secretary's review decision.
In cases involving certain parts of title IV of the Social Security
Act, the Secretary would only be authorized to affirm the Board or
remand the case back to the Board with instructions for further
consideration. This is because sections 410(c) and 1123A(c) of the
Social Security Act, pertaining to the program for Temporary Assistance
for Needy Families, provide that the final decision of the Board is
appealable to federal court. In these cases, while we would provide for
Secretarial review, the Board would issue the final agency decision.
We have not proposed in the regulatory text any briefing or other
procedures for Secretarial review in order to maintain flexibility to
tailor the process to the needs of the particular case. We anticipate
that the Secretary would notify the parties as to the procedures to be
followed. But we invite comments on whether the regulations should
specify procedures for Secretarial review.
We propose to require that the Secretary would issue a written
decision upon review. In the case of affirmance or reversal of the
Board decision, this would be the final decision of the Secretary on
the matter. The written decision would contain the basis for the
Secretary's conclusions. In the case of a summary affirmance, or a
partial affirmance, the written decision could incorporate by reference
some or all of the Board decision. In the case of a remand of the case
to the Board for further proceedings, the written remand order would
include the basis for remand and would instruct the DAB in the proper
application of statutes, regulations or interpretive policy. Upon
remand, the Board would be bound by the Secretary's remand
instructions. The Board would be responsible, however, to apply the law
to the facts of the particular case. The Board would thus issue a new
decision in accordance with the Secretary's instructions.
[[Page 73712]]
While we anticipate that Secretarial review will be a review of the
record created before the Board, the Secretary may identify specific
issues for which additional briefing by the parties is necessary. This
additional briefing would ensure that the record fully reflects the
factual, legal and policy issues that the Secretary considers in
reviewing the case. Such additional briefing would ensure that both
sides have a full and fair opportunity to respond to issues that the
Secretary determines are relevant to the outcome. We do not presently
contemplate providing the parties a right to request an additional
briefing opportunity, but we solicit comments on whether there are
circumstances in which such a right would be appropriate.
C. Technical Changes (45 CFR Part 16)
1. Title of 45 CFR Part 16, 45 CFR Sec. Sec. 16.2 and 16.20(a)--
Updating DAB Name and Address
We propose to delete the word ``Grant'' from the title of 45 CFR
Part 16 and the definition of the ``Board'' in Sec. 16.2, and to
update the name and address of the DAB in Sec. 16.20(a). In Sec.
16.20(a), we would reference filing instructions set forth in the final
written decision being appealed and the Appellate Division Practice
Manual found on DAB's Web site. We indicate that the DAB's mailing
address can be found on that Web site because the Web site can reflect
updated addresses. We also list the 2007 address. In light of these
references, we would delete Sec. 16.20(d) and (e), since these
provisions refer to issues addressed in the filing instructions noted
in revised Sec. 16.20(a) and, furthermore, do not reflect current
Board procedures relating to electronic submissions.
2. 45 CFR Sec. Sec. 16.3(b), 16.7(a), 16.12 and 16.22(b)(1)-Deleting
Outdated References
45 CFR Sec. Sec. 16.3(b), 16.7(a) and 16.22(b)(1) contain outdated
references to sections of 45 CFR Part 74, which has since been revised
so that the cited sections no longer correspond to the referenced
substance. For example, the references to 45 CFR 74.304 in Sec.
16.3(b) and 16.7(a) would more properly be to 45 CFR 74.90. We propose
to delete these references both because they are outdated and because
the regulations at 45 CFR Part 74 are general cross-cutting
Departmental rules and many of the programs subject to review now have
individualized regulatory provisions that address the same subjects, in
some cases in more detail. 45 CFR 16.12(d) contains an outdated
reference to the Public Health Service, which we would delete. Instead,
we would insert a parenthetical reference to the process set forth at
42 CFR Part 50 as an example of a formal preliminary review process.
3. 45 CFR Part 16, Appendix A--Updating References and Reflecting Board
Authority to Hear Disputes Based on Procedural Delegations of Authority
In Appendix A, we propose to update or delete outdated statutory
and regulatory references. In addition, as noted above, the Board
exercises hearing and appeal responsibilities based on procedural
delegations of authority to the Board from the Secretary, the head of
the appropriate HHS component responsible for administering the
program. Such a delegation may be made on a case-by-case basis, through
general delegations of authority over a class of disputes, or through
other arrangements between the DAB and the Secretary or the head of the
appropriate HHS component responsible for administering the program.
The proposed rule would clarify Appendix A to make clear that the Board
may hear cases based on such a delegation.
D. Addition of 45 CFR Sec. 81.64--Conforming Changes in Standard of
Review
Regulations in 45 CFR Part 81 set forth procedures for
administrative hearings pursuant to Title VI of the Civil Rights Act of
1964 and 45 CFR Part 80. These hearings are conducted by hearing
examiners who are authorized, under Sec. 81.62, to either make initial
decisions or recommended findings and proposed decisions. These
decisions are reviewable by a reviewing authority, under Sec. 81.104,
and by the Secretary, under Sec. 81.106.
The regulations governing these hearings and reviews, however, do
not clearly articulate the standard of review to be applied by hearing
examiners and reviewing authorities in reviewing issues of law,
regulation or policy interpretation.
We are thus proposing to add a new section, Sec. 81.64, to explain
that hearing examiners and reviewing authorities are bound by all
applicable statutes, regulations, Secretarial delegations of authority
and published guidance and interpretations of the Secretary or relevant
component to the extent not inconsistent with applicable statutes and
regulations. This is the same standard, discussed above, that would be
applied in DAB review under 45 CFR Part 16. This change would thus
conform the standard of review in these hearings with the standard of
review in other Departmental hearing procedures.
E. 45 CFR Sec. Sec. 160.508(c), 160.548, and 160.554--Conforming
Changes in Standard of Review, Removal of Board Decision
Reconsideration Process and Provision for Secretarial Review Authority
Regulations at 45 CFR Part 160, Subpart E, set out procedures for
administrative hearings for disputes involving the imposition of civil
money penalties for violation of the Administrative Simplification
provisions of HIPAA and its implementing regulations. Current
regulations in 45 CFR Sec. 160.508(c)(1) articulate limitations on ALJ
review with respect to finding invalid or refusing to follow Federal
statutes, regulations, or Secretarial delegations of authority, or
refusing to defer to published Departmental guidance. While we believe
these limitations embody the same principles as the limitations that we
are proposing elsewhere in this rulemaking, we are proposing to revise
slightly 45 CFR Sec. 160.508(c)(1) to conform the description of these
limitations to the other proposed regulatory provisions discussed in
this rulemaking.
These limitations are also intended to apply to Board appellate
review of the ALJ decisions. Accordingly, to make clear that these same
limitations also apply to Board appellate review of ALJ decisions, we
propose to add a provision to that effect at Sec. 160.548(h)(2).
We also propose to provide for Secretarial review authority for
Board and certain ALJ decisions by inserting a new proposed Sec.
160.554 and making conforming changes to 45 CFR 160.548(j) and (k)(1).
The same considerations discussed above with respect to DAB review
under 45 CFR Part 16 apply to decisions concerning civil money
penalties for violations of Administrative Simplification requirements
that are subject to the appeal processes set forth under 45 CFR Part
160. Thus, we believe that Secretarial review authority is appropriate
under these provisions. Because Board review is not a mandatory part of
the appeals process under Part 160 (the Board can decline review of an
ALJ decision), we are proposing Secretarial review of both ALJ
decisions that the Board has declined to review and Board decisions. To
ensure that the Board has the primary review authority, however, we
propose that the Secretary will only be able to review an ALJ decision
after the Board denies a request for review of the case.
[[Page 73713]]
In addition, because of the proposed addition of Secretarial review
to the HIPAA Administrative Simplification hearing appeals process, we
are proposing to remove the level of review that currently exists at
Sec. 160.548(j) for reconsideration by the Board, on request of either
party, of its own decisions.
The proposed removal of the reconsideration process would ensure
the appeals process remains efficient and is not unduly prolonged.
Also, the removal of the reconsideration process would better align the
appeals process at Part 160 with the appeals process provided in the
regulations at 42 CFR Part 1005, upon which the hearing appeals
provisions at 45 CFR Part 160 were originally based.
F. Revision of 45 CFR 1303.17(a) To Conform Timing for Head Start
Appeals To Provide for Opportunity for Secretarial Review
The current provisions at 45 CFR 1303.17(a) require that the
``final'' decision be rendered not later than 60 days after the closing
of the record before the Board. We propose to revise this regulation by
providing that this time limit is applicable only to the timing of the
Board's decision, by replacing the phrase ``final decision'' with
``Board's decision.''
G. Revision of 42 CFR Parts 422 and 423 By the addition of 42 CFR
Sec. Sec. 422.1007, 422.1085, 423.1007 and 423.1085 and Revisions to
42 CFR Sec. Sec. 422.1068, 422.1078(c), 422.1086, 422.1088, 423.1068,
423.1078(c), 423.1086, and 423.1088--Conforming Articulation of
Limitations on Review and Provision for Secretarial Review Authority
Recently issued regulations in 42 CFR Parts 422 and 423 do not
articulate the principle that administrative law judges and the Board
are bound by all applicable statutes and regulations. Articulation of
this principle may prevent inappropriate arguments or requests for
equitable relief unfounded in law or practice. The articulation of this
principle will also make the appeals process more transparent. In
addition, we propose to include in the new regulatory provision
language parallel to the language proposed for 45 CFR Sec. 16.14
regarding the treatment of published guidance by the Secretary or
relevant component. We see no basis to distinguish the scope of review
in appeals under 42 CFR Parts 422 and 423 from that proposed in appeals
under 45 CFR Part 16. In all cases, the fundamental interpretive
authority rests in the Secretary or the component delegated the
authority by the Secretary to administer the provisions at issue.
We also propose to provide authority for Secretarial review of
Board and ALJ decisions by adding 42 CFR Sec. Sec. 422.1085 and
423.1085. The same considerations discussed above with respect to Board
review under 45 CFR Part 16 apply to decisions concerning initial
determinations under Medicare and Medicaid that are subject to the
appeal processes set forth under 42 CFR Parts 422 and 423. Thus, we
believe that Secretarial review authority is appropriate under these
appeal provisions.
Secretarial review ensures that the Department exercises its full
authority to interpret and implement statutory and regulatory
provisions and ensures that the Secretary's policies are appropriately
implemented. The Secretary's views will continue to be ultimately
subject to federal court review.
Because DAB review is not a mandatory part of the appeals process
under Parts 422 and 423 (the Board can deny review of an ALJ decision),
we are proposing Secretarial review of both ALJ decisions and Board
decisions. By this, we intend that where the Board denies or dismisses
review of an ALJ decision (42 CFR Sec. Sec. 422.1078 and 423.1078),
the Secretary may review the ALJ decision and affirm, reverse or
remand, parallel to the authority in the proposed 45 CFR Sec. 16.21.
To ensure that the Board has the primary review authority, however, we
propose that the time frame for determination of whether the Secretary
will review an ALJ decision will run only from the time that the Board
denies a request for review of the case.
In sum, we are proposing a similar opportunity for Secretarial
review under this provision as we propose under 45 CFR Part 16.
H. Addition of 42 CFR Sec. 498.8 and Revisions to 42 CFR Sec. Sec.
498.74, 498.89 and 498.90--Conforming Articulation of Limitations on
Review and Provision for Secretarial Review Authority
Current regulations in 42 CFR Part 498 do not articulate the
principle that administrative law judges and the Board are bound by all
applicable statutes and regulations. While in practice, this principle
has generally been applied in decisions, and thus articulation of this
principle will not result in any change in practice, its articulation
may prevent inappropriate arguments or requests for equitable relief
unfounded in law or practice. The articulation of this principle will
also make the appeals process more transparent. In addition, we propose
to include in the new regulatory provision language parallel to the
language proposed for 45 CFR Sec. 16.14 regarding the treatment of
published guidance by the Secretary or relevant component. We see no
basis to distinguish the scope of review in appeals under 42 CFR Part
498 from that proposed in appeals under 45 CFR Part 16. In both cases,
the fundamental interpretive authority rests in the Secretary or the
component delegated the authority by the Secretary to administer the
provisions at issue.
We also propose to provide authority for Secretarial review of
Board and ALJ decisions. The same considerations discussed above with
respect to Board review under 45 CFR Part 16 apply to decisions
concerning initial determinations under Medicare and Medicaid that are
subject to the appeal processes set forth under 42 CFR Part 498. Thus,
we believe that Secretarial review authority is appropriate under this
provision.
In particular, there are a significant number of decisions under
Part 498 that may be the first articulation of Departmental
interpretation and implementation of policies with respect to
applicable statutes and regulations. Only through review of these
decisions can the Department exercise its full authority to interpret
and implement statutory and regulatory provisions and ensure that the
Secretary's policies are appropriately implemented. The Secretary's
views will continue to be ultimately subject to federal court review.
Because DAB review is not a mandatory part of the appeals process
under Part 498 (the Board can deny review of an ALJ decision), we are
proposing Secretarial review of both ALJ decisions and Board decisions.
By this, we intend that where the Board denies review of an ALJ
decision (42 CFR Sec. Sec. 498.74(b)(2), 498.83(a)), the Secretary may
review the ALJ decision and affirm, reverse or remand, parallel to the
authority in the proposed 45 CFR Sec. 16.21. To ensure that the Board
has the primary review authority, however, we propose that the time
frame for determination of whether the Secretary will review an ALJ
decision will run only from the time that the Board denies a request
for review of the case.
In sum, we are proposing a similar opportunity for Secretarial
review under this provision as we propose under 45 CFR Part 16.
I. Revisions to 42 CFR Part 1005--Conforming Provision for Secretarial
Review Authority
We propose to provide regulatory authority for Secretarial review
of Board decisions concerning the exclusion, CMP, and assessment
authorities
[[Page 73714]]
delegated to the I.G. by the Secretary. The same considerations
discussed above with respect to Board review under 45 CFR Part 16 and
42 CFR Part 498 apply to such decisions. Thus, we believe that
Secretarial review authority is appropriate under this provision.
As with 45 CFR Part 16 and 42 CFR Part 498, there are a significant
number of decisions under 42 CFR Part 1005 that may be the first
articulation of Departmental interpretation and implementation of
policies with respect to applicable statutes and regulations. Only
through review of these decisions can the Department exercise its full
authority to interpret and implement statutory and regulatory
provisions and ensure that the Secretary's policies are appropriately
implemented. The Secretary's views will continue to be ultimately
subject to federal court review.
The proposed revisions would provide that, when the Board declines
review of an ALJ decision under Sec. 1005.21(g), the Secretary may
review the ALJ decision, as contemplated in proposed 42 CFR Sec.
1005.24. To ensure that the Board continues to have the primary review
authority, we are proposing that the time frame for determination of
whether the Secretary will review an ALJ decision will run only from
the time that the Board denies a request for review of the case. In
addition, the procedure for Secretarial review has been tailored in
proposed Sec. 1005.24 to conform to the administrative appeals process
in Part 1005.
Because of the limitations on Board review that currently exist in
the regulations relating to the exclusion, CMP, and assessment
authorities, we do not believe additional clarification is needed with
respect to the Board's treatment of published guidance. The regulations
limit an ALJ's ability to find invalid or refuse to follow a federal
statute or regulation. 42 CFR Sec. 1005.4(c)(1). Also, an ALJ is
unable to review the exercise of discretion in imposing a permissive
exclusion, CMP, or assessment, or to reduce a period of exclusion to
zero. 42 CFR Sec. Sec. 1005.4(c)(5)-(7). The only issues that may be
appealed in an exclusion action are whether the petitioner received
proper notice of the exclusion, whether a basis for exclusion exists,
and whether the length of the exclusion is unreasonable. 42 CFR Sec.
1001.2007(a). Further, an ALJ is required to follow the determination
of the scope and effect of an exclusion. 42 CFR Sec. 1005.4(c)(5).
Finally, the Board's standard of review of factual disputes is whether
the ALJ's decision is supported by substantial evidence on the whole
record. 42 CFR Sec. 1005.21(h). The Board's standard of review of
legal disputes is whether the ALJ's decision is erroneous. Id. Because
these regulations limit the issues that are appealable, they safeguard
the discretion to pursue exclusions, CMPs, or assessments in
appropriate cases. The proposed ability of the Secretary to review
Board decisions will help preserve the Secretary's authority to
interpret the exclusion, CMP, and assessment statutes and regulations.
Therefore, we are not amending the DAB standard of review for
matters that fall within 42 CFR Part 1005. We are, however, proposing a
Secretarial review process under 42 CFR Part 1005 as is similarly
proposed under 45 CFR Part 16.
III. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the Dates section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
IV. Regulatory Impact Statement
We have examined the impact of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), as
amended by Executive Order 13422 (January 2007), the Regulatory
Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section
1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of
1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866, as amended, directs agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
This rule concerns agency administrative appeal procedures, and any
direct burden that is imposed on appellants (such as the cost of
additional briefing or the cost of delays in the final agency decision)
does not reach the economic threshold and, thus, is not considered a
major rule. These changes in agency procedures may impact the handling
of administrative appeals that involve more than $100 million in a
year. But any impact would result from improved application of existing
statutes, regulations and Departmental interpretations and must be
attributed to those underlying legal requirements. While we conclude
that this proposed rule is not economically significant, we
nevertheless are characterizing this proposed rule as significant under
E.O. 12866 because it will materially affect the procedural rights of
grant recipients with respect to appeals. As noted above, the proposed
rule would not affect substantive rights to administrative
determinations consistent with existing statutes, regulations and
Departmental interpretations.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, by virtue of either nonprofit status or having
revenues of $6 million to $29 million in any 1 year. Individuals and
States are not included in the definition of a small entity. While
there are a number of small entities that receive Departmental grants
and have access to the DAB for appeal of disallowances, we have
determined that the direct effects of the proposed changes in
administrative appeal procedures, such as the cost of additional
briefing or the cost of delays in the final agency decision, are not
economically significant. Thus, we are not preparing an analysis for
the RFA because we have determined that this rule will not have a
significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Social Security Act requires us
to prepare a regulatory impact analysis if a rule may have a
significant impact on the operations of a substantial number of small
rural hospitals. This analysis must conform to the provisions of
section 603 of the RFA. For purposes of section 1102(b) of the Social
Security Act, we define a small rural hospital as a hospital that is
located outside of a Core-Based Statistical Area and has fewer than 100
beds. We are not preparing an analysis for section 1102(b) of the Act
because we have determined that this rule will not have a significant
impact on the operations of a substantial number of small rural
hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending
[[Page 73715]]
in any one year of $100 million in 1995 dollars, updated annually for
inflation. That threshold level is currently approximately $120
million. The direct burden of these changes in administrative appeal
procedures, such as the cost of additional briefing or the cost of
delays in the final agency decision, does not reach the economic
threshold. An indirect impact may result from improved application of
existing statutes, regulations and Departmental interpretations, but
must be attributed to those underlying legal requirements. As a result,
we conclude that this rule will have no consequential effect on State,
local, or tribal governments or on the private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. Since this regulation does not impose any significant
direct costs on State or local governments, the requirements of E.O.
13132 are not applicable.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 422
Administrative practice and procedure, Health facilities, Health
maintenance organizations (HMO), Medicare, Penalties, Privacy, and
Reporting and recordkeeping requirements.
42 CFR Part 423
Administrative practice and procedure, Emergency medical services,
Health facilities, Health maintenance organizations (HMO), Health
professionals, Medicare, Penalties, Privacy, and Reporting and
recordkeeping requirements.
42 CFR Part 498
Administrative practice and procedure, Health facilities, Health
professions, Medicare, and Reporting and recordkeeping requirements.
42 CFR Part 1005
Administrative practice and procedure, Fraud, Grant programs-
health, Health facilities, Health professions, Maternal and child
health, Medicaid, Medicare, Penalties, and Social security.
45 CFR Part 16
Administrative practice and procedure, Grant programs health, and
Grant programs-social programs.
45 CFR Part 81
Administrative practice and procedure, and Civil rights.
45 CFR Part 160
Administrative practice and procedure, Computer technology, Health
care, Health facilities, Health insurance, Health records, Hospitals,
Medicaid, Medicare, Penalties, and Reporting and recordkeeping
requirements.
45 CFR Part 1303
Administrative practice and procedure, Education of disadvantaged,
Grant programs-social programs, and Reporting and recordkeeping
requirements.
For the reasons set forth in this preamble, the Department of
Health and Human Services proposes to amend 42 CFR chapters IV (parts
422 and 423 as published on December 5, 2007 (72 FR 68700)) and V and
45 CFR chapters I and XIII as follows:
Title 42--Public Health
PART 422--MEDICARE ADVANTAGE PROGRAM
1. The authority citation for part 422 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart T--Appeal procedures for Civil Money Penalties
2. Section 422.1007 is added to read as follows:
Sec. 422.1007 Limitations of review.
The ALJ and the Departmental Appeals Board may not find invalid or
refuse to follow Federal statutes, regulations, or Secretarial
delegations of authority and must follow published guidance to the
extent not inconsistent with statute or regulation.
3. Section 422.1068 is amended by--
A. Removing the word ``or'' at the end of paragraph (b)(3).
B. Redesignating paragraph (b)(4) as paragraph (b)(5).
C. Adding new paragraph (b)(4).
The addition reads as follows:
Sec. 422.1068 Administrative Law Judge's decision.
* * * * *
(b) * * *
(4) The Secretary undertakes review of the case pursuant to Sec.
422.1085 of this chapter.
* * * * *
4. Section 422.1078 is amended by revising paragraph (c) to read as
follows:
Sec. 422.1078 Departmental Appeals Board action on request for
review.
* * * * *
(c) Effect of dismissal. The dismissal of a request for Board
review shall be the final agency decision unless the Secretary elects
review under Sec. 422.1085.
* * * * *
5. Section 422.1085 is added to read as follows:
Sec. 422.1085 Secretarial Review of ALJ or Departmental Appeals Board
decisions.
The Secretary may review a decision of an ALJ or the Board for
error in applying statutes, regulations or interpretive policy.
(a) A copy of each preliminary Board decision will be delivered to
the Secretary and the parties within 5 working days from the date the
Board issues it. When the Board denies a request for review of an ALJ
decision, a copy of the ALJ decision will be delivered to the Secretary
and the parties within 5 working days from the date the Board declines
to review it.
(b) After delivery of the Board or ALJ decision, the Secretary may,
within 30 days of receipt of the decision, undertake review of the case
by mailing (or otherwise communicating) to the Board, or the ALJ, and
the parties notice of a pending Secretarial review. The underlying
decision will be a preliminary decision during the 60-day period after
issuance, or a longer period while Secretarial review is pending. If
the Secretary decides not to review the case within 30 days, or if the
Secretary affirms the decision, summarily, the Board or ALJ decision
becomes the final decision of the Secretary on the matter.
(c) After undertaking review of a case, the Secretary may affirm or
reverse the underlying decision, or remand the case with instructions
for further proceedings. If the Secretary affirms with modifications or
reverses the underlying decision, a written decision that sets forth
the basis for the action will be the final decision of the Secretary on
the matter. If the Secretary remands the case for further proceedings,
the original Board or ALJ decision shall be set aside and a written
remand order will issue from the Secretary which shall include the
reasons for remand and instructions on the proper application of
statutes, regulations or interpretive policy. Such
[[Page 73716]]
an order will be binding on the Board or ALJ which shall issue a new
decision consistent with the Secretary's remand order.
(d) If the Secretary declines review, or disposes of the case by
final decision affirming or reversing the Board, the Board shall
promptly issue a notice of case closure to the parties.
6. Section 422.1086 is amended by revising the section heading, the
introductory text of paragraph (a), and paragraph (c) to read as
follows:
Sec. 422.1086 Effect of the Departmental Appeals Board or Secretarial
decision.
(a) General rule. A decision of the Board is the final agency
decision, unless: the time period permitted for Secretarial review has
not elapsed; it is the subject of a Secretarial remand; or it is set
aside by a decision by the Secretary to affirm or reverse. If a
decision of the Board is set aside by the Secretary, the Secretary
shall issue the final agency decision. The final agency decision shall
be indicated in the notice of case closure issued by the Board pursuant
to 422.1085(d), and shall be binding unless --
* * * * *
(c) Special rules. Civil money penalty--
Finality of decision. When CMS imposes a civil money penalty, the
final administrative action that initiates the 60-day period for
seeking judicial review will be receipt of the notice of case closure
issued by the Board pursuant to Sec. 422.1085(d).
7. Section 422.1088 is amended by revising paragraph (a) to read as
follows:
Sec. 422.1088 Extension of time for seeking judicial review.
(a) Any affected party that is dissatisfied with a final
administrative decision that imposes a CMP, either a binding decision
of the Departmental Appeals Board under 422.1086 or a decision by the
Secretary under 422.1085, and is entitled to judicial review must
commence a civil action within 60 calendar days from receipt of the
notice of case closure issued pursuant to 422.1085(d), unless the Board
extends the time in accordance with paragraph (c) of this section.
* * * * *
PART 423--VOLUNTEER MEDICAL PRESCRIPTION DRUG BENEFIT
8. The authority for part 423 continues to read as follows:
Authority: Secs 1102, 1860D-1 through 1860D-42, and 1871 of the
Social Security Act (42 U.S.C. 1302, 1395w-101 through 1395w-152,
and 1395hh).
Subpart T--Appeal Procedures for Civil Money Penalties
9. Section 423.1007 is added to read as follows:
Sec. 423.1007 Limitations of review.
The ALJ and the Departmental Appeals Board may not find invalid or
refuse to follow Federal statutes, regulations, or Secretarial
delegations of authority and must follow published guidance to the
extent not inconsistent with statute or regulation.
10. Section 423.1068 is amended by--
A. Removing the word ``or'' at the end of paragraph (b)(3).
B. Redesignating paragraph (b)(4) as paragraph (b)(5).
C. Adding new paragraph (b)(4).
The addition reads as follows:
Sec. 423.1068 Administrative Law Judge's decision.
* * * * *
(b) * * *
(4) The Secretary undertakes review of the case pursuant to Sec.
423.1085.
* * * * *
11. Section 423.1078 is amended by revising paragraph (c) to read
as follows:
Sec. 423.1078 Departmental Appeals Board action on request for
review.
* * * * *
(c) Effect of dismissal. The dismissal of a request for Board
review shall be the final agency decision unless the Secretary elects
review under Sec. 423.1085.
* * * * *
12. Section 423.1085 is added to read as follows:
Sec. 423.1085 Secretarial Review of ALJ or Departmental Appeals Board
decisions.
The Secretary may review a decision of an ALJ or the Board for
error in applying statutes, regulations or interpretive policy.
(a) A copy of each preliminary Board decision will be delivered to
the Secretary and the parties within 5 working days from the date the
Board issues it. When the Board denies a request for review of an ALJ
decision, a copy of the ALJ decision will be delivered to the Secretary
and the parties within 5 working days from the date the Board declines
to review it.
(b) After delivery of the Board or ALJ decision, the Secretary may,
within 30 days of receipt of the decision, undertake review of the case
by mailing (or otherwise communicating) to the Board, or the ALJ, and
the parties notice of a pending Secretarial review. The underlying
decision will be a preliminary decision during the 60-day period after
issuance or a longer period while Secretarial review is pending. If the
Secretary decides not to review the case within 30 days, or if the
Secretary affirms the decision, summarily, the Board or ALJ decision
becomes the final decision of the Secretary on the matter.
(c) After undertaking review of a case, the Secretary may affirm or
reverse the underlying decision, or remand the case with instructions
for further proceedings. If the Secretary affirms with modifications or
reverses the underlying decision, a written decision that sets forth
the basis for the action will be the final decision of the Secretary on
the matter. If the Secretary remands the case for further proceedings,
the original Board or ALJ decision shall be set aside and a written
remand order will issue from the Secretary which shall include the
reasons for remand and instructions on the proper application of
statutes, regulations or interpretive policy. Such an order will be
binding on the Board or ALJ which shall issue a new decision consistent
with the Secretary's remand order.
(d) If the Secretary declines review, or disposes of the case by
final decision affirming or reversing the Board, the Board shall
promptly issue a notice of case closure to the parties.
13. Section 423.1086 is amended by revising the section heading,
the introductory text of paragraph (a), and paragraph (c) to read as
follows:
Sec. 423.1086 Effect of the Departmental Appeals Board or Secretarial
decision.
(a) General rule. A decision of the Board is the final agency
decision, unless: the time period permitted for Secretarial review has
not elapsed; it is the subject of a Secretarial remand; or it is set
aside by a decision by the Secretary to affirm or reverse. If a
decision of the Board is set aside by the Secretary, the Secretary
shall issue the final agency decision. The final agency decision shall
be indicated in the notice of case closure issued by the Board pursuant
to 423.1085(d), and shall be binding unless--
* * * * *
(c) Special rules. Civil money penalty--
Finality of decision. When CMS imposes a civil money penalty, the
final administrative action that initiates the 60-day period for
seeking judicial review will be receipt of the notice of case closure
issued by the Board pursuant to 423.1085(d).
14. Section 423.1088 is amended by revising paragraph (a) to read
as follows:
[[Page 73717]]
Sec. 423.1088 Extension of time for seeking judicial review.
(a) Any affected party that is dissatisfied with a final
administrative decision that imposes a CMP, either a binding decision
of the Departmental Appeals Board under Sec. 423.1086 or a decision by
the Secretary under Sec. 423.1085, and is entitled to judicial review
must commence a civil action within 60 calendar days from receipt of
the notice of case closure issued pursuant to Sec. 423.1085(d), unless
the Board extends the time in accordance with paragraph (c) of this
section.
* * * * *
PART 498-- APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT
PARTICIPATION IN THE MEDICARE PROGRAM AND FOR DETERMINATIONS THAT
AFFECT THE PARTICIPATION OF ICFS/MR AND CERTAIN NFS IN THE MEDICAID
PROGRAM
15. The authority citation for part 498 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart A--General Provisions
16. Section 498.8 is added to read as follows:
Sec. 498.8 Limitations of review.
The ALJ and the Departmental Appeals Board may not find invalid or
refuse to follow Federal statutes, regulations, or Secretarial
delegations of authority and must follow published guidance to the
extent not inconsistent with statute or regulation.
Subpart D--Hearings
17. Section 498.74 is amended by--
A. Redesignating paragraphs (b)(2), (b)(3) and (b)(4) as (b)(3),
(b)(4) and (b)(5), respectively.
B. Adding new paragraph (b)(2).
The addition reads as follows:
Sec. 498.74 Administrative Law Judge's decision.
* * * * *
(b) * * *
(2) The Secretary undertakes review of the case pursuant to Sec.
498.89.
* * * * *
Subpart E--Departmental Appeals Board Review
18. Section 498.83 is amended by revising paragraph (c) to read as
follows:
Sec. 498.83 Departmental Appeals Board action on request for review.
* * * * *
(c) Effect of dismissal. The dismissal of a request for Board
review shall be the final agency decision unless the Secretary elects
review under Sec. 498.89.
* * * * *
19. Section 498.89 is added to read as follows:
Sec. 498.89 Secretarial Review of ALJ or Departmental Appeals Board
decisions.
The Secretary may review a decision of an ALJ or the Board for
error in applying statutes, regulations or interpretive policy.
(a) A copy of each preliminary Board decision will be delivered to
the Secretary and the parties within 5 working days from the date the
Board issues it. When the Board denies or dismisses a request for
review of an ALJ decision, a copy of the ALJ decision will be delivered
to the Secretary and the parties within 5 working days from the date
the Board declines to review it.
(b) After delivery of the Board or ALJ decision, the Secretary may,
within 30 days of receipt of the decision, undertake review of the case
by mailing (or otherwise communicate) to the Board, or the ALJ, and the
parties notice of a pending Secretarial review. The underlying decision
will be a preliminary decision during the 60-day period after issuance
or a longer period while Secretarial review is pending. If the
Secretary decides not to review the case within 30 days, or if the
Secretary affirms the decision, summarily, the Board or ALJ decision
becomes the final decision of the Secretary on the matter.
(c) After undertaking review of a case, the Secretary may affirm or
reverse the underlying decision, or remand the case with instructions
for further proceedings. If the Secretary affirms with modifications or
reverses the underlying decision, a written decision that sets forth
the basis for the action will be the final decision of the Secretary on
the matter. If the Secretary remands the case for further proceedings,
the original Board or ALJ decision shall be set aside and a written
remand order will issue from the Secretary which shall include the
reasons for remand and instructions on the proper application of
statutes, regulations or interpretive policy. Such an order will be
binding on the Board or ALJ which shall issue a new decision consistent
with the Secretary's remand order.
(d) If the Secretary declines review, or disposes of the case by
final decision affirming or reversing the Board, the Board shall
promptly issue a notice of case closure to the parties.
20. Section 498.90 is amended by revising the section heading, the
introductory text of paragraph (a), and paragraph (c)(1) to read as
follows:
Sec. 498.90 Effect of the Departmental Appeals Board or Secretarial
decision.
(a) General rule. A decision of the Board is the final agency
decision, unless: The time period permitted for Secretarial review has
not elapsed; it is the subject of a Secretarial remand; or it is set
aside by a decision by the Secretary to affirm or reverse. If a
decision of the Board is set aside by the Secretary, the Secretary
shall issue the final agency decision. The final agency decision shall
be indicated in the notice of case closure issued by the Board pursuant
to Sec. 498.89(d), and shall be binding unless--
* * * * *
(c) Special rules. Civil money penalty--
(1) Finality of decision. When CMS imposes a civil money penalty,
the final administrative action that initiates the 60-day period for
seeking judicial review will be receipt of the notice of case closure
issued by the Board pursuant to Sec. 498.89(d).
* * * * *
21. Section 498.95 is amended by revising paragraph (a) to read as
follows:
Sec. 498.95 Extension of time for seeking judicial review.
(a) Any affected party that is dissatisfied with a final agency
decision and is entitled to judicial review must commence a civil
action within 60 days from receipt of the notice of case closure issued
by the Board pursuant to Sec. 498.89(d), unless the Board extends the
time in accordance with paragraph (c) of this section. The date of
receipt is deemed to be 5 days after the date on the notice, unless
there is a showing that it was, in fact, received earlier or later.
* * * * *
PART 1005--APPEALS OF EXCLUSIONS, CIVIL MONEY PENALTIES AND
ASSESSMENTS
22. The authority citation for part 1005 continues to read as
follows:
Authority: 42 U.S.C. 405(a), 405(b), 1302, 1320a-7, 1320a-7a and
1320c-5.
23. Section 1005.20 is amended by revising paragraph (d) to read as
follows:
Sec. 1005.20 Initial decision.
* * * * *
(d) Except for exclusion actions taken in accordance with Sec.
1001.2003 of this chapter and paragraph (e) of this section, unless the
initial decision is appealed to the DAB, it will be final and
[[Page 73718]]
binding on the parties 30 days after the ALJ serves the parties with a
copy of the decision. If service is by mail, the date of service will
be deemed to be 5 days from the date of mailing.
* * * * *
24. Section 1005.21 is amended by revising paragraphs (j) and (k)
to read as follows:
Sec. 1005.21 Appeal to DAB.
* * * * *
(j) Except with respect to any penalty, assessment or exclusion
remanded to the ALJ or to be reviewed by the Secretary pursuant to
Sec. 1005.24 of this chapter, the DAB's decision, including a decision
to decline review of the initial decision, becomes final and binding 60
days after the date on which the DAB serves the parties with a copy of
the decision. If service is by mail, the date of service will be deemed
to be 5 days from the date of mailing.
(k)(1) Any petition for judicial review must be filed within 60
days after the decision becomes final and binding as provided in
paragraph (j) of this section or Sec. 1005.24(c)(1).
(2) In compliance with 28 U.S.C. 2112(a), a copy of any petition
for judicial review filed in any U.S. Court of Appeals challenging a
final decision will be sent by certified mail, return receipt
requested, to the Chief Counsel to the IG. The petition copy will be
time-stamped by the clerk of the court when the original is filed with
the court.
(3) If the Chief Counsel to the IG receives two or more petitions
within 10 days after the decision becomes final and binding, the Chief
Counsel to the IG will notify the U.S. Judicial Panel on Multidistrict
Litigation of any petitions that were received within the 10-day
period.
25. Section 1005.24 is added to read as follows:
Sec. 1005.24 Secretarial Review of ALJ or DAB decisions.
The Secretary may review all ALJ decisions that the DAB has
declined to review and all DAB decisions for error in applying
statutes, regulations or interpretive policy.
(a) A copy of each DAB decision will be delivered to the Secretary
within 5 working days from the date the DAB issues it. When the DAB
denies a request for review of an ALJ decision, a copy of the ALJ
decision will be delivered to the Secretary by the DAB within 5 working
days from the date the DAB declines review.
(b) After delivery of a DAB or ALJ decision, the Secretary may
undertake a review of the decision.
(1) The Secretary may, within 30 days of receipt of the Board or
ALJ decision, undertake review of the decision by mailing (or otherwise
transmitting) to the Board, or the ALJ, and the parties notice of a
pending Secretarial review. The Secretary's undertaking review of the
decision automatically stays the effective date of the decision.
(2) If the Secretary does not undertake a review within 30 days of
receipt of the decision, the decision shall be final and binding 60
days after the date the DAB served the parties with the decision, as
provided in Sec. 1005.21(j).
(c) Upon review of the decision, the Secretary may affirm or
reverse the decision, or remand the matter to the DAB or ALJ for
further proceedings.
(1) The Secretary's affirmance or reversal of the decision shall be
final and binding on the date the Secretary serves the parties with a
written decision setting forth the basis for the decision. Such a
decision may incorporate by reference some or all of the reasoning of
the reviewed decision, and shall be the final agency action. If service
is by mail, the date of service shall be deemed to be 5 days from the
date of mailing. Any petition for judicial review must be filed within
60 days after the Secretary serves the parties with the decision.
(2) If the Secretary remands the decision to the DAB or ALJ, the
Secretary shall issue a written remand order including the reasons for
remand and instructions on the proper application of statutes,
regulations or interpretive policy. The Secretary's remand order will
be binding on the DAB or ALJ. Upon issuance of the Secretary's remand
order, the original DAB or ALJ decision shall be set aside.
(3) Within 60 days of receipt of the Secretary's remand order by
the DAB or ALJ, the DAB or ALJ shall serve the parties and the
Secretary with a copy of the new decision consistent with the
Secretary's remand order. If service is by mail, the date of service
will be deemed to be 5 days from the date of mailing.
Title 45--Public Welfare
PART 16--PROCEDURES OF THE DEPARTMENTAL APPEALS BOARD
1. The authority citation for part 16 continues to read as follows:
Authority: 5 U.S.C. 301 and secs. 1, 5, 6, and 7 of
Reorganization Plan No. 1 of 1953, 18 FR 2053, 67 Stat. 631 and
authorities cited in the Appendix.
2. The heading of part 16 is revised to read as forth above.
Sec. 16.2 [Amended]
3. Section 16.2 is amended in paragraph (a) by removing the word
``Grant'' from the phrase ``Departmental Grant Appeals Board.''
4. Section 16.3 is amended by revising paragraph (b) to read as
follows:
Sec. 16.3 When these procedures become available.
* * * * *
(b) The appellant must have received a final written decision, and
must appeal that decision within 30 days after receiving it.
* * * * *
5. Section 16.7 is amended by revising paragraph (a) to read as
follows:
Sec. 16.7 The first steps in the appeal process: The notice of appeal
and the Board's response.
(a) A prospective appellant must submit a notice of appeal to the
Board within 30 days after receiving the final decision. The notice of
appeal must include a copy of the final decision, a statement of the
amount in dispute in the appeal, and a brief statement of why the
decision is wrong.
* * * * *
6. Section 16.12 is amended by revising the introductory text of
paragraph (d) to read as follows:
Sec. 16.12 The expedited process.
* * * * *
(d) Special expedited procedures where there has already been
review. Some HHS components use a board or other relatively independent
reviewing authority to conduct a formal preliminary review process
(such as the process described at 42 CFR Part 50, Subpart D) which
results in a written decision based on a record including documents or
statements presented after reasonable notice and opportunity to present
such material. In such cases, the following rules apply to appeals of
$25,000 or less instead of those under paragraph (c) of this section.
* * * * *
7. Section 16.14 is revised to read as follows:
Sec. 16.14 How Board review is limited.
The Departmental Appeals Board may not find invalid or refuse to
follow Federal statutes, regulations, or Secretarial delegations of
authority and must follow published guidance to the extent not
inconsistent with statute or regulation.
8. Section 16.20 is amended by--
A. Revising paragraph (a).
B. Removing paragraphs (d) and (e).
The revision reads as follows:
[[Page 73719]]
Sec. 16.20 How to submit material to the Board.
(a) All submissions should be filed in the manner indicated in the
final written decision being appealed or the filing instructions
contained in the Appellate Division Practice Manual available on the
Board's website at http://www.hhs.gov/dab. The Board's mailing address is set
forth on that Web site, and, as of October 1, 2007, is: Department of
Health and Human Services, Departmental Appeals Board, Appellate
Division, Cohen Building, Rm. G-644, MS 6127, 330 Independence Ave.,
SW., Washington, DC 20201.
* * * * *
9. Section 16.21 is amended by adding paragraphs (c), (d), and (e)
to read as follows:
Sec. 16.21 Record and decisions.
* * * * *
(c) The Board will promptly notify the Secretary of any disposition
of a case on the merits by delivering a copy of each Board decision to
the Secretary within 5 working days after the Board issues it.
(d) After delivery of the Board decision, the Secretary may, within
30 days of receipt of the Board decision, undertake review of the case
by mailing (or otherwise transmitting) to the Board and the parties
notice of a pending Secretarial review. The Board's decision will be a
proposed decision during the 30 day period after issuance and while
Secretarial review is pending. If the Secretary does not within 30 days
determine to review the case, or if the Secretary affirms the Board
decision summarily, the Board decision becomes the final decision of
the Secretary on the matter, and the Board will promptly so notify the
parties.
(e) After undertaking review of a case, the Secretary may affirm or
reverse the Board's decision, or remand the case with instructions for
further proceedings. In cases involving title IV of the Social Security
Act, the Secretary may only affirm or remand the case with instructions
for further proceedings. If the Secretary affirms with modifications or
reverses the Board's decision, a written decision that sets forth the
basis for the action will be the final decision of the Secretary on the
matter. If the Secretary remands the case to the Board for further
proceedings, the Board's original decision shall be set aside and a
written remand order will issue from the Secretary which shall include
the reasons for remand and instructions on the proper application of
statutes, regulations or interpretive policy. Such an order will be
binding on the Board which shall issue a new decision consistent with
the Secretary's remand order.
10. Section 16.22 is amended by revising paragraphs (a) and (b)(1)
to read as follows:
Sec. 16.22 The effect of an appeal.
(a) General. Until the Board disposes of an appeal and the
opportunity for Secretarial review has lapsed, the respondent shall
take no action to implement the final decision appealed.
(b) * * *
(1) Suspend funding;
* * * * *
11. Appendix A to Part 16 is amended by--
A. Revising paragraph A.
B. Amending paragraph B by--
i. In paragraph (a)(1), removing the phrase ``Titles I, IV, VI X,
XVI(AABD) XIX and XX'' and adding in its place the phrase ``Titles IV,
X, XIV, XVI (AABD), XIX, XX and XXI.''
ii. In paragraph (a)(1), removing the phrase ``such as those under
sections 403(g) and 1903(g)''.
iii. In paragraph (a)(2), inserting the word ``former'' before the
phrase ``Public Health Service.''
iv. In paragraph (a)(3) removing the phrase ``sections 113 and
132'' and adding in its place the phrase ``sections 124 and 143'';
v. Adding paragraph (a)(7).
C. Revising subparagraph (b) of paragraph C.
D. Revosomg paragraph E.
The revisions and addition read as follows:
Appendix A to Part 16--What Disputes the Board Reviews.
A. What this Appendix covers.
This Appendix describes some of the programs which use the
procedures in 45 CFR Part 16 for dispute resolution, the types of
disputes covered, and any conditions for Board review of final
written decisions resulting from those disputes. Disputes under
programs not specified in this Appendix may be covered in a program
regulation, delegation, memorandum of understanding, or other
arrangement between the Board and the head of the appropriate HHS
operating component or other agency responsible for administering
the program. If in doubt, call the Board. Even though a dispute may
be covered here, the Board may still not be able to review it if the
limits in paragraph F apply.
B. Mandatory grant programs.
(a) * * *
(7) Disallowance determinations under the Child Care and
Development Fund Program as provided in 45 CFR 98.66.
* * * * *
C. Direct, discretionary project programs.
* * * * *
(b) Where an HHS component uses a preliminary appeal process
(such as the one described at 42 CFR Part 50, Subpart D), the
``final written decision'' for purposes of Board review is the
decision issued as a result of that process.
* * * * *
PART 81--PRACTICE AND PROCEDURE FOR HEARINGS UNDER PART 80 OF THIS
TITLE
12. The authority citation for part 81 continues to read as
follows:
Authority: 5 U.S.C. 301 and 45 CFR 80.9(d).
Subpart G--Responsibilities and Duties of Presiding Officer
13. Section 81.64 is added to read as follows:
Sec. 81.64 Scope of review of the presiding officer and the reviewing
authority.
The hearing examiner and the reviewing authority may not find
invalid or refuse to follow Federal statutes, regulations, or
Secretarial delegations of authority and must follow published guidance
to the extent not inconsistent with statute or regulation.
PART 160--GENERAL ADMINISTRATIVE REQUIREMENTS
14. The authority citation for part 160 continues to read as
follows:
Authority: 42 U.S.C. 1302(a), 42 U.S.C. 1320d-1320d8, sec. 264
of Pub. L. 104-191, 110 Stat. 2033-2034 (42 U.S.C. 1320d-2 (note)),
and 5 U.S.C. 552.
Subpart E--Procedures for Hearings
15. Section 160.508 is amended by revising paragraph (c)(1) to read
as follows:
Sec. 160.508 Authority of the ALJ.
* * * * *
(c) * * *
(1) May not find invalid or refuse to follow Federal statutes,
regulations, or Secretarial delegations of authority and must follow
published guidance to the extent not inconsistent with statute or
regulation;
* * * * *
16. Section 160.548 is amended by--
A. Redesignating paragraph (h) as paragraph (h)(1).
B. Adding paragraph (h)(2).
C. Revising paragraph (j).
D. Revising paragraph (k)(1).
The revisions and addition read as follows:
Sec. 160.548 Appeal of the ALJ's decision.
* * * * *
(h) * * *
(2) The Board may not find invalid or refuse to follow Federal
statutes, regulations, or Secretarial delegations of
[[Page 73720]]
authority and must follow published guidance to the extent not
inconsistent with statute or regulation.
* * * * *
(j) Except with respect to a decision remanded to the ALJ, or a
decision the Secretary has undertaken to review pursuant to Sec.
160.554 of this part, the Board's decision, including a decision to
decline review of the initial decision, becomes final and binding as
the decision of the Secretary 60 days after the date on which the Board
serves the parties with a copy of the decision. If service is by mail,
the date of service will be deemed to be 5 days from the date of
mailing.
(k)(1) A respondent's petition for judicial review must be filed
within 60 days of when the decision of the Secretary becomes final and
binding as provided in paragraph (j) of this section or Sec.
160.554(c)(1).
* * * * *
17. Section 160.554 is added to read as follows:
Sec. 160.554 Secretarial Review of ALJ or Board Decisions.
The Secretary may review all ALJ decisions that the Board has
declined to review and all Board decisions for error in applying
statutes, regulations or interpretative policy.
(a) A copy of each Board decision will be delivered to the
Secretary within 5 working days after the Board issues it. When the
Board denies a request for review of an ALJ decision, a copy of the ALJ
decision will be delivered to the Secretary by the Board within 5
working days after the Board declines review.
(b) After delivery of a Board or ALJ decision, the Secretary may
undertake a review of the decision.
(1) The Secretary may, within 30 days of receipt of the Board or
ALJ decision, undertake review of the decision by mailing (or otherwise
transmitting) to the Board, or the ALJ, and the parties notice of a
pending Secretarial review. The Secretary's undertaking review of the
decision automatically stays the effective date of the decision.
(2) If the Secretary does not undertake review within 30 days of
receipt of the decision, the decision shall be final and binding as the
decision of the Secretary 60 days after the date the Board served the
parties with the decision, as provided in Sec. 160.548(j).
(c) Upon review of the decision, the Secretary may affirm or
reverse the decision, or remand the matter to the Board or ALJ for
further proceedings.
(1) The Secretary's affirmance or reversal of the decision shall be
final and binding on the date the Secretary serves the parties with a
written decision setting forth the basis for the decision. Such a
decision may incorporate by reference some or all of the reasoning of
the reviewed decision, and shall be the final agency action. Any
petition for judicial review must be filed within 60 days of when the
respondent receives notice of the Secretary's decision.
(2) If the Secretary remands the decision to the Board or ALJ, the
Secretary shall issue a written remand order including the reasons for
remand and instructions on the proper application of statutes,
regulations or interpretative policy. The Secretary's remand order will
be binding on the Board or ALJ. Upon issuance of the Secretary's remand
order, the original Board or ALJ decision shall be set aside.
(3) If service of a ruling or decision issued under this section is
by mail, the date of service shall be deemed to be 5 days from the date
of the mailing.
PART 1303-- APPEAL PROCEDURES FOR HEAD START GRANTEES AND CURRENT
OR PROSPECTIVE DELEGATE AGENCIES
18. The authority citation for part 1303 continues to read as
follows:
Authority: 42 U.S.C. 9801, et seq.
Subpart B--Appeals by Grantees
Sec. 1303.17 [Amended]
19. Section 1303.17 is amended by removing the phrase ``final
decision'' in paragraph (a), in the second sentence, and adding in its
place the phrase ``Board's decision''.
Dated: September 17, 2007.
Michael O. Leavitt,
Secretary.
[FR Doc. 07-6221 Filed 12-21-07; 1:00 pm]
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