73708 Federal Register / Vol. 72, No. 248 / Friday, December 28, 2007 / Proposed Rules 

§ 302.6 Notification requirements. 

* * * * * 

(e) * * * 

(3) Releases to the air of any 

hazardous substance from animal waste 

at farms. 

* * * * * 

PART 355—EMERGENCY PLANNING 

AND NOTIFICATION 

4. The authority citation for part 355 

continues to read as follows: 

Authority: 42 U.S.C. 11002, 11004, and 

11048. 

5. Section 355.20 is amended by 

adding in alphabetical order the 

definitions of ‘‘Animal waste’’ and 

‘‘Farm’’ to read as follows: 

§ 355.20 Definitions. 

* * * * * 

Animal Waste as used in § 355.40 

only, animal waste means manure 

(feces, urine, other excrement, and 

bedding, produced by livestock that has 

not been composted), digestive 

emissions, and urea. The definition 

includes animal waste when mixed or 

commingled with bedding, compost, 

feed, soil and other typical materials 

found with animal waste. 

* * * * * 

Farm as used in § 355.40 only, farm 

means: 

(1) Any place whose operation is 

agricultural and from which $1,000 or 

more of agricultural products were 

produced and sold, or normally would 

have been sold, during the census year. 

Operations receiving $1,000 or more in 

Federal government payments are 

counted as farms, even if they have no 

sales and otherwise lack the potential to 

have $1,000 or more in sales; or 

(2) A Federal or state poultry, swine, 

dairy or livestock research farm. 

* * * * * 

6. Section 355.40 is amended by 

adding paragraph (a)(2)(viii) to read as 

follows: 

§ 355.40 Emergency release notification. 

(a) * * * 

(2) * * * 

(viii) Any release to the air of a 

hazardous substance from animal waste 

at farms. 

* * * * * 

[FR Doc. E7–25231 Filed 12–27–07; 8:45 am] 

BILLING CODE 6560–50–P 

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. 

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 


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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 


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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 § 81.62, either to make initial 

decisions or to recommend findings and 

propose decisions. These decisions are 

reviewable by a reviewing authority, 

under § 81.104, and by the Secretary, 

under § 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 

§ 16.14) 

Current regulations at 45 CFR § 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 § 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 


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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. 


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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 

§§ 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 

§ 16.2, and to update the name and 

address of the DAB in § 16.20(a). In 

§ 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 

§ 16.20(d) and (e), since these provisions 

refer to issues addressed in the filing 

instructions noted in revised § 16.20(a) 

and, furthermore, do not reflect current 

Board procedures relating to electronic 

submissions. 

2. 45 CFR §§ 16.3(b), 16.7(a), 16.12 and 

16.22(b)(1)–Deleting Outdated 

References 

45 CFR §§ 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 § 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-bycase 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 § 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 § 81.62, to either make initial 

decisions or recommended findings and 

proposed decisions. These decisions are 

reviewable by a reviewing authority, 

under § 81.104, and by the Secretary, 

under § 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, § 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 §§ 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 § 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 

§ 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 

§ 160.548(h)(2). 

We also propose to provide for 

Secretarial review authority for Board 

and certain ALJ decisions by inserting a 

new proposed § 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. 


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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 § 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 §§ 422.1007, 

422.1085, 423.1007 and 423.1085 and 

Revisions to 42 CFR §§ 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 

§ 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 §§ 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 §§ 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 

§ 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 § 498.8 and 

Revisions to 42 CFR §§ 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 

§ 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 

§§ 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 

§ 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 


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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 

§ 1005.21(g), the Secretary may review 

the ALJ decision, as contemplated in 

proposed 42 CFR § 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 

§ 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 

§ 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 

§§ 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 § 1001.2007(a). 

Further, an ALJ is required to follow the 

determination of the scope and effect of 

an exclusion. 42 CFR § 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 

§ 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 


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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 programshealth, 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: 

§ 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: 

§ 422.1068 Administrative Law Judge’s 

decision. 

* * * * * 

(b) * * * 

(4) The Secretary undertakes review 

of the case pursuant to § 422.1085 of 

this chapter. 

* * * * * 

4. Section 422.1078 is amended by 

revising paragraph (c) to read as follows: 

§ 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 

§ 422.1085. 

* * * * * 

5. Section 422.1085 is added to read 

as follows: 

§ 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 


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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: 

§ 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 § 422.1085(d). 

7. Section 422.1088 is amended by 

revising paragraph (a) to read as follows: 

§ 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: 

§ 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: 

§ 423.1068 Administrative Law Judge’s 

decision. 

* * * * * 

(b) * * * 

(4) The Secretary undertakes review 

of the case pursuant to § 423.1085. 

* * * * * 

11. Section 423.1078 is amended by 

revising paragraph (c) to read as follows: 

§ 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 

§ 423.1085. 

* * * * * 

12. Section 423.1085 is added to read 

as follows: 

§ 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: 

§ 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: 


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§ 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 § 423.1086 or a 

decision by the Secretary under 

§ 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 § 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: 

§ 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: 

§ 498.74 Administrative Law Judge’s 

decision. 

* * * * * 

(b) * * * 

(2) The Secretary undertakes review 

of the case pursuant to § 498.89. 

* * * * * 

Subpart E—Departmental Appeals 

Board Review 

18. Section 498.83 is amended by 

revising paragraph (c) to read as follows: 

§ 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 § 498.89. 

* * * * * 

19. Section 498.89 is added to read as 

follows: 

§ 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: 

§ 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 § 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 § 498.89(d). 

* * * * * 

21. Section 498.95 is amended by 

revising paragraph (a) to read as follows: 

§ 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 

§ 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: 

§ 1005.20 Initial decision. 

* * * * * 

(d) Except for exclusion actions taken 

in accordance with § 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 


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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: 

§ 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 § 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 § 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: 

§ 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 § 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. 

§ 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: 

§ 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: 

§ 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: 

§ 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: 

§ 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: 


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§ 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 

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: 

§ 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: 

§ 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: 

§ 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: 

§ 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: 

§ 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 


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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 § 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 § 160.554(c)(1). 

* * * * * 

17. Section 160.554 is added to read 

as follows: 

§ 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 § 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 

§ 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] 

BILLING CODE 4163–18–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Federal Emergency Management 

Agency 

44 CFR Part 67 

[Docket No. FEMA–B–7753] 

Proposed Flood Elevation 

Determinations 

AGENCY: Federal Emergency 

Management Agency, DHS. 

ACTION: Proposed rule. 

SUMMARY: Comments are requested on 

the proposed Base (1 percent annualchance) Flood Elevations (BFEs) and 

proposed BFE modifications for the 

communities listed in the table below. 

The purpose of this notice is to seek 

general information and comment 

regarding the proposed regulatory flood 

elevations for the reach described by the 

downstream and upstream locations in 

the table below. The BFEs and modified 

BFEs are a part of the floodplain 

management measures that the 

community is required either to adopt 

or show evidence of having in effect in 

order to qualify or remain qualified for 

participation in the National Flood 

Insurance Program (NFIP). In addition, 

these elevations, once finalized, will be 

used by insurance agents, and others to 

calculate appropriate flood insurance 

premium rates for new buildings and 

the contents in those buildings. 

DATES: Comments are to be submitted 

on or before March 27, 2008. 

ADDRESSES: The corresponding 

preliminary Flood Insurance Rate Map 

(FIRM) for the proposed BFEs for each 

community are available for inspection 

at the community’s map repository. The 

respective addresses are listed in the 

table below. 

You may submit comments, identified 

by Docket No. FEMA-B–7753, to 

William R. Blanton, Jr., Chief, 

Engineering Management Branch, 

Mitigation Directorate, Federal 

Emergency Management Agency, 500 C 

Street SW., Washington, DC 20472, 

(202) 646–3151, or (e-mail) 

bill.blanton@dhs.gov. 

FOR FURTHER INFORMATION CONTACT: 

William R. Blanton, Jr., Chief, 

Engineering Management Branch, 

Mitigation Directorate, Federal 

Emergency Management Agency, 500 C 

Street SW., Washington, DC 20472, 

(202) 646–3151 or.(e-mail) 

bill.blanton@dhs.gov. 

SUPPLEMENTARY INFORMATION: The 

Federal Emergency Management Agency 

(FEMA) proposes to make 

determinations of BFEs and modified 

BFEs for each community listed below, 

in accordance with section 110 of the 

Flood Disaster Protection Act of 1973, 

42 U.S.C. 4104, and 44 CFR 67.4(a). 

These proposed BFEs and modified 

BFEs, together with the floodplain 

management criteria required by 44 CFR 

60.3, are the minimum that are required. 

They should not be construed to mean 

that the community must change any 

existing ordinances that are more 

stringent in their floodplain 

management requirements. The 

community may at any time enact 

stricter requirements of its own, or 

pursuant to policies established by other 

Federal, State, or regional entities. 

These proposed elevations are used to 


jlentini on PROD1PC65 with PROPOSALS