[Federal Register Volume 63, Number 37 (Wednesday, February 25, 1998)]
[Proposed Rules]
[Pages 9499-9500]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4725]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 50

RIN 0930-ZA00


Simplification of Grant Appeals Process

AGENCY: HHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Pursuant to 42 CFR Part 50, Subpart D, the Indian Health 
Service (IHS) and the Substance Abuse and Mental Health Services 
Administration (SAMHSA) (formerly, the Alcohol, Drug Abuse and Mental 
Health Administration) have provided an informal level of appeal on 
those grant related disputes subject to the departmental appeal 
procedures codified at 45 CFR Part 16.\1\ These agencies are proposing 
by this notice to amend 42 CFR Part 50, Subpart D, to remove IHS and 
ADAMHA (now SAMHSA) from the list of agencies to which these informal 
appeal procedures apply and thus permit aggrieved grantees direct 
access to the Departmental Grant Appeals Board and that board's 
original jurisdiction.

    \1\ Section 161 of the ADAMHA Reorganization Act, Pub. L. 102-
321 (July 10, 1992), provides that references in any regulations to 
ADAMHA shall be deemed to refer to SAMHSA and, accordingly, the 
informal level of appeal is available to SAMHSA's grantees.
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DATES: Written comment must be received on or before April 27, 1998.

ADDRESSES: Written comments on the proposed rule must be sent to Thomas 
M. Reynolds, Room 13C-20, Parklawn Bldg., 5600 Fishers Lane, Rockville, 
MD 20857.

FOR FURTHER INFORMATION CONTACT: For the Indian Health Service, Ms. M. 
Kay Carpentier, (301) 443-5204; for the Substance Abuse and Mental 
Health Services Administration, Thomas M. Reynolds, (301) 443-0179.

SUPPLEMENTARY INFORMATION: When the Department first established its 
Departmental Grant Appeals Board (now the Departmental Appeals Board), 
there was no provision for the Department's subordinate agencies to 
first review the disputed actions of officials prior to appeal at the 
Departmental level. However, it quickly became apparent that a number 
of disputes could and would, be resolved quickly by informal means if 
the grantees' complaints were surfaced to management levels within the 
HHS subordinate agencies. As a result, the regulations at 45 CFR Part 
16 were revised to permit subordinate agencies to interpose an 
``informal'' level of appeal prior to submission of an appeal to the 
Departmental Appeals Board. Various agencies in the Public Health 
Service (which has since been reorganized) chose to institute an 
intermediate informal review process as is currently described in 42 
CFR Part 50, Subpart D. The intermediate level of appeal provided these 
agencies with an opportunity to relatively quickly and economically 
reverse erroneous Federal decisions, or to reassure grantees that a 
decision adverse to them was indeed an ``agency'' decision. At the time 
these regulations were instituted, this informal process was of 
significant benefit to both grantees and the subordinate agencies. 
Based on the lessons learned from this process and other means, IHS and 
SAMHSA instituted a policy of reviewing carefully the adverse 
determinations of their employees prior to permitting them to be issued 
so as to avoid erroneous determinations which would be subject to 
reversal upon appeal at the informal level. These agencies believe that 
they have reached the point where the adverse determinations being 
issued in recent years generally represent their best judgment.

    The Department therefore believes that, for these agencies and 
their grantees, this informal process is no longer of benefit, and the 
cost in time and expense to the grantee is no longer warranted. 
Consequently, the Department is proposing to amend 42 CFR part 50, 
Subpart D, to remove IHS and ADAMHA (now SAMHSA) from the list of 
Agencies to which the regulations apply. As a result, under this 
proposal, grantees wishing to appeal IHS's and SAMHSA's eligible 
adverse determinations would be entitled to appeal such determinations 
directly to the Departmental Appeals Board. In addition, 42 CFR Part 
50, Subpart D, will be revised to reflect organizational changes in the 
Department, particularly that pertaining to the Public Health Service.

Economic Impact

    This rule does not have cost implications for the economy of $100 
million or otherwise meet the criteria for a major rule under Executive 
Order 12291, and therefore does not require a regulation impact 
analysis. Further, this regulation will not have a significant impact 
on a substantial number of small entities, and therefore does not 
require a regulatory flexibility analysis under the Regulatory 
Flexibility Act of 1980.

Regulatory Evaluation

    This Proposal is not a significant regulatory action under Section 
3(f) of the Executive Order 12866 and does not require an assessment of 
the potential costs and benefits under Section 6(a)(3) of that Order 
and so has been exempted from review by the Office of Management and 
Budget under that Order.

Paperwork Reduction Act

    There are no new paperwork requirements subject to the Office of 
Management and Budget approval under the Paperwork Reduction Act of 
1980.

List of Subjects in 42 CFR Part 50

    Administrative practice and procedure, Grant programs--health, 
Health care.

    Approved: February 18, 1998.
Donna E. Shalala,
Secretary.

    For the reasons set forth in the preamble, the Department proposes 
to amend Subpart D of Part 50 of Title 42 of the Code of Federal 
Regulations as follows:

[[Page 9500]]

PART 50--[AMENDED]

    1. The authority citation for part 42 continues to read as follows:

    Authority: Sec. 215, Public Health Service Act, 58 Stat. 690 (42 
U.S.C. 216); 45 CFR 16.3(c).

    2. Section 50.401 is revised to read as follows:


Sec. 50.401  What is the purpose of this subpart?

    This subart establishes an informal procedure for the resolution of 
certain postaward grant and cooperative agreement disputes within the 
agencies and offices identified in Sec. 50.402.
    3. Section 50.402 is revised to read as follows:


Sec. 50.402  To what programs do these regulations apply?

    This subpart applies to all grant and cooperative agreement 
programs, except block grants, which are administered by the National 
Institutes of Health; the Health Resources and Services Administration; 
The Centers for Disease Control and Prevention; the Agency for Toxic 
Substances and Disease Registry; the Food and Drug Administration; and 
the Office of the Assistant Secretary for Public Health and Science. 
For purposes of this subpart, these entities are hereinafter referred 
to as ``agencies.''
    4. The third sentence of Sec. 50.403 is revised to read as follows:


Sec. 50.403  What is the policy basis for these procedures?

* * * This subpart provides such an informal preliminary procedure for 
resolution of disputes in order to preclude submission of cases to the 
Departmental Appeals Board before an agency identified in Sec. 50.402 
has had an opportunity to review decisions of its officials and to 
settle disputes with grantees.
    5. In Sec. 50.404, paragraph (a) introductory text and the first 
sentence of paragraph (b) are revised to read as follows:


Sec. 50.404  What disputes are covered by these procedures?

    (a) These procedures are applicable to the following adverse 
determinations under discretionary project grants and cooperative 
agreements (both referred to in this subpart as grants) issued by the 
agencies identified at Sec. 50.402:
* * * * *
    (b) A determination subject to this subpart may not be reviewed by 
the review committee described in Sec. 50.405 unless an officer or 
employee of the agency has notified the grantee in writing of the 
adverse determination. * * *
    6. In Sec. 50.405 the second sentence is removed and the first 
sentence is revised to read as follows:


Sec. 50.405  What is the structure of the review committees?

    The head of the agency, or his or her designee, shall appoint 
review committees to review adverse determinations made by officials 
for programs under this jurisdiction. * * *
    7. In Sec. 50.406, paragraphs (a), (c), (d) and (g), and the first 
sentence of (e) are revised to read as follows:


Sec. 50.406  What are the steps in the process?

    (a) A grantee with respect to whom an adverse determination 
described in Sec. 50.404(a) has been made and who desires a review of 
that determination must submit a request for such review to the head of 
the appropriate agency or his or her designee no later than 30 days 
after the written notification of the determination is received, except 
that if the grantee shows good cause why an extension of time should be 
granted, the head of the appropriate agency or his or her designee may 
grant an extension of time.
* * * * *
    (c) When a request for review has been filed under this subpart 
with respect to an adverse determination, no action may be taken by the 
awarding agency pursuant to such determination until the request has 
been disposed of, except that the filing of the request shall not 
affect any authority which the agency may have to suspend assistance or 
otherwise to withhold or defer payments under the grant during 
proceedings under this subpart. This paragraph does not require the 
awarding agency to provide continuation funding during the appeal 
process to a grantee whose noncompeting continuation award has been 
denied.
    (d) Upon receipt of a request for review, the head of the agency or 
his or her designee will make a decision as to whether the dispute is 
reviewable under this subpart and will promptly notify the grantee and 
the office responsible for the adverse determination of this decision. 
If the head of the agency or his or her designee determines that the 
dispute is reviewable, he or she will forward the matter to the review 
committee appointed under Sec. 50.405.
    (e) The agency involved will provide the review committee appointed 
under Sec. 50.405 with copies of all relevant background materials 
(including applications(s), award(s), summary statement(s), and 
correspondence) and any additional pertinent information available. * * 
*
* * * * *
    (g) The review committee may, at its discretion, invite the grantee 
and/or the agency staff to discuss the pertinent issues with the 
committee and to submit such additional information as the committee 
deems appropriate.
* * * * *
[FR Doc. 98-4725 Filed 2-24-98; 8:45 am]
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