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Proposed Rule

Simplification of the Grant Appeals Process

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Information about this document as published in the Federal Register.

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Health Resources and Services Administration, HHS.


Notice of proposed rulemaking.


Pursuant to 42 CFR part 50, subpart D, the Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS), has provided an informal level of appeal on those grant related disputes subject to the departmental appeal procedures codified at 45 CFR Part 16. HHS is proposing to amend 42 CFR part 50, subpart D, to remove HRSA from the list of agencies to which these informal appeal procedures apply. This would permit aggrieved HRSA grantees direct access to the Departmental Grant Appeals Board and that Board's original jurisdiction.


Written comments must be received on or before August 8, 2005.


You may submit comments, identified by RIN number 0906-AA69, by any of the following methods:

1. Federal eRulemaking Portal: Follow the instructions for submitting comments.

2. Submit written comments by mail to the attention of Gail Lipton, Director, Division of Grants Policy, Room 11A-55, Parklawn Bldg., 5600 Fishers Lane, Rockville, MD 20857.Start Printed Page 33054

3. E-mail:

4. FAX: 301-443-5461.

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Gail Lipton, 301-443-6509.

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When HHS 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 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, HRSA 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. HRSA believes that it has reached the point where the adverse determinations being issued in recent years generally represent the Agency's best judgment.

HHS therefore believes that, for HRSA and its grantees, this information process is no longer of benefit, and the cost in time and expense to the grantee is no longer warranted. Consequently, HHS is proposing to amend 42 CFR part 50, subpart D, to remove HRSA from the list of agencies to which the regulations apply. As a result, under this proposal, grantees wishing to appeal HRSA's eligible adverse determinations would be entitled to appeal such determinations directly to the Departmental Appeals Board.

Executive Order 12866

Executive Order (EO) 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when rulemaking is necessary, to select regulatory approaches that provide the greatest net benefits. We have determined that the rule is not a significant regulatory action under Section 3(f) of the EO and does not require an assessment of the potential costs and benefits under section 6(a)(3) of that EO. Under the EO, the Office of Management and Budget (OMB) has exempted it from review. This regulation was reviewed by OMB.

Regulatory Flexibility

The Regulatory Flexibility Act (5 U.S.C. Chapter 6) requires that regulatory actions be analyzed to determine whether they will have a significant impact on a substantial number of small entities. We have determined that this is not a “major” role under this Act and therefore does not require a regulatory flexibility analysis. The elimination of the informal appeals process will represent a cost savings for aggrieved HRSA grantees regardless of whether the organizations are large or small entities, as the affected grantees will now have direct access to the Departmental Appeals Board to petition for reconsideration of adverse findings rather than first presenting their cases to an informally constituted HRSA review committee. As a result, aggrieved grantees will only incur costs related to the preparation and presentation of their petitions to the Departmental Appeals Board, and not the costs which might be incurred for preparation and submission to both an ad-hoc committee and the Departmental Appeals Board.

Unfunded Mandates

The Unfunded Mandates Reform Act requires that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in an expenditure by States, local or tribal governments, or by the private sector of $100 million or more in any given year. This rule does not have cost implications for the economy of $100 million or more, nor otherwise meet the criteria for a major rule under Executive Order 12291, and therefore does not require a regulation impact analysis.

Executive Order 13132

Executive Order 13132 requires that Federal agencies consult with State and local government officials in the development of regulatory policies with federalism implications. In the event that this rule may have such implications, we solicit comment from State and local government officials.

Executive Order 13175

Executive Order 13175 requires the Department to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” Although it is not clear that the proposed rule will have tribal implications, we solicit comment on this proposed rule from tribal officials.

Paperwork Reduction Act

There are no new paperwork requirements subject to OMB approval under the Paperwork Reduction Act of 1995.

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List of Subjects in 42 CFR Part 50

  • Administrative practice and procedure
  • Grant programs—health
  • Health care
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Elizabeth M. Duke,

Administrator, Health Resources and Services Administration.

Approved: May 27, 2005.

Michael O. Leavitt,

Secretary of Health and Human Services.

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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:

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Subpart D—Public Health Service Grant Appeals Procedure

1. The authority citation for Part 50, Subpart D, continues to read as follows:

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

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2. Section 50.402 is revised to read as follows:

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 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 Sciences. For purposes of this regulation, these entities are hereinafter referred to as “agencies.”

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[FR Doc. 05-11262 Filed 6-6-05; 8:45 am]