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Guidelines -- Appellate Review of Administrative Law Judge Decisions Under the Program Fraud Civil Remedies Act of 1986

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Introduction
The Program Fraud Civil Remedies Act of 1986 (PFCRA), Title 31 of the United States Code (U.S.C.) §§ 3801-3812, establishes an administrative remedy against any person who makes a false claim or written statement to any of certain federal agencies, including the Department of Health and Human Services (Department). The Department promulgated the regulations at Title 45 of the Code of Federal Regulations (C.F.R.) Part 79 to implement the provisions of PFCRA. Under those regulations, a person (the “defendant”) served with a complaint alleging liability under PFCRA may request a hearing before an Administrative Law Judge (ALJ) by timely filing an answer with the reviewing official who issued the complaint, who then files the complaint and answer with an ALJ. After conducting a hearing, the ALJ issues an “initial decision,” which may be revised after a motion for reconsideration.

The regulations governing appeals of initial or revised decisions by ALJs in cases where the defendant has timely filed an answer are found at 45 C.F.R. § 79.39. The Departmental Appeals Board (Board), formerly the Departmental Grant Appeals Board, is the "authority head" designated to hear appeals of these ALJ decisions. See 45 C.F.R. § 79.2. These guidelines have been designed to assist the parties in understanding and following the procedures in 45 C.F.R. § 79.39 relating to Board review of initial or revised decisions by ALJs. These guidelines do not apply where a defendant has failed to timely file an answer. In that circumstance, a defendant may appeal to the Board only an ALJ’s denial of a motion to reopen the ALJ’s decision. See 45 C.F.R. § 79.10(h)-(l).

If you have any questions about these guidelines or about procedures for appealing an ALJ’s denial of a motion to reopen, you may call Appellate Division attorney Carolyn Reines-Graubard at (202) 565-0116.

Starting the Review Process
(a) Under 45 C.F.R. § 79.39, a defendant who has filed a timely answer and who is determined in the ALJ decision to be liable for a civil penalty or assessment may appeal the decision by filing a notice of appeal with the Board. There is no right to appeal an interlocutory ruling by the ALJ. See 45 C.F.R. § 79.39(g).

(b) A defendant has a right to be represented before the Board, at the defendant’s own expense, by an attorney. A representative should file with the Board a signed statement that he or she has been authorized to represent the entity, unless the same representative appeared in the proceedings before the ALJ.

(c) The period for filing a notice of appeal specified in (d) or (e) below will be extended if the defendant files a written request for an extension which the Board grants for good cause shown. The request must be filed within the original 30-day period and should explain why there is good cause for the requested extension, which may not exceed 30 days.

(d) A notice of appeal must be filed within 30 days after the ALJ issues the initial decision, unless a motion for reconsideration of that decision is timely filed with the ALJ by either party.

(e) If a motion for reconsideration of the ALJ decision is timely filed and the defendant has not previously filed a notice of appeal, a notice of appeal must be filed within 30 days after the ALJ issues a ruling denying the motion or issues a revised decision, whichever applies.

(f) If the ALJ’s initial or revised decision or ruling denying a motion for reconsideration is mailed to you, the decision or ruling is considered issued five calendar days from the date on the decision or ruling. See 45 C.F.R. § 79.27(c).

(g) Your notice of appeal must be accompanied by a written brief specifying each finding of fact and conclusion of law with which you disagree, and your basis for contending that each such finding or conclusion is unsupported or incorrect. The Board expects that the basis for each challenge to a finding or conclusion in the ALJ decision will be set forth in a separate paragraph or section, and that the accompanying arguments will be concisely stated. In addition, where appropriate, each argument should be supported by precise citations to the record and/or by precise citations to statutes, regulations or other relevant authorities upon which the defendant is relying.

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Filing Requirements for All Submissions
(a) A submission is considered “filed” with the Board on the postmark date, the date sent by registered or certified mail, the date deposited with a commercial delivery service, or the date a fax (where permitted) is sent.

(b) If the last day of the period for filing a submission falls on a federal nonworkday (a Saturday, Sunday, legal holiday, or a day which by statute or Executive Order is declared to be a nonworkday for federal employees), the submission may be filed on the next federal workday.

(c) All submissions to the Board should be addressed to:

Department of Health and Human Services
Departmental Appeals Board, MS 6127
Appellate Division
330 Independence Ave., S.W.
Cohen Building, Room G-644
Washington, D.C. 20201

Faxes should be sent to (202) 565-0238. Please do not fax a submission if it is over 10 pages.

(d) Both parties should provide an original and two copies of all submissions to the Board and a copy to the opposing party. If your submission is faxed, the required two copies should be mailed. Include in any submission to the Board a statement that you have sent a copy to the opposing party.

(e) The parties should not submit to the Board materials already submitted to the ALJ since those materials will be transferred to the Board by the ALJ after the time for filing a motion for reconsideration has expired.

(f) A submission (including the notice of appeal) may not incorporate by reference a brief or parts of a brief previously submitted to the ALJ.

(g) Certain written submissions are subject to page limits, unless the Board grants a motion to increase the number of pages: notice of appeal – no more than 40 pages; response – no more than 40 pages. If typed, the submission should be double-spaced and the font size should be no less than 12. Cover letters and attachments are not included in the page count.

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Development of the Record on Appeal
(a) The notice of appeal is referred to a panel of three Board members, one of whom presides over the development of the record on appeal. The Presiding Board Member is assisted by a staff attorney whom the parties may contact if they have any questions about case status or procedures.

(b) Board proceedings are automatically stayed if a motion for reconsideration of the ALJ decision is timely filed. A party should promptly notify the Board that it has filed a motion for reconsideration with the ALJ.

(c) The Department’s representative may submit a response to the notice of appeal. The response must be filed within 30 days after the Department receives a copy of the notice of appeal.

(d) The Board expects a party needing an extension for filing the response (or any additional submissions required by the Board) to file a request for an extension before the original due date, to include a statement about whether the opposing party objects to the requested extension, and to state the reasons for the request. The Board will grant an extension only for good cause shown.

(e) There is no right to appear personally before the Board. On rare occasions, the Board may grant a request for oral argument if the Board determines that oral argument would facilitate its decision-making. A party wishing to appear before the Board to present oral argument should request such an opportunity in the notice of appeal or the response and should state the purpose of the requested appearance. Generally, any oral proceeding will be conducted by the Presiding Board Member by telephone conference rather than in person.

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Completion of the Review Process
(a) The Board may affirm, reduce, reverse, compromise, remand or settle any penalty or assessment determined by the ALJ. The Board will generally approve any settlement agreement, but has final authority to determine if a settlement would be in the interests of the government. See 45 C.F.R. §§ 79.39(j), 79.46(a), (c), (e).

(b) The Board has adopted the following standard of review. The standard of review on a disputed factual issue is whether the ALJ decision is supported by substantial evidence in the record as a whole. The standard of review on a disputed issue of law is whether the ALJ decision is erroneous. The bases for reducing, reversing or remanding an ALJ decision include the following: a finding of material fact necessary to the outcome of the decision is not supported by substantial evidence; a legal conclusion necessary to the outcome of the decision is erroneous; the decision is contrary to law or applicable regulations; a prejudicial error of procedure (including an abuse of discretion under the law or applicable regulations) was committed.

(c) If a party demonstrates to the satisfaction of the Board that evidence not presented to the ALJ is relevant and material and that there were reasonable grounds for the failure to present the evidence to the ALJ, the Board will remand the case to the ALJ for consideration of such additional evidence. See 45 C.F.R. § 79.39(i).

(d) The Board will review only those parts of the record before the ALJ which are cited by the parties or which the Board considers necessary to decide the appeal. The Board will not consider any objection that was not raised before the ALJ, unless a demonstration is made of extraordinary circumstances causing the failure to raise the objection. See 45 C.F.R. § 79.39(h).

(e) The decision of the Board (other than a remand to the ALJ) is binding unless the defendant has a right to judicial review and timely files a civil action seeking judicial review in accordance with 45 C.F.R. §§ 79.39(l) and 79.42.

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Last Revised: October 19, 2010