As explained in Hearings, Appeals, and Litigation Law (HALLEX) manual HA 01120.011, if a hearing level decision maker approves a fee agreement in connection with a favorable (fully or partially) decision, and the Appeals Council (AC) takes an action that vacates the favorable decision, the AC action also vacates the approval of the fee agreement and any authorization of fees under the agreement. If the AC issues a revised favorable decision on the case, it will approve or disapprove the fee agreement based on the circumstances that exist as of the date of the AC's decision (even when the AC adjudicates only through the date of the hearing decision).

This instruction generally applies only when the AC exercises its authority to issue a revised favorable decision after granting review or taking own motion review of a favorable hearing level decision (see HALLEX HA 01360.001). It is unnecessary for the AC to process the fee agreement if the AC:

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  Changes a favorable decision to an unfavorable decision;

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  Remands a favorable decision to an administrative law judge (ALJ) for further administrative action;

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  Dismisses a request for hearing or a request for review; or

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  Does not grant review or take own motion review.

If a revised favorable AC decision results in an adjustment in the past-due benefits amount for the claimant, the effectuating component will determine whether the representative or entity with a valid assignment is due any additional payment or must refund any excess payment after the new AC action on the fee agreement.

When the AC issues a revised favorable decision, it will approve the fee agreement if there has been no pertinent change in circumstance and a fee agreement approval is proper under HALLEX HA 01120.012.

If the AC issues a revised favorable decision after granting review or taking own motion review and the fee agreement is non-tiered, the AC will approve a fee agreement that meets the statutory criteria and no exceptions apply. If the representative states the intent to pursue an additional fee above the applicable statutory fee cap, see HALLEX HA 01120.044. See HALLEX HA 01120.012 A.3. for information about the statutory fee cap.

When the AC exercises its authority to issue a revised favorable decision and a prior decision maker approved a two-tiered fee agreement with the hearing decision, it must determine whether the fee agreement was intended to apply at the AC level. If not, the AC will disapprove the fee agreement because the fee agreement does not apply at the AC level.

There may be unique processing issues in some cases at the AC level:

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  When issuing a decision after granting review or taking own motion review, the AC may choose to limit application of the new decision to the time period adjudicated by the hearing level decision maker. However, even when the time period adjudicated is limited, the AC has still vacated the hearing level decision and, in doing so, has also vacated the approval of the fee agreement and any authorization of fees under the fee agreement, as explained in HALLEX HA 01120.011. Therefore, the AC must act on the fee agreement if issuing a revised favorable decision.

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  When the AC takes own motion review and issues a revised favorable decision, the AC may find that the language in a two-tiered fee agreement does not address own motion review. When the AC takes own motion review and the second tier of the fee agreement would clearly apply had the claimant requested AC review, the AC will disapprove the fee agreement because it cannot ascertain the level at which the fee agreement applies.

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  If the AC does not vacate the favorable aspect of an ALJ's decision but remands the case for additional proceedings on unfavorably decided issues), a fee agreement (that the ALJ approved) remains in effect. If a more favorable decision is later made on the unfavorably decided issues the effectuating component may pay an additional fee amount to the representative or eligible entity based on an assignment. The claimant or representative will have the opportunity to request administrative review of the amended fee that arises from the revised decision. For administrative review procedures, see HALLEX HA 01120.044.

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  In the rare circumstance that a claimant or representative protests the amount of an authorized fee before the AC notifies the claimant and representative of an own motion review, the administrative review action on the fee authorization is moot because the AC vacated the prior favorable decision when it took own motion review.