42 C.F.R. § 3.534 – The hearing.

(a) The ALJ must conduct a hearing on the record in order to determine whether the respondent should be found liable under this part.
(b)
1. (1) The respondent has the burden of going forward and the burden of persuasion with respect to any challenge to the amount of a proposed penalty pursuant to §§ 3.404 and 3.408, including any factors raised as mitigating factors.
2. (2) The Secretary has the burden of going forward and the burden of persuasion with respect to all other issues, including issues of liability and the existence of any factors considered as aggravating factors in determining the amount of the proposed penalty.
3. (3) The burden of persuasion will be judged by a preponderance of the evidence.
(c) The hearing must be open to the public unless otherwise ordered by the ALJ for good cause shown, which may be that identifiable patient safety work product has been introduced into evidence or is expected to be introduced into evidence.
(d)
1. (1) Subject to the 15-day rule under § 3.518(a) and the admissibility of evidence under § 3.540, either party may introduce, during its case in chief, items or information that arose or became known after the date of the issuance of the notice of proposed determination or the request for hearing, as applicable. Such items and information may not be admitted into evidence, if introduced—
  1. (i) By the Secretary, unless they are material and relevant to the acts or omissions with respect to which the penalty is proposed in the notice of proposed determination pursuant to § 3.420 of this part, including circumstances that may increase penalties; or
  2. (ii) By the respondent, unless they are material and relevant to an admission, denial or explanation of a finding of fact in the notice of proposed determination under § 3.420 of this part, or to a specific circumstance or argument expressly stated in the request for hearing under § 3.504, including circumstances that may reduce penalties.
2. (2) After both parties have presented their cases, evidence may be admitted in rebuttal even if not previously exchanged in accordance with § 3.518.