Administrative Review Process for Adjudicating Initial Disability Claims

SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404, 405, 416, and 422

RIN 0960-AG31

Administrative Review Process for Adjudicating Initial Disability Claims

AGENCY:

Social Security Administration.

ACTION:

Final rule.

SUMMARY:

The Social Security Administration is committed to providing the high quality of service the American people expect and deserve. In light of the significant growth in the number of disability claims and the increased complexity of those claims, the need to make substantial changes in our disability determination process has become urgent. We are publishing a final rule that amends our administrative review process for applications for benefits that are based on whether you are disabled under title II of the Social Security Act (the Act), or applications for supplemental security income (SSI) payments that are based on whether you are disabled or blind under title XVI of the Act. We expect that this final rule will improve the accuracy, consistency, and timeliness of decision-making throughout the disability determination process.

DATES:

This rule is effective August 1, 2006.

FOR FURTHER INFORMATION CONTACT:

Mary Chatel, Executive Director, Disability Service Improvement, Social Security Administration, 500 E Street, SW., Suite 854, Washington DC 20254, 202-358-6094 or TTY 410-966-5609, for information about this notice. For information on eligibility or filing for benefits, call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet site, Social Security Online, at

http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

The electronic file of this document is available on the date of publication in the

Federal Register

at

http://www.gpoaccess.gov/fr/index.html.

Introduction

Today, as part of our continuing efforts to make fundamental improvements in our disability decision-making, we are publishing this rule establishing our new disability determination process, known as the Disability Service Improvement (DSI) process. This rule explains our new procedures for adjudicating the disability portion of initial claims for Social Security disability insurance (DI) benefits and for supplemental security income (SSI) based on disability or blindness. The purpose of the rule is to improve the accuracy, consistency, and fairness of our disability determination process and to make the right decision as early in the process as possible.

Under this rule, the administrative review process consists of several steps, which must be requested within certain time periods. When you file for benefits, we will make an initial determination on your claim, and in certain circumstances refer your claim for a quick disability determination (QDD). If you are dissatisfied with our initial determination, you may request review by a Federal reviewing official. If you are dissatisfied with the Federal reviewing official's decision, you may request a hearing before an administrative law judge. The administrative law judge's decision becomes our final decision, unless your claim is referred to the Decision Review Board (DRB). When the DRB reviews your claim and issues a decision, that decision is our final decision. If you are dissatisfied with our final decision, you may seek judicial review in Federal district court.

Following is a description of our various initiatives towards improving the disability process, an explanation of the new process created by this rule, and a discussion of the comments that we received in response to our notice of proposed rulemaking (NPRM), 70 FR 43590 (July 27, 2005).

Background

During the five decades that have elapsed since its enactment, the DI program has provided many millions of disabled American workers and their families with critically needed income support. The SSI program, enacted 34 years ago, has similarly helped many millions of low income disabled individuals meet their basic needs. These two programs are a vital part of the nation's social insurance and income support systems.

The number of disability beneficiaries in our programs has grown significantly over the years. In January 2005, nearly eight million disabled workers and their dependents received DI benefits, double the number of beneficiaries in 1985 (about a 100% increase). Nearly six million disabled adults and children received SSI disability payments, more than double the number in 1985 (a 130% increase).

The adjudication of disability claims now constitutes the major part of our workload and nearly every one of our components has a role in administering the disability programs. In fiscal year 2005, the State disability determination services (DDSs) processed more than 2.6 million initial claims for DI benefits and SSI based on disability or blindness. Our hearing offices processed approximately 500,000 disability claims on behalf of claimants who appealed their denials.

As the disability programs have grown in both size and complexity, we have been increasingly challenged to provide the high quality of service that disabled claimants and the public expect and deserve. Over the last four years we have undertaken a number of major initiatives designed to fundamentally improve the administration of these programs.

To further one of those initiatives, on July 27, 2005, we published an NPRM that described the changes we have already begun and those we intend to make in the months to come to improve the accuracy, consistency, and fairness of our disability determination process, to make the right decision as early in the process as possible, and to assist disabled individuals who want to work to do so.

We determined that to accomplish these objectives, we needed a two-pronged strategy: (1) Strengthen our disability determination process through structural and qualitative change, and (2) make important institutional improvements to better support our disability programs. The important institutional improvements we are making include:

• Implementing a new electronic disability system;

• Establishing a new, integrated, and more comprehensive quality system;

• Enhancing our management information;

• Updating medical and vocational policy and strengthening our ability to address policy issues; and

• Implementing new work opportunity initiatives.

These improvements go hand-in-hand with the process changes that we are making in this rule. Both are essential if our disability programs are to meet the needs of the claimants and public whom we serve.

A New Electronic Disability System

At this time, we are well along in replacing our old paper disability approach with an electronic system that will enable us to handle all new claims in an expedited manner. Each component in our adjudicative process, from beginning to end, is increasingly able to process claims electronically. This new electronic system, which we

call eDib, permits us to avoid delays that result from having to mail, locate, and organize paper folders. It also enables more than one employee or component to work on a claim at the same time, thus speeding up the process. Medical records can be quickly scanned into the system and made readily accessible to adjudicators. The electronic system also includes safeguards to help adjudicators avoid mistakes, which will result in more accurate decision-making. It also protects the confidentiality of claimant information.

The implementation of this new electronic system has progressed rapidly. All of our 1,338 field offices are now using the Electronic Disability Collect System (EDCS), taking 20,000 claims per day. This system enables them to immediately transfer a disability claim to a DDS, thus avoiding delays.

The rollout of eDib in the DDSs has been phased in gradually so that we can provide each DDS with the support needed for successful implementation. Once rollout begins in a DDS, the number of DDS decision-makers working with electronic folders gradually expands as the DDS develops expertise with the process. To date, all of the 50 States have rolled out the electronic disability folder. Nationally, over 80% of DDS decision-makers are now adjudicating cases in an electronic environment.

In January 2005, the Mississippi DDS became the first in the nation to start processing its cases in a totally electronic environment. Another 20 States have joined Mississippi and are processing all new disability claims in a totally electronic environment, thus eliminating the need for a paper folder. We plan to continue implementation in the DDSs in 2006.

Within the Office of Hearings and Appeals (OHA), all of our hearing offices are outfitted with our new electronic Case Processing and Management System (CPMS), which controls case flow and provides current management information. In addition, hearing offices in 47 States are equipped to work cases electronically.

eDib also improves our ability to manage decisional quality. Access to the electronic folder provides quality reviewers greater flexibility. This will allow us to transition to our new quality system that will rely on both in-line and end-of-line reviews and will provide timely and efficient feedback to decision-makers to enable them to improve how we administer our programs.

In 2006, each of the field offices, DDSs, and hearing offices will be processing workloads with electronic disability folders on a regular basis.

A New Quality System

Over the last two years we have been designing a new integrated quality system that we believe will significantly improve our disability determination process as well as other program areas within our responsibility, including the Social Security retirement program and the SSI age-based program. We expect to begin the implementation of our new quality system this spring. This system employs a multi-dimensional definition of quality that includes five elements: accuracy, service, timeliness, productivity, and cost. It will emphasize in-line, as well as end-of-line, quality assurance.

The new, comprehensive quality system will be implemented throughout our Agency, including in teleservice centers, program service centers, field offices, DDSs, and hearing offices, as well as for the Federal reviewing official, Medical and Vocational Expert System (MVES), and the DRB. The centrally-managed quality system will replace the current regionally-based Disability Quality Branches that review State DDS determinations.

Data will be gathered in-line and end-of-line to provide timely, meaningful feedback. Specialized units comprised of trained employees who will be responsible for fostering continuous improvements in the Agency's work products will work together with employees in all components to improve the process on an ongoing basis. Quality will not be separate from, but will be integrated into every step of, the process.

The new quality system is being designed to improve accountability and to provide feedback to adjudicators at all administrative levels, including the individual, unit, component, State, region, and headquarters. The system will provide administrators with the detailed data they need to understand the strengths and weaknesses of their performance, and what they need to do to improve it. To ensure successful implementation, we will be providing training so that employees will understand what is expected of them and will be able to fulfill their responsibilities. This will improve the quality of our decisions throughout the disability determination process.

Improving Management Information

The new DSI process that we describe below is intended to improve our service to the public. Critical to achieving this objective is having the management information that is needed to measure both the overall impact of the new disability determination process and the effectiveness of its component parts.

We are currently undertaking a major effort to enhance our management information capacity. We anticipate that these enhancements will not only improve our current capability to perform such ongoing functions as tracking program and administrative costs, but will also help us measure the success of the new DSI process. These enhancements will enable us to determine whether our performance matches our business goals, and whether these changes result in the intended objectives.

For example, we will be able to answer the following types of questions:

• Did overall disability processing time improve? Did the new QDD process contribute to that improvement?

• Did our new Medical and Vocational Expert System (MVES) enhance adjudicators' access to the medical and vocational expertise they need to make better decisions?

• Did the accuracy, timeliness, and consistency of decisions improve as a result of our new in-line and end-of-line quality initiatives?

We intend to use our improved management information tools dynamically, resolving management problems as we find them, and making continuous improvements as the new process is rolled out.

Improvements in Policy

We are undertaking a major effort to review, and update if necessary, our medical and vocational policies and to improve our capacity to identify and make needed changes in our disability policies and procedures.

Medical Policy.

As part of this effort, we have implemented a new business process to streamline the updating of our medical listings.

In fiscal year 2005, we published revised medical criteria for malignant neoplastic diseases, impairments that affect multiple body systems, and genitourinary impairments. In addition, we provided timely cross-component training and guidance on these provisions. We also published an NPRM for vision impairments. We will continue to update additional medical listings throughout fiscal year 2006. For example, the final cardiovascular listing was published in January 2006.

We have taken steps to increase outside participation in the development of our medical listings. As a first step, we now publish an advance

NPRM to encourage members of the public to comment on the current medical criteria and to provide suggestions on how the medical criteria could be updated.

In fiscal year 2005, we published advance notices involving impairments related to the respiratory and endocrine systems, growth impairments, and neurological impairments, as well as portions of the special senses (hearing impairments and disturbances of the labyrinthine-vestibular function). We also proposed the development of a new listing covering language and speech impairments.

Following up on the advance notices, we have held numerous public outreach events. These sessions provide an opportunity for medical experts, claimants, and advocates to comment on our current policies and to advise us on the future content of the medical criteria.

Vocational Policy.

We are working to update and clarify our vocational policy to assist adjudicators in the field. We recently published a Social Security Ruling to communicate the Supreme Court's decision on how adjudicators should apply our rules when determining whether a claimant can return to his/her past relevant work. We are also building a comprehensive policy access tool, known as Disability Online, which will give our adjudicators electronic access to all vocational rules and training materials.

Disability Program Policy Council.

Recognizing the need for a more integrated approach in addressing policy issues, we are establishing a new Disability Program Policy Council (DPPC) that will be responsible for recommending changes in our disability policies and procedures to improve the quality of our disability determination process. This Council will be chaired by the Deputy Commissioner for Disability and Income Security Programs. It will include representatives from components that are responsible for policy and for the operations of the disability determination process, as well as the Office of Quality, the Office of the General Counsel, and the DRB. The Council will serve as a forum for making policy recommendations for consideration by the Commissioner.

Electronic Disability Guide.

In support of our eDib initiative, we have created an electronic disability guide (eDG) for use by adjudicators. This guide consolidates disability policies and procedures in one convenient place and serves as an instructional manual for processing disability claims as we transition from paper to an electronic environment. This electronic repository is also accessible to the public. It has proven to be extremely helpful when we discover policy or procedural weaknesses that arise with the conversion from our paper approach to our new electronic system. In such instances, we identify the problem, make necessary changes, and update our eDG repository accordingly so that they can be implemented immediately.

Our Work Opportunity Initiatives

In addition to the above improvements in our infrastructure, we are implementing a number of initiatives designed to encourage and assist individuals to participate in employment opportunities.

Our initiatives recognize that the DI and SSI programs serve a diverse population of individuals with disabilities. Our beneficiaries are from various age groups with different impairments, levels of education, work experience, and capacities for working. While many cannot work at all on a sustained basis, others may be able to work part time or full time with reasonable accommodations and/or ongoing supports. As we have been developing our return-to-work initiatives, we have been mindful that the unique needs of every beneficiary cannot be met by one return-to-work program. In conjunction with our plans to improve our disability determination process, we will be conducting a number of diverse demonstration projects aimed at helping individuals who want to work to do so. Our demonstration projects are as follows:

DI Benefit Offset Demonstration Project.

We are developing a benefit offset demonstration that will reduce DI benefits by $1 for every $2 earned over a certain threshold. Currently, a beneficiary could lose DI entitlement, and therefore all benefit payments, as soon as earnings exceed the substantial gainful activity level. This potential loss of benefits and eventually the corresponding access to Medicare benefits is thought to discourage many beneficiaries from attempting to work. We are working with a contractor on the design, implementation, and evaluation of the project. The contractor also will develop a model that will test an early intervention strategy focusing on DI benefit applicants. Enrollments in the national project are expected by the end of this year.

At the same time, we are conducting a small DI benefit offset demonstration project in four States: Connecticut, Utah, Vermont, and Wisconsin. To date, approximately 200 beneficiaries are enrolled.

Youth Transition Projects.

We have cooperative agreements in six States for the purpose of assisting youths with disabilities to successfully transition from school, which may include post-secondary education, to employment and ultimately economic self-sufficiency. The States have formed partnerships with Federal, State, and local entities to improve employment outcomes for persons who are age 14-25 and who receive SSI or DI benefits on the basis of their own disability. The projects are providing a broad array of transition-related services and supports for these individuals.

Accelerated Benefits.

Under current law, there is a 24-month wait before Medicare is available to a person whom we determine to be disabled and eligible for DI. A contract was recently awarded to implement and evaluate the accelerated benefits demonstration project, which will provide immediate private health insurance to individuals who have medical impairments expected to improve within two to three years. Project participants will be recruited at the point that disability beneficiaries are informed of their benefit allowance. Participants will also be provided with employment supports with return to work as the goal at the end of the two to three-year time frame. At the end of the time frame, participants will be assessed to see whether they have medically improved. Enrollments are expected by the end of this year.

Mental Health Treatment Study.

We will provide comprehensive health care to DI beneficiaries who have schizophrenia or affective disorders. The purpose of this study is to determine what treatment and support variables for persons with mental illness lead to better employment outcomes. The project will use provider networks that offer a range of psychiatric, pharmaceutical, and employment supports. The project will provide an individualized, comprehensive care and support plan for each participant. Services will be provided in 21 nationally representative sites across the United States. We expect participants will be enrolled by summer 2006.

Human Immunodeficiency Virus/Auto-Immune Disorder (HIV/AI) Demonstration.

The HIV/AI demonstration will provide support services and private health benefits to current DI beneficiaries with a diagnosis of HIV, immune disorder, and/or auto-immune disorder. The purpose of this California-based demonstration is to provide immediate access to comprehensive health care services and resources required for a successful

return to work. The health benefits will be designed to provide beneficiaries with HIV or other immune-related disorders with health coverage to ensure they receive necessary medical treatment for their impairments. Project participants will also receive employment service coordination. Each beneficiary enrolled will be assessed to determine the types of services and/or interventions needed for a sustained and successful return to work. An expert medical unit, comprised of medical specialists in the HIV/auto-immune field, will be established to provide expert guidance regarding issues relevant to this population.

Development of the New Disability Service Improvement Process

We believe that the improvements described above will provide a strong underpinning for the successful operation of our new DSI process. The new process will apply to claims for DI benefits and for SSI payments based on disability or blindness.

The new approach was presented to the Subcommittee on Social Security of the House Committee on Ways and Means in September 2003. As we discussed in the July 2005 NPRM, this initial presentation was followed by extensive discussions with all interested parties so that we could have the benefit of their views and recommendations in developing our new proposed rules. We met with hundreds of interested organizations, groups, and individuals, including Members of Congress and congressional staff; representatives of claimants and beneficiaries; organizations representing the legal and medical professions, including Federal judges; and organizations representing State and Federal employees who are engaged in the disability determination process. We also established an Internet site to provide additional access to individuals and organizations who wanted to submit their views and recommendations.

As a result of this outreach effort, the July 27, 2005 NPRM included numerous improvements over our original proposal. During the 90-day comment period after our NPRM was published, we received nearly 900 new written comments from interested individuals and organizations. We have carefully read and considered each of them. They are available on our Web site,

http://www.ssa.gov.

The comments we received were detailed and insightful, and they have been extremely helpful to our deliberations. We deeply appreciate the extraordinary effort that was expended to help us make the decisions that are needed to bring about fundamental improvement in our disability process. The final rule that we are publishing today contains a number of changes from our NPRM and reflects the thoughtful input that the many individuals and organizations have provided. Below we discuss and respond to the significant comments; we have not addressed, however, most technical comments, those comments that are outside the scope of the NPRM, or those comments that do not otherwise require a response.

Summary of Differences Between the Proposed Rule and the Final Rule

Quick Disability Determinations

The proposed rule stated that in order for a State DDS to make a quick disability determination, a medical or psychological expert must verify the claimant's diagnosis. The final rule clarifies this language by providing that the expert must “verify that the medical evidence in the file is sufficient to determine” that the claimant's impairments meet the standards we establish for making QDDs. The final rule provides further that if there is disagreement between the examiner and the expert as to whether a claim meets the QDD standards, the claim will not be allowed as a quick disability determination. Rather, it will be transferred out of the QDD unit to be processed by the DDS in the normal manner.

The proposed rule established a 20-day processing standard for States to make QDDs, but did not address performance support for the States. The final rule keeps the 20-day processing standard but adds a provision stating that we may offer, or the State may request, performance support to assist a DDS in enhancing performance. If monitoring and review reveal that the processing standard is not met for one calendar quarter, we will provide mandatory performance support to a DDS. The preamble to the final rule also makes clear that we will not find that a State has substantially failed to meet our processing standard until the predictive model that is used to identify QDDs has been implemented and tested for one year. Thereafter, as new States begin implementation of the QDD process they will be given a six-month grace period before sanction provisions will be applied to them.

The proposed rule stated that when we provide notice of the initial determination, we would inform the claimant of the right to review by a Federal reviewing official. The final rule adds that the notice will also explain that the claimant has the right to be represented.

Medical and Vocational Expertise

The name of the expert system was changed in the final rule from Federal Expert Unit to Medical and Vocational Expert System (MVES). The rule clarifies the organizational structure to provide that the MVES will be comprised of a Medical and Vocational Expert Unit that will oversee a national network of medical, psychological, and vocational experts and will also maintain a national registry of vocational experts.

The proposed rule stated that the expert system would provide assistance to adjudicators at all levels of the disability review process. The final rule does not provide for assistance from the MVES in reviewing a claim at the DRB level.

The preamble to the proposed rule stated that we expect to issue qualification standards for experts on or before the issuance of a final rule, but that they would be published no later than six months after the effective date of the final rule. The preamble to the final rule states that we expect to issue initial qualification standards in the near future.

Federal Reviewing Official Level

We added language to the final rule to make it clear that a claimant may submit additional evidence to the Federal reviewing official even if that evidence is not originally submitted by the claimant when the claimant requests review. In addition, we added language in the final rule to make clear that a claimant may request additional time to file a request for Federal reviewing official review before the 60-day period has ended as well as after it has ended.

The proposed rule provided that a Federal reviewing official may remand a claim to the State DDS under specified circumstances. The final rule does not permit a Federal reviewing official to remand a claim to a State DDS but does permit the Federal reviewing official to ask the State agency to clarify or provide additional information about the basis for its determination. In such a situation, the Federal reviewing official retains the authority to make the decision as to whether a claimant is disabled.

The proposed rule did not address subpoena authority at the Federal reviewing official level. The final rule adds subpoena authority and states that the Office of the General Counsel may seek enforcement of the subpoena.

Administrative Law Judge Hearing Level

The proposed rule stated that claimants must submit evidence no later than 20 days before a hearing. The final rule provides that claimants must submit evidence no later than five business days before the hearing. The proposed rule stated that there were only two exceptions to the 20-day limit and both had to be raised at the hearing. The final rule makes clear that the five-day limit is subject to several exceptions, depending on when the claimant attempts to submit the additional evidence and expands the range of circumstances under which an administrative law judge may accept and consider evidence that the claimant does not submit timely.

The proposed rule stated that the administrative law judge must notify the claimant of the hearing date at least 45 days before the date of the hearing. The final rule states that the administrative law judge will notify the claimant of the time and place of the hearing at least 75 days before the date of the hearing.

The proposed rule provided that claimants must submit all available evidence that supports the claim, even evidence that might undermine or appear contrary to the allegations. The final rule states that claimants must provide evidence, without redaction, showing how their impairments affect functioning during the time they say they are disabled.

Decision Review Board

The final rule allows claimants whose claims are reviewed by the DRB to submit statements explaining why they agree or disagree with the administrative law judge's decision, regardless of whether the DRB requests the statement. The proposed rule provided that such statements may be no longer than three pages with typeface no smaller than 12 point font. The final rule provides that such statements may be no longer than 2,000 words and, if typed, that the typeface must be 12 point font or larger.

Reopening; Other Provisions

The proposed rule revised the current reopening criteria that allow us to reopen a determination or decision within one year of the date of the notice of initial determination for any reason. The proposed rule also deleted new and material evidence as a basis for finding good cause to reopen. Under the final rule, our existing reopening rules continue to operate for all claims adjudicated prior to the hearing level. The final rule only makes changes at the post-administrative law judge decision level so that once a decision is issued, reopening for good cause is limited to six months. Under the final rule, “new and material evidence” is not a basis for finding good cause in such circumstances.

The proposed rule stated that claimants may establish good cause for missing a deadline if they show that “some other unusual and unavoidable circumstance” beyond their control prevented timely filing. The final rule states that claimants can establish good cause for missing a deadline if they can show that “some other unusual, unexpected, or unavoidable circumstance” beyond their control prevented timely filing.

The proposed rule provided that discrimination complaints must be filed by a claimant within 60 days of the date upon which the claimant becomes aware of the discrimination. The final rule changes the date by which a claimant must file a discrimination claim with us from 60 days to 180 days of the date upon which the claimant becomes aware of the discrimination.

Implementation

The final rule changes this section by specifying that Boston is the first region for implementation and that we will wait at least one year after implementing in Boston before we implement in a second region. We added a provision to the final rule to address instances where a claimant moves from a region where DSI has been implemented to a region where it has not, and visa versa. In such situations, the claim will continue to be reviewed using the same procedures under which the claim was originally filed.

The final rule adds language making it clear that throughout the period during which we are implementing these new rules across the country, the Appeals Council will continue to perform the non-disability review functions and some of the other review functions that it currently performs (

e.g.

, review of retirement and survivors insurance cases and overpayment waiver claims).

Overview of the New DSI Process

In summary, the rule we are publishing today provides for the following:

• Individuals who are clearly disabled will have a process through which favorable determinations can be made within 20 calendar days after the date the DDS receives the claim.

• The Medical and Vocational Expert System will enhance the quality and availability of medical and vocational expertise that our adjudicators need to make accurate and timely decisions.

• A new position at the Federal level—the Federal reviewing official—will be established to review DDS initial determinations upon the request of the claimant.

• The right of claimants to request and be provided a de novo hearing conducted by an administrative law judge is preserved.

• The record will be closed after the administrative law judge issues a decision, with provision for good cause exceptions to this rule.

• A new body, the Decision Review Board, will be created to identify and correct decisional errors and to identify issues that may impede consistent adjudication at all levels of the process.

• The Appeals Council will be gradually phased out as the new process is implemented throughout the nation.

This final rule contains a significant number of changes designed to provide the high quality of service that the public expects and deserves. In drafting this final rule, we understood that, although there was broad agreement on the need for change, numerous commenters perceived our proposed rule as favoring administrative efficiency over fairness. Our expectation is that the changes we are making will give claimants a meaningful opportunity to present their claim and at the same time provide them with more accurate, consistent, fair, and timely decisions. Our improvements are aimed at strengthening the disability determination process from beginning to end. If, as implementation proceeds, we find that further improvements are needed, we will make them.

We also recognize that for various reasons many of our claimants need assistance in pursuing their claims, and we continually assist claimants throughout the claims process by:

• Obtaining information needed to support a claim;

• Arranging for a representative payee to assist in the development of the information for the claim and to administer the benefit payment, if a claimant is mentally incompetent;

• Providing extra assistance to the homeless to complete the proper forms and obtain evidence and an interpreter if the claimant has limited English proficiency, or is hearing impaired;

• Using the expedited procedures in place for terminal illness cases, military service casualties, severe impairment, and disaster cases;

• Explaining denial notices and how to file an appeal; and

• Referring claimants for services outside the scope of the Social Security

program using information and referral files that detail public and private agencies available in the service area to assist with housing, food, clothing, counseling, child care, medical needs, legal services, and other needs.

DDSs and hearing offices also have the responsibility of helping claimants who need assistance in collecting medical evidence. They request evidence from treating sources and arrange and pay for consultative examinations when medical evidence from a treating source is unobtainable or incomplete. Some field offices also have special arrangements with hospitals and mental institutions to obtain medical evidence. We are currently working with medical sources to encourage the submission of evidence electronically whenever possible in order to expedite the decisional process. Special arrangements are in place to obtain both medical and non-medical records from large governmental agencies such as the Department of Veterans Affairs, the Military Personnel Records Center, and the Division of Vital Statistics. Additionally, in 2005 we sponsored a national training conference to help educate DDS employees on how best to secure electronic medical evidence (EME). We also recently hosted a national outreach conference for major providers of EME to help them gain familiarity with new options for submitting EME.

As we roll out the new DSI process, we intend to continue and expand our efforts to ensure that all adjudicators make their disability determinations and decisions based upon a record that is as complete as possible. We intend to review and improve our informational services to claimants and to medical providers so that they will better understand what adjudicators need to make accurate determinations or decisions. As noted below, we also intend to develop requirements for training and certification of physicians who perform our consultative examinations to make certain that they understand our disability determination process and the information we need to make accurate determinations and decisions. We are developing templates that adjudicators will use when they request consultative examinations for common types of cases to ensure that the appropriate information is requested.

We have also been developing decisional templates for use by adjudicators at the DDS, Federal reviewing official, and administrative law judge levels that will assist them in writing decisions. Each of these levels of adjudication will have a template that is appropriate for that level. We believe that the use of these templates will help to ensure that disability claims are properly developed and that decisions are legally sustainable and consistent with our policies. These templates are being developed and tested in close consultation with adjudicators in the field. All adjudicators will receive training in their use.

Initial Determination Level

Quick Disability Determinations (QDDs)

We believe that many individuals who are clearly disabled are being required to wait too long to get DI or SSI payments based on disability or blindness. Therefore, as we proposed in our NPRM, this rule provides for establishing at the initial claims level a system for expediting fully favorable decisions for those individuals.

A predictive model will identify claims that involve a high potential that the claimant is disabled and that evidence of the claimant's allegations can be easily and quickly obtained. Through the predictive model, selected claims will be automatically referred from the field office to a State QDD unit. This rule provides that any State that currently performs the disability determination function will be deemed to have given us notice that it wishes to perform the QDD function. In order to participate in the QDD process, however, each DDS must establish a separate QDD unit to process the QDD claims.

Given the importance we assign to the QDD process, we believe that the DDS employees who are involved in making these decisions must be examiners who are experienced in making disability determinations. Several commenters opposed our decision to use experienced disability examiners for the QDD process. One commenter thought it would be a waste of resources, while another thought that we could use inexperienced examiners if we clearly delineated a set of conditions and symptoms that would establish disability. It was also suggested that this requirement might lead to a decline in the quality of cases that are not adjudicated by the QDD units. It is critical that QDDs be made both quickly and accurately. We intend that DDS administrators should use their considered judgment, assigning to the QDD unit those examiners who have demonstrated that they have the skills that are needed to meet our performance requirements. QDDs will be subject to both processing and quality standards, and it is important to us, to DDSs, and claimants that these standards be met.

We understand the concern expressed by smaller DDSs that have limited numbers of staff and want flexibility to assign them to where they are most needed. We intend that they will have that flexibility. For example, if the DDS director determines that an examiner is needed only half-time to carry out the QDD assignment, the DDS examiner may be assigned to non-QDD work as well as to the QDD unit.

The objective is to ensure that QDDs are processed by individuals with the knowledge, training, and experience to effectively carry out the QDD function and that they will be held accountable for performing this important task.

This rule makes clear that a QDD will be made using a team approach involving sign-off by both an examiner and a medical expert. The medical expert may be employed by or under contract with the DDS, or be part of the national network of medical experts that we maintain. The role of the expert will be to verify that the medical evidence that has been provided is sufficient to determine that a claim meets the standards relating to a claimant's medical condition established by us for making a QDD. If there is disagreement between the examiner and the expert as to whether a claim meets our QDD standards, the claim will not be allowed. Instead, it will be transferred out of the QDD unit to be processed by the DDS according to the date the claim originally was received by the QDD unit so that there will be no delay in making a determination regarding those claims.

This rule requires that the DDS meet timeliness standards for processing QDDs in order to retain their QDD adjudication responsibilities. We provide that QDD units must make favorable determinations for those who meet our QDD criteria within 20 calendar days after they receive a claim from the field office. (We also plan to carry out expedited pre-effectuation reviews of some of these determinations within this 20-day period.) If the QDD unit determines that a fully favorable determination cannot be made within 20 days of receiving the claim or if there is disagreement between the disability examiner and the medical or psychological expert, the DDS will transfer the claim out of the QDD unit and adjudicate it using its regular claim determination procedures.

One commenter indicated that the proposed regulation was not clear as to whether the 20-day restriction means 20 working days or 20 calendar days. The rule clearly defines “day” to mean calendar day, unless otherwise indicated. Thus, the 20-day time frame

for a QDD includes all weekends and holidays.

We will monitor the performance of the QDD units to ensure that these claims are being processed in conformance with our regulations. As with other claims, QDDs will be subject to quality review by the Office of Quality. We will also review claims that are transferred out of the QDD unit for regular adjudication to ascertain that these transfers are being made appropriately.

We will be issuing administrative guidance to the States which will further explain how we expect DDSs to carry out these requirements and the flexibility that they will be given to ensure that they can perform as required.

We anticipate that the number of QDD claims will initially be relatively small. As we gain experience with the new QDD system, we expect that the number and characteristics of claims that are identified as potential QDDs will gradually increase.

The predictive model that we will use to identify potential QDD claims will score claims by taking into account such factors as medical history, treatment protocols, and medical signs and findings. As noted above, those claims with scores that indicate a high likelihood of a quick allowance will be referred to a QDD unit.

We intend to carefully test the QDD predictive model to ensure its efficacy and integrity before we will implement the provision in this rule that requires a DDS to meet our processing requirements or be subject to sanction. In addition, this rule provides for performance support at any time that the regular monitoring and review process reveals that support could enhance performance. However, if for two or more consecutive calendar quarters a State agency falls below our 20-day QDD processing standard without good cause, we will notify the State agency that we propose to find that it has substantially failed to comply with our standards. After notice and opportunity for a hearing, if it is found that a State agency has substantially failed to meet our standards, we will assume responsibility for performing the QDD function. However, we will not make this finding with respect to any State agency until the model has been initially implemented and tested for one year. Additionally, as new States begin implementation of the QDD process they will be given a six-month grace period before our sanction provisions will be applied to them.

This rule provides that we will not impose sanctions if we determine that a State agency's failure to meet our requirements is the result of: a natural disaster that affects the agency's ability to carry out its work; strikes of State agency staff or other government or private personnel necessary to the performance of the disability determination function; or sudden and unanticipated workload changes that result from changes in Federal law, regulations, or written guidelines, systems modification or systems malfunctions, or rapid, unpredictable caseload growth for a six-month period or longer.

We intend to process presumptive disability and terminally ill cases under current procedures.

Requirements for DDS Determination Notices

This rule requires that DDS notices sent to claimants will explain in clear and understandable language the specific reasons for and the effect of the initial determination. Claimants must also be informed of the right to review by a Federal reviewing official and their right to representation. We believe that better articulation of the reasons for the determination will result in more accurate decisions and will assist in any further adjudication by a Federal reviewing official, an administrative law judge, or the DRB.

Response to Public Comments About Initial Determinations Including QDDs

While many commenters voiced broad support for the QDD process generally, some had questions about how it would operate. We have clarified that DDSs will adjudicate QDDs, using the same definition and procedural rules as are applied to all other initial determinations. Some comments suggested that State adjudicators should have the power to make determinations without the use of a medical or psychological expert. We are making clear that QDDs will require sign-off by both a disability examiner and a medical expert, reflecting our decision to maintain a team approach. Other comments revealed confusion regarding the role of the expert in making a QDD, and for clarity we have revised the rule. Instead of indicating that the expert will be used to verify a claimant's diagnosis, our final rule states that the expert will verify that the medical evidence in the file is sufficient to determine that as of the claimant's alleged onset date, the claimant's impairment(s) meets the standards we establish.

A number of commenters supported, but provided suggestions regarding, our proposal to use a predictive model software tool to identify claims for processing by the QDD units. Additionally, several commenters asked us to provide a list of conditions that would be identified by the predictive model. The predictive model will not necessarily identify specific conditions. Instead, as described above, it will consider a variety of factors, including medical history, treatment protocols, and medical signs and findings.

Some commenters suggested that implementation of the new process be delayed until the predictive model software is fully tested and one commenter stated that we should not require that State agencies establish separate QDD units until we have sufficient data and workload estimates. We have decided not to postpone implementation of the QDD because we believe the new, expedited process will be of such great benefit to many claimants. However, as noted above, we do have a careful rollout plan that should alleviate any concerns. Finally, we had invited comments on whether to accelerate the rollout of the QDD process and we received only one comment on the issue. We will continue to examine the issue of the manner in which the QDD process should be rolled out.

We agree with those commenters who recommended that we give State agencies input as we complete the development of the predictive model screening software. In fact, the QDD predictive model will be based upon the analysis of actual DDS determination data: nearly two million initial DDS determinations were analyzed to determine factors which consistently resulted in quick allowances.

A number of commenters thought that the 20-day time period in which to make a QDD was impractical because it would be difficult for some applicants, especially individuals with low incomes or those who are homeless and have little or no medical care, to obtain necessary documentation in that time frame. Claimants will not have an unusual burden to obtain medical evidence under the QDD process. In fact, because the predictive model is designed to identify those applicants with obvious, severe, disabling conditions that do not require an assessment of residual functional capacity, it is likely that the available or readily obtainable medical records of individuals whose cases have been selected for the QDD process will be sufficient.

Given the difficulty and complexity of implementing this proposal, we will not implement suggestions by other commenters to have pre-determination contact, either face-to-face or via video

teleconference, with the State agency. As noted elsewhere in this preamble, however, we do regard as a high priority the adequate development of the evidence so that our adjudicators can make accurate determinations and decisions and we are including in this rule a number of requirements that we believe will help to achieve this objective. In addition, claimants will retain the right to a face-to-face hearing before an administrative law judge.

Additionally, although the comments revealed some confusion regarding the public availability of any expert opinions we receive during the initial determination process, we intend that all expert evidence will be made part of the record to assist both the claimant and our adjudicators with any further review.

Commenters disagreed about whether a standardized decision-writing format should be utilized for QDDs or whether a detailed rationale is necessary for initial determination notices. We believe that better articulation of the reasons for the determination is central to more accurate decisions and will assist in any further adjudication by Federal reviewing officials, administrative law judges, or the DRB. Accordingly, we are developing and intend to use standardized decision-writing formats at each level of adjudication, including QDDs. We agreed with the suggestion that our initial determination notices should include information regarding a claimant's right to representation, and, as noted above, we have revised § 405.115 to state this requirement.

Several commenters opposed § 405.835, under which we would notify the State agency that it has failed to comply with our QDD standards, and suggested that we provide technical assistance to the State agency before we propose to take action. We agree and have changed the rules to provide for mandatory and optional technical assistance to State agencies. As explained above, we also intend to test thoroughly the QDD predictive model before implementing our sanction provisions. State agencies will be given a grace period before any sanctions will be applied to them.

Enhanced Medical and Vocational Expertise

Description of the Medical and Vocational Expert System (MVES)

We believe that the quality of the disability determination process at all levels of adjudication will be significantly enhanced if we provide adjudicators with the medical, psychological, and vocational expertise they need to make accurate and consistent decisions. We have studied the approaches used by other entities that must make these complex decisions, including those in the private sector. We have also sought the advice of the Institute of Medicine (IOM), National Academy of Sciences. The IOM established a Committee on Improving the Disability Process in January 2005 and published an interim report with recommendations to us in December 2005.

We have heard broad agreement on the part of persons both within our Agency and without, that the expertise needed by our disability adjudicators is currently not available at all levels of the process or in all parts of the country. We have therefore determined that we need to make major changes both in our institutional arrangements and procedures. The changes we are making in this rule are based on careful study and analysis of our needs.

While many disability impairments may be properly evaluated by medical generalists, claims that involve difficult or complex issues require medical specialist or subspecialist expertise. We therefore provide in this rule for the establishment of an MVES, which will provide the expert assistance that adjudicators need to render disability determinations and decisions that are accurate, consistent, and fair. The MVES will be composed of a Medical and Vocational Expert Unit (MVEU) and a national network of medical, psychological, and vocational experts who meet qualification standards required by the Commissioner. After we establish qualification standards for vocational experts, the MVEU will maintain a separate registry of vocational experts who meet those standards which will be available for use by DDSs.

The MVEU will be staffed by individuals who will be able to advise adjudicators on the nature of the expertise that they may need and to arrange for the provision of that expertise. It will develop and oversee a national network of medical and psychological experts who will be available to advise on complex medical issues, and it will arrange for consultative examinations that are requested by Federal reviewing officials and administrative law judges. Federal reviewing officials and administrative law judges who request the assistance of a medical, psychological, or vocational expert must do so through the MVEU. When the MVEU arranges for medical, psychological, or vocational expertise needed by Federal reviewing officials and administrative law judges, it will do so on a rotational basis, ensuring that the expert has not been involved in the claim at a prior level of adjudication.

We are currently reviewing the IOM's interim report and expect to issue our initial qualification standards within the near future. We anticipate that over time we will establish additional qualification standards that experts will be required to meet in order to participate in the adjudication of claims involving those impairments that require special expertise. These qualification standards for specialists and subspecialists will apply to medical expert participation at all levels of the adjudication process, including DDSs, Federal reviewing officials, and administrative law judges. Experts who are employed by a State agency will have to meet qualification standards established by us no later than one year after the date such standards are published. Thereafter, we will neither accept a medical sign-off from an expert who does not meet applicable qualification standards nor reimburse State agencies for the costs associated with work performed on our behalf by such experts.

Our plan is to develop a network capable of serving adjudicators throughout the country. Our electronic record will enable experts to examine case records regardless of the location of the claimant or the expert. We will establish safeguards to keep such information secure. Medical experts will be drawn from various sources, including medical schools and academic clinical research centers that focus on conditions that are difficult to evaluate. DDS physicians and psychologists who meet our standards will also qualify for service with the network. Medical, psychological, and vocational experts who are in the network will be compensated according to a fee schedule that we establish for services arranged by the MVEU.

In summary, this rule provides for use of the MVES by DDSs and by Federal reviewing officials and administrative law judges as follows:

If the DDS does not have a medical or psychological expert who meets our qualification standards, once they are established, for adjudicating a claim involving a specific impairment, the MVES will provide such an expert. If the DDS otherwise requests the assistance of a medical or psychological expert, the MVES will, to the extent practicable, provide such assistance. After standards for vocational experts are established, the DDSs may use the national registry of vocational experts maintained by the MVEU.

The Federal reviewing official must consult with an MVES medical or psychological expert (1) if the claim involves new medical evidence or (2) if the Federal reviewing official disagrees with the DDS determination.

Both Federal reviewing officials and administrative law judges may request evidence from a claimant's treating source, including requesting a treating physician to conduct a consultative examination. However, if they need additional medical, psychological, or vocational documentary or testimonial evidence to adjudicate a claim, they must use the MVES.

We are currently studying the recommendation by the IOM Committee that we should encourage the use of licensed medical personnel other than physicians or psychologists in appropriate cases, such as occupational therapists, physical therapists, registered nurses, and psychiatric social workers.

As noted above, a national registry of vocational experts will also be maintained by the MVEU. The Commissioner will issue qualification standards for participation in the registry. DDSs may arrange for vocational services by individuals on the registry and will be responsible for payment.

The IOM Committee also expressed the view that fuller case development at the front end of the process should reduce the impetus for appeal, reduce the number of reversals on appeal, and shorten the average length of time before reaching final adjudication. The Committee made recommendations for strengthening claim development, beginning at the DDS level.

We believe there are a number of steps that we should take as quickly as possible. We agree with the IOM Committee that fully performing the DDS medical consultant role requires mastery of three domains of knowledge. Medical consultants must be experts in their medical field (e.g., cardiology and orthopedics); they need to understand how to evaluate disability; and they must be knowledgeable about SSA's policies and procedures. We believe that a nationally standardized training program for medical experts who are part of the national network will improve both the accuracy and consistency of our disability determinations. To achieve that objective, we intend to develop a program to provide both initial and ongoing training that all medical consultants and experts will attend. This training will concentrate on the second and third domains cited above.

We also intend to develop requirements for training and certification of physicians who perform our consultative examinations. The IOM report recommends that consultative examiner training should focus on two competencies: (1) Evaluation of limitations on ability to work resulting from impairments; and (2) evidentiary and other requirements of our disability decision-making process. As another step in improving our consultative examination process, we are developing templates that adjudicators will use when they request consultative examinations for common types of cases to help ensure that the appropriate information is requested. In addition, we expect to develop qualification standards that consultative examiners must meet in order to perform consultative examinations in the case of impairments that require special expertise.

Recognizing the need of the DDSs for improved vocational expertise, we are also planning a standardized national training program for DDS personnel so that they will be better able to adjudicate claims that involve vocational issues. DDSs may also use the national registry of vocational experts that is maintained by the MVEU if they need expertise that is not otherwise available to them regarding vocational issues.

We will be consulting closely with adjudicators throughout the disability process as we move forward with these efforts.

Response to Public Comments About Enhanced Medical and Vocational Expertise

Many commenters supported our plan to establish a Federal Expert Unit with medical and psychological experts who have needed specialties. Some commenters raised concerns about our plan to use a centralized Federal Expert Unit. These commenters pointed out that having experts in only one part of the country would not be useful because the experts would not know how medicine is practiced in another part of the country. One commenter recommended that we continue to rely on “generalist” medical consultants in the State agencies, but supplement their expertise with regionally-based Federal Expert Units.

We expect that, through the network, we will be able to draw from expertise throughout the country. It is not necessary that medical experts are licensed to practice in the State in which a claimant lives or receives medical treatment. Our experience with the Federal Disability Determination Services, which handles DDS cases from around the nation, also indicates that the lack of familiarity with local medical practice is not a barrier to providing the needed medical expertise. Using a national network will allow us to use such expertise in cases regardless of their location. One commenter suggested that we test the use of the national network and the expert unit. As described in the implementation section of this preamble, we will be rolling out the DSI process, including the implementation of the MVES, on a gradual basis. We intend to monitor its use and effectiveness carefully and to make improvements as needed.

Some commenters asked about the provision in proposed § 405.15 which states that experts who are called by the claimant “and that the administrative law judge approves” are not required to be affiliated with the national network. The commenters asked what we intended by this provision and whether it would be used to suppress evidence from claimants' experts. We have removed that language, but under this rule, an adjudicator would not exclude evidence from a claimant's physician or reject the opinion of a claimant's physician because he/she is not a member of the network. The evidence would be admissible and if it is opinion evidence, must be evaluated under our evaluation-of-opinion-evidence rules at 20 CFR 404.1527 and 416.927.

Federal Reviewing Official Level

Description of Federal Reviewing Official Level

For many years there has been a perception that initial determinations of disability are not being made in a consistent manner. We believe that confidence in decision-making can be significantly enhanced by establishing a new Federal position—the Federal reviewing official—to review initial determinations upon the request of a claimant. A major objective of using Federal reviewing officials to review disability claims is to ensure to the maximum extent possible the accuracy and consistency—and thus the fairness—of determinations made at the front end of the process.

The Federal reviewing official position will be centrally managed. The comments were split in favor of and against our proposal to hire attorneys for this position. As proposed in our NPRM, we intend to hire attorneys to serve as Federal reviewing officials. We believe that attorneys are ideally suited to perform certain activities that are essential to the Federal reviewing official function, including careful

development and documentation of the evidence and the drafting of a legally sound decision.

We received many comments on the Federal reviewing official's role in developing the evidentiary record. The comments ranged from recommending that the Federal reviewing official assist claimants in obtaining all available evidence to recommending that the Federal reviewing official have authority to subpoena records from uncooperative medical providers. We are committed to giving the Federal reviewing official both the responsibility and the resources to assure that a claimant's record is adequately developed. To further this objective, we are giving the Federal reviewing official specific authority to issue a subpoena if an evidentiary source is uncooperative in responding to a request for evidence.

We plan to employ highly qualified individuals who are thoroughly trained in the policies and procedures of our disability programs. Federal reviewing officials will be able to affirm, deny, or modify the initial determination. If, in reviewing a claim, the Federal reviewing official determines that additional medical evidence is necessary, the Agency may obtain such evidence from other sources, including from the State agency or a treating source. The Federal reviewing official may ask the State agency to clarify or to provide additional information about the basis for its determination. In such circumstances, the Federal reviewing official will retain the authority to make the decision as to whether you are disabled.

This rule specifies that the Federal reviewing official will consult with an MVES medical expert in cases involving medical evidence that was not considered by the DDS. The Federal reviewing official will also consult with an MVES medical expert before issuing a decision that disagrees with the DDS determination. After consultation, the Federal reviewing official will issue a decision as to whether a claimant is disabled under our rules. To ensure decisional objectivity, any medical expert used by the Federal reviewing official for these purposes must not have been involved in the DDS initial determination.

Some commenters believed that under the proposed rules, the Federal reviewing official did not need to consider new medical evidence unless the claimant submitted it at the time that he/she requested review. This is incorrect. In making a decision, the Federal reviewing official will consider evidence submitted by the claimant, even if not submitted with the request for review, as well as any other evidence that the Federal reviewing official obtains. The Federal reviewing official may order a consultative examination if the Federal reviewing official determines that this is necessary. This rule provides that a claimant should submit additional evidence (evidence obtained since the prior decision) when making the request for review by the Federal reviewing official, but may submit evidence up to the date the Federal reviewing official issues a decision.

The Federal reviewing official will make a decision based on the developed record. Although several commenters suggested that Federal reviewing officials conduct hearings, we decided that in the interests of efficiency claimants will not be given a hearing before the Federal reviewing official.

The Federal reviewing official's decision will explain in clear and understandable language the specific reasons for the decision, including an explanation as to why the Federal reviewing official agrees or disagrees with the rationale articulated in the initial determination. We believe that this requirement will provide a clearer understanding of why the claimant is or is not disabled under our rules. The decision will be sent to the State agency that made the determination, thereby providing feedback to DDS adjudicators and managers.

The Federal reviewing official will mail a written notice of his/her decision to the claimant at the claimant's last known address. The notice will also inform the claimant of his/her right to a hearing before an administrative law judge.

In our NPRM we provided that, if a claimant does not request review of an initial determination timely (within 60 days after receiving notice of the initial denial), the claimant may ask for more time to request review. In response to a commenter's recommendation, this rule clarifies that a claimant may request an extension of time both before and after the 60-day period has elapsed.

We intend to address performance requirements for the Federal reviewing official position when we announce our plan for a new quality system. Two commenters recommended that we include performance standards for Federal reviewing officials like those the State agencies must meet under the current reconsideration process. We are developing performance standards for Federal reviewing officials but have not included them in this rule. We also intend that Federal reviewing official decisions will be subject to both in-line and end-of-line review, including pre-effectuation review by the Office of Quality.

Response to Public Comments About Federal Reviewing Official Level

Some commenters objected to the creation of the Federal reviewing official position because they believed that this administrative step would cause delays. Others expressed concern based on their experience with other models of pre-hearing review that have been tested by the Agency. They suggested we impose a limit on the time a Federal reviewing official has to make a decision. We believe that the benefit from review by a Federal reviewing official will far outweigh the time that this administrative step will take because we expect Federal reviewing officials will work to create a complete record and will explain fully the rationale underlying their decisions. In addition, we wanted to ensure that claimants retain the right to two levels of Federal review. Further, claims may be selected for review by the DRB.

We also received comments concerning the particular evidence the claimant must submit to the Federal reviewing official. We wish to emphasize that we are not requiring the claimant to submit any particular evidence to the Federal reviewing official. Section 405.210(a) requires only that the request for review be in writing and lists several items that “should” be included in a request for review. Nevertheless, in response to these comments, we have revised the section to clarify that the claimant should, but is not required to, specify reasons why he/she disagrees with the initial determination.

Some commenters questioned what we meant by “available” in the request to submit available evidence along with the request for Federal reviewing official review in § 405.210(a)(4) (and in § 405.310 at the administrative law judge level). We believe that it is sufficiently clear and that our rule will encourage claimants to present evidence to us as early as possible.

We received a number of comments expressing concern that the proposed rule did not sufficiently describe the circumstances under which a Federal reviewing official can remand the case to the State agency. We have revised the rule and deleted the Federal reviewing official authority to remand a case back to the State agency. If the Federal reviewing official determines that additional information from the State agency is necessary, we may ask the State agency to clarify or provide additional information about the basis

for its determination. Under these circumstances, the Federal reviewing official will retain authority over the claim.

We received a comment recommending that the Federal reviewing official be allowed to dismiss a request for review in the event that the claimant withdraws the request for review, is not entitled to review, or requests review in an untimely manner and cannot demonstrate good cause for late filing. We have decided not to give the Federal reviewing official dismissal authority. Rather, under the circumstances mentioned above, the field office will retain the authority to dismiss the request for review.

One comment suggested that we not call the Federal reviewing official's work product a “decision.” The commenter believed the use of the term “decision” at the Federal reviewing official level could undermine the separate and independent status of the administrative law judge's decision and confuse claimants. We have decided to continue calling the Federal reviewing official's work product a decision. The Federal reviewing official level is a level of Federal review. Accordingly, we believe that it is appropriate to call the work product a decision. The rule makes clear that the Federal reviewing official's decision is not evidence; thus, we do not believe that there is any undermining of the separate and independent status of the administrative law judge's decision-making authority.

We received a number of comments suggesting that a claimant not be required to separately request a hearing if the claimant is dissatisfied with the Federal reviewing official's decision, but instead allow an automatic appeal. Under usual administrative adjudication processes, an administrative agency's determination is final unless the claimant timely requests further review. We believe that allowing an automatic appeal to the administrative law judge or making the Federal reviewing official's decision only a recommended decision would run counter to the normal administrative adjudication process. Additionally, the hearing before an administrative law judge is de novo, which allows the administrative law judge to consider the matter anew, as if no determination had previously been made. We believe that allowing an automatic appeal or making the Federal reviewing official's decision a recommended decision would inappropriately tie the hearing to the proceedings and decision that went before.

We also received comments concerning the Federal reviewing official's role in increasing the quality and consistency of the State agency determinations. One commenter recommended that the Federal reviewing official review a random sample of all favorable State agency determinations, and one commenter believed that the Federal reviewing official should function in a manner similar to the current Disability Quality Branches, which review determinations by the State agencies. The Federal reviewing official is not a quality reviewer for the State agencies, so we have decided not to require random reviews of State agency determinations by Federal reviewing officials. However, as already noted, Federal reviewing official decisions will be sent to the State agency that made the initial determination to provide qualitative feedback to the DDS. In addition, under the Agency's new quality system, both DDS allowances and denials will be subject to quality review.

Administrative Law Judge Hearing Level

Description of Administrative Law Judge Hearing Level

This rule preserves a claimant's right to a de novo hearing before an administrative law judge if the claimant disagrees with the decision of the Federal reviewing official.

We are, however, changing some of the procedures to improve the disability decision-making process at the hearing level. For example, in order to improve timeliness, we are revising the rule that addresses the time frames for submitting evidence to the administrative law judge. Our current rule states that, if possible, a claimant should submit the evidence, or a summary of the evidence, within 10 days after filing the request for a hearing. In many cases, however, claimants submit evidence to us well after that time frame.

Our program experience has convinced us that the late submission of evidence to the administrative law judge significantly impedes our ability to issue hearing decisions in a timely manner. When new and voluminous medical evidence is presented at the hearing or shortly before, the administrative law judge does not have the time needed to review and consider that evidence. We often must reschedule the hearing, which not only delays the decision on that claim, but also delays other claimants' hearings.

To improve the timeliness of our hearing process and to ensure appropriate consideration of all claims, we are setting as an administrative goal that within 90 days of the date we receive a hearing request, the administrative law judge will establish the time and place for the hearing. In response to comments that Agency goals should not be made a part of the rule, we removed this 90-day goal from the rule, but are retaining it as an administrative goal. This 90-day time frame does not provide the claimant with a substantive right to have the hearing date established within this period. However, by setting this administrative goal we are stressing to our hearing offices and administrative law judges our commitment to providing timely service.

To ensure claimants have adequate time in which to prepare for the hearing, this rule requires administrative law judges to notify a claimant of the time and place of the hearing at least 75 days before the date of the hearing, unless the claimant agrees to a shorter notice period.

This rule provides that if a claimant objects to the time or place of the hearing, the claimant should notify the administrative law judge in writing as soon as possible after receiving the notice of hearing, but no later than 30 days after receiving the notice. If the claimant objects to the issues to be decided at the hearing, the claimant will be required to notify the administrative law judge in writing at least five business days prior to the hearing date.

Claimants will be encouraged to submit evidence as soon as possible after they file their request for a hearing. They will be required to submit all of the evidence to be relied upon in a case no later than five business days before the hearing. This is a reasonable deadline given that we also require the administrative law judge to notify the claimant of the hearing date at least 75 days before the hearing. It will ensure that the administrative law judge and any medical or vocational expert or other individual who will be participating in the hearing will have time to review the record before the hearing in order to adequately prepare for the hearing, and that the hearing will not have to be postponed.

The five-day time limit for submitting evidence is subject to exceptions, depending on when the claimant attempts to submit additional evidence. If the claimant requests to submit evidence within the five-day time limit before the hearing takes place, the administrative law judge will accept and consider the evidence if:

1. Our action misled the claimant;

2. The claimant had a physical, mental, educational, or linguistic limitation(s) that prevented him from submitting the evidence earlier; or

3. Some other unusual, unexpected, or unavoidable circumstance beyond the claimant's control prevented the claimant from submitting the evidence earlier.

If the claimant requests to submit evidence after the hearing but before the hearing decision is issued, the administrative law judge will accept and consider the evidence if the claimant makes one of these three showings and there is a reasonable possibility that the evidence would affect the outcome of the claim.

Our rule provides that when a claimant files a written request for a hearing, the claimant should include in the request his/her name and social security number, the specific reasons why the claimant disagrees with the Federal reviewing official's decision, a statement of the medically determinable impairment(s) that the claimant believes prevents him/her from working, any evidence that is available to the claimant, and the name and address of the claimant's representative, if any.

At any time before the hearing begins, a claimant may submit, or the administrative law judge may request the claimant to submit, a prehearing statement as to why the claimant is disabled. This statement should discuss briefly: (1) The issues involved in the proceeding, (2) facts, (3) witnesses, (4) the evidentiary and legal basis upon which the claim can be approved, and (5) any other comments, suggestions, or information that might assist in preparing for the hearing.

Also before the hearing, the administrative law judge may decide on his/her own initiative or at the claimant's request to conduct a prehearing conference if the administrative law judge believes that such a conference would facilitate the hearing or the decision in a claim. This rule provides that these conferences will normally be held by telephone unless the administrative law judge decides that it would be more efficient and effective to conduct the prehearing conference in a different manner. During these conferences, the administrative law judge will consider matters that may expedite the hearing, such as simplifying or amending issues or obtaining and submitting evidence. The administrative law judge will have a record made of the prehearing conference and will either summarize the actions taken as a result of the conference in writing or make a statement in the record summarizing them during the hearing. The rule also states that if neither the claimant nor the representative appears for the prehearing conference and there is not a good reason for the failure to appear, the claimant's hearing request might be dismissed.

The purpose of these provisions is to ensure that each claimant's hearing is as fair, timely, and comprehensive as possible. Both claimants and the Agency have the responsibility to work toward this objective.

This rule also provides that when setting the time and place of the hearing, the administrative law judge will determine whether the claimant and any other person will appear at the hearing in person, which for experts would include by telephone as is our current practice, or by video teleconference. As we explained in 2003 when we published the final rule on video hearings, we believe that the ability to conduct hearings via video teleconference provides us with greater flexibility in scheduling and holding hearings, improves hearing process efficiency, and extends another service delivery option to individuals requesting a hearing. Greater efficiency is accomplished through savings in administrative law judge travel time, faster case processing, and higher ratios of hearings held to hearings scheduled.

Our rule provides that unless a claimant objects to appearing at a hearing by video teleconference, the administrative law judge will direct that a person's appearance be conducted by video teleconference: (1) If video teleconferencing is available, (2) if use of the technology would be more efficient than conducting an examination of a witness in person, and (3) if the administrative law judge does not determine that there is another reason why a video hearing should not be conducted. If a claimant objects to appearing by video teleconference, the claimant's hearing will be rescheduled so that the claimant can appear in person before the administrative law judge. However, if the claimant objects to having any other person appear by video teleconference, the administrative law judge will decide whether that person should appear in person or by video teleconference.

The claimant may request, or the administrative law judge may decide, to hold a posthearing conference to facilitate the hearing decision. The conference will normally be held by telephone. If neither the claimant nor the representative appears at the posthearing conference and there is not a good reason for failing to appear, the administrative law judge will make a decision based on the hearing record.

In addition to these above provisions, this final rule specifies that the administrative law judge will retain discretion at the time of the hearing to hold the record open for the submission of additional evidence. If a claimant is aware of any additional evidence that the claimant was unable to obtain and submit before or at the hearing, or if the claimant is scheduled to undergo additional medical evaluation after the hearing for any impairment that forms the basis of the claim, the claimant should inform the administrative law judge of the circumstances during the hearing. If the claimant requests additional time to submit the evidence, the administrative law judge may exercise discretion and choose to keep the record open for a defined period of time to give the claimant the opportunity to obtain and submit the additional evidence. Once the additional evidence is received, the administrative law judge will close the record and issue a decision.

One of our major goals in promulgating this rule is to improve the quality of decision-making at all levels of our adjudicatory process. As discussed above, one of the new features of this process is the use of a Federal reviewing official who, upon the request of a claimant, will review the State agency's initial determination and make a decision on the claim. To help improve the quality of State agency determinations, we are requiring the Federal reviewing official to explain in the decision why he/she agrees or disagrees with the rationale in the State agency's determination.

We are including a similar rule at the hearing level. Under the rule, the administrative law judge's decision will explain in clear and understandable language the specific reasons for the decision. While the administrative law judge will not consider the Federal reviewing official's decision to be evidence, the written decision will explain in detail why the administrative law judge agrees or disagrees with the substantive findings and overall rationale of the Federal reviewing official's decision. The decision will be made part of the record and will be sent to the Federal reviewing official who adjudicated the claim as well as to the claimant. We believe that this requirement will provide useful information to claimants. It also will be an important educational tool for Federal reviewing officials to help them improve the quality of their decisions, and will be very useful for management and training purposes.

The notice to the claimant which accompanies the decision will inform the claimant whether the decision is our final decision. If it is not, the notice will explain that the DRB, described below,

will review the claim. If the DRB does not review the claim, the administrative law judge's decision will stand as our final decision, and the claimant may seek review of the administrative law judge's decision in Federal district court.

We recognize, however, that there are certain limited circumstances in which a claimant may have a good reason for failing to provide evidence in a timely manner to the administrative law judge. Therefore, for those cases where the claimant's decision has not been referred to the DRB, we are providing that the administrative law judge will consider new evidence submitted after the issuance of the decision if, within 30 days of the date the claimant receives notice of the decision, the claimant requests consideration and shows that there is a reasonable probability that the evidence, alone or when considered with other evidence of record, would change the outcome of the decision, and that either: (1) Our action misled the claimant; (2) the claimant had a physical, mental, educational, or linguistic limitation that prevented him from submitting the evidence earlier; or (3) some other unusual, unexpected, or unavoidable circumstance beyond the claimant's control prevented the submission of evidence earlier.

In those cases where the administrative law judge's decision is not our final decision, the claimant must submit the evidence to the DRB no later than 30 days after the date the claimant receives notice of the decision and make the same showings regarding the probity of evidence and the reasons why it was not provided earlier. The DRB will review and consider the evidence.

Response to Public Comments About the Administrative Law Judge Level

In general, commenters expressed concern with our proposed rules on the submission of evidence. Some supported the imposition of time limits and thought that the rules should be revised to give administrative law judges stronger authority to curb abuses in the submission of evidence. Others disagreed with our proposal to impose such time limits. They believed our proposed 20-day deadline unrealistic because many claimants do not contact a representative until shortly before the hearing and because it is difficult for some claimants, such as the homeless, to obtain medical evidence from medical providers and vocational sources, especially HIV or mental health records, which often require specialized authorizations. As an alternative, they recommended that we notify claimants earlier than 45 days before the hearing or allow claimants to provide evidence to the administrative law judge less than 20 days before the hearing date. As explained in more detail above, we have decided to change our proposed rules in response to the public comments and will provide 75 days notice of the hearing date and allow evidence to be submitted up to five business days before the hearing with certain exceptions to that five-day requirement allowed.

We did not adopt a comment to revise proposed § 405.301 to specify the circumstances under which we may assign a claim to another administrative law judge for decision because we believe the language of the regulation should be flexible enough to cover circumstances that we may not foresee today. One commenter suggested that we change the language in § 405.302 that administrative law judge authority over these hearings derives from the Social Security Act. Although we deleted § 405.302, we did not remove the concept because we added language to § 405.1(a) clarifying that all adjudicators' authority derives from the Act.

Some commenters suggested that we delete “specific” from proposed § 405.310(a)(3) because many unrepresented claimants may not be able to articulate specific reasons why they disagree with the initial determination. We did not delete “specific” from that provision because we believe it is important to highlight for adjudicators the issues that claimants wish them to review. We do not intend for this requirement to preclude administrative law judges from reviewing other issues raised in the claim, and we clarified in § 405.320 that the administrative law judge “will look fully look into all of the issues raised by your claim.”

We accepted suggestions to revise § 405.310 to state that a claimant “should” include certain items with their request for a hearing, rather than “must include,” as the proposed rule states.

Consistent with comments, we revised proposed § 405.310 to allow a claimant to request an extension of time to request a hearing before the time period has passed. Because many commenters were unclear regarding the video hearing provisions of the proposed rules, we revised them to follow our present rules and retain our present practice, except we also clarified in § 405.315(c) that administrative law judges retain the authority to allow, over a claimant's objection, witnesses other than the claimant to appear by video teleconference.

A number of commenters disagreed with the provisions of proposed § 405.317(a), which would require a claimant to notify the administrative law judge in writing within 10 days after receiving the hearing notice if he/she objects to the time and place of the hearing. We agreed and have changed the time frame to allow the claimant 30 days to object. We changed the time limit for objecting to issues from 10 days after receipt of the notice to five business days before the date of the hearing.

Some commenters also raised concerns about proposed §§ 405.330(d) and 405.366(b), which would allow an administrative law judge to dismiss a hearing request if neither the claimant nor his/her representative appeared at either prehearing or posthearing conferences. Although we retained the authority to dismiss in prehearing situations because it is akin to failing to show for the hearing itself, we agree that it is not appropriate to dismiss the hearing request once the hearing has been held. Thus, we will issue a decision based on the record if neither a claimant nor his/her representative appears at a posthearing conference. We decided not to define “reasonable” notice or include specific time frames for the prehearing conference notice because we expect that administrative law judges will understand reasonable notice and claimants will have the opportunity to raise the issue of unreasonable notice to the DRB if an administrative law judge dismisses a claim where the claimant failed to attend the conference. In response to a comment, we also modified § 405.380 to address res judicata.

One commenter recommended that we allow DRB review of the administrative law judge's finding that there is no good cause for the late submission of evidence. We have rejected this suggestion, but as discussed above, we relaxed the rules, before and after the hearing, regarding circumstances under which the late submittal of evidence would be excused.

Because a number of commenters asked about the provisions of proposed § 405.333, which states that all documents must use type face no smaller than 12 point font, we clarified that the rule applies to documents that are prepared and submitted by the claimant or his/her representative, not to medical or other evidentiary documents.

Some commenters thought that we should revise or delete proposed

§ 405.334 governing prehearing statements, recommending that we request claimants to file such a statement, and that we should not require these statements. We did not delete the provision because we believe such statements can be helpful for the adjudication process. However, we agreed with the commenters to make it a request rather than a requirement and to change the language regarding the items to be included in the statement from “must discuss” to “should discuss.” We hope that, when requested, claimants and their representatives will take the opportunity to thoughtfully prepare such statements.

Some commenters objected to requiring an administrative law judge to explain why he/she disagrees with the Federal reviewing official's decision, expressing concerns that the requirement could undermine the de novo nature of the administrative law judge hearing process, compromise an administrative law judge's decisional independence, and add an unnecessary burden to the administrative law judge's decision-making process. We have clarified that the Federal reviewing official's decision is not evidence before the administrative law judge. Nevertheless, for purposes of quality feedback, the administrative law judge must address the Federal reviewing official's substantive findings and rationale. We do not believe that this requirement infringes in any way on administrative law judges' decisional independence.

We considered comments in favor of and against closing the record after the administrative law judge decision. Many thought that if we did close the record, there should be an exception that would allow claimants to submit new and material evidence within the meaning of section 205(g) of the Act. Some commenters, who recommended that we delete proposed § 405.373, believed it harsh to require the submission of requests to consider new evidence within 10 days of the decision. They also objected to requiring an “unforeseen and material change” in the claimant's condition and were concerned that the rule did not require the administrative law judge to keep the record open. Similarly, commenters objected to our proposed definition of “material,” believing it to be too restrictive.

Upon consideration of these concerns, we deleted “material” from the definitions section and for the most part specifically describe the likely effect, depending on when submitted, new evidence would need to have on a decision in order to be considered. For example, we changed the final rule on submitting new evidence after the administrative law judge's decision is issued to allow claimants to submit such evidence within 30 days of receiving the decision, relaxed the materiality requirement to a “reasonable probability” standard, and required administrative law judges to consider the evidence if the claimant and his/her evidence meets the regulatory requirements.

Finally, we agreed to remove language requiring claimants to submit evidence adverse to their claims because the comments revealed that the requirement was too confusing. We clarified, however, that when claimants submit evidence, such as a medical report, the evidence must not be redacted.

Decision Review Board (DRB)

Description of DRB Level

This rule provides for establishing a new body, the DRB, and phasing out, in a very gradual and carefully monitored process, the current Appeals Council. We believe that the DRB, the members of which will be appointed by the Commissioner, will be a vital tool in our efforts to improve the decision-making process.

The purpose of the DRB is to promote accurate, consistent, and fair decision-making. In carrying out this purpose the DRB will review and correct administrative law judge decisions. It may also identify issues that may impede consistent adjudication at all levels of the disability adjudication process, and recommend ways to improve the process.

The DRB will review both allowances and denials. Claims will be reviewed before the decision of the administrative law judge has been effectuated. The DRB will have the authority to affirm, modify, or reverse the administrative law judge's decision. It may also remand a claim to the administrative law judge for further action and decision.

The DRB also may take any of these actions consistent with the instructions of a Federal court when the court has remanded a case to us for further administrative proceedings.

The DRB may also select a claim for review after the administrative law judge's decision has been effectuated for purposes of studying our decision-making process. In the case of such claims, however, the DRB will not change the administrative law judge's decision, except in those limited circumstances when our rules for reopening claims are applicable. These rules (which have been modified since we issued our NPRM) are described below.

The DRB will serve as the final step in the administrative review process if a request for a hearing has been dismissed by an administrative law judge. A claimant must timely request the administrative law judge to vacate the dismissal order before requesting the DRB to vacate the order.

Consistent with its purpose, the claims that the DRB will review may include claims where there is an increased likelihood of error, or claims that involve new policies, rules, or procedures in order to ensure that they are being interpreted and used as intended. The DRB will review both allowances and denials of benefits. It will not review claims based on the identity of the administrative law judge who decided the claim.

If a claim is selected for review, the claimant will be notified at the same time that the claimant receives the decision of the administrative law judge. The claimant will be told that his/her claim is being reviewed by the DRB and the administrative law judge's decision is not our final decision. The notice will explain that the DRB will complete its action on the claim within 90 days of the date the claimant receives notice. The notice will also explain that if the DRB does not complete its action within the 90-day time frame, the administrative law judge's decision will become our final decision. If the claimant is dissatisfied with the final decision, the claimant may seek judicial review.

If the DRB does not complete its review of a claim within 90 days, it will take no further action with respect to the claim unless it determines that it can make a decision that is fully favorable to the claimant. In that case, it will reopen the administrative law judge's decision and revise it as appropriate. If the claimant has already sought judicial review, the DRB will notify the Office of the General Counsel, which will take appropriate action with the Department of Justice in order to request that the court remand the case for the purpose of issuing the DRB's favorable decision.

When the DRB reviews a claim it will apply a substantial evidence standard to questions of fact and consider the record that was closed at the time that the administrative law judge issued the decision (subject to the exception described above when the claimant has good cause for failing to submit evidence timely). Some commenters agreed that the DRB should use a substantial evidence standard, while others advocated that the DRB should

re-weigh the record and issue its own decision without remanding cases to administrative law judges. We retained the substantial evidence standard for DRB review of questions of fact, as well as the plenary standard for questions of law, because those are the usual standards for appellate review of decisions of triers of fact. In those cases where the record clearly shows that an administrative law judge's decision simply should be reversed, the DRB has that authority.

When the DRB issues a decision, it is our final decision. If a claimant is dissatisfied with the decision, the claimant may seek judicial review.

The DRB will be composed of experienced administrative law judges and administrative appeals judges who are highly knowledgeable about our decision-making process. Individuals who serve on the DRB will serve on a rotational basis, as the Commissioner determines, and terms will be staggered to ensure a high degree of continuity in DRB membership. It will be centrally located and will be supported by a highly qualified staff.

To enhance accountability and to provide feedback in the decision-making process, DRB decisions that are in disagreement with administrative law judge hearing decisions will be sent to the administrative law judge who issued the decision.

We believe that the DRB, as established in this rule, will significantly strengthen our disability adjudication process and that, in combination with the other changes we are making, our decisions will become more accurate, consistent, fair, and timely than under the current process.

We recognize, however, that there are many who are deeply concerned that elimination of the Appeals Council and the right to appeal, which we provide in this rule, may have a detrimental effect on claimants and result in an increased burden on the Federal courts.

To provide time for our new process to demonstrate its value while responding to these concerns, we intend to phase out the Appeals Council and the right to appeal gradually. As described more fully below, we will eliminate the right of claimants to appeal disability decisions to the Appeals Council only with respect to claims that have been initially filed in those States where our new process has been implemented. The claimants initially affected will be those filing a claim in one of our smallest regions, the Boston region. The only claims that will be affected will be those that have gone through the new process, including review by a Federal reviewing official and the de novo hearing as provided in this rule. Claimants will retain the right to appeal their claims to the Appeals Council in all other cases.

As we carefully roll out our new DSI process, we will closely monitor the effects our changes are having. If we determine that our proposed changes are not having the positive effects that we believe they will have, we will amend our regulations as necessary.

Response to Public Comments About the Decision Review Board

We received a large number of comments regarding our proposal to establish a DRB, and gradually shift the Appeals Council's functions to the DRB. Although some commenters agreed that the Appeals Council should be eliminated, many opposed the proposal, believing that the Appeals Council provides a reasoned, timely, and consistent response to claimants and intercepts a large number of claims that would not withstand district court review.

We believe that the DRB will perform more effectively than the Appeals Council and provide better relief for claimants, in that we can identify the most error-prone claims. Moreover, the DRB will review the claims that are most likely to be problematic and will be able to focus on promptly identifying decision-making errors that, when corrected, will improve decision-making at all levels of the disability determination process.

While claimants may appeal to the DRB a dismissal by an administrative law judge, we have decided not to allow the claimant the right to request DRB review of our final decision. Claimants have two levels of Federal administrative review after the initial determination, and the administrative law judge level of review allows the claimant the opportunity for a face-to-face hearing. Neither the Social Security Act nor due process requires further opportunities for administrative review. We believe that our plan to gradually roll out the new process in a careful and measured manner will allow us to closely monitor any effects that our changes have on the disability determination process and will allow us to quickly address any unintended consequences.

Contrary to some of the comments, we do not believe the new process will be more complicated for the claimant. The claimant will receive notice of the administrative law judge's decision and, if the DRB has decided to review the case, the claimant will simultaneously receive notice of the DRB's intent to review. The claimant need take no further action until such time as the DRB issues its decision, although the claimant may submit a written statement to the DRB. The new process will benefit the claimant by providing an opportunity for further administrative review if the case is one that is likely to be problematic. Otherwise, the new process provides the claimant with a final decision more quickly so that the claimant can proceed to Federal district court if the claimant still disagrees with the decision.

Some commenters pointed out that the elimination of the claimant's right to request administrative review of an administrative law judge's decision would prejudice claimants because of the expenses associated with filing a civil action, including a filing fee, and because of the delays in the Federal court system. Still other commenters noted that eliminating the claimant's right to request review would increase the likelihood that erroneous administrative law judge decisions would not be reviewed, because the claimant's representative would be unable to alert the DRB to subtle problems with the administrative law judge's decision that may be overlooked in a screening process.

We do not agree that the removal of a right to appeal an administrative law judge's decision is prejudicial. We believe our selection process for DRB review will identify problematic cases and discrete issues, and we will continuously fine-tune the screening tools based on the experience and knowledge we gain. With respect to a representative's opportunity to alert the DRB to subtle problems, the final rule does allow claimants whose claims have been selected for review to submit a written statement to the DRB.

Some commenters questioned why persons who have claims that do not involve disability have a right to request Appeals Council review, while a disability claimant does not, and thought that retaining the ability of a claimant to request Appeals Council review in non-disability claims would be confusing. As explained in the implementation section, the Appeals Council will continue to review administrative law judge disability decisions in regions where the DSI has not been implemented or administrative law judge decisions that involve non-disability claims and issues, and in those circumstances, claimants will continue to have the right to seek Appeals Council review. Because our focus is on improving the disability claims process, our changes, including the elimination of Appeals Council review, do not include claims involving

issues other than when a claimant is disabled. Our notices in individual claims will clearly explain where appeals will be held.

Some commenters were under the impression that the proposed rule allowed favorable decisions to be reviewed, but did not provide administrative review for unfavorable decisions. The commenters thought that this provision would make the review process more unbalanced. Other commenters were concerned that the DRB might be used to target individual administrative law judges and that some administrative law judges on the DRB would not be inclined to overturn their “peers.” They suggested clarifying the roles and workloads of the DRB to alleviate these concerns, including specifying that the DRB will review favorable and unfavorable decisions in equal numbers.

As explained above, and as set out in § 405.410, the DRB will review favorable, partially favorable, and unfavorable cases, and cases will not be selected for DRB review based on the identity of the administrative law judge. We do not believe that administrative law judges serving on the DRB will allow their peer status to interfere with their honest review of disability decisions because administrative law judges currently engage in such review through our peer quality review process.

Some commenters thought that we should not use a computer profile to identify error-prone administrative law judge decisions for review by the DRB and expressed other concerns with the DRB's selection process. As explained above, we will select cases for review by the DRB in several different ways. This varied approach to selecting cases for review will efficiently identify problematic cases without unfairly targeting any specific category of claimant. We have decided against including in this rule a specific statement regarding the method and range of sample sizes because, as explained above, our methods of selecting cases for review will change over time as we gain experience and knowledge in the use of our computer-based tools.

One commenter asked us to clarify what we meant by cases that involve “fact patterns that increase the likelihood of error” in proposed § 405.410(b)(2). We have revised § 405.410, and it no longer contains that phrase.

Some commenters questioned how claimants will know when the 90-day period for DRB review of an administrative law judge's decision specified in proposed § 405.420(a)(2) has passed. Other commenters thought that the 90-day time period did not provide a meaningful time limit because the proposed rule did not specify how long the DRB could hold a claim before it issued a notice of intent to review the administrative law judge's decision. Section 405.420(a)(2) explains that the 90-day period begins on the date the claimant receives notice that the DRB will review the claim. We intend that the DRB will make its decision on whether to review a claim within 10 days after the administrative law judge's decision. If the DRB decides to review a claim, the claimant will receive notice of the DRB's intent to review the claim at the same time that the claimant receives the administrative law judge's decision.

Some commenters noted that the DRB must act within 90 days of the date that the claimant receives the administrative law judge decision, but they thought that the provision could conflict with the requirement in section 223(h) of the Act that we pay interim benefits to claimants in instances in which we do not make a final decision within 110 days after an administrative law judge makes a favorable decision. One commenter recommended that, rather than place a 90-day limit on the DRB's action, we provide that we will pay a claimant interim benefits if the DRB does not act within 90 (or 110) days of the date of the administrative law judge's decision.

As explained in § 405.420(a), if the DRB decides to review a favorable administrative law judge decision, the administrative law judge's decision will not be our final decision. However, if the DRB does not complete its review within 90 days of the date the claimant receives notice that the DRB will review the claim, the administrative law judge's decision will become our final decision. Section 223(h) of the Act applies when the administrative law judge issues a favorable decision, the Appeals Council takes review of that favorable decision, and the Appeals Council fails to issue our final decision within 110 days after the date of the administrative law judge's decision. Section 223(h) will not apply to cases where the DRB does not complete its review within 90 days of the date the claimant receives notice that the DRB will review the claim because, at that point, the administrative law judge's decision will be our final decision.

A number of commenters objected to the provisions of proposed § 405.425(b)(1), under which the DRB could request that the claimant submit a written statement of no longer than three pages to the DRB for its consideration. Some commenters thought that the proposed rule raised due process concerns. Others thought that the provision would result in significant legal and factual errors not being identified for the DRB, that the inability of claimants to submit briefs to the DRB would make the process more unbalanced against claimants, and that the page limit would deprive the DRB of an accurate recitation of the facts of the case. We do not believe the limits we have imposed regarding the length of submissions to the DRB raise any due process concerns as other administrative agencies and certainly courts impose similar limitations. In addition, we have amended § 405.425 to allow the claimant to submit a written statement to the DRB, even without a request from the DRB. We have also amended the provision to allow for a maximum of 2,000 words to account for handwritten or typeface larger than 12 point.

Some commenters objected to the 10-day time limit for filing a request for permission to submit a written statement. We have removed the requirement for permission to submit a written statement. However, we have retained the 10-day time period for filing a written statement so that the DRB will be able to complete its review in a timely manner. The written statement need not be submitted by an attorney.

Some commenters objected to the provision of proposed § 405.425(d), which would allow the DRB to obtain advice from experts affiliated with the national network. We have accepted the comments and have removed the provision. The DRB nevertheless may consult with the MVES for background information about various conditions, but not in the context of a specific case before it.

Many commenters, including the Administrative Office of United States Courts, thought that the shift of the Appeals Council's functions to the DRB would have an adverse effect on the Federal court system and would result in an increase in the number of cases appealed to the Federal courts. To address these concerns, we plan a gradual rollout to minimize the impact on the judiciary. We plan to begin implementation of the new process in the Boston region, which is one of our smallest regions. Because we are beginning in a small region, we will be able to have the DRB initially review all or most of the administrative law judge decisions that are issued in the Boston region. At the same time, we will be fine-tuning the screening tools for selecting cases for DRB review in those regions where we cannot review every

decision. In addition, the DRB will monitor administrative law judge decisions in order to identify trends or developments that we need to address. Lastly, we believe that comparing DSI with the process it is replacing fails to consider the many positive changes outlined in today's rule.

Another commenter recommended that we revise the rule to require us to provide unrepresented claimants with information about pursuing a civil action in Federal court, including the availability of in forma pauperis applications, and information regarding the name and address of the clerk of the district court in the venue in which review would be sought. We have amended § 405.445 to clarify that, in addition to explaining how to seek judicial review, the notification of the DRB's action will explain the claimant's right to representation. We have decided against including more detailed information, such as information on the specific court, due to variations in the information that may be applicable to each jurisdiction.

Some commenters recommended that we provide that if the DRB fails to act within a specified time period, the claimant would receive a “right to sue” letter that would inform the person that he/she could seek judicial review within 60 days of the date the right to sue letter was received. We have not made any changes based on this recommendation because § 405.420 already provides that the administrative law judge's decision becomes final if the DRB does not complete its review within 90 days of the date the claimant receives notice that the DRB will review the claim. Section 405.420 explains that the claimant may then seek judicial review of the administrative law judge's decision under section 205(g) of the Act within 60 days of the expiration of the 90-day time period.

Reopening

Our current rules allow us to reopen and revise a determination or decision that has become final under certain specified circumstances. We have amended this reopening rule to provide that a final decision made after a hearing may be reopened and revised within six months of the date of the final decision, and we have removed new and material evidence as a basis for finding good cause to reopen such claims. We have not made any other changes to our current reopening rules.

Many commenters opposed our proposal to limit the reopening of prior claims, believing that the proposed rules governing reopening were unfair to claimants who did not have representatives, had mental impairments, had impairments that were difficult to diagnose, such as multiple sclerosis, or whose date last insured had expired. A commenter recommended that we not have separate reopening rules for disability and non-disability claims, but that we use the same rules for all types of claims. Many commenters asked that we retain our current reopening policies. Many commenters recommended that we retain our current standard under which we consider reopening a claim based on “new and material” evidence in certain instances. Some commenters also opposed our proposal to eliminate the ability of adjudicators to reopen a prior determination or decision for one year after the date of the notice of the initial determination “for any reason.”

Given these comments, we decided to retain our existing reopening rules except that once an administrative law judge decision is made, reopening for good cause is limited to six months after the administrative law judge's decision and new and material evidence will not be a basis for good cause. We did this to reinforce our view that claimants should make every effort to submit evidence to us as soon as possible. Thus, our existing reopening rules continue to apply unchanged to determinations made by the State agency. In addition, the current reopening rules will apply to Federal reviewing official decisions that become final. Our amendments only apply to final decisions made after a claimant has received a hearing before an administrative law judge.

Response to Public Comments About Other Issues

Although some commenters supported our goal of providing a uniform, fair, and flexible standard for all good cause findings, several commenters recommended that we revise the language on good cause. Some commenters thought that we should include good cause exceptions for each of the time limits set out in the proposed rule. We agreed that, except for good cause for filing an appeal, we should state the good cause exceptions for the time limits.

Several commenters objected to our standards for determining good cause in proposed § 405.20. They were concerned that the phrase “unusual and unavoidable circumstances beyond your control” was ambiguous and suggested that if we kept the standard, we should change “and” to “or.” We accepted the comment to change “and” to “or” and we added “unexpected,” but we retained “unusual” and “unavoidable” without adding further explanation because we have provided a non-exclusive list of situations that are examples of such circumstances.

Several commenters noted that proposed § 405.20(a)(2) required a claimant to show that a “reasonable person” would have been prevented from complying with a deadline due to a physical, mental, educational, or linguistic limitation. These commenters questioned how we intended to use a “reasonable person” standard for individuals with mental impairments or those who were not proficient in English. We agree and have removed the “reasonable person” language.

One commenter questioned what we meant by the phrase “must document” in proposed § 405.20(a). To clarify, we decided to simply use the term “show,” which allows adjudicators to consider various types of evidence in determining good cause for missing deadlines to file appeals.

Although some commenters supported proposed § 405.30, which would govern the filing of discrimination complaints against adjudicators, a number of commenters thought that the provision lacked specificity. The commenters recommended that we revise the section to incorporate a thorough, complete, and meaningful complaint procedure that would explain matters such as to whom the complaint will be sent, how it will be investigated, and what relief could be afforded to the claimant.

We presently have procedures in place to deal with allegations of administrative law judge bias and complaints of discrimination from the public, but we did not believe that it was necessary to include those procedures in this particular rule which primarily concerns the processing of disability claims, not discrimination complaints. Nevertheless, in response to a comment, we increased the time period for filing a claim of discrimination from 60 to 180 days.

How We Will Implement the New Process

As noted above, we plan to roll out the new DSI process in a measured and careful manner. Gradual implementation will allow us to monitor the effects that our changes are having on the entire disability determination process, and lessons learned during the early stages of implementation will allow us to proceed in an increasingly efficient and effective manner in the later stages of implementation. We will begin implementation in one of our smallest regions, the Boston region, which is

comprised of the States of Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont.

We will carefully monitor the implementation process in the Boston region and quickly address any problems that may arise. We plan to wait an entire year before implementing this rule in a second region so we can be sure that our improved disability determination process is functioning in the manner that we expect and to be certain that we have resolved any unanticipated issues that arise during the first phase of implementation. As we decide to roll this process out to other geographic areas, we will amend the appendix to subpart A of part 405 by publishing a notice in the “Notices” section of the

Federal Register

. Because we have solicited and responded to public comment for the new disability process through the proposed rule of July 27, 2005 (70 FR 43590), and through this final rule, the notice(s) amending the appendix to subpart A will serve as a technical amendment(s) and will not undergo a formal rulemaking process. The new DSI process will not take effect in the region(s) identified in the notice until the date identified in the

Federal Register

notice.

We expect that the experience and knowledge we gain while implementing this rule in the Boston region will help make implementation in the remaining regions proceed more efficiently. We anticipate that after this first year, we will be able to implement the DSI process at a faster pace.

Under our implementation plan, this final rule will only apply to claims that are filed in a region where the new DSI process has been implemented. If a claim is filed in a region where we have not yet implemented the new process, we will use our current procedural regulations, 20 CFR 404.900-404.999d and 416.1400-416.1499, to adjudicate that claim. For example, if a disability claim is filed in New Hampshire after we have rolled out the new DSI process in the Boston region, this rule will apply to the adjudication of that claim. Such a claim will be screened for possible adjudication as a QDD claim and could be considered by a Federal reviewing official, an administrative law judge, and possibly the DRB if the claim reached those levels. However, if a claim is filed in a State in a region where we have not yet rolled out the new process, that claim will be adjudicated under the present process. In other words, the State DDS will issue an initial determination on that claim and the claimant will be able to seek DDS reconsideration and subsequent review by an administrative law judge and the Appeals Council, if necessary.

If a claimant moves from one State to another after he/she files a claim, adjudicators at subsequent levels of review will apply the regulations that were applicable to the claim initially. For example, if a claimant files a claim in the Boston region after we have rolled out the new DSI process there, part 405 will apply to the claim at subsequent levels of review, even if the claimant moves to a State in a region where we have not yet rolled out the new process. Conversely, if a claimant files a claim in a region where we have not yet rolled out the new process, the pre-existing procedural regulations in parts 404 and 416 will apply, even if the claimant subsequently moves to a State where we have rolled out the new process.

As noted above, many of the comments we received regarding our proposed rule expressed concern about the possible effects of the elimination of the Appeals Council and the right of claimants to appeal administrative law judge decisions. We believe that our plan to gradually roll out the new DSI process in a careful and measured manner will allow us to closely monitor any effects that our changes may have on the disability determination process or on the Federal courts, and will allow us to quickly address any unintended consequences.

Under our implementation plan, a claimant will not be able to seek Appeals Council review if his/her claim was initially filed in a region where our new rule has been implemented and the claim was reviewed by a Federal reviewing official and an administrative law judge. In other words, the elimination of the right to Appeals Council review will only apply in regions where we have rolled out the new DSI process and to claims that have been processed from the start under this rule. The Appeals Council will continue to function and review claims that have been filed in regions where we have not yet rolled out the new DSI process. That means that in those regions where we have not yet rolled out the new DSI process, the Appeals Council will continue to perform all of the functions that they currently perform, including: Considering requests to review administrative law judge decisions; considering requests to review hearing request dismissals; considering cases referred from other components; preparing court transcripts; and handling court remand cases.

In addition, the Appeals Council will continue to perform its responsibilities pertaining to review of administrative law judge decisions that involve claims not covered by this rule (such as retirement and survivors insurance claims) or claims involving issues other than whether a claimant is disabled (such as whether a disability claimant has received an overpayment and whether that overpayment should be waived). Our new rule addresses the administrative review process for adjudicating disability claims; claimants will continue to have the right under our pre-existing regulations to seek Appeals Council review of administrative law judge decisions regarding issues that do not pertain to the administrative adjudication of whether a claimant is disabled. The Appeals Council will continue to perform these non-disability functions throughout the entire implementation process. However, once the new process has been rolled out in every region, we plan to transfer these remaining Appeals Council functions to the DRB.

We will be fine-tuning the screening tools we will use in the future to select cases for DRB review in those regions where we cannot review every single decision. As implementation begins and the DRB is reviewing all or most of the decisions issued in the Boston region, we will evaluate our screening tools to ensure that they will capture the appropriate cases for review. In addition, the DRB will monitor administrative law judge decisions in order to identify trends or developments that we need to address. If we determine that this rule adversely affects the disability determination process or the Federal courts over time, we will make changes to the process as necessary.

Throughout the implementation process, we will meet regularly with individuals representing organizations with various perspectives with respect to the disability process, including claimant representatives and advocates, State agency directors and employees, administrative law judges, and members of the judiciary. Through these discussions, we will continue, and further expand, the dialogue that began when our new approach was first proposed. The meetings will ensure that both we and these interested parties have an opportunity to discuss and better understand the impact of these changes as they are rolled out and to make any needed modifications to achieve the goal of making the right decision as early in the process as possible.

Regulatory Procedures

Executive Order 12866

We have consulted with the Office of Management and Budget and have

determined that this rule meets the criteria for an economically significant regulatory action under Executive Order 12866. Thus, it was reviewed by OMB.

The Office of the Chief Actuary (OCACT) estimates that this rule will result in increased program outlays resulting in the following costs (in millions of dollars) over the next 10 years:

Fiscal year

Title II

Title XVI

Medicare

Medicaid

Total

2006

$5

$1

$0

$2

$7

2007

40

7

0

17

63

2008

94

11

−1

31

135

2009

209

43

−2

114

364

2010

307

43

−7

119

461

2011

277

39

−14

106

408

2012

156

8

−24

26

166

2013

31

2

−35

−5

−8

2014

2

2

−46

−21

−63

2015

−9

0

−57

−40

−107

Total:

2006-2010

654

104

−10

282

1,031

2006-2015

1,110

155

−186

347

1,427

Note:

The totals may not equal the sum of the rounded components.

Cost estimates for the new disability determination process were developed by the OCACT under the assumptions of the mid-session review of the Fiscal Year 2006 Budget. For these estimates, the OCACT assumed that a significant number of disability allowances would be determined quickly under the quick determinations made by special units at the State DDS. In addition, the new Federal reviewing official determinations are assumed to provide allowances substantially in excess of the number produced by the reconsideration in the current process. The effects of the allowances and documentation are assumed to diminish the number of allowances made by administrative law judges. With careful implementation of the new process, the OCACT estimates that about the same total number of disability allowances will be made ultimately for each group of new applicants, but that these allowances will, on average, be made somewhat more quickly. Due to this speeding-up of the determination process program costs are expected to be increased somewhat for about the next 10 years. However, after this transitional period, annual costs for the disability programs are not expected to be substantially different, again assuming that the new process is implemented carefully.

We anticipate no more than negligible increases, if any, in the Agency's administrative costs as a result of the issuance of this rule.

Accounting Statement

As required by OMB Circular A-4 (available at

http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf),

in the following table (Table 1) below we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of this final rule. This table provides our best estimate of the increase in benefit payments as a result of the changes to the administrative review process presented in this final rule. All expenditures are classified as transfers to beneficiaries whose benefits are paid on the basis disability under title II of the Act or under disability or blindness under title XVI of the Act.

Table 1.—Accounting Statement: Classification of Estimated Costs

[In millions]

Category

Transfers

Annualized Monetized Transfers

$140.6.

From Who to Whom?

OASI, DI, HI, and SMI and General Fund of the Treasury to Disability Beneficiaries.

Benefits of New Procedures

This final rule addresses the challenges and issues in the current disability determination process identified through an extensive outreach effort to all interested parties in the disability determination process including the Congress, advocates, claimant representatives, the Federal Judiciary, and State and Federal adjudicators.

It provides for significant changes in our disability process and administrative procedures to improve service and stewardship. The changes will reduce processing time and increase accuracy to help ensure the right decision is made as early in the process as possible. These changes will ensure that adjudicators are accountable for the quality of disability adjudications at every step of the process by ensuring the development and documentation of a complete record for each claimant.

The new quick disability determination process ensures that beneficiaries who are clearly disabled receive favorable determinations within 20 calendar days or less from the date their completed application for benefits is sent to the State agency for adjudication. The creation of the Federal reviewing official provides for a Federal review earlier in the process. The establishment of a national network of experts will provide additional specialized expertise to assist adjudicators at all levels. The new comprehensive quality system will help ensure program integrity as well as continued improvement in decision-making. The Decision Review Board will provide the final agency opportunity to ensure the accuracy of decisions and reduce remands from the Federal courts. In addition, new

procedures will help ensure that adjudicators receive evidence in a timely manner resulting in a more efficient determination process while protecting the rights of the claimant.

Regulatory Flexibility Act

We certify that this rule will not have a significant economic impact on a substantial number of small entities as they affect only individuals or States. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.

Federalism Impact and Unfunded Mandates Impact

We have reviewed this rule under the threshold criteria of Executive Order 13132 and the Unfunded Mandates Reform Act and have determined that it does not have substantial direct effects on the States, on the relationship between the national government and the States, on the distribution of power and responsibilities among the various levels of government, or on imposing any costs on State, local, or tribal governments. This rule does not affect the roles of the State, local, or tribal governments. However, the rule takes administrative notice of existing statutes governing the roles and relationships of the State agencies and SSA with respect to disability determinations under the Act.

Paperwork Reduction Act

This final rule contains information collection requirements that require Office of Management and Budget clearance under the Paperwork Reduction Act of 1995 (PRA). As required by the PRA, we have submitted a clearance request to OMB for approval. We will publish the OMB number and expiration date upon approval.

As required by the PRA, we have published a notice of proposed rulemaking on July 27, 2005 at 70 FR 43590 and solicited comments under the PRA on the burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility and clarity; and on ways to minimize the burden on respondents, including the use of automated collection techniques or other forms of information technology. While commenters did not specifically address the issues specified above, a number of comments concerned timeframes for sending information to us. For example, commenters disagreed with our proposed 20-day deadline for submitting evidence for a hearing. As a result, we decided to change the proposed rule and will provide 75 days notice of the hearing date and allow evidence to be submitted up to five business days before the hearing with certain exceptions to that five-day requirement. In addition, we expanded timeframes in other sections of the regulation for submitting documentation/evidence to us.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; and 96.006, Supplemental Security Income)

List of Subjects

20 CFR Part 404

Administrative practice and procedure; Blind, Disability benefits; Old-Age, Survivors, and Disability Insurance; Reporting and recordkeeping requirements; Social Security.

20 CFR Part 405

Administrative practice and procedure; Blind, Disability benefits; Old-Age, Survivors, and Disability Insurance; Public assistance programs, Reporting and recordkeeping requirements; Social Security; Supplemental Security Income (SSI).

20 CFR Part 416

Administrative practice and procedure; Aged, Blind, Disability benefits, Public assistance programs, Reporting and recordkeeping requirements; Supplemental Security Income (SSI).

20 CFR Part 422

Administrative practice and procedure; Organization and functions (Government agencies); Reporting and recordkeeping requirements; Social Security.

Jo Anne B. Barnhart,

Commissioner of Social Security.

For the reasons set out in the preamble, subparts J, P, and Q of part 404, subparts I, J, and N of part 416 and subparts B and C of part 422 of chapter III of title 20 of the Code of Federal Regulations are amended and part 405 is added as set forth below:

PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )

Subpart J—[Amended]

1. The authority citation for subpart J of part 404 is revised to read as follows:

Authority:

Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j), 221, 223(i), 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 404(f), 405(a), (b), (d)-(h), and (j), 421, 423(i), 425, and 902(a)(5)); sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); secs. 5, 6(c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 421 note).

2. Amend § 404.903 by removing “and” at the end of paragraph (v), by removing the “.” at the end of paragraph (w) and replacing it with “;” and by adding paragraphs (x) and (y) to read as follows:

§ 404.903

Administrative actions that are not initial determinations.

(x) Determining whether to select your claim for the quick disability determination process under § 405.105 of this chapter; and

(y) The removal of your claim from the quick disability determination process under § 405.105 of this chapter.

Subpart P—[Amended]

3. The authority citation for subpart P of part 404 is revised to read as follows:

Authority:

Secs. 202, 205(a), (b), and (d)-(h), 216(i), 221(a) and (i), 222(c), 223, 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 405(a), (b), and (d)-(h), 416(i), 421(a) and (i), 422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 Stat. 2105, 2189.

4. Amend § 404.1502 by revising the definition of “nonexamining source” to read as follows:

§ 404.1502

General definitions and terms for this subpart.

Nonexamining source

means a physician, psychologist, or other acceptable medical source who has not examined you but provides a medical or other opinion in your case. At the administrative law judge hearing and Appeals Council levels of the administrative review process, and at the Federal reviewing official, administrative law judge, and Decision Review Board levels of the administrative review process in claims adjudicated under the procedures in part 405 of this chapter, it includes State agency medical and psychological consultants, other program physicians and psychologists, and medical experts or psychological experts we consult. See § 404.1527.

5. Amend § 404.1503 by adding a sixth sentence to paragraph (a), and by removing the parenthetical statement after the first sentence of paragraph (e), to read as follows:

§ 404.1503

Who makes disability and blindness determinations.

(a) * * * Subpart I of part 405 of this chapter contains additional rules that

the States must follow in making disability and blindness determinations in cases adjudicated under the procedures in part 405 of this chapter.

6. Amend § 404.1512 by revising paragraph (b)(6) and the second sentence of paragraph (c) to read as follows:

§ 404.1512

Evidence.

(b) * * *

(6) At the administrative law judge and Appeals Council levels, and at the reviewing official, administrative law judge, and Decision Review Board levels in claims adjudicated under the procedures in part 405 of this chapter, findings, other than the ultimate determination about whether you are disabled, made by State agency medical or psychological consultants and other program physicians or psychologists, and opinions based on their review of the evidence in your case record expressed by medical experts or psychological experts that we consult. See § 404.1527(f)(2)-(3).

(c) * * * You must provide evidence, without redaction, showing how your impairment(s) affects your functioning during the time you say that you are disabled, and any other information that we need to decide your claim. * * *

7. Amend § 404.1513 by revising the first sentence of paragraph (c) to read as follows:

§ 404.1513

Medical and other evidence of your impairment(s).

(c) * * * At the administrative law judge and Appeals Council levels, and at the reviewing official, administrative law judge, and Decision Review Board levels in claims adjudicated under the procedures in part 405 of this chapter, we will consider residual functional capacity assessments made by State agency medical and psychological consultants, medical and psychological experts (as defined in § 405.5 of this chapter), and other program physicians and psychologists to be “statements about what you can still do” made by nonexamining physicians and psychologists based on their review of the evidence in the case record. * * *

8. Amend § 404.1519k by revising paragraph (a) to read as follows:

§ 404.1519k

Purchase of medical examinations, laboratory tests, and other services.

(a) Subject to the provisions of § 405.805(b)(2) of this chapter in claims adjudicated under the procedures in part 405 of this chapter, the rate of payment to be used for purchasing medical or other services necessary to make determinations of disability may not exceed the highest rate paid by Federal or public agencies in the State for the same or similar types of service. See §§ 404.1624 and 404.1626 of this part.

9. Amend § 404.1519m by revising the third sentence to read as follows:

§ 404.1519m

Diagnostic tests or procedures.

* * * A State agency medical consultant, or a medical expert (as defined in § 405.5 of this chapter) in claims adjudicated under the procedures in part 405 of this chapter, must approve the ordering of any diagnostic test or procedure when there is a chance it may involve significant risk. * * *

10. Amend § 404.1519s by revising paragraph (c) to read as follows:

§ 404.1519s

Authorizing and monitoring the consultative examination.

(c) Subject to the provisions of § 405.805(b)(2) of this chapter in claims adjudicated under the procedures in part 405 of this chapter, and consistent with Federal and State laws, the State agency administrator will work to achieve appropriate rates of payment for purchased medical services.

11. Amend § 404.1520a by revising the third sentence and adding a new fourth sentence to paragraph (d)(2) and revising paragraph (e) to read as follows:

§ 404.1520a

Evaluation of mental impairments.

(d) * * *

(2) * * * We will record the presence or absence of the criteria and the rating of the degree of functional limitation on a standard document at the initial and reconsideration levels of the administrative review process. We will record the presence or absence of the criteria and the rating of the degree of functional limitation in the decision at the administrative law judge hearing and Appeals Council levels (in cases in which the Appeals Council issues a decision), and in the decision at the Federal reviewing official, administrative law judge, and the Decision Review Board levels in claims adjudicated under the procedures in part 405 of this chapter. * * *

(e)

Documenting application of the technique.

At the initial and reconsideration levels of the administrative review process, we will complete a standard document to record how we applied the technique. At the administrative law judge hearing and Appeals Council levels (in cases in which the Appeals Council issues a decision), and at the Federal reviewing official, administrative law judge, and the Decision Review Board levels in claims adjudicated under the procedures in part 405 of this chapter, we will document application of the technique in the decision.

(1) At the initial and reconsideration levels, except in cases in which a disability hearing officer makes the reconsideration determination, our medical or psychological consultant has overall responsibility for assessing medical severity. At the initial level in claims adjudicated under the procedures in part 405 of this chapter, a medical or psychological expert (as defined in § 405.5 of this chapter) has overall responsibility for assessing medical severity. The State agency disability examiner may assist in preparing the standard document. However, our medical or psychological consultant (or the medical or psychological expert (as defined in § 405.5 of this chapter) in claims adjudicated under the procedures in part 405 of this chapter) must review and sign the document to attest that it is complete and that he or she is responsible for its content, including the findings of fact and any discussion of supporting evidence. When a disability hearing officer makes a reconsideration determination, the determination must document application of the technique, incorporating the disability hearing officer's pertinent findings and conclusions based on this technique.

(2) At the administrative law judge hearing and Appeals Council levels, and at the Federal reviewing official, administrative law judge, and the Decision Review Board levels in claims adjudicated under the procedures in part 405 of this chapter, the written decision must incorporate the pertinent findings and conclusions based on the technique. The decision must show the significant history, including examination and laboratory findings, and the functional limitations that were considered in reaching a conclusion about the severity of the mental impairment(s). The decision must include a specific finding as to the degree of limitation in each of the functional areas described in paragraph (c) of this section.

(3) Except in cases adjudicated under the procedures in part 405 of this chapter, if the administrative law judge requires the services of a medical expert to assist in applying the technique but such services are unavailable, the administrative law judge may return the case to the State agency or the appropriate Federal component, using the rules in § 404.941 of this part, for completion of the standard document. If, after reviewing the case file and completing the standard document, the State agency or Federal component concludes that a determination favorable to you is warranted, it will process the case using the rules found in § 404.941(d) or (e) of this part. If, after reviewing the case file and completing the standard document, the State agency or Federal component concludes that a determination favorable to you is not warranted, it will send the completed standard document and the case to the administrative law judge for further proceedings and a decision.

12. Amend § 404.1526 by revising the first sentence of paragraph (c) to read as follows:

§ 404.1526

Medical equivalence.

(c) * * * A medical or psychological consultant designated by the Commissioner includes any medical or psychological consultant employed or engaged to make medical judgments by the Social Security Administration, the Railroad Retirement Board, or a State agency authorized to make disability determinations, and includes a medical or psychological expert (as defined in § 405.5 of this chapter) in claims adjudicated under the procedures in part 405 of this chapter. * * *

13. Amend § 404.1527 by revising paragraph (f)(1) and by adding paragraph (f)(4) to read as follows:

§ 404.1527

Evaluating opinion evidence.

(f) * * *

(1) In claims adjudicated by the State agency, a State agency medical or psychological consultant (or a medical or psychological expert (as defined in § 405.5 of this chapter) in claims adjudicated under the procedures in part 405 of this chapter) will consider the evidence in your case record and make findings of fact about the medical issues, including, but not limited to, the existence and severity of your impairment(s), the existence and severity of your symptoms, whether your impairment(s) meets or equals the requirements for any impairment listed in appendix 1 to this subpart, and your residual functional capacity. These administrative findings of fact are based on the evidence in your case record but are not themselves evidence at these steps.

(4) In claims adjudicated under the procedures in part 405 of this chapter at the Federal reviewing official, administrative law judge, and the Decision Review Board levels of the administrative review process, we will follow the same rules for considering opinion evidence that administrative law judges follow under this section.

14. Amend § 404.1529 by revising the third and fifth sentences of paragraph (b) to read as follows:

§ 404.1529

How we evaluate symptoms, including pain.

(b) * * * In cases decided by a State agency (except in disability hearings under §§ 404.914 through 404.918 of this chapter), a State agency medical or psychological consultant, a medical or psychological consultant designated by the Commissioner, or a medical or psychological expert (as defined in § 405.5 of this chapter) in claims adjudicated under the procedures in part 405 of this chapter, directly participates in determining whether your medically determinable impairment(s) could reasonably be expected to produce your alleged symptoms. * * * At the administrative law judge hearing or Appeals Council level of the administrative review process, or at the Federal reviewing official, administrative law judge, and Decision Review Board levels in claims adjudicated under the procedures in part 405 of this chapter, the adjudicator(s) may ask for and consider the opinion of a medical or psychological expert concerning whether your impairment(s) could reasonably be expected to produce your alleged symptoms. * * *

15. Amend § 404.1546 by revising the text of paragraph (a) and by adding a new paragraph (d) to read as follows:

§ 404.1546

Responsibility for assessing your residual functional capacity.

(a) * * * When a State agency makes the disability determination, a State agency medical or psychological consultant(s) (or a medical or psychological expert (as defined in § 405.5 of this chapter) in claims adjudicated under the procedures in part 405 of this chapter) is responsible for assessing your residual functional capacity.

(d)

Responsibility for assessing residual functional capacity in claims adjudicated under part 405 of this chapter.

In claims adjudicated under the procedures in part 405 of this chapter at the Federal reviewing official, administrative law judge, and Decision Review Board levels of the administrative review process, the Federal reviewing official, administrative law judge, or the Decision Review Board is responsible for assessing your residual functional capacity.

Subpart Q—[Amended]

16. The authority citation for subpart Q of part 404 continues to read as follows:

Authority:

Secs. 205(a), 221, and 702(a)(5) of the Social Security Act (42 U.S.C. 405(a), 421, and 902(a)(5)).

17. Amend § 404.1601 by adding a new third sentence to the introductory text to read as follows:

§ 404.1601

Purpose and scope.

* * * Subpart I of part 405 of this chapter contains additional rules that the States must follow in making disability and blindness determinations in cases adjudicated under the procedures in part 405 of this chapter.

18. Amend § 404.1616 by adding a new third sentence in paragraph (b) and a new paragraph (e)(4) to read as follows:

§ 404.1616

Medical or psychological consultants.

(b) * * * In claims adjudicated under the procedures in part 405 of this chapter, medical experts employed by or under contract with the State agencies must meet the qualification standards prescribed by the Commissioner.

(e) * * *

(4) In claims adjudicated under the procedures in part 405 of this chapter, psychological experts employed by or under contract with the State agencies must meet the qualification standards prescribed by the Commissioner.

19. Amend § 404.1624 by revising the first sentence to read as follows:

§ 404.1624

Medical and other purchased services.

Subject to the provisions of § 405.805(b)(2) of this chapter in claims adjudicated under the procedures in part 405 of this chapter, the State will

determine the rates of payment to be used for purchasing medical or other services necessary to make determinations of disability. * * *

20. A new part 405 is added to read as follows:

PART 405—ADMINISTRATIVE REVIEW PROCESS FOR ADJUDICATING INITIAL DISABILITY CLAIMS

Subpart A—Introduction, General Description, and Definitions

Sec.

405.1

Introduction.

405.5

Definitions.

405.10

Medical and Vocational Expert System.

405.20

Good cause for extending deadlines.

405.25

Disqualification of disability adjudicators.

405.30

Discrimination complaints.

Appendix to Subpart A of Part 405—Claims That Will Be Handled Under the Procedures in This Part

Subpart B—Initial Determinations

405.101

Disability determinations.

405.105

Quick disability determination process.

405.110

Standards for making quick disability determinations.

405.115

Notice of the initial determination.

405.120

Effect of an initial determination.

Subpart C—Review of Initial Determinations by a Federal Reviewing Official

405.201

Reviewing an initial determination—general.

405.210

How to request review of an initial determination.

405.215

Procedures before a Federal reviewing official.

405.217

Subpoenas.

405.220

Decision by the Federal reviewing official.

405.225

Notice of the Federal reviewing official's decision.

405.230

Effect of the Federal reviewing official's decision.

Subpart D—Administrative Law Judge Hearing

405.301

Hearing before an administrative law judge—general.

405.305

Availability of a hearing before an administrative law judge.

405.310

How to request a hearing before an administrative law judge.

405.315

Time and place for a hearing before an administrative law judge.

405.316

Notice of a hearing before an administrative law judge.

405.317

Objections.

405.320

Administrative law judge hearing procedures—general.

405.325

Issues before an administrative law judge.

405.330

Prehearing conferences.

405.331

Submitting evidence to an administrative law judge.

405.332

Subpoenas.

405.333

Submitting documents.

405.334

Prehearing statements.

405.340

Deciding a claim without a hearing before an administrative law judge.

405.350

Presenting evidence at a hearing before an administrative law judge.

405.351

Closing statements.

405.360

Official record.

405.365

Consolidated hearing before an administrative law judge.

405.366

Posthearing conferences.

405.370

Decision by the administrative law judge.

405.371

Notice of the decision of an administrative law judge.

405.372

Finality of an administrative law judge's decision.

405.373

Requesting consideration of new evidence.

405.380

Dismissal of

This text is long and has been trimmed here. Open the source document for the complete record.