Reopening Determinations and Decisions

Federal RegisterFeb 23, 1994

Ask Donna

What actually matters in this document.

Text

DEPARTMENT OF HEALTH AND HUMAN SERVICES

20 CFR Parts 404 and 416

[Regulations Nos. 4 and 16]

RIN 0960-AD12

Reopening Determinations and Decisions

AGENCY: Social Security Administration, HHS.

ACTION: Final rules.

-----------------------------------------------------------------------

SUMMARY: These final rules revise our regulations to clarify the

longstanding policy of the Social Security Administration (SSA) that

the Agency on its own initiative, as well as at the request of any

person claiming a right under the Social Security or supplemental

security income (SSI) programs, may reopen and revise a final

administrative determination or decision.

EFFECTIVE DATE: The final regulations are effective February 23, 1994.

FOR FURTHER INFORMATION CONTACT: Henry D. Lerner, Legal Assistant,

Office of Regulations, Social Security Administration, 6401 Security

Blvd., Baltimore, MD 21235, (410) 965-1762.

SUPPLEMENTARY INFORMATION: We are revising Secs. 404.987 and 416.1487

of our regulations to clarify that we may reopen and revise a final

administrative determination or decision either on our own initiative

or at the request of a person who was a party to the determination or

decision.

Prior to August 5, 1980, our regulations expressly provided that we

had the discretion to reopen and revise a final determination or

decision, including a final revised determination or decision, either

on our own motion or upon the request of any party to the determination

or decision. See 20 CFR 404.956, 404.957, 416.1475 and 416.1477 (1980).

On August 5, 1980, however, we published, pursuant to the notice of

proposed rulemaking procedures, final regulations which reorganized and

restated in simpler language our rules on the administrative review

process, including our rules for reopening and revising final

determinations and decisions. This recodification was undertaken as

part of a Department-wide effort to make the rules clearer and easier

for the public to use and understand (45 FR 52078, August 5, 1980).

Our existing regulations on the procedures for reopening and

revising a determination or decision were a part of the recodification

that was published and became effective on August 5, 1980. Although no

substantive changes were intended with regard to the authority to

reopen on our own initiative, the regulations, as recodified, have been

read by some to permit reopening and revision of a final determination

or decision only when the beneficiary or claimant requests reopening.

With respect to the reopening and the revising of a final

determination or decision, Secs. 404.987 and 416.1487 of our existing

regulations state that ``[y]ou may ask that a determination or a

decision to which you were a party be revised.'' These sections have

created some confusion and have been read by some courts to mean that

we may not reopen and revise a final determination or decision on our

own initiative.

The final rules eliminate the ambiguity that exists in our

regulations regarding our authority to reopen and revise a final

determination or decision on our own initiative. The final rules revise

Secs. 404.987 and 416.1487 to state explicitly that we may reopen a

determination or decision that has become final on our own initiative

or at the request of an individual who was a party to the determination

or decision.

Public Comments

We published the proposed rules with a Notice of Proposed

Rulemaking (NPRM) in the Federal Register on October 28, 1991 (56 FR

55477). Interested persons and organizations were given 60 days to

comment. The comment period closed on December 27, 1991. We received

comments from six commenters: Two State agencies which make disability

determinations, and three legal services organizations and one private

attorney who represent claimants and beneficiaries.

One commenter supported the proposed rules without modification.

This commenter agreed with our view that the proposed rules clarified

our longstanding policy regarding our authority to reopen a final

determination or decision on our own initiative.

The other commenters either opposed the proposed changes to the

regulations or conditioned their support for the proposed rules upon

our making additional changes to our regulations. Most of these

commenters generally perceived the proposed rules to be a policy change

that would confer upon SSA a new or expanded authority to reopen and

revise determinations or decisions on its own initiative. Many of the

comments which were provided by these commenters also reflected a

misunderstanding of the requirements and procedures for reopening a

determination or decision. Some of these commenters recommended that

the proposed rules be modified or withdrawn. Some recommended that they

be expanded to clarify or further limit the specific conditions, which

are stated elsewhere in our regulations, under which a final

determination or decision may be reopened.

We considered carefully all of the comments which we received on

the proposed rules. However, for the reasons stated below, we did not

adopt the recommendation to withdraw the proposed rules or any of the

recommendations to modify or expand the changes to the regulations. The

changes to the regulations do not represent a substantive change in

policy. The sole purpose of the changes is to clarify in the

regulations our longstanding policy that we may reopen and revise a

final determination or decision on our own initiative as well as upon

the request of a party to the determination or decision. Accordingly,

the final rules are the same as the proposed rules.

A summary of the comments that raised issues concerning the

proposed rules and our responses to the comments are provided below.

For ease of comprehension, we have consolidated the comments and

organized them according to the general issues raised in the comments.

Comment: Three commenters thought that the proposed rules would be

inconsistent with a decision of a circuit court which had concluded

that our regulations should be interpreted to allow the Appeals Council

to reopen a final decision of an administrative law judge (ALJ) only on

the basis of a request by a claimant or beneficiary. One commenter

stated that the proposed rules would circumvent judicial decisions, but

did not mention any specific court decisions.

Response: As discussed earlier in this preamble and in the preamble

to the NPRM, the regulations which we are revising, Secs. 404.987 and

416.1487, were a part of the regulations that were published on August

5, 1980, which reorganized and restated in simpler language all of our

rules on the administrative review process. Although no substantive

changes were intended with regard to our authority to reopen final

determinations or decisions on our own initiative, this authority was

not stated as clearly in the recodified rules as it had been in the

longer, more detailed prior rules. As a result, several lawsuits were

brought challenging our authority under the recodified regulations to

continue our longstanding policy to reopen and revise final

determinations or decisions on our own initiative. All but one of the

circuit courts that have directly addressed this issue have concluded,

however, that our regulations on reopening do provide authority for us

to reopen and revise final determinations or decisions on our own

initiative, including authority for the Appeals Council to reopen and

revise a final decision of an ALJ on its own initiative. Only the

circuit court mentioned by the three commenters above and some Federal

district courts have concluded that our existing regulations should be

interpreted to allow the reopening and revision of a final

determination or decision only when a claimant or beneficiary requests

reopening. These final rules revise the regulations to eliminate the

ambiguity which led these courts to interpret the regulations to mean

that only a claimant or beneficiary may initiate reopening. We are

revising Secs. 404.987 and 416.1487 to state explicitly that we may

reopen a final determination or decision either on our own initiative

or at the request of a party to the determination or decision.

Comment: Several commenters thought that the time periods within

which a final decision of an ALJ may be reopened under current

Sec. 404.988 (a) or (b) or Sec. 416.1488 (a) or (b), which we did not

propose to change, are measured from the date of the ALJ decision. Some

commenters opposed the proposed revisions of Secs. 404.987 and 416.1487

because they believed that the Appeals Council would have the

discretion under Sec. 404.988(b) or Sec. 416.1488(b) to reopen a final

decision of an ALJ on its own initiative within 4 years of the date of

the ALJ decision if the Council finds good cause to reopen. One

commenter stated that the proposed rules would render meaningless the

60-day time limit within which the Appeals Council may decide to review

a decision by an ALJ on its own initiative under Secs. 404.969 and

416.1469. This statement was based on the commenter's belief that

Secs. 404.988(a) and 416.1488(a), when read together with the proposed

rules, give the Appeals Council the discretion to reopen a final

decision of an ALJ on its own initiative within 1 year of the date of

the ALJ decision for any reason.

Response: Sections 404.988 and 416.1488 state the conditions under

which we may reopen final determinations or decisions under the Social

Security and SSI programs, respectively. We are not making any changes

to these sections of our regulations. Sections 404.988(a) and

416.1488(a) provide that a determination or decision may be reopened

within 12 months of the date of the notice of the initial determination

for any reason. Sections 404.988(b) and 416.1488(b) provide that a

determination or decision may be reopened within 4 years (2 years for

SSI cases) of the date of the notice of the initial determination if we

find good cause, as defined in Secs. 404.989 and 416.1489, to reopen

the case. The time periods within which a final decision of an ALJ may

be reopened under these sections, therefore, are measured from the date

of the notice of the initial determination, not from the date of the

ALJ decision. Under these sections, the Appeals Council may reopen a

final decision of an ALJ within 12 months of the date of the notice of

the initial determination for any reason, or within 4 years (only 2

years for SSI cases) of the date of the notice of the initial

determination if the Council finds good cause to reopen.

These final rules, like the proposed rules, revise Secs. 404.987

and 416.1487 to clarify that we may reopen and revise a final

determination or decision either on our own initiative or upon the

request of a person who was a party to the determination or decision.

While the final rules clarify that the Appeals Council has the

discretion to reopen a final decision of an ALJ on its own initiative,

as well as at the request of a party to the decision, under the

conditions specified in Secs. 404.988 and 416.1488, they do not make

the reopening authority under Secs. 404.988(a) and 416.1488(a)

inconsistent with the authority provided under Secs. 404.969 and

416.1469 for Appeals Council own-motion review of an ALJ decision.

Sections 404.988 and 416.1488 state the conditions under which a

determination or decision that has become final may be reopened.

Sections 404.969 and 416.1469, on the other hand, authorize the Appeals

Council to initiate review of an ALJ decision that has not become

final. A decision by an ALJ becomes final unless a person who was a

party to the decision requests Appeals Council review of the decision

within the stated time period, see Secs. 404.968 and 416.1468, or the

Council itself decides to review the decision within the time period

provided in Secs. 404.969 and 416.1469. The latter sections provide

that any time within 60 days after the date of an ALJ decision or

dismissal of a hearing request, the Appeals Council may decide on its

own initiative to review the decision or dismissal. By contrast,

Secs. 404.988(a) and 416.1488(a) allow the Appeals Council to reopen a

final decision of an ALJ for any reason only within 12 months of the

date of the notice of the initial determination made in the case. In

almost all cases in which an ALJ decision becomes final, this 12-month

period for reopening for any reason will have expired due to the normal

processing time required for the disposition of the case through the

reconsideration and ALJ hearing steps of the administrative review

process. Therefore, a final decision of an ALJ seldom can be reopened

under the conditions specified in Secs. 404.988(a) and 416.1488(a).

Comment: Some commenters expressed the view that the proposed rules

were unfair to claimants and beneficiaries because they permitted SSA

to reopen on its own initiative a final determination or decision that

was favorable to the individual and make a revised determination or

decision that could be unfavorable to the individual. One commenter

stated that fairness requires that only claimants and beneficiaries be

permitted to initiate the reopening and revision of a final

determination or decision.

Response: Our authority to initiate reopening gives us the

discretion to reopen and revise a final determination or decision on

our own initiative under the conditions described in Secs. 404.988 and

416.1488 whether such final determination or decision was favorable or

unfavorable to the individual. The revised determination or decision

which we make may be less favorable or more favorable to the individual

than the prior determination or decision, or it may involve merely a

technical revision that does not affect the ultimate conclusion

regarding the individual's rights under the Social Security or SSI

program.

The policy that we may reopen and revise final determinations or

decisions on our own initiative is advantageous to many claimants and

beneficiaries. While an individual may request that a final

determination or decision that was unfavorable to the individual be

reopened and revised, it is often SSA, and not the individual, that

discovers that an error was made, or that new and material evidence

exists, that provides a basis to reopen and revise a final

determination or decision that was unfavorable to the individual. The

authority to reopen on our own initiative allows us to reopen and

revise the determination or decision in these cases even though the

individual has not requested reopening. Indeed, in many, if not most,

cases in which we reopen and revise a final determination or decision

on our own initiative, we do so for the sole purpose of making a

revised determination or decision that would be more favorable to the

individual than the prior determination or decision.

Our longstanding policy regarding the authority to reopen on our

own initiative is intended to ensure that the final determinations and

decisions which we make about the rights of individuals under the

Social Security and SSI programs are fair and proper. It enables us to

protect the integrity of these programs by allowing us to reopen and

revise final determinations or decisions on our own initiative, as well

as at the request of a party to the determination or decision, in cases

where, for example, the determination or decision was obtained by

fraud, the evidence that was considered in making the determination or

decision clearly shows on its face that an error was made in the

determination or decision, or new and material evidence shows that the

determination or decision is incorrect. See Secs. 404.988, 404.989,

416.1488 and 416.1489. In addition, if we reopen and revise a final

determination or decision on our own initiative, any person who was a

party to the revised determination or decision has the opportunity

under Secs. 404.994 and 416.1494 to request that the revision be

reviewed. Under these sections, if an individual is dissatisfied with a

revised determination or decision made in his or her case, he or she

may request further administrative or judicial review, as appropriate,

of our revised determination or decision.

Comment: Two commenters believed that some of the conditions for

reopening determinations and decisions provided in Secs. 404.988 and

416.1488 are too broad. One of the commenters stated that the criteria

in Secs. 404.989 and 416.1489 for determining whether good cause exists

to reopen under Secs. 404.988(b) and 416.1488(b) should be clarified to

provide more precise standards for determining good cause to reopen.

The other commenter urged that the criteria for determining good cause

be modified to limit further the conditions under which a determination

or decision may be reopened. This commenter also recommended the

elimination of the provisions of Secs. 404.988(a) and 416.1488(a) which

permit the reopening of a determination or decision within 12 months of

the date of the notice of the initial determination for any reason.

Response: We do not believe that there is any need at this time to

modify or clarify the specific criteria in Secs. 404.989 and 416.1489

for determining whether good cause exists to reopen a determination or

decision under Secs. 404.988(b) and 416.1488(b). In addition, we

believe that the conditions for reopening provided in Secs. 404.988 and

416.1488, including the provisions of Secs. 404.988(a) and 416.1488(a),

are sufficiently restrictive. These sections of the regulations provide

that a determination or decision may be reopened only within limited

time periods and/or under limited circumstances. They limit the

conditions under which we may reopen a final determination or decision

either on our own initiative or on the request of a person who was a

party to the determination or decision.

The final rules, like the proposed rules, only revise Secs. 404.987

and 416.1487. The sole purpose of the revisions is to clarify our

longstanding policy that we may reopen and revise final determinations

or decisions on our own initiative as well as at the request of a party

to the determination or decision. These final rules, therefore, do not

make any changes to Sec. 404.988, Sec. 404.989, Sec. 416.1488 or

Sec. 416.1489. For the foregoing reasons, the proposed rules are being

adopted as final regulations.

Regulatory Procedures

Paperwork Reduction Act

These regulations impose no new reporting or recordkeeping

requirements necessitating clearance by the Office of Management and

Budget.

Regulatory Flexibility Act

We certify that these final regulations will not have a significant

economic impact on a substantial number of small entities because they

affect determinations or decisions about the rights of individuals

under the Social Security and SSI programs. Therefore, a regulatory

flexibility analysis as provided in Pub. L. 96-354, the Regulatory

Flexibility Act, is not required.

(Catalog of Federal Domestic Assistance Program Nos. 93.802, Social

Security-Disability Insurance; 93.803, Social Security-Retirement

Insurance; 93.805, Social Security-Survivors Insurance; 93.807,

Supplemental Security Income)

List of Subjects

20 CFR Part 404

Administrative practice and procedure, Death benefits, Disability

benefits, Old-Age, Reporting and recordkeeping requirements, Survivors

and Disability Insurance.

20 CFR Part 416

Administrative practice and procedure, Aged, Blind, Disability

benefits, Public assistance programs, Reporting and recordkeeping

requirements, Supplemental Security Income.

Dated: November 4, 1993.

Shirley Chater,

Commissioner of Social Security.

Approved: February 7, 1994.

Donna E. Shalala,

Secretary of Health and Human Services.

For the reasons set out in the preamble, subpart J of part 404 and

subpart N of part 416 of chapter III of title 20 of the Code of Federal

Regulations are amended as set forth below.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE

(1950- )

20 CFR part 404, subpart J, is amended as follows:

1. The authority citation for subpart J of part 404 continues to

read as follows:

Authority: Secs. 201(j), 205 (a), (b), and (d)-(h), 221(d), and

1102 of the Social Security Act; 31 U.S.C. 3720A; 42 U.S.C. 401(j),

405 (a), (b), and (d)-(h), 421(d), and 1302.

2. Section 404.987 is revised to read as follows:

Sec. 404.987 Reopening and revising determinations and decisions.

(a) General. Generally, if you are dissatisfied with a

determination or decision made in the administrative review process,

but do not request further review within the stated time period, you

lose your right to further review and that determination or decision

becomes final. However, a determination or a decision made in your case

which is otherwise final and binding may be reopened and revised by us.

(b) Procedure for reopening and revision. We may reopen a final

determination or decision on our own initiative, or you may ask that a

final determination or a decision to which you were a party be

reopened. In either instance, if we reopen the determination or

decision, we may revise that determination or decision. The conditions

under which we may reopen a previous determination or decision, either

on our own initiative or at your request, are explained in

Sec. 404.988.

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND

DISABLED

20 CFR part 416, subpart N, is amended as follows:

1. The authority citation for subpart N of part 416 continues to

read as follows:

Authority: Secs. 1102, 1631, and 1633 of the Social Security

Act; 42 U.S.C. 1302, 1383, and 1383b; sec. 6 of Pub. L. 98-460, 98

Stat. 1802.

2. Section 416.1487 is revised to read as follows:

Sec. 416.1487 Reopening and revising determinations and decisions.