Administrative Review Process, Testing Modifications to Prehearing Procedures and Decisions by Adjudication Officers

Federal RegisterJun 9, 1995

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

RIN 0960-AE06

Administrative Review Process, Testing Modifications to

Prehearing Procedures and Decisions by Adjudication Officers

AGENCY: Social Security Administration.

ACTION: Proposed rule.

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SUMMARY: We propose to amend our rules to establish the authority to

test the position of an adjudication officer who, under the Plan for a

New Disability Claim Process approved by the Commissioner of Social

Security in September 1994 (the disability redesign plan), would be the

focal point for all prehearing activities when a request for a hearing

before an administrative law judge (ALJ) is filed. The adjudication

officer is an integral element of the disability redesign plan. We

expect that our test of the adjudication officer position will provide

us with sufficient information to determine the effect of the position

on the hearing process. This proposed rule only refers to the changes

to the disability procedures we will test. Unless specified, all other

regulations related to the disability determination process remain

unchanged.

DATES: To be sure that your comments are considered, we must receive

them no later than July 10, 1995.

ADDRESSES: Comments should be submitted in writing to the Commissioner

of Social Security, P.O. Box 1585, Baltimore, Maryland 21235, sent by

telefax to (410) 966-2830, sent by E-mail to ``[email protected],''

or delivered to the Division of Regulations and Rulings, Social

Security Administration, 3-B-1 Operations Building, 6401 Security

Boulevard, Baltimore, Maryland 21235, between 8:00 a.m. and 4:30 p.m.

on regular business days. Comments may be inspected during these same

hours by making arrangements with the contact person shown below.

The electronic file of this document is available on the Federal

Bulletin Board (FBB) at 9:00 a.m. on the date of publication in the

Federal Register. To download the file, modem dial (202) 512-1387. The

FBB instructions will explain how to download the file and the fee.

This file is in Wordperfect and will remain on the FBB during the

comment period.

FOR FURTHER INFORMATION CONTACT: Harry J. Short, Legal Assistant,

Division of Regulations and Rulings, Social Security Administration,

6401 Security Boulevard, Baltimore, Maryland 21235, (410) 965-6243.

SUPPLEMENTARY INFORMATION:

Background

The Social Security Administration (SSA) decides claims for Social

Security benefits under title II of the Social Security Act (the Act)

and for Supplemental Security Income (SSI) benefits under title XVI of

the Act in an administrative review process that generally consists of

four steps. Claimants who are not satisfied with the initial

determination we make on a claim may request reconsideration. Claimants

who are not satisfied with our reconsidered determination may request a

hearing before an ALJ, and claimants who are dissatisfied with an ALJ's

decision may request review by the Appeals Council. Claimants who have

completed these steps and who are not satisfied with our final

decision, may request judicial review of the decision in the Federal

courts.

Generally, when a claim is filed for Social Security or SSI

benefits based on disability, a State agency makes the initial and

reconsideration disability determination for us. A hearing requested

after we have made a reconsideration determination is conducted by an

ALJ in one of the 132 hearing offices we have nationwide.

Applications for Social Security and SSI benefits based on

disability have risen dramatically in recent years. The number of new

disability claims SSA received in Fiscal Year (FY) 1994--3.56 million--

represented a 40 percent increase over the number received in FY 1990--

2.55 million. Requests for an ALJ hearing also have increased

dramatically. In FY 1994, our hearing offices had almost 540,000

hearing receipts, and most of these receipts were filed by persons

claiming disability benefits. In that year, the number of hearing

receipts we received exceeded the number of receipts we received in FY

1990 by more than 70 percent.

Despite management initiatives that resulted in a record increase

in ALJ productivity in FY 1994 and the hiring of more than 200 new ALJs

and more than 650 new support staff in that year, the number of cases

pending in our hearing offices has reached unprecedented levels--more

than 480,000 at the end of FY 1994.

In order to process this workload the disability redesign plan

contains other changes to the disability determination process by which

SSA plans to decrease processing times while providing world class

service. For example, the disability redesign plan envisions a

streamlined [[Page 30483]] initial disability determination process

which will result in more timely determinations and the elimination of

the reconsideration step in the administrative review process for

disability claims. We expect that one consequence of these initiatives

will be an increase in the number of requests for hearings filed over

the next several years. In light of these growing workload

expectations, and to process more efficiently the hearing requests now

pending at our hearing offices, we are issuing this notice of proposed

rule making (NPRM) which proposes to establish the authority to test

having an adjudication officer conduct prehearing development and, if

appropriate, issue a decision wholly favorable to the claimant.

We expect that use of an adjudication officer process, as described

in our Plan for a New Disability Claim Process, will enable us to

ensure development of a complete record and to issue decisions in a

more efficient manner when a request for a hearing has been filed.

Under this NPRM, we propose initially to test the adjudication officer

position before implementing it as contemplated in the disability

redesign plan. We anticipate that our tests of the adjudication officer

position will provide us with information regarding the effect the

position has on the hearing process currently, and how to best

implement it under the redesigned disability process. We will do this

by testing the adjudication officer position alone and in combination

with one or more of the tests we are conducting pursuant to the final

rule ``Testing Modifications to the Disability Determination

Procedures,'' which was published in the Federal Register on April 24,

1995 (60 FR 20023).

We consider testing and implementation of the adjudication officer

position to be a high priority. It is a complementary approach to

short-term disability processing initiatives we currently are

undertaking which are designed to reduce pending requests for hearings

from more than 480,000 at the end of FY 1994 to 375,000 at the end of

FY 1996. One short-term initiative is set out in the NPRM we published

in the Federal Register on April 14, 1995 (60 FR 19008) to authorize

attorney advisors in our Office of Hearings and Appeals to conduct

certain prehearing proceedings and, where appropriate, issue decisions

which are wholly favorable to the claimant. The principal aim of the

attorney advisor procedures is to expedite decisions on pending

requests for hearings. The adjudication officer process is focused on

making more efficient use of existing resources so that ongoing cases

are processed more timely and in a more efficient manner. This proposed

rule authorizing testing of an adjudication officer process, if

published as a final rule, will allow us to test the effect of a

process that we expect will allow us to better manage the hearing

process in the years to come.

In view of the salutary effect we expect this rule to have on our

ability to improve our service to claimants, and the importance we

place on ensuring that we adjudicate claims timely and accurately, we

are providing a 30-day comment period for this rule rather than the 60-

day period we usually provide. We also believe that a 30-day comment

period is appropriate in this instance because we previously provided

the public with the opportunity to comment on all aspects of the

disability redesign plan, including the establishment of the

adjudication officer position. We believe that for these reasons, a 30-

day comment period is sufficiently long to allow the public a

meaningful opportunity to comment on the proposed rule in accordance

with Executive Order 12866.

The proposed rules are explained below in more detail.

Prehearing Procedures Under the Disability Redesign Plan

On April 15, 1994, SSA published a notice in the Federal Register

(59 FR 18188), setting out a proposal to reengineer the initial and

administrative review process we use to determine an individual's

entitlement to Social Security and SSI benefits based on disability.

Comments on this comprehensive and far-reaching proposal were

requested, and during the comment period that began on April 1, 1994,

and ended on June 14, 1994, SSA received, from a broad spectrum of

respondents, over 6,000 written responses and extensive verbal

comments. The commenters expressed their belief that improvements were

needed to provide better service and to manage the claims process more

effectively. While some concerns were expressed, the commenters praised

SSA for taking on the task of redesigning the disability claim process.

On September 7, 1994, the Commissioner of Social Security accepted

the revised disability redesign plan that was submitted for her

approval on June 30, 1994, with the full understanding that some

aspects of the proposal would require research and testing. The plan as

approved by the Commissioner was published in the Federal Register on

September 19, 1994 (59 FR 47887).

The plan anticipates a redesigned, two-level process for deciding

social security and SSI claims based on disability. The claimant's

right of administrative review following an initial determination will

be to request an ALJ hearing. When a hearing is requested, as planned

in the redesigned process, the focal point for prehearing activities

will be an adjudication officer who will work with, among others,

claimants and their representatives. Adjudication officers will have

authority to make decisions wholly favorable to the claimant where such

decisions are warranted by the evidence.

The adjudication officer, together with the claimant and his or her

representative, will have responsibility for ensuring that claims

coming before ALJs are fully developed.

The procedures outlined in the disability redesign plan make the

best use of representatives' services by defining the clear

responsibility on the part of claimants and their representatives to

submit evidence. One of the features of the adjudication officer

process is an informal conference with a claimant's representative to

identify the issues in dispute and to prepare written agreements

regarding those issues which are not in dispute and those issues

proposed for hearing. We would not ask a claimant who does not have a

representative to limit issues prior to the hearing. However, if the

claimant obtains representation subsequent to the AO's conclusion that

the case is ready for a hearing, the case will be returned to the AO

who will conduct an informal conference with the claimant and his

representative.

In this NPRM we propose to amend our rules by adding new

Secs. 404.943 and 416.1443 to establish the authority to test having an

adjudication officer be the focal point for prehearing activities, as

described in the disability redesign plan.

For many years, our hearing offices nationwide have productively

utilized various forms of prehearing development. We have successfully

conducted tests of a standard prehearing development process. Our

recent experience with many of the elements of the adjudication

officer's responsibilities and duties has given us some information

about the effect the establishment of an adjudication officer position

would have on the administrative review process. However, as we believe

that further information will be helpful, we will begin testing the

adjudication officer position as soon as possible after publication of

a final rule in order to [[Page 30484]] assess whether the position

meets the goals of the disability redesign process and whether it will

have an effect on administrative and program expenditures. We propose

that the adjudication officer's functions will be performed when a

hearing before an ALJ is requested. We will be closely managing the

tests of the adjudication officer position to ensure that the

procedures are consistently and effectively applied at all locations.

In accordance with the goals and directives of the National

Performance Review I and II and our disability redesign plan, the

nature of the adjudication officer must be flexible to make the best

use of available program resources consistent with providing world

class service to our customers. Accordingly, the rule as proposed for

testing permits the adjudication officer to be a qualified employee of

the SSA or a State agency that makes disability determinations for us.

The adjudication officer may be located in field offices or program

service centers, in State agencies that make disability determinations

for us, in our Office of Hearings and Appeals, or in our Regional

Office of Program and Integrity Reviews.

Adjudication Officer Qualifications

The adjudication officer will be expected to bring relevant

experience to the position, with additional training provided as may be

essential to complete the preparation of the individual to assume the

full range of duties. The adjudication officer must be qualified to

communicate effectively with the public (including claimant

representatives), in informal conferences and in writing. The

adjudication officer must, of necessity, be able to manage a

substantial caseload, must be able to review independently the claim

file information and determine the need for additional evidence, and

then be able to evaluate that evidence under the applicable provisions

of the Social Security Act, our regulations and rulings. In addition,

where appropriate, the adjudication officer must be able to write a

comprehensive, factually correct and legally sound decision that can be

readily understood by the public.

Evaluation of Implementation of Prehearing Procedures and Decisions by

Adjudication Officers

This NPRM proposes to establish the authority to test

implementation of prehearing procedures involving the adjudication

officer. We plan to test the procedures in multiple sites to provide a

means of determining the effect of the procedures in an operational

environment. Each test will involve a representative mix of geographic

areas and caseloads. Before we commence each test we will publish a

notice in the Federal Register designating the test site and duration

of the test. The notice will also describe when the test will be

conducted in combination with one or more of the tests we are

conducting pursuant to the final rule ``Testing Modifications to the

Disability Determination Procedures.'' We will evaluate test outcomes

against the objectives of the disability redesign:

Is the process user friendly?

Does the process maintain a high level of payment quality?

Does the process take less time?

Is the process efficient?

Does the process result in satisfying work for employees?

One of the most important measures is the effect of the procedures

on overall disability allowance rates. The adjudication officer's

functions are not designed to change the overall allowance rates. In

order to determine whether the prehearing procedures result in

processing improvements consistent with expected outcomes, the

Commissioner of Social Security will review evaluation results on a

quarterly basis. If there is evidence that overall allowance rates

increase or decrease unacceptably, the Commissioner will cease use of,

or make appropriate adjustments to the prehearing procedures consistent

with this regulatory authority.

SSA published a final rule, ``Testing Modifications to the

Disability Determination Procedures,'' at 60 FR 20023 on April 24, 1995

which provided authority for us to test several elements of the

disability redesign plan. In the preamble to that final rule, we

indicated that we plan to test the adjudication officer prehearing

procedures, as well as other aspects of the disability redesign which

do not require regulatory changes, in combination with one or more of

the four models described in that final rule at some test sites. This

continues to be our intention. Such tests will provide us with a body

of information about each individual part of the redesign, as well as

whether the combined effect of the redesign meets our goals of making

the disability process user friendly, more timely and more accurate and

efficient. It will also provide us with information about program

expenditures in connection with the overall redesign.

Regulatory Procedures

Executive Order No. 12866

We have consulted with the Office of Management and Budget (OMB)

and determined that this proposed rule meets the criteria for a

significant regulatory action under Executive Order (E.O.) 12866. Thus

it was subject to OMB review. This rule does not adversely affect

State, local or tribal governments. The administrative costs of the

tests will be covered within budgeted resources. No program costs are

expected. We have not, therefore, prepared a cost/benefit analysis

under E.O. 12866.

Regulatory Flexibility Act

We certify that this regulation will not have a significant

economic impact on a substantial number of small entities because it

affects only individuals. Therefore, a regulatory flexibility analysis

as provided in Pub. L. 96-354, the Regulatory Flexibility Act, is not

required.

Paperwork Reduction Act

This regulation imposes no new reporting or record keeping

requirements requiring OMB clearance.

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

Security-Disability Insurance; 93.807, Supplemental Security Income)

List of Subjects

20 CFR Part 404

Administrative practice and procedure, Death benefits, Disability

benefits, Old-Age, Survivors and Disability Insurance, Reporting and

record keeping requirements, Social Security.

20 CFR Part 416

Administrative practice and procedure, Aged, Blind, Disability

benefits, Public assistance programs, Supplemental Security Income

(SSI), Reporting and record keeping requirements.

Dated: May 4, 1995.

Shirley S. Chater,

Commissioner of Social Security.

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 proposed to be amended as set forth below.

[[Page 30485]]

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), 205(a), (b), and (d)-(h), 221(d), 225

and 702(a)(5) of the Social Security Act; (42 U.S.C. 401(j), 405

(a), (b), and (d)-(h), 421(d), 425 and 902(a)(5); 31 U.S.C. 3720A.

2. New Sec. 404.943 is added under the undesignated center heading

``Hearing Before an Administrative Law Judge'' to read as follows:

Sec. 404.943 Responsibilities of the adjudication officer.

(a)(1) General. Under the procedures set out in this section we

will test modifications to the prehearing procedures we follow when you

file a request for a hearing before an administrative law judge in

connection with a claim for benefits based on disability where the

question of whether you are under a disability as defined in

Sec. 404.1505 is at issue. These modifications will enable us to test

the effect of having an adjudication officer be your primary point of

contact after you file a hearing request and before you have a hearing

with an administrative law judge. The tests may be conducted alone, or

in combination with the tests of the modifications to the disability

determination procedures which we conduct under Sec. 404.906. The

adjudication officer, working with you and/or your representative,

identifies issues in dispute, develops evidence, conducts informal

conferences, and conducts other prehearing proceedings as may be

necessary. The adjudication officer has the authority to make a

decision wholly favorable to you if the evidence so warrants. If the

adjudication officer does not make a decision on your claim, your

hearing request will be assigned to an administrative law judge for

further proceedings.

(2) Procedures for cases included in the tests. Prior to commencing

tests of the adjudication officer position in selected site(s), we will

publish a notice in the Federal Register. The notice will describe

where the specific test site(s) will be and the duration of the

test(s). We will also state whether the tests of the adjudication

officer position in each site will be conducted alone, or in

combination with the test of the modifications to the disability

determination process which we conduct under Sec. 404.906. The

individuals who participate in the test(s) will be assigned randomly to

a test group in each site where the tests are conducted.

(b)(1) Prehearing procedures conducted by an Adjudication Officer.

When you file a request for a hearing before an administrative law

judge in connection with a claim for benefits based on disability where

the question of whether you are under a disability as defined in

Sec. 404.1505 is at issue, the adjudication officer will conduct an

interview with you. The interview may take place in person, by

telephone, or by videoconference, as the adjudication officer

determines is appropriate under the circumstances of your case. If you

file a request for an extension of time to request a hearing in

accordance with Sec. 404.933(c), the adjudication officer may develop

information on, and may decide in wholly favorable decisions that you

had good cause for missing the deadline for requesting a hearing. To

determine whether you had good cause for missing the deadline, the

adjudication officer will use the standards contained in Sec. 404.911.

(2) Representation. The adjudication officer will provide you with

information regarding the hearing process, including your right to

representation. As may be appropriate, the adjudication officer will

provide you with referral sources for representation, and give you

copies of necessary documents to facilitate the appointment of a

representative. If you have a representative, the adjudication officer

will conduct an informal conference with the representative, in person

or by telephone, to identify the issues in dispute and prepare written

agreements regarding those issues which are not in dispute and those

issues proposed for the hearing. If you decide to proceed without

representation, the AO may hold an informal conference with you. If you

obtain representation subsequent to the AO's conclusion that your case

is ready for a hearing, your case will be returned to the AO who will

conduct an informal conference with you and your representative.

(3) Evidence. You, or your representative, may submit, or may be

asked to obtain and submit, additional evidence to the adjudication

officer. As the adjudication officer determines is appropriate under

the circumstances of your case, the adjudication officer may refer the

claim for further medical or vocational evidence.

(4) Referral for a hearing. The adjudication officer will refer the

prepared claim to the administrative law judge for a hearing when the

development of evidence is complete, and you or your representative

agree that a hearing is ready to be held. At this point, the

administrative law judge conducts all further hearing proceedings,

including scheduling and holding a hearing and issuing a decision or

dismissal of your request for a hearing, as may be appropriate.

(c)(1) Wholly favorable decisions issued by an adjudication

officer. (i) If, after a hearing is requested but before it is held,

the adjudication officer decides that the evidence in your case

warrants a decision which is wholly favorable to you, the adjudication

officer may issue such a decision. For purposes of the tests authorized

under this section, the adjudication officer's decision shall be

considered to be a decision as defined in Sec. 404.901.

(ii) If the adjudication officer issues a decision under this

section, it will be in writing and will give the findings of fact and

the reasons for the decision. The adjudication officer will evaluate

the issues relevant to determining whether or not you are disabled in

accordance with the provisions of the Social Security Act, the rules in

this part and part 422 of this chapter and applicable Social Security

Rulings, which are available from the Superintendent of Documents,

United States Government Printing Office, Washington, DC 20402. For

cases in which the adjudication officer issues a decision, he or she

may determine your residual functional capacity in the same manner that

an administrative law judge is authorized to do so in Sec. 404.1546.

The adjudication officer may also evaluate the severity of your mental

impairments in the same manner that an administrative law judge is

authorized to do so under Sec. 404.1520a. The adjudication officer's

decision will be based on the evidence which is included in the record

and, subject to paragraph (c)(2) of this section, will complete the

actions that will be taken on your request for hearing. A copy of the

decision will be mailed to all parties at their last known address. We

will tell you in the notice that the administrative law judge will not

hold a hearing unless a party to the hearing requests that the hearing

proceed. A request to proceed with the hearing must be made in writing

within 30 days after the date the notice of the decision of the

adjudication officer is mailed.

(2) Effect of a decision by an adjudication officer. A decision by

an adjudication officer which is wholly favorable to you under this

section, and notification thereof, completes the administrative action

on your request for hearing and is binding on all parties to the

hearing and not subject to further review, unless-- [[Page 30486]]

(i) You or another party requests that the hearing continue, as

provided in paragraph (c)(1) of this section;

(ii) The Appeals Council decides to review the decision on its own

initiative under the authority provided in Sec. 404.969;

(iii) The decision is revised under the procedures explained in

Secs. 404.987 through 404.989; or

(iv) In a case remanded by a Federal court, the Appeals Council

assumes jurisdiction under the procedures in Sec. 404.984.

(3) Fee for a representative's services. The adjudication officer

may authorize a fee for your representative's services if the

adjudication officer makes a decision on your claim that is wholly

favorable to you, and you are represented. The actions of, and any fee

authorization made by, the adjudication officer with respect to

representation will be made in accordance with the provisions of

subpart R of this part.

(d) Who may be an adjudication officer. The adjudication officer

described in this section may be an employee of the Social Security

Administration or a State agency that makes disability determinations

for us.

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

DISABLED

Subpart N--[Amended]

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

read as follows:

Authority: Sec. 702(a)(5), 1631, and 1633 of the Social Security

Act; (42 U.S.C. 902(a)(5), 1383, and 1383b.)

2. New Sec. 416.1443 is added under the undesignated center heading

``Hearing Before an Administrative Law Judge'' to read as follows:

Sec. 416.1443 Responsibilities of the adjudication officer.

(a)(1) General. Under the procedures set out in this section we

will test modifications to the prehearing procedures we follow when you

file a request for a hearing before an administrative law judge in

connection with a claim for benefits based on disability where the

question of whether you are under a disability as defined in

Secs. 416.905 and 416.906 is at issue. These modifications will enable

us to test the effect of having an adjudication officer be your primary

point of contact after you file a hearing request and before you have a

hearing with an administrative law judge. The tests may be conducted

alone, or in combination with the tests of the modifications to the

disability determination procedures which we conduct under

Sec. 416.1406. The adjudication officer, working with you and/or your

representative, identifies issues in dispute, develops evidence,

conducts informal conferences, and conducts other prehearing

proceedings as may be necessary. The adjudication officer has the

authority to make a decision wholly favorable to you if the evidence so

warrants. If the adjudication officer does not make a decision on your

claim, your hearing request will be assigned to an administrative law

judge for further proceedings.