Administrative Review Process, Prehearing Proceedings and Decisions by Attorney Advisors

Federal RegisterJun 30, 1995

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

RIN 0960-AE10

Administrative Review Process, Prehearing Proceedings and

Decisions by Attorney Advisors

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: We are adding new rules which modify, on a temporary basis,

the prehearing procedures we follow in claims for Social Security or

Supplemental Security Income (SSI) benefits based on disability. Under

the final rules, attorney advisors in our Office of Hearings and

Appeals (OHA) have the authority to conduct certain prehearing

proceedings, and where the documentary record developed as a result of

these proceedings warrants, to issue decisions that are wholly

favorable to the parties to the hearing. Because requests for an

administrative law judge (ALJ) hearing have increased dramatically in

recent years, and cases pending in our hearing offices have reached

unprecedented levels, we have taken a number of actions designed to

help us decide these cases more efficiently. These final rules are an

important part of our efforts in this regard.

EFFECTIVE DATE: June 30, 1995.

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

Division of Regulations and Rulings, Social Security Administration,

6401 Social 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 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 conducted

after we have made a reconsideration determination is held 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.

Requests for an ALJ hearing also have increased dramatically. In FY

1994, our hearing offices had almost 540,000 hearing receipts and the

overwhelming majority of these were related to requests for a hearing

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. We expect hearing receipts

to increase to more than 590,000 in FY 1995.

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 and more than 540,000 at the

end of May 1995.

On September 19, 1994, the Commissioner of Social Security

published a Plan for a New Disability Claim Process in the Federal

for redesigning and fundamentally improving the overall disability

claim process. On a separate track from that longer term plan, we have

developed a number of short term initiatives to process cases more

efficiently and, therefore, to reduce the number of cases pending in

our hearing offices. As part of our short term disability process

improvements, we are issuing these final regulations that make a

temporary change in our administrative review procedures.

Under these final rules, attorney advisors will conduct certain

prehearing proceedings and, where appropriate, issue decisions that are

wholly favorable to the claimant and any other party to the hearing.

These procedures will remain in effect for a period of time not to

exceed two years from the effective date of these final rules unless

they are extended by the Commissioner of Social Security by publication

of a final rule in the Federal Register.

[[Page 34127]]

Regulatory Provisions

We have added new Secs. 404.942 and 416.1442 to our regulations to

authorize attorney advisors in OHA to conduct certain prehearing

proceedings and, where appropriate, make decisions based on the

documentary record that are wholly favorable to the parties to the

hearing. Our purpose in issuing these rules is to expedite the

processing of cases pending at OHA without infringing on a claimant's

right to a hearing before an ALJ.

The authority of an attorney advisor to conduct prehearing

proceedings and to make wholly favorable decisions under these final

rules is temporary, and applies only in the limited circumstances

described below. Also, the attorney advisor's conduct of certain

prehearing proceedings will not delay the scheduling of a hearing

before an ALJ. If the prehearing proceedings are not concluded before

the hearing date, the case will be sent to the ALJ unless a decision

wholly favorable to the claimant and all other parties is in process,

or the claimant and all other parties to the hearing agree in writing

to delay the hearing until the prehearing proceedings are completed.

Prehearing proceedings may be conducted by the attorney advisor

under this rule if new and material evidence is submitted; there is an

indication that additional evidence is available; there is a change in

the law or regulations; or there is an error in the file or some other

indication that a wholly favorable decision may be issued. A decision

by an attorney advisor will be mailed to all parties. The notice of

decision will state the basis for the decision and advise the parties

that an ALJ will dismiss the hearing request unless a request to

proceed with the hearing is made by a party within 30 days after the

date the notice of the decision is mailed.

We believe that these temporary procedures will enable us to manage

our pending hearing requests in a more timely manner. They also may

provide information that can help us better identify cases that can be

decided without a hearing before an ALJ and improve our ability to

narrow the issues that must be resolved before a decision can be made.

The attorney advisor's functions are not designed to change in any

significant way the overall rate at which we allow claims for benefits

when an individual requests a hearing before an ALJ. In order to assure

that no unacceptable change in the overall allowance rate occurs, the

Commissioner of Social Security will review management and quality

assurance information on an ongoing basis. If there is evidence that

the overall allowance rate increases or decreases unacceptably, the

Commissioner will curtail use of, or make appropriate adjustments to

the attorney advisor procedures, consistent with this regulatory

authority.

We find good cause for dispensing in this case with the 30-day

delay in the effective date of a substantive rule, provided for by 5

U.S.C. 553(d). As explained above, and in the notice of proposed

rulemaking (NPRM), the number of hearing requests pending at OHA has

reached unprecedented levels. In light of the record number of pending

hearing requests, the importance we place on ensuring that we

adjudicate claims timely and accurately, and the beneficial effect we

expect these final rules to have on our ability to provide better

service to claimants, we find that it is in the public interest to make

these final rules effective upon publication.

Public Comments

These regulatory provisions were published in the Federal Register

as an NPRM on April 14, 1995 (60 FR 19008). We provided interested

parties with a 30 day comment period. We received 82 letters

representing the views of over 125 individuals. Most of the comments we

received were from individuals employed either as attorney advisors or

ALJs in OHA. However, we also received comments from a variety of other

sources, including private citizens, claimant representatives, State

agencies which make disability determinations for us, and union

representatives. After carefully considering the comments received, we

have decided to adopt the proposed rule essentially without change.

In general, the comments either strongly supported or strongly

opposed adoption of the proposed rule. Only a few of the comments were

in any way equivocal, and even these can be properly categorized as

either basically supporting or opposing the proposed rule.

Almost all of the comments supporting adoption of the proposed rule

did so without recommending changes. While the comments which

recommended against adoption of the proposed rule more frequently

suggested changes, the changes suggested were generally so substantive

that they effectively constituted expressions of disagreement with the

concept of the rule as proposed, rather than proposals to change the

rule to make it function more effectively. Some of the comments we

received were outside the scope of the proposed rule, and therefore

have not been addressed. The substantive comments made by the

commenters and our responses are summarized below. Because some of the

comments were detailed, we had to condense, summarize or paraphrase

them. We have, however, tried to summarize the commenters views

accurately and to respond to all of the significant issues raise by the

commenters.

The comments from individuals employed as attorney advisors

unanimously supported adoption of the proposed rule; all but one of the

comments from individuals employed as ALJs recommended against adoption

of the proposed rule. Most of the remaining comments, including most of

those received from private citizens, claimant representatives, and

union representatives, supported adoption of the proposed rule.

The comments supporting the adoption of the proposed rule generally

did so based on the view that the contemplated changes would result in

quicker, more cost-effective service to the public. We agree with these

comments; our intent in these final rules is to enhance our ability to

decide cases more quickly during the period in which these rules will

be effective and, therefore, to improve the level of service we provide

to claimants.

The comments from individuals who supported adoption of the

proposed rule also stressed the serious detrimental effects the number

of pending claims has on both claimants and our hearing offices. These

comments also stressed that making fuller use of the experience and

expertise of the attorney advisors in OHA constitutes the most

effective way that SSA can promptly apply existing resources to process

the number of cases pending at OHA in the most expeditious manner. We

also agree with these comments.

A number of the commenters who supported adoption of the proposed

rule also indicated that the procedures described in the proposed rule

should be viewed as a logical and natural extension of the prehearing

conference program OHA has already successfully conducted under

existing regulatory authority. Many of these comments stressed the

importance of the procedures contained in these final rules in

preserving the time and skill of the ALJs for use in cases that cannot

be decided without a hearing. These comments further noted that the

proposed rule would provide the ALJ with the benefit of a better

developed record in cases in which an ALJ held a hearing. We concur in

these comments.

[[Page 34128]]

The comments received from individuals who opposed adoption of the

proposed rule also reflected a number of common themes and views. These

comments recommended against adoption of the proposed rule on five

principal bases: (1) that the proposed rule violated the Administrative

Procedure Act (APA) or the Act; (2) that it denied claimants their

constitutional rights of due process and equal protection; (3) that it

was impractical; (4) that it is unnecessary because of the availability

of preferable alternatives; and (5) that it would result in decisions

which inappropriately found that claimants were disabled and therefore

would result in increased program costs. Our responses to these

comments, and to the other comments we received regarding the substance

of the rule, are set out in detail below.

Comment: A number of comments received, primarily from individuals

employed as ALJs, expressed the view that, for a number of reasons, the

proposed rule violated either the APA or the Act and improperly

delegated decision making authority to individuals who are not

appointed as ALJs. Another commenter expressed the view, however, that

the proposed rule was fully consistent with the Act and the APA.

Response: We do not agree that these final rules violate either the

APA or the Act. The Act directs the Commissioner of Social Security to

make decisions as to the rights of any individuals applying for

disability benefits. The Act also provides that the Commissioner shall

provide an individual who makes a showing in writing that his or her

rights may be prejudiced by any decision that the Commissioner has

rendered, with an opportunity for a ``hearing'' regarding his or her

right to benefits. Currently, by regulation, the Commissioner has

provided that such a ``hearing'' shall be before an ALJ who shall issue

the hearing decision.

These final rules augment this process by authorizing attorney

advisors to make fully favorable decisions in claims for disability

benefits when there is no need for a hearing. No provision of the Act

requires the Commissioner to utilize an ALJ when issuing a decision,

nor does the APA require an agency to hold an ALJ hearing when there

are no material facts in dispute, and the agency has decided that it is

appropriate to issue a fully favorable decision with respect to a

specific claim. The Act only requires that the Commissioner provide an

individual with the opportunity for a hearing when the individual makes

the requisite showing that his or her rights may be prejudiced by any

decision that the Commissioner has rendered. That process is not being

changed; the final rules explicitly preserve the individual's right to

a hearing which will be conducted by an ALJ if the individual is

dissatisfied with the decision made by the attorney advisor. Under

SSA's regulations as amended by these final rules, either an attorney

advisor or an ALJ may issue a fully favorable decision without a

hearing in a claim for disability benefits, but if a hearing is to be

held, the ALJ will conduct that hearing and issue a decision. This

process is fully in accord with the Act and in no way violates the APA.

Comment: One commenter stated the view that the proposed rule

violated the settlement agreement between the parties in the 1979 case,

Bono, et al. v. United States of America Social Security

Administration, et al., Civil Action No. 77-0819-CV-W-4 (W.D. Mo.),

regarding the rotational assignment of cases to ALJs. Another

commenter, however, expressed the opinion that the proposed rule did

not violate the Bono settlement agreement.

Response: We disagree that these final rules violate the settlement

agreement in Bono. Without conceding that any particular aspect of the

Bono settlement is applicable here, under the Bono settlement

agreement, OHA reserved the right to modify or change the agreed-upon

policies after appropriate consultation with the ALJs. The Bono

agreement also specified that the Agency could consider the number of

cases pending before an ALJ in determining the extent to which the

rotational assignment of cases to an ALJ immediately upon their receipt

in the hearing office was practicable. Under our existing procedures,

cases remain on the master docket of the hearing office until several

prehearing procedures have been completed. The prehearing procedures we

are adopting in these final rules represent further modifications to

our procedures undertaken and proposed with appropriate consultation

with our ALJs.

Comment: Two of the commenters thought the proposed rule would

violate a claimant's right to due process and equal protection under

the Constitution. However, several other commenters stated that the

proposed rule protected a claimant's right to due process under the

Constitution.

Response: We do not agree that these rules violate a claimant's

right to due process or equal protection under the Constitution in any

way. These final rules do not impair or interfere with a claimant's

right to a hearing before an ALJ. Rather, the claimant's right to a

hearing conducted by an ALJ is explicitly preserved if the individual

is dissatisfied with the decision made by an attorney advisor. The

preservation of the claimant's right to an ALJ hearing fully comports

with due process and equal protection under the Constitution.

Comment: Some of the commenters stated that the proposed rule was

impractical and would not work because the effect of the rule would be

to divert needed resources away from ALJs.

Response: Our intent is to identify those cases meeting the

statutory definition of disability as early in the administrative

review process as possible. By promptly identifying these cases--

preferably before a hearing is held--SSA can avoid the costs, in terms

of staff resources and time, of scheduling and holding unnecessary

hearings.

Some of the procedures we are implementing under these rules are

based on prehearing conference and screening procedures we fully tested

based on existing regulatory authority during a pilot study completed

in 1993. The results of that study, which collected data from more than

40,000 cases, showed that hearing offices could significantly reduce

average case processing time by more effectively identifying and

processing claims in which a hearing decision could be issued ``on-the-

record'' under our current regulations (i.e., without holding an oral

hearing).

The data analysis also showed that, in addition to avoiding

unnecessary hearings, the procedures tested did not increase the time

needed to process claims that required a hearing. The results of the

pilot study also demonstrated that the prehearing conference and

screening procedures did not lower hearing office productivity.

Further, we found that the considerable savings realized in ALJ and

staff time by avoiding unnecessary hearings more than offset the time

spent in prehearing analysis and development.

Although under these final rules some attorney advisors may draft

fewer hearing decisions in cases in which a hearing before an ALJ is

held, and provide less professional assistance to ALJs, there are a

number of initiatives already underway that are designed to provide

hearing offices with additional case preparation and decision writing

support during the course of this initiative. In addition, not all

attorney advisors assigned to hearing offices will be authorized to

conduct prehearing proceedings and issue fully favorable decisions in

appropriate cases under the

[[Page 34129]]

authority contained in these final rules. Many attorney advisors, as

well as our paralegal specialists, will be available to provide ALJs

with research and decision drafting support.

Comment: As an alternative to authorizing attorney advisors to

conduct certain prehearing proceedings and issue wholly favorable

decisions in appropriate cases, several commenters suggested that the

proposed rule should be modified to allow OHA attorney advisors to

conduct prehearing proceedings under the direction of an ALJ and make

recommended decisions that the ALJ could approve or disapprove. One

commenter suggested several specific modifications to the text of the

proposed rule to address this issue.

Response: We have not adopted this comment. Under current

procedures conducted under existing regulatory authority, ALJs may

authorize attorney advisors to review cases pending before the ALJ

before a hearing is scheduled in order to conduct certain prehearing

proceedings and recommend wholly favorable decisions or the scheduling

of a hearing, as appropriate. Our experience under the 1993 pilot study

was that ALJs agreed with and accepted the recommendations made by

attorney advisors with very few exceptions. The procedures we are

implementing under these final rules will allow us to process cases

more efficiently by authorizing the attorney advisors, during the

period in which these rules will be effective, to issue decisions which

are wholly favorable to the claimant and any other party to the hearing

in appropriate cases, obviating the need for duplicative review by an

ALJ. These final rules take full advantage of the experience and

expertise of the attorney advisor and will allow ALJs to better focus

upon the complex cases that require their skills.

Comment: One commenter suggested that the proposed rule be modified

to authorize other individuals, such as adjudicators who make

disability determinations for us in the State agencies at the initial

and reconsideration steps of the administrative review process, to make

revised determinations on the same basis as these final rules authorize

attorney advisors to make decisions.

Response: We have not adopted this comment. The provisions we are

establishing in these final rules complement, but do not supersede, the

provisions of Secs. 404.941 and 416.1441 of our regulations. These

provisions allow us to refer a case after a hearing is requested, but

before it is held, to the component that issued the determination being

reviewed (including a State agency) so that it may conduct a prehearing

case review to determine if a wholly or partially favorable revised

determination should be made. The conditions for conducting prehearing

case reviews are essentially identical to those under which attorney

advisors may conduct prehearing proceedings under these final rules. We

would not expect, however, that a case would be subject to both

prehearing proceedings by an attorney advisor and a prehearing case

review by the component that issued the determination being reviewed.

The establishment of temporary procedures authorizing attorney advisors

to conduct such proceedings does not limit our authority to refer cases

for a prehearing case review under Secs. 404.941 and 416.1441.

Furthermore, on June 9, 1995, we published an NPRM proposing to

establish the authority to test implementation of the position of an

adjudication officer who, under the disability redesign plan, would be

the focal point for all prehearing activities when a request for

hearing before an ALJ is filed (60 FR 30482). Under the tests proposed

in the NPRM, the adjudication officer would be authorized to take a

number of actions, including issuing a wholly favorable decision when

warranted by the evidence in the record. The rule as proposed for

testing permits the adjudication officer to be a qualified employee of

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

Consequently, we believe that the more appropriate course of action

would be to address the concerns raised by this commenter in the

context of our adjudication officer rulemaking initiative.

Comment: A few commenters suggested other alternatives to the

proposed rule to address the increasing number of claims pending at

OHA, including providing ALJs with more support, hiring more ALJs and

increasing the role of the claimant's representative in the

administrative review process.

Response: As discussed above in our response to the comment

concerning the practicality of the proposed rule, we are devoting

appropriate, additional resources to provide staff support to the ALJs

in connection with our short term initiatives to reduce the time

required to process the cases awaiting a hearing.

We have no current plans to increase the number of ALJs we employ

in any substantial way. However, we expect to hire enough additional

ALJs so that the number on duty should, with allowances for expected

attrition, increase slightly during this fiscal year (from 1,045 at the

end of October 1994 to about 1,050 at the end of FY 95).

One of our short term initiatives to process cases awaiting an ALJ

hearing more efficiently is to encourage claimants and representatives

to submit proposed decisional language. Under that initiative, OHA

currently advises claimants and representatives early in the hearing

process of the opportunity to submit arguments in the form of a

recommended decision.

Comment: A few commenters expressed the view that the proposed rule

should be modified to provide adequate quality assurance review

procedures, as an alternative to or in addition to review by the

Appeals Council, as provided for in the proposed rule.

Response: No change in these final rules or in other regulations is

required to allow us to subject the decisions made by attorney advisors

to quality assurance review procedures, in addition to the reviews the

final rules authorize the Appeals Council to conduct on its own motion.

We are establishing an intensive quality assurance review program that

will supplement own motion reviews by the Appeals Council in assuring

the accuracy of the decisions made by the attorney advisors.

Comment: A number of commenters expressed concern that the proposed

rule would encourage adjudicators to allow claims, and therefore would

increase the allowance rate for cases decided at the hearing step of

the administrative review process and increase program costs.

Response: The attorney advisor's functions are not designed to

increase (or decrease) in a significant way the overall rates at which

we allow claims for benefits when an individual requests a hearing

before an ALJ. Based on our experience with the 1993 pilot study, we

anticipate no significant change in overall allowance rates in claims

in which a hearing has been requested. However, we will monitor the

impact of these final rules on overall allowance rates and decisional

accuracy and will curtail use of, or make appropriate adjustments to

the attorney advisor procedures consistent with this regulatory

authority, if we determine that there is evidence of any unacceptable

change in the rates at which we allow claims for benefits when an

individual requests a hearing before an ALJ.

Other Comments

Other comments involved suggestions for changing the rule in

specific ways.

[[Page 34130]]

Comment: One commenter recommended that SSA should adopt procedures

to ensure that the ALJ does not know if review by an attorney advisor

has occurred.

Response: We have not adopted this comment. We do not believe such

procedures could be devised or that they are required. ALJs are

typically aware that another adjudicator has not made a wholly

favorable determination or decision in a specific case. It has not been

our experience that such knowledge compromises the ability of ALJs to

hold hearings and decide cases in a fair, impartial manner. We believe

that the attorney advisor's performance of the functions authorized by

these final rules does not materially affect the ability of our ALJs to

hold hearings and make decisions fairly and impartially.

Comment: One commenter suggested that part 422 of 20 C.F.R. may

need to be amended to give the attorney advisors decisionmaking

authority.

Response: We disagree with this comment. We do not believe that

giving attorney advisors the temporary decisionmaking authority

provided in new Secs. 404.942 and 416.1442 of our regulations requires

amendment of part 422. The applicable regulations in part 422,

Secs. 422.130 and 422.203, generally describe either our overall claims

adjudication process (Sec. 422.130) or procedures followed by OHA

(Sec. 422.203). However, Sec. 422.201 explicitly refers to the

regulations in Secs. 404.929 through 404.983 of this chapter and

Secs. 416.1429 through 416.1483 of this chapter for ``detailed

provisions related to'' the hearings process. The regulations in part

422, therefore, are intended only to describe in general terms the

overall procedures followed by OHA. They are not intended to describe

each provision contained in the applicable regulations of subpart J of

part 404 of this chapter or subpart N of part 416 of this chapter.

Consequently, we do not believe that we need to amend any provision of

part 422 of this chapter to refer specifically to the provisions of

these final rules.

Comment: One commenter stated that the proposed rule should be

clarified to establish that attorney advisors would be able to make

fully favorable decisions in claims involving drug addiction and

alcoholism where the claimant agrees that drug addiction and/or

alcoholism is a contributing factor material to the finding of

disability.

Response: The final rules give attorney advisors authority to make

decisions which are wholly favorable to the claimant and all other

parties in cases in which a claimant has filed a claim for benefits

based on disability under title II and/or title XVI. For the purposes

of new Secs. 404.942 and 416.1442, a ``wholly favorable'' decision is

intended to have the same definition as it is under the current

regulations that authorize ALJs to make such a decision, Secs. 404.948

and 416.1448. A wholly favorable decision is a decision that makes a

finding in favor of the claimant and all the parties on every issue.

Criteria for determining if any particular decision is wholly favorable

would not be appropriately included in Secs. 404.942 and 416.1442.

However, we expect that this issue will be addressed in the

instructions we plan to issue to implement these final rules.

Comment: Two commenters suggested extending the provisions of the

proposed rule to include other categories of claims, including claims

arising under the Old Age and Survivors program under title II of the

Act and claims adjudicated by OHA on behalf of the Health Care

Financing Administration under Parts A and B of the Medicare program

under title XVIII of the Act.

Response: The overwhelming majority of cases pending at OHA involve

claims for benefits based on disability. For the purposes of this short

term initiative, we decided that it would be best to focus these final

rules on increasing the efficiency with which we can process the

largest group of pending cases. Cases involving other types of claims,

however, will benefit from the general increase in efficiency at OHA

resulting from implementation of these rules.

Comment: One comment expressed the view that Secs. 404.957 and

416.1457 of subparts J and N of parts 404 and 416 of our regulations

should be amended to specify that a claimant's agreement to postpone a

hearing will constitute good cause for a failure to appear at a

scheduled hearing.

Response: This comment assumes that a case will have been assigned

to an ALJ before an attorney advisor conducts prehearing proceedings

under the authority contained in these rules. As discussed above,

however, that is not our intent. The prehearing proceedings conducted

under these provisions will not delay the scheduling of a hearing

because those proceedings will be conducted before the case would be

scheduled for a hearing, considering the number of cases awaiting

hearings and our general practice of scheduling hearings according to

the request for hearing date. The provisions concerning claimant

agreement to delay the hearing would apply if the prehearing

proceedings can not be completed before the case is ready to be

scheduled for a hearing.

Comment: Two commenters also recommended that Secs. 404.957 and

416.1457 of our regulations be revised to clarify that an ALJ may

dismiss a request for hearing when an attorney advisor issues a wholly

favorable decision under Secs. 404.942 or 416.1442.

Response: An ALJ's authority to dismiss a request for hearing under

the circumstances set forth under Secs. 404.942 and 416.1442 is

sufficiently well established by the provisions of these final rules.

For many years, ALJs have exercised the authority to dismiss requests

for hearing when revised determinations are made under the prehearing

case review regulations found at Secs. 404.941 and 416.1441, even

though such authority is not expressly set forth in the provisions of

Secs. 404.957 and 416.1457. The same principles apply with respect to

the similar, but temporary, provisions being established in these final

rules.

Comment: One commenter suggested that the proposed rule should be

clarified to state whether the ALJ's dismissal of the request for

hearing is required or only permitted after the attorney advisor issues

a decision, and no party requests that the hearing continue.

Response: We have not adopted this comment. An ALJ is required to

dismiss a hearing request when the attorney advisor issues a wholly

favorable decision and no party makes a written request to proceed with

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

the attorney advisor is mailed. Under these rules, the attorney

advisor's notice of decision will advise the claimant that the ALJ

``will'' dismiss the request for hearing under those circumstances.

Comment: Several commenters also suggested that the proposed rule

should be amended to provide that issuance of a wholly favorable

decision by an attorney advisor would result in immediate dismissal of

the request for a hearing.

Response: We have not adopted this comment. For the purposes of

this temporary procedure, we believe it is more appropriate to make

dismissal of the request for hearing contingent on the failure of any

party to request to proceed with the hearing within 30 days after the

date the notice of the attorney advisor's decision is mailed. That

requirement clearly establishes that our intent in these temporary

provisions is to expedite the processing of cases without infringing on

a claimant's right to a hearing before an ALJ.

Comment: Several comments stated that the criteria in the proposed

rule under which attorney advisors in OHA

[[Page 34131]]

could conduct prehearing proceedings were too broad. One commenter

suggested that the criteria in the proposed rule under which attorney

advisors could conduct prehearing proceedings if new and material

evidence was submitted was vague and should be clarified.

Response: We have not adopted these comments. Restricting the

criteria under which an attorney advisor can conduct prehearing

proceedings would, in our judgment, unnecessarily preclude the most

prompt action possible on some cases. Moreover, in our experience,

there has been no confusion over nor excessive use of the regulations

found at Secs. 404.941 and 416.1441, which allow prehearing case

reviews under conditions substantially the same as those set forth in

new Secs. 404.942 and 416.1442.

Comment: One commenter suggested changes to the proposed rules to

clarify in several places in the regulations that attorney advisors may

only issue fully favorable decisions.

Response: We believe the regulations clearly limit the attorney

advisors to making only wholly favorable decisions, and do not require

further clarification, as suggested by the commenter.

Comment: Two commenters suggested that the proposed rule be revised

to clarify whether the attorney advisor can request vocational

evidence, in addition to medical evidence, as part of the prehearing

proceedings.

Response: The final rules state that the attorney advisor may

``[r]equest additional evidence that may be relevant to the claim,

including medical evidence. * * *'' That language is sufficiently broad

to allow the attorney advisor to request vocational evidence in

appropriate cases. It should be noted, however, that the attorney

advisor's ability to request additional evidence must be exercised in

accordance with the purpose of Secs. 404.942 and 416.1442 to facilitate

the identification and prompt processing of cases in which a wholly

favorable decision may be made without the need for an ALJ hearing.

Regulatory Procedures

Executive Order No. 12866

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

and determined that this rule does not meet the criteria for a

significant regulatory action under Executive Order 12866. Thus, the

rule is not subject to OMB review.

Regulatory Flexibility Act

We certify that these regulations will not have a significant

economic impact on a substantial number of small entities because they

affect only individuals. Therefore, a regulatory flexibility analysis

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

required.

Paperwork Reduction Act

These regulations impose no new reporting or recordkeeping

requirements requiring OMB clearance.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social

Security-Disability Insurance; 96.006, 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

recordkeeping requirements, Social Security.

20 CFR Part 416

Administrative practice and procedure, Aged, Blind, Disability

benefits, Public assistance programs, Supplemental Security Income

(SSI), Reporting and recordkeeping requirements.

Dated: June 26, 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 amended 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), 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. 404.942 is added under the undesignated center heading

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

Sec. 404.942 Prehearing proceedings and decisions by attorney

advisors.

(a) General. After a hearing is requested but before it is held, an

attorney advisor in our Office of Hearings and Appeals may conduct

prehearing proceedings as set out in paragraph (c) of this section. If

upon the completion of these proceedings, a decision that is wholly

favorable to you and all other parties may be made, an attorney

advisor, instead of an administrative law judge, may issue such a

decision. The conduct of the prehearing proceedings by the attorney

advisor will not delay the scheduling of a hearing. If the prehearing

proceedings are not completed before the date of the hearing, the case

will be sent to the administrative law judge unless a wholly favorable

decision is in process or you and all other parties to the hearing

agree in writing to delay the hearing until the proceedings are

completed.

(b) When prehearing proceedings may be conducted by an attorney

advisor. An attorney advisor may conduct prehearing proceedings if you

have filed a claim for benefits based on disability and--

(1) New and material evidence is submitted;

(2) There is an indication that additional evidence is available;

(3) There is a change in the law or regulations; or

(4) There is an error in the file or some other indication that a

wholly favorable decision may be issued.

an attorney advisor. As part of the prehearing proceedings, the

attorney advisor, in addition to reviewing the existing record, may--

(1) Request additional evidence that may be relevant to the claim,

including medical evidence; and

(2) If necessary to clarify the record for the purpose of

determining if a wholly favorable decision is warranted, schedule a

conference with the parties.

(d) Notice of a decision by an attorney advisor. If the attorney

advisor issues a wholly favorable decision under this section, we shall

mail a written notice of the decision to all parties at their last

known address. We shall state the basis for the decision and advise all

parties that an administrative law judge will dismiss the hearing

request unless a party 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 attorney advisor is mailed.

(e) Effect of actions under this section. If under this section, an

administrative law judge dismisses a request for a hearing, the

dismissal is binding in accordance with Sec. 404.959 unless it is

vacated by an administrative law judge or the Appeals Council pursuant

to Sec. 404.960. A decision made by an attorney advisor under this

section is binding unless--

[[Page 34132]]

(1) A party files a request to proceed with the hearing pursuant to

paragraph (d) of this section and an administrative law judge makes a

decision;

(2) The Appeals Council reviews the decision on its own motion

pursuant to Sec. 404.969 as explained in paragraph (f)(3) of this

section; or

(3) The decision of the attorney advisor is revised under the

procedures explained in Sec. 404.987.

(f) Ancillary provisions. For the purposes of the procedures

authorized by this section, the regulations of Part 404 shall apply

to--

(1) Authorize an attorney advisor to exercise the functions

performed by an administrative law judge under Secs. 404.1520a and

404.1546;

(2) Define the term ``decision'' to include a decision made by an

attorney advisor, as well as the decisions identified in Sec. 404.901;

and

(3) Make the decision of an attorney advisor subject to review by

the Appeals Council under Sec. 404.969 if an administrative law judge

dismisses the request for a hearing following issuance of the decision,

and the Appeals Council decides to review the decision of the attorney

advisor anytime within 60 days after the date of the dismissal.

(g) Sunset provision. The provisions of this section will no longer

be effective on June 30, 1997 unless they are extended by the

Commissioner of Social Security by publication of a final rule in the

Federal Register.

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. 416.1442 is added under the undesignated center heading

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

Sec. 416.1442 Prehearing proceedings and decisions by attorney