Federal Old-Age, Survivors, and Disability Insurance and Supplemental Security Income for the Aged, Blind, and Disabled; Benefit Reforms for Individuals Disabled Based on Drug Addiction or Alcoholism

Federal RegisterFeb 10, 1995

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Social Security Administration

20 CFR Parts 404 and 416

[Regulations Nos. 4 and 16]

RIN 0960-AD96

Federal Old-Age, Survivors, and Disability Insurance and

Supplemental Security Income for the Aged, Blind, and Disabled; Benefit

Reforms for Individuals Disabled Based on Drug Addiction or Alcoholism

AGENCY: Social Security Administration, HHS.

ACTION: Interim final rules with request for comments.

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SUMMARY: The Social Security Independence and Program Improvements Act

of 1994 contains provisions affecting the payment of benefits under

titles II and XVI of the Social Security Act (the Act) to individuals

whose drug addiction or alcoholism is a contributing factor material to

the determination of disability. These interim final rules implement

certain provisions related to limitations on benefit payments and the

nonpayment and termination of benefits to these individuals.

DATES: These interim final rules are effective on March 1, 1995. To be

sure that your comments are considered, we must receive them no later

than April 11, 1995.

ADDRESSES: Comments should be submitted in writing to the Commissioner

of Social Security, Department of Health and Human Services, P.O. Box

1585, Baltimore, MD 21235, sent by telefax to (410) 966-2830, or

delivered to the Division of Regulations and Rulings, Social Security

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

Baltimore, MD 21235, between 8:00 a.m. and 4:30 p.m. on regular

business days. Comments received may be inspected during these hours by

making arrangements with the contact person shown below.

FOR FURTHER INFORMATION CONTACT: Regarding this Federal Register

document--Richard M. Bresnick, Legal Assistant, Division of Regulations

and Rulings, Social Security Administration, 6401 Security Boulevard,

Baltimore, MD 21235, (410) 965-1758; regarding eligibility or filing

for benefits--our national toll-free number, 1-800-772-1213.

SUPPLEMENTARY INFORMATION:

History

In 1972, Public Law (Pub. L.) 92-603 established the supplemental

security income (SSI) program under title XVI of the Act. Aside from

disability for children under age 18 and blindness, the Act provided

the same definition of disability for individuals under title XVI as it

does under title II. However, the SSI program included special

provisions for disabled persons medically determined to be drug addicts

or alcoholics. As implemented, those provisions applied to individuals

whose drug addiction or alcoholism (DAA) was a contributing factor

material to the determination that they were disabled (disabled based

on DAA). The SSI provisions stated that an individual determined to be

disabled based on DAA could receive SSI benefits only if he or she

underwent appropriate treatment for the substance addiction when it was

available and received payments through a representative payee.

The 1972 legislation also required the Secretary of Health and

Human Services (the Secretary) to provide for the monitoring and

testing of these individuals to assure compliance with treatment and to

determine how the imposition of the treatment requirement contributes

to the achievement of program purposes. The Secretary also was required

to submit an annual report to Congress on the treatment and compliance

of affected SSI recipients.

Prior to the passage of the Social Security Independence and

Program Improvements Act of 1994, Pub. L. 103-296, enacted on August

15, 1994, there were no special program rules for Social Security

beneficiaries whose medically determined drug addiction or alcoholism

was a contributing factor material to the determination of disability.

New Legislation

The amendments made to the Act by section 201 of Pub. L. 103-296

introduced several new requirements and limitations for SSI recipients

disabled based on DAA and applied similar requirements and limitations

to Social Security beneficiaries disabled based on DAA, as well. These

requirements and limitations are, in part, intended to discourage

individuals from using Social Security or SSI benefits to support an

addiction, as well as encourage the treatment and rehabilitation of

individuals disabled based on DAA.

Section 201(a) of Pub. L. 103-296 contains the title II provisions

related to DAA and section 201(b) contains the corresponding SSI

provisions. The new requirements and changes under both programs for

individuals disabled based on DAA include:

Paying benefits to a representative payee;

A preference for selecting certain types of organizational

payees, inclusion of certain State and local government agencies as

qualified organizations, making permanent the provision authorizing

certain qualified organizations to collect a fee from beneficiaries for

whom they serve as representative payees, and increasing the upper

limit of the fee that organizational payees can charge persons disabled

based on DAA;

Requiring both Social Security and SSI recipients who are

disabled based on DAA to undergo appropriate substance abuse treatment,

if available;

Suspending benefits for months in which there is a failure

to comply with appropriate, available treatment and requiring that

individuals must demonstrate compliance with that treatment for a

specified period of time before payments can resume;

Terminating benefits after 12 consecutive months of

suspension for noncompliance (the individual may reapply and receive

disability benefits based on DAA for the remainder of the 36-month

limit described below);

Monitoring and testing of individuals to assure

compliance;

Establishing at least one referral and monitoring agency

(RMA) in every State to identify appropriate treatment placements, to

refer individuals disabled based on DAA to treatment and to monitor

compliance with such treatment;

Paying past-due benefits in installments, with a limited

exception for individuals with outstanding debts related to housing who

are at a high risk of homelessness;

A 36-month limit on the payment of benefits beginning with

the March 1995 payment month, with some differences between the title

II and SSI programs as to how the months are counted (months of

suspension will not be counted in the 36 months for either program);

A ``sunset date'' of September 2004 for the 36-month limit

on the payment of benefits;

Continued Social Security benefit payments to auxiliaries

after a disabled wage earner's benefits are suspended for failure to

comply with treatment requirements or when entitlement is terminated

after the 36 months, as long as the wage earner continues to be

disabled; [[Page 8141]]

Continuation of beneficiary status for purposes of

Medicare and Medicaid coverage during periods of suspense for

noncompliance and after eligibility or entitlement is terminated after

36 months of benefits are paid, as long as the individual remains

disabled.

Many of these provisions are effective for benefits payable for

months beginning March 1, 1995. Implementing regulations for certain

statutory provisions must be issued by February 11, 1995, 180 days

after enactment, and are included in these interim final rules. For

those statutory provisions not requiring final regulations by February

1995, principally those concerning representative payment, we will

publish a separate notice of proposed rulemaking (NPRM) in the Federal

These interim final regulations affect all disabled individuals

whose drug addiction or alcoholism is a contributing factor material to

the determination of disability, including those who were found

eligible for title II or SSI benefits before March 1, 1995. By March 1,

1995, the Social Security Administration (SSA) will have sent notices

to these individuals of the changes in the Act which affect them, as

required by section 201 of Pub. L. 103-296. At the same time, SSA also

will have sent notices to the representative payees of these

individuals who have them.

Congressional Direction to Consult With Experts

Section 201 of Pub. L. 103-296 directed the Secretary to consult

with drug and alcohol treatment professionals in formulating

regulations defining appropriate treatment for individuals subject to

the new provisions and establishing guidelines for the review and

evaluation of compliance and progress. On August 24-25, 1994, SSA

convened a meeting in Hunt Valley, Maryland of substance abuse

treatment professionals from across the nation to gain their individual

views on devising the new and revised regulations. During this meeting,

a wide range of substance abuse-related topics was discussed, but the

focus was on the legislative requirements to treat and monitor this

disabled population. In addition, SSA has written directly to numerous

professional organizations, individual treatment professionals, public

advocacy organizations, RMAs, and others with knowledge of substance

abuse-related issues seeking their views on treatment and compliance

questions and issues to gain balanced input on general contemporary

treatment philosophies.

On October 17, 1994, SSA published in the Federal Register a Notice

of Intent with Request for Comments (59 FR 52380) to solicit public

comments about the legislative requirements imposed by Pub. L. 103-296

and the regulations SSA is required to promulgate. The comment period

closed on November 16, 1994.

The comments we have received from all of these varied sources have

proved to be invaluable in revising the rules relating to individuals

under a disability when drug addiction or alcoholism is a contributing

factor material to the determination of disability.

What the Experts and Other Public Commenters Told Us

We solicited the views of experts in the field of substance abuse

treatment, as required by Pub. L. 103-296. We received valuable input

from treatment professionals and administrators at the August 24-25

meeting and subsequently received written comments from many of the

attendees. While we were interested in receiving the views of the

experts and other members of the public on all issues related to the

DAA provisions, we sought specific input from the discussions and the

Notice of Intent published October 17, 1994, on the following issues:

The definition of ``appropriate'' treatment for DAA;

The definition of when treatment is ``available'';

How to define and evaluate ``progress'' in treatment;

How to evaluate ``compliance'' with treatment;

The frequency with which RMAs should monitor an

individual's compliance with his/her treatment plan;

The definition of ``good cause'' for an individual's

failure to comply with the treatment requirements; and

The costs and benefits to be realized from the provisions.

In response to the Notice of Intent, we received comments from 56

individuals and groups. Commenters from State and local governments

ranged from State RMAs to Social Service Agencies, Medicaid Agencies,

and county government offices. Two national associations of directors

of State governmental entities also provided comments. In addition,

several treatment facilities, legal services organizations, and

individual attorneys commented on the Notice of Intent.

We have carefully considered all of the comments in developing

these interim final regulations.

Appropriate Treatment

Most commenters defined appropriate substance abuse treatment as a

continuum of services to individuals with alcohol and other drug

problems. Many commenters believed that appropriate treatment is that

which serves the individual's needs in the least restrictive setting

consistent with an individualized treatment plan. A significant number

of commenters expressed the view that appropriate treatment can be

defined only on an individualized basis by treatment professionals

since there is no one modality that will work for every client disabled

based on DAA. Accordingly, various commenters advised SSA to refrain

from promulgating specific regulatory guidelines. Rather, they

suggested that the determination of ``appropriate'' treatment should be

within the purview of treatment professionals, circumscribed by very

general guidelines provided by SSA. Many commenters stated that client

participation in 12-step programs such as Alcoholics Anonymous is not,

in and of itself, appropriate treatment. While such programs may be

part of an overall treatment plan, because of their nature, they are

not treatment.

Available Treatment

Many commenters believed that the definition of ``availability'' of

substance abuse treatment should be a broadly inclusive definition to

assure that the client can in fact avail himself or herself of

appropriate treatment. Many commenters offered a list of factors that

should be used in determining availability of treatment: location of

the facility, availability and affordability of transportation, child

care, the client's general health, particular condition and

circumstances, language and cultural appropriateness.

There was a division among commenters as to whether one component

of ``available'' should be whether the treatment was without cost to

the client. Some commenters were of the view that treatment must be

without cost in order to be ``available.'' Others thought that the

client should be required to make some investment in the treatment

program by paying for some or all of the cost of treatment, depending

upon the type of treatment and the client's circumstances.

Evaluating Progress in Treatment

Generally, commenters posited that it would be difficult to

construct one definition or method by which to measure individuals'

progress in treatment. A large organization of State

[[Page 8142]] program administrators and others commented that no

universally accepted tool existed to measure individuals' progress in

substance abuse treatment. Due to the lack of a universally acceptable

tool to measure progress, other commenters were of the view that

treatment professionals should evaluate whether progress is made

according to very general rules set out by SSA. A few commenters

provided suggestions for some of the elements in the measurement of

progress, including abstinence from alcohol and drug use, a reduction

in the use of emergency medical services, an increase in educational or

vocational rehabilitation activities, and avoidance of criminal

activity.

Evaluating Compliance With Treatment

The commenters favored general rather than specific rules governing

compliance with the treatment requirements. Several commenters were of

the view that compliance means that an individual follows his or her

individual treatment plan. Accordingly, the treatment professional is

in the best position to evaluate compliance. One legal services

organization was concerned that SSA retain the ultimate responsibility

for determining compliance. One aspect of compliance is the issue of

requiring alcohol and drug testing. A few commenters recommended that

SSA mandate drug tests for beneficiaries in treatment. Several

commenters, including one of the large national organizations of State

administrators, advised against mandatory drug testing. In their view,

the need for and frequency of drug testing should be determined by the

treatment professional in accordance with an individualized treatment

plan. Concern was expressed about the cost of mandatory drug testing

and inaccuracies inherent in drug testing results.

Good Cause for Failure to Comply With Treatment

Many commenters supported an expansive list of factors that would

be considered ``good cause'' for noncompliance with the treatment

requirements, such as medical problems, lack of transportation, or

personal or family tragedies. Some commenters thought that the

treatment provider was in the best position to evaluate if the client

had ``good cause'' for noncompliance. A minority of commenters

supported a very restrictive definition because of their concern that

``good cause'' factors could be manipulated by individuals in

treatment.

Costs and Benefits

Few commenters provided information on the potential costs and

benefits of the provisions. Commenters provided a range of estimated

costs for drug testing expenses.

Other Comments

Many commenters expressed concerns regarding a number of

operational issues which are not the subject of these regulations.

Although these concerns are not regulatory issues, they have been

considered carefully in the development of our operating procedures.

Explanation of Revisions

These interim final regulations amend Secs. 404.315, 404.316,

404.321, 404.332, 404.335, 404.337, 404.350, 404.352, 404.402, 404.902,

416.202, 416.213, 416.262, 416.265, 416.535, 416.542, 416.558, 416.601,

416.610, 416.935, 416.936, 416.937, 416.938, 416.939, 416.1123,

416.1326, 416.1331, 416.1335, 416.1402 and 416.1725 and create new

Secs. 404.470, 404.480, 404.1535, 404.1536, 404.1537, 404.1538,

404.1539, 404.1540, 404.1541, 416.544, 416.940 and 416.941 to reflect

the statutory changes.

Section 404.315 is revised to add a new paragraph explaining the

prohibition against reentitlement to disability benefits based on DAA

after receiving 36 months of disability benefits on the basis of that

impairment.

Sections 404.316 and 404.321 have been amended to include an

explanation of the 36-month benefit limit and the termination of

benefits for 12 consecutive months of noncompliance in cases in which

drug addiction or alcoholism is a contributing factor material to the

determination of disability.

Section 404.332 is revised to state that, if the insured person is

disabled based on DAA and benefits terminate because of noncompliance

with treatment or because of the 36-month benefit limit, benefits to

the spouse will continue, provided the insured person remains disabled.

Section 404.335 provides that, if benefits to a widow(er) who is

disabled based on DAA are terminated after 36 months of benefits, that

person cannot become entitled again to widow(er)'s benefits if drug

addiction or alcoholism is a contributing factor material to the later

determination of disability.

Section 404.337 explains that, if the widow(er)'s entitlement to

benefits is based on DAA, benefits will terminate after 12 consecutive

months of suspension for noncompliance with treatment or, unless

otherwise disabled without regard to drug addiction or alcoholism,

after having received 36 months of payment.

Section 404.350 is revised to state that, if the entitlement of a

disabled child age 18 or over whose disability was based on DAA

terminates because of the 36-month benefit limit, the child may not be

entitled again to benefits based on a disability if drug addiction or

alcoholism is a contributing factor material to the later determination

of disability.

Section 404.352 states that, if the disability of a disabled child

age 18 or over is based on DAA and his or her benefits have been

suspended for a period of 12 consecutive months for failure to comply

with treatment, those benefits will terminate with the month following

the 12-month period of suspension. Likewise, if, after receiving 36

months of benefits based on DAA, the child would not otherwise be

disabled without regard to drug addiction or alcoholism, benefits based

on disability will be terminated with the month following the 36th

month of payment. If the disabled child is receiving benefits on the

record of a wage earner whose disability was based on DAA and benefits

to the wage earner end because of noncompliance with treatment or 36

months of benefits have been paid, benefits to the child will continue,

provided the insured person would have remained entitled to benefits

but for the operation of this provision.

Section 404.402 is revised to include nonpayments because of drug

addiction or alcoholism in the list of deductions, reductions, and

adjustment events which are considered before computing any applicable

reduction for the family maximum.

Sections 404.470 and 416.1725 explain the nonpayment ramifications

for beneficiaries disabled based on DAA who fail to comply with the

rules regarding available treatment for drug addiction or alcoholism.

Benefits will be suspended beginning with the first month after we

notify the individual of a determination of noncompliance with the

treatment requirements. Benefits will be terminated after 12

consecutive months of suspension for noncompliance.

Sections 404.480 and 416.544 explain that past-due benefits must be

paid in installments. Accrued unpaid benefits must be paid in

installments so that the total monthly payment including the

installment generally does not exceed two times the monthly benefit

amount. These sections also explain the exception to the limitation if

the [[Page 8143]] beneficiary has unpaid housing debts which put him or

her at high risk of homelessness. We consider an individual to be at

high risk of homelessness if continued nonpayment of housing expenses

is likely to result in the individual losing a place to live. We also

consider an individual who is already homeless to be among those at

high risk of homelessness.

Section 404.902 is revised to expand the list of administrative

actions that are initial determinations to include determinations about

drug addiction or alcoholism.

Sections 404.1535 and 416.935 explain the process by which a

determination is made that drug addiction or alcoholism is a

contributing factor material to the determination of disability.

Sections 404.1536 and 416.936 explain the treatment requirements

and the consequences of noncompliance with these requirements for

individuals disabled based on DAA. For consistency between programs,

especially for individuals who receive concurrent title II and SSI

benefits, we extend to title II beneficiaries the current SSI policy

that individuals referred for treatment generally are not expected to

pay for the treatment.

Sections 404.1537 and 416.937 explain what we mean by appropriate

treatment for these individuals and give examples of appropriate

treatment modalities.

Sections 404.1538 and 416.938 explain what we mean by approved

institutions or facilities for providing the appropriate treatment.

Sections 404.1539 and 416.939 describe the factors we will consider

in determining the availability of treatment.

Sections 404.1540 and 416.940 explain how we intend to assess

compliance with prescribed treatment, including measuring progress with

the treatment.

Based upon our contact with treatment professionals and

administrators, we deemed it best that our regulations not attempt to

provide exhaustive guidelines for determining what constitutes

appropriate treatment and definitive methods of measuring progress.

These particular concepts are inherent parts of the treatment program,

which must be developed by the treatment professional for each

individual. Thus, in these regulatory sections, we have provided broad

rather than narrow guidelines in these areas.

Sections 404.1541 and 416.941 delineate the functions and

responsibilities of the RMAs. The RMAs' duties include making treatment

referrals and monitoring compliance with prescribed treatment. The

contractual agreements with the RMAs will set forth their functions and

responsibilities in much more detail.

In carrying out their functions and responsibilities, the RMAs will

work closely with State alcohol and other drug abuse agencies, which

often are the focal point for the delivery of publicly funded services

to SSI beneficiaries.

Section 416.202 has been revised to reflect the new provision that

an individual disabled based on DAA is not eligible for SSI benefits if

he or she has previously received 36 months of Social Security benefits

when treatment was available or 36 months of SSI benefits based on DAA.

Section 416.213 is revised to state that an individual disabled

based on DAA who refuses or does not follow available and appropriate

treatment for drug addiction or alcoholism will not receive SSI

benefits until he or she has demonstrated compliance with treatment

requirements for the period specified in the revised rules in

Sec. 416.1326. The section also explains in detail the eligibility

requirement that an individual cannot receive SSI benefits on the basis

of disability based on DAA if he or she has already received 36 months

of SSI or Social Security benefits on the same basis. The section

contains references to other SSI and Social Security regulatory

sections which explain how the 36 months are calculated for each of

those programs.

Sections 416.262 and 416.265 have been revised to explain that

individuals who are disabled based on DAA may be eligible for SSI

payments, including special SSI cash benefits, and special SSI

eligibility status for a total of 36 months.

Section 416.535 is revised to include cross-references to the SSI

regulatory sections which state the rules on the installment payment of

past-due benefits for individuals who are disabled based on DAA.

Section 416.542 is revised to explain that, if an underpaid

recipient disabled based on DAA is alive, the amount of any

underpayments due the recipient will be paid to his or her

representative payee. No underpayments may be paid to the recipient.

Section 416.558 is revised by adding to paragraph (a) a reference

to the new Sec. 416.544, and by adding a new paragraph (c) to explain

that, whenever a decision is made about the amount of any benefits due

for a past period that should be paid in installments, the written

notice which is sent to the individual and the individual's

representative payee will also explain the amount of the installment

payment and when an increased initial installment payment may be made.

The last sentence of paragraph (b)(1) of Sec. 416.601 and paragraph

(a)(3) of Sec. 416.610 are revised to update the language referring to

an individual ``medically determined to be a drug addict or an

alcoholic.'' We now refer to individuals for whom ``drug addiction or

alcoholism is a contributing factor material to the determination of

disability.'' This does not change the meaning in any way; it merely

makes the terminology consistent with that used throughout these

regulations.

Paragraph (d) of Sec. 416.1123, which discusses how we count

retroactive monthly Social Security benefits as unearned income, is

revised to address the counting of such benefits when they are paid in

installments. New installment requirements for past-due benefits for

individuals disabled based on DAA are explained in Sec. 416.544.

Because of those requirements, SSA generally will be precluded from

paying at one time all past-due benefits remaining after reimbursing a

State for interim assistance (when appropriate). Paragraph (d)(2)

explains that the total of retroactive Social Security benefits paid in

installments to individuals disabled based on DAA which is countable

income after the rules in paragraph (d)(1) are applied will be counted

as unearned income only in the first month they are paid.

In enacting section 201 of Pub. L. 103-296, Congress evidenced no

intent to change the manner in which past-due Social Security benefits

are counted for SSI purposes, but instead intended to reduce the

likelihood that the past-due benefits would be used by the beneficiary

in a way that would support continuing substance abuse. By counting

retroactive benefits paid in installments as if received in a lump sum

in the first month of payment, the SSI recipient will be at risk of

losing SSI (and possibly Medicaid) eligibility for at most 1 month

because of the receipt of those benefits, as is now the case. The

alternative method of counting these past-due benefits--month by month

as the installments are received--would result, in many cases, in the

loss of eligibility for both SSI and Medicaid for the entire period

during which the installments are paid. A loss of eligibility for

Medicaid could severely limit the accessibility of treatment for drug

addiction or alcoholism and thus undermine the intent of the

legislation. Accordingly, these regulations make no change in the way

past-due benefits are counted for SSI purposes; past-due benefits will

continue to be counted as [[Page 8144]] if received in a lump sum even

when received in installments.

Section 416.1326 has been revised to explain that SSI benefits for

individuals disabled based on DAA will be suspended for noncompliance

with treatment requirements effective the first month after

notification of noncompliance. Suspension of SSI benefits will continue

until the recipient demonstrates compliance with treatment for

specified periods; a minimum of 2 months, 3 months, and 6 months,

respectively, for the first, second, and third and additional

determinations of noncompliance. Suspension of benefits for 12

consecutive months, for any reason, will result in termination of

benefits.

Section 416.1331, which addresses termination of disability

benefits, has been revised. New paragraph (c) discusses termination

after 12 months of suspension for noncompliance. New paragraph (d)

describes the limit of 36 months on benefits and that this limit is no

longer effective for benefits for months beginning after September

2004. New paragraph (e) explains what months are counted in determining

the 36 months of benefits.

Section 416.1335, which discusses termination due to continuous

suspension for ineligibility, has been amended by changing the language

to explain that SSI benefits will be terminated after 12 months of

suspension, even when some or all of the suspension months are due to

suspense for noncompliance, as defined in Sec. 416.1326.

Paragraph (d) of Sec. 416.1402 is revised to update the language

referring to an individual ``determined to be a drug addict or an

alcoholic.'' We now refer to an individual for whom ``drug addiction or

alcoholism is a contributing factor material to the determination of

disability.'' This does not change the meaning in any way; it merely

makes the terminology consistent with that in the new legislation and

used throughout these regulations.

Regulatory Procedures

The Department of Health and Human Services, even when not required

by statute, as a matter of policy generally follows the Administrative

Procedure Act (APA) NPRM and public comment procedures specified in 5

U.S.C. 553 in the development of its regulations. The APA provides

exceptions to its notice and comment procedures when an agency finds

that there is good cause for dispensing with such procedures on the

basis that they are impracticable, unnecessary, or contrary to the

public interest. In the case of these interim final rules, we have

determined that under 5 U.S.C. 553(b)(B), good cause exists for waiving

the NPRM procedures.

Pub. L. 103-296 was signed into law on August 15, 1994. Sections

201(a)(3)(E)(i) and 201(b)(3)(E)(i) of Pub. L. 103-296 require the

Secretary to issue regulations necessary to carry out those amendments

made by section 201 which are the subject of these interim final rules

by February 11, 1995. In addition, the legislation requires that the

Secretary consult with drug and alcohol treatment professionals in

developing certain aspects of these regulations with regard to defining

appropriate substance abuse treatment and establishing guidelines to

review and evaluate compliance with treatment and measures of progress.

Accordingly, to undertake the required consultation process and also

issue these rules as an NPRM would have delayed issuance of final rules

until well past the statutory deadline of February 11, 1995. In light

of these constraints, we solicited public comments on the regulations

needed to implement certain aspects of this new legislation by

publishing a Notice of Intent with Request for Comments on October 17,

1994 (59 FR 52380), and allowed adequate time to give the comments

received in response to that notice our full consideration.

In addition, publishing interim final regulations will permit the

timely and effective implementation of the new provisions for

recipients whose drug addiction or alcoholism is a contributing factor

material to the determination of disability. Such implementation may

allow some recipients to get into available treatment for their

addictions sooner. This will benefit both the recipients and the public

at large.

In light of the Congressional mandate that we issue regulations

needed to carry out these statutory provisions no later than February

11, 1995, we believe that, under the APA, good cause exists for waiver

of the prior notice procedures since issuance of proposed rules would

be impracticable and contrary to the public interest. While we are

issuing these rules as interim final regulations, we are interested in

receiving public comments regarding the substance of these interim

rules.

Executive Order 12866

These interim final rules reflect and implement most of the

provisions of sections 201(a) and 201(b) of Pub. L. 103-296. The Office

of Management and Budget (OMB) has reviewed these interim final rules

and determined that they meet the criteria for a significant regulatory

action under E.O. 12866. Therefore, we prepared and submitted to OMB,

separately from the interim final rules, an assessment of the potential

costs and benefits of this regulatory action. This document also

contains an analysis of alternative policies we considered and chose

not to adopt. This assessment is available for review by members of the

public.

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 individuals' eligibility for program benefits under the Social

Security Act. Therefore, a regulatory flexibility analysis as provided

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

Paperwork Reduction Act

These interim final rules contain information collection

requirements in Secs. 404.480, 404.1540, 404.1541, 416.544, 416.940,

and 416.941. As required by the Paperwork Reduction Act of 1980, we

will submit a copy of these information collection requirements to OMB

for its review. Organizations and individuals desiring to submit

comments on these information collection requirements should direct

them to the Office of Information and Regulatory Affairs, OMB, New

Executive Office Building, Room 3208, Washington, D.C. 20503,

Attention: Desk Officer for HHS. The public reporting burden for the

collections of information in Secs. 404.480 and 416.544 is estimated to

average 4 minutes per response. The burden for Secs. 404.1540,

404.1541, 416.940, and 416.941 is estimated to average 5 minutes per

response for one form for each beneficiary annually, and 10 minutes per

response for another form for each beneficiary monthly. These include

the time it will take to read the instructions, gather the necessary

facts, and provide the information. For Secs. 404.480 and 416.544 we

expect approximately 2,400 beneficiaries or recipients to provide

responses and estimate the total annual burden to be 160 hours. For

Secs. 404.1540, 404.1541, 416.940, and 416.941 we expect responses from

treatment providers through approximately 52 RMAs on behalf of

approximately 184,000 beneficiaries or recipients and estimate the

total annual burden to be 395,600 hours. If you have any comments or

suggestions on these estimates, write to the Social Security

Administration, Attention: Reports Clearance Officer, 1-A-21 Operations

Building, 6401 [[Page 8145]] Security Boulevard, Baltimore, MD 21235.

(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, Blind, 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: December 22, 1994.

Shirley S. Chater,

Commissioner of Social Security.

Approved: February 2, 1995.

Donna E. Shalala,

Secretary of Health and Human Services.

For the reasons set forth in the preamble, part 404, subparts D, E,

J, and P 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- )

1. The authority citation for subpart D of part 404 is revised to

read as follows:

Authority: Secs. 202, 203(a) and (b), 205(a), 216, 223, 225,

228(a) through (e), and 1102 of the Social Security Act; 42 U.S.C.

402, 403 (a) and (b), 405(a), 416, 423, 425, 428(a) through (e), and

1302.

2. Section 404.315 is amended by redesignating the introductory

test as paragraph (a) and adding a heading to it, redesignating former

paragraphs (a) through (d) as paragraphs (a)(1) through (a)(4), and

adding a new paragraph (b) to read as follows:

Sec. 404.315 Who is entitled to disability benefits.

(a) General. * * *

* * * * *

(b) Prohibition against reentitlement to disability benefits if

drug addiction or alcoholism is a contributing factor material to the

determination of disability. You cannot be entitled to a period of

disability payments if drug addiction or alcoholism is a contributing

factor material to the determination of disability and your earlier

entitlement to disability benefits on the same basis terminated after

you received benefits for 36 months during which treatment was

available.

3. Section 404.316 is amended by adding paragraphs (e) and (f) to

read as follows:

Sec. 404.316 When entitlement to disability benefits begins and ends.

* * * * *

(e) If drug addiction or alcoholism is a contributing factor

material to the determination of disability as described in

Sec. 404.1535, you may receive disability benefits on that basis for no

more than 36 months regardless of the number of entitlement periods you

may have. Not included in these 36 months are months in which treatment

for your drug addiction or alcoholism is not available, months before

March 1995, and months for which your benefit payments were suspended

for any reason. Benefits to your dependents may continue after the 36

months of benefits if, but for the operation of this paragraph, you

would otherwise be entitled to benefits based on disability. The 36-

month limit is no longer effective for benefits for months beginning

after September 2004.

(f) If drug addiction or alcoholism is a contributing factor

material to the determination of disability as described in

Sec. 404.1535 and your disability benefits are suspended for 12

consecutive months because of your failure to comply with treatment

requirements, your disability benefits will be terminated effective the

first month after such 12-month period. Benefits to your dependents may

continue after the 12-month period if, but for the operation of this

paragraph, you would otherwise be entitled to benefits based on

disability.

4. Section 404.321 is amended by adding paragraph (d) to read as

follows:

Sec. 404.321 When a period of disability begins and ends.

* * * * *

(d) When drug addiction or alcoholism is a contributing factor

material to the determination of disability. (1) Your entitlement to

receive disability benefit payments ends the month following the month

in which, regardless of the number of entitlement periods you may have

had based on disability where drug addiction or alcoholism is a

contributing factor material to the determination of disability (as

described in Sec. 404.1535)--

(i) You have received a total of 36 months of disability benefits.

Not included in these 36 months are months in which treatment for your

drug addiction or alcoholism is not available, months before March

1995, and months for which your benefits were suspended for any reason;

(ii) Your benefits have been suspended for 12 consecutive months

because of your failure to comply with treatment requirements.

(2) For purposes other than payment of your disability benefits,

your period of disability continues until the termination month as

explained in Sec. 404.325.

5. Section 404.332 is amended by adding a sentence to the end of

paragraph (b)(5) to read as follows:

Sec. 404.332 When wife's and husband's benefits begin and end.

* * * * *

(b) * * *

(5) * * * Exception: Your benefits will continue if the insured

person was entitled to disability benefits based on a finding that drug

addiction or alcoholism was a contributing factor material to the

determination of his or her disability (as described in Sec. 404.1535),

the insured person's benefits ended after 36 months of benefits (see

Sec. 404.316(e)) or 12 consecutive months of suspension for

noncompliance with treatment (see Sec. 404.316(f)), and but for the

operation of these provisions, the insured person would remain entitled

to benefits based on disability.

* * * * *

6. Section 404.335 is amended by removing the word ``and'' at the

end of paragraph (c)(2), adding the word ``and'' after the semicolon at

the end of paragraph (c)(3), and adding a new paragraph (c)(4) to read

as follows:

Sec. 404.335 Who is entitled to widow's or widower's benefits.

* * * * *

(4) You have not previously received 36 months of payments based on

disability when drug addiction or alcoholism was a contributing factor

material to the determination of disability (as described in

Sec. 404.1535), regardless of the number of entitlement periods you may

have had, or your current application for widow(er)'s benefits is not

based on a disability where drug addiction or alcoholism is a

contributing factor material to the determination of disability.

* * * * *

7. Section 404.337 is amended by adding a new sentence at the end

of paragraph (b)(2) to read as follows: [[Page 8146]]

Sec. 404.337 When widow's and widower's benefits begin and end.

* * * * *

(2) * * * If your widow's or widower's benefit is based on a

finding that drug addiction or alcoholism is a contributing factor

material to the determination of disability as described in

Sec. 404.1535, your entitlement to benefits will terminate the month

after the 12th consecutive month of suspension for noncompliance with

treatment or after 36 months of benefits on that basis when treatment

is available regardless of the number of entitlement periods you may

have had, unless you are otherwise disabled without regard to drug

addiction or alcoholism.

* * * * *

8. Section 404.350 is amended by redesignating the introductory

text as paragraph (a) and adding a heading to it, redesignating former

paragraphs (a) through (e) as paragraphs (a)(1) through (a)(5), and

adding a new paragraph (b) to read as follows:

Sec. 404.350 Who is entitled to child's benefits.

(a) General. * * *

* * * * *

(b) Entitlement preclusion for certain disabled children. If you

are a disabled child as referred to in paragraph (a)(5) of this

section, and your disability was based on a finding that drug addiction

or alcoholism was a contributing factor material to the determination

of disability (as described in Sec. 404.1535) and your benefits ended

after your receipt of 36 months of benefits, you will not be entitled

to benefits based on disability for any month following such 36 months

regardless of the number of entitlement periods you have had if, in

such following months, drug addiction or alcoholism is a contributing

factor material to the later determination of disability (as described

in Sec. 404.1535).

9. Section 404.352 is amended by adding a new sentence to the end

of paragraph (b)(3), redesignating paragraphs (c) and (d) as paragraphs

(d) and (e), and adding a new paragraph (c) to read as follows:

Sec. 404.352 When child's benefits begin and end.

* * * * *

(b) * * *

(3) * * * Exception: Your benefits will continue if the insured

person was entitled to disability benefits based on a finding that drug

addiction or alcoholism was a contributing factor material to the

determination of his or her disability (as described in Sec. 404.1535),

the insured person's benefits ended after 36 months of payment (see

Sec. 404.316(e)) or 12 consecutive months of suspension for

noncompliance with treatment (see Sec. 404.316(f)), and the insured

person remains disabled.

over and your disability is based on a finding that drug addiction or

alcoholism was a contributing factor material to the determination of

disability (as described in Sec. 404.1535), your benefits also will

terminate under the following conditions:

(1) If your benefits have been suspended for a period of 12

consecutive months for failure to comply with treatment, your benefits

will terminate with the month following the 12 months unless you are

otherwise disabled without regard to drug addiction or alcoholism (see

Sec. 404.470(c)).

(2) If you have received 36 months of benefits on that basis when

treatment is available, regardless of the number of entitlement periods

you may have had, your benefits will terminate with the month following

such 36-month payment period unless you are otherwise disabled without

regard to drug addiction or alcoholism.

* * * * *

10. The authority citation for subpart E of part 404 is revised to

read as follows:

Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c),

222(b), 223(e), 224, 225, 227, and 1102 of the Social Security Act;

42 U.S.C. 402, 403, 404(a) and (e), 405(a) and (c), 422(b), 423(e),

424, 425, 427, and 1302.

11. Section 404.402 is amended by revising paragraph (a),

introductory text, to read as follows:

Sec. 404.402 Interrelationship of deductions, reductions, adjustments,

and nonpayment of benefits.

(a) Deductions, Reductions, Adjustment. Deductions because of

earnings or work (see Secs. 404.415 and 404.417); failure to have a

child ``in her care'' (see Sec. 404.421); refusal to accept

rehabilitation services (see Sec. 404.422); as a penalty for failure to

timely report noncovered work outside the United States, failure by a

woman to report that she no longer has a child ``in her care,'' or

failure to timely report earnings (see Secs. 404.451 and 404.453);

because of unpaid maritime taxes (see Sec. 404.457); or nonpayments

because of drug addiction and alcoholism to individuals other than an

insured individual who are entitled to benefits on the insured

individual's earnings record are made:

* * * * *

12. A new Sec. 404.470 is added to read as follows:

Sec. 404.470 Nonpayment of disability benefits due to noncompliance

with rules regarding treatment for drug addiction or alcoholism.

(a) Suspension of monthly benefits. (1) For an individual entitled

to benefits based on a disability (Sec. 404.1505) and for whom drug

addiction or alcoholism is a contributing factor material to the

determination of disability (as described in Sec. 404.1535), monthly

benefits will be suspended beginning with the first month after we

notify the individual in writing that he or she has been determined not

to be in compliance with the treatment requirements for such

individuals (Sec. 404.1536).

(2) This rule applies to all individuals entitled to disability

benefits (Sec. 404.315), widow(er)'s benefits (Sec. 404.335), and

child's benefits based on a disability (Sec. 404.350) effective with

benefits paid in months beginning on or after March 1, 1995.

(3) Benefit payments to any other person who is entitled on the

basis of a disabled wage earner's entitlement to disability benefits

are payable as though the disabled wage earner were receiving benefits.

(b) Resumption of monthly benefits. The payment of benefits may be

resumed only after an individual demonstrates and maintains compliance

with appropriate treatment requirements for:

(1) 2 consecutive months for the first determination of

noncompliance;

(2) 3 consecutive months for the second determination of

noncompliance; and

(3) 6 consecutive months for the third and all subsequent

determinations of noncompliance.

due to noncompliance with the treatment requirements for 12 consecutive

months will result in termination of benefits effective with the first

month following the 12th month of suspension of benefits.

(2) Benefit payments to any other person who is entitled on the

basis of a disabled wage earner's entitlement to disability benefits

are payable as though the disabled wage earner were receiving benefits.

13. A new Sec. 404.480 is added to read as follows:

Sec. 404.480 Paying benefits in installments: Drug addiction or

alcoholism.

(a) General. For disabled beneficiaries who receive benefit

payments through a representative payee because drug

[[Page 8147]] addiction or alcoholism is a contributing factor material

to the determination of disability (as described in Sec. 404.1535),

certain amounts due the beneficiary for a past period will be paid in

installments. The amounts subject to payment in installments include:

(1) benefits due but unpaid which accrued prior to the month

payment was effectuated;

(2) benefits due but unpaid which accrued during a period of

suspension for which the beneficiary was subsequently determined to

have been eligible; and

(3) any adjustment to benefits which results in an accrual of

unpaid benefits.

(b) Installment formula. Except as provided in paragraph (c) of

this section, the amount of the installment payment in any month is

limited so that the sum of (1) the amount due for a past period (and

payable under paragraph (a) of this section) paid in such month and (2)

the amount of any benefit due for the preceding month under such

entitlement which is payable in such month, does not exceed two times

the amount of the beneficiary's benefit payment for the preceding

month. In counting the amount of the beneficiary's benefit payment for

the previous month, no reductions or deductions under this title are

taken into account.

installment payment limitation in paragraph (b) of this section can be

granted for the first month in which a beneficiary accrues benefit

amounts subject to payment in installments if the beneficiary has

unpaid housing expenses which result in a high risk of homelessness for

the beneficiary. In that case, the benefit payment may be increased by

the amount of the unpaid housing expenses so long as that increase does

not exceed the amount of benefits which accrued during the most recent

period of nonpayment. We consider a person to be at risk of

homelessness if continued nonpayment of the outstanding housing

expenses is likely to result in the person losing his or her place to

live or if past nonpayment of housing expenses has resulted in the

person having no appropriate personal place to live. In determining

whether this exception applies, we will ask for evidence of outstanding

housing expenses that shows that the person is likely to lose or has

already lost his or her place to live. For purposes of this section,

homelessness is the state of not being under the control of any public

institution and having no appropriate personal place to live. Housing

expenses include charges for all items required to maintain shelter

(for example, mortgage payments, rent, heating fuel, and electricity).

(d) Payment through a representative payee. If the beneficiary does

not have a representative payee, payment of amounts subject to

installments cannot be made until a representative payee is selected.

(e) Underpaid beneficiary no longer entitled. In the case of a

beneficiary who is no longer currently entitled to monthly payments,

but to whom amounts defined in paragraph (a) are still owing, we will

treat such beneficiary's monthly benefit for the last month of

entitlement as the beneficiary's benefit for the preceding month and

continue to make installment payments of such benefits through a

representative payee.

(f) Beneficiary currently not receiving Social Security benefits

because of suspension for noncompliance with treatment. If a

beneficiary is currently not receiving benefits because his or her

benefits have been suspended for noncompliance with treatment (as

defined in Sec. 404.1536), the payment of amounts under paragraph (a)

will stop until the beneficiary has demonstrated compliance with

treatment as described in Sec. 404.470 and will again commence with the

first month the beneficiary begins to receive benefit payments.

(g) Underpaid beneficiary deceased. Upon the death of a

beneficiary, any remaining unpaid amounts as defined in paragraph (a)

will be treated as underpayments in accordance with Sec. 404.503(b).

14. The authority citation for subpart J of part 404 is revised to

read as follows:

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

221(d), 225, and 1102 of the Social Security Act; 31 U.S.C. 3720A;

42 U.S.C. 401(j), 405(a), (b), and (d) through (h), 421(d), 425, and

1302; sec. 5 of Pub. L. 97-455, 96 Stat. 2500; sec. 6 of Pub. L. 98-

460, 98 Stat. 1802.

15. Section 404.902 is amended by revising paragraph (o),

redesignating paragraphs (p) through (v) as paragraphs (q) through (w),

and adding a new paragraph (p) to read as follows:

Sec. 404.902 Administrative actions that are initial determinations.

* * * * *

(o) Whether the payment of your benefits will be made, on your

behalf, to a representative payee, unless you are under age 18, legally

incompetent, or you are disabled and drug addiction or alcoholism is a

contributing factor material to the determination of disability (as

described in Sec. 404.1535);

(p) Your drug addiction or alcoholism;

* * * * *

16. The authority citation for subpart P of part 404 is revised to

read as follows:

Authority: Secs. 202, 205(a), (b), and (d) through (h), 216(i),

221(a) and (i), 222(c), 223, 225, and 1102 of the Social Security

Act; 42 U.S.C. 402, 405 (a), (b), and (d) through (h), 416(i),

421(a) and (i), 422(c), 423, 425, and 1302.

17. A new Sec. 404.1535 is added to read as follows:

Sec. 404.1535 How we will determine whether your drug addiction or

alcoholism is a contributing factor material to the determination of

disability.

(a) General. If we find that you are disabled and have medical

evidence of your drug addiction or alcoholism, we must determine

whether your drug addiction or alcoholism is a contributing factor

material to the determination of disability.

(b) Process we will follow when we have medical evidence of your

drug addiction or alcoholism.

(1) The key factor we will examine in determining whether drug

addiction or alcoholism is a contributing factor material to the

determination of disability is whether we would still find you disabled

if you stopped using drugs or alcohol.

(2) In making this determination, we will evaluate which of your

current physical and mental limitations, upon which we based our

current disability determination, would remain if you stopped using

drugs or alcohol and then determine whether any or all of your

remaining limitations would be disabling.

(i) If we determine that your remaining limitations would not be

disabling, we will find that your drug addiction or alcoholism is a

contributing factor material to the determination of disability.

(ii) If we determine that your remaining limitations are disabling,

you are disabled independent of your drug addiction or alcoholism and

we will find that your drug addiction or alcoholism is not a

contributing factor material to the determination of disability.

18. A new Sec. 404.1536 is added to read as follows:

Sec. 404.1536 Treatment required for individuals whose drug addiction

or alcoholism is a contributing factor material to the determination of

disability.

(a) If we determine that you are disabled and drug addiction or

alcoholism is a contributing factor [[Page 8148]] material to the

determination of disability (as described in Sec. 404.1535), you must

avail yourself of appropriate treatment for your drug addiction or

alcoholism at an institution or facility approved by us when this

treatment is available and make progress in your treatment. Generally,

you are not expected to pay for this treatment. You will not be paid

benefits for any month after the month we have notified you in writing

that--

(1) You did not comply with the terms, conditions and requirements

of the treatment which has been made available to you; or

(2) You did not avail yourself of the treatment after you had been

notified that it is available to you.

(b) If your benefits are suspended for failure to comply with

treatment requirements, your benefits can be reinstated in accordance

with the rules in Sec. 404.470.

19. A new Sec. 404.1537 is added to read as follows:

Sec. 404.1537 What we mean by appropriate treatment.

By appropriate treatment, we mean treatment for drug addiction or

alcoholism that serves the needs of the individual in the least

restrictive setting possible consistent with your treatment plan. These

settings range from outpatient counseling services through a variety of

residential treatment settings including acute detoxification, short-

term intensive residential treatment, long-term therapeutic residential

treatment, and long-term recovery houses. Appropriate treatment is

determined with the involvement of a State licensed or certified

addiction professional on the basis of a detailed assessment of the

individual's presenting symptomatology, psychosocial profile, and other

relevant factors. This assessment may lead to a determination that more

than one treatment modality is appropriate for the individual. The

treatment will be provided or overseen by an approved institution or

facility. This treatment may include (but is not limited to)--

(a) Medical examination and medical management;

(b) Detoxification;

methadone);

(d) Psychiatric, psychological, psychosocial, vocational, or other

substance abuse counseling in a residential or outpatient treatment

setting; or

(e) Relapse prevention.

20. A new Sec. 404.1538 is added to read as follows:

Sec. 404.1538 What we mean by approved institutions or facilities.

Institutions or facilities that we may approve include--

(a) An institution or facility that furnishes medically recognized

treatment for drug addiction or alcoholism in conformity with

applicable Federal or State laws and regulations;

(b) An institution or facility used by or licensed by an

appropriate State agency which is authorized to refer persons for

treatment of drug addiction or alcoholism;

(d) Programs accredited by the Commission on Accreditation for

Rehabilitation Facilities (CARF) and/or the Joint Commission for the

Accreditation of Healthcare Organizations (JCAHO) for the treatment of

drug addiction or alcoholism;

(e) Medicare or Medicaid certified care providers; or

(f) Nationally recognized self-help drug addiction or alcoholism

recovery programs (e.g., Alcoholics Anonymous or Narcotics Anonymous)

when participation in these programs is specifically prescribed by a

treatment professional at an institution or facility described in

paragraphs (a) through (e) of this section as part of an individual's

treatment plan.

21. A new Sec. 404.1539 is added to read as follows:

Sec. 404.1539 How we consider whether treatment is available.

Our determination about whether treatment is available to you for

your drug addiction or your alcoholism will depend upon--

(a) The capacity of an approved institution or facility to admit

you for appropriate treatment;

(b) The location of the approved institution or facility, or the

place where treatment, services or resources could be provided to you;

place of treatment;

(d) Your general health, including your ability to travel and

capacity to understand and follow the prescribed treatment;

(e) Your particular condition and circumstances; and

(f) The treatment that is prescribed for your drug addiction or

alcoholism.

22. A new Sec. 404.1540 is added to read as follows:

Sec. 404.1540 Evaluating compliance with the treatment requirements.

(a) General. Generally, we will consider information from the

treatment institution or facility to evaluate your compliance with your

treatment plan. The treatment institution or facility will:

(1) Monitor your attendance at and participation in treatment

sessions;

(2) Provide reports of the results of any clinical testing (such

as, hematological or urinalysis studies for individuals with drug

addiction and hematological studies and breath analysis for individuals

with alcoholism) when such tests are likely to yield important

information;

(3) Provide observational reports from the treatment professionals

familiar with your individual case (subject to verification and Federal

confidentiality requirements); or

(4) Provide their assessment or views on your noncompliance with

treatment requirements.

(b) Measuring progress. Generally, we will consider information

from the treatment institution or facility to evaluate your progress in

completing your treatment plan. Examples of milestones for measuring

your progress with the treatment which has been prescribed for your

drug addiction or alcoholism may include (but are not limited to)--

(1) Abstinence from drug or alcohol use (initial progress may

include significant reduction in use);

(2) Consistent attendance at and participation in treatment

sessions;

(3) Improved social functioning and levels of gainful activity;

(4) Participation in vocational rehabilitation activities; or

(5) Avoidance of criminal activity.

23. A new Sec. 404.1541 is added to read as follows:

Sec. 404.1541 Establishment and use of referral and monitoring

agencies.

We will contract with one or more agencies in each of the States,

Puerto Rico and the District of Columbia to provide services to

individuals whose disabilities are based on a determination that drug

addiction or alcoholism is a contributing factor material to the

determination of disability (as described in Sec. 404.1535) and to

submit information to us which we will use to make decisions about

these individuals' benefits. These agencies will be known as referral

and monitoring agencies.

Their duties and responsibilities include (but are not limited

to)--

(a) Identifying appropriate treatment placements for individuals we

refer to them;

(b) Referring these individuals for treatment;

treatment of these individuals; and [[Page 8149]]

(d) Promptly reporting to us any individual's failure to comply

with treatment requirements as well as failure to achieve progress

through the treatment.

For the reasons set forth in the preamble, part 416, subparts B, E,

F, I, K, M, N, and Q of chapter III of title 20 of the Code of Federal

Regulations are amended as set forth below.

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

DISABLED

24. The authority citation for subpart B of part 416 continues to

read as follows:

Authority: Secs. 1102, 1110(b), 1602, 1611, 1614, 1615(c),

1619(a), 1631, and 1634 of the Social Security Act; 42 U.S.C. 1302,

1310(b), 1381a, 1382, 1382c, 1382d(c), 1382h(a), 1383, and 1383c;

secs. 211 and 212 of Pub. L. 93-66, 87 Stat. 154 and 155; sec.

502(a) of Pub. L. 94-241, 90 Stat. 268; and sec. 2 of Pub. L. 99-

643, 100 Stat. 3574.

25. Section 416.202 is amended by redesignating paragraph (e) as

paragraph (f) and adding a new paragraph (e) to read as follows:

Sec. 416.202 Who may get SSI benefits.

* * * * *

(e) You are disabled, drug addiction or alcoholism is a

contributing factor material to the determination of disability (see

Sec. 416.935), and you have not previously received a total of 36

months of Social Security benefit payments when appropriate treatment

was available or 36 months of SSI benefits on the basis of disability

where drug addiction or alcoholism was a contributing factor material

to the determination of disability.

* * * * *

26. Section 416.213 is revised to read as follows:

Sec. 416.213 You are disabled and drug addiction or alcoholism is a

contributing factor material to the determination of disability.

(a) If you do not comply with treatment requirements. If you

receive benefits because you are disabled and drug addiction or

alcoholism is a contributing factor material to the determination of

disability (see Sec. 416.935), you must avail yourself of any

appropriate treatment for your drug addiction or alcoholism at an

approved institution or facility when this treatment is available and

make progress in your treatment. You are not eligible for SSI benefits

beginning with the month after the month you are notified in writing

that we determined that you have failed to comply with the treatment

requirements. If your benefits are suspended because you failed to

comply with treatment requirements, you will not be eligible to receive

benefits until you have demonstrated compliance with treatment for a

period of time, as specified in Sec. 416.1326. The rules regarding

treatment for drug addiction and alcoholism are in subpart I of this

part.

(b) If you previously received 36 months of SSI or Social Security

benefits. You are not eligible for SSI benefits by reason of disability

on the basis of drug addiction or alcoholism as described in

Sec. 416.935 if--

(1) You previously received a total of 36 months of SSI benefits on

the basis of disability and drug addiction or alcoholism was a

contributing factor material to the determination of disability for

months beginning March 1995, as described in Sec. 416.935. Not included

in these 36 months are months before March 1995 and months for which

your benefits were suspended for any reason. The 36-month limit is no

longer effective for months beginning after September 2004; or

(2) You previously received a total of 36 months of Social Security

benefits counted in accordance with the provisions of Sec. 404.316,

404.337, and 404.352 by reason of disability on the basis of drug

addiction or alcoholism as described in Sec. 404.1535.

27. Section 416.262 is amended by removing the word ``and'' at the

end of paragraph (c), redesignating paragraph (d) as paragraph (e), and

adding a new paragraph (d) to read as follows:

Sec. 416.262 Eligibility requirements for special SSI cash benefits.

* * * * *

(d) If your disability is based on a determination that drug

addiction or alcoholism is a contributing factor material to the

determination of disability as described in Sec. 416.935, you have not

yet received SSI cash benefits, special SSI cash benefits, or special

SSI eligibility status for a total of 36 months, or Social Security

benefit payments when treatment was available for a total of 36 months;

and

* * * * *

28. Section 416.265 is amended by revising paragraph (a) to read as

follows:

Sec. 416.265 Requirements for the special SSI eligibility status.

* * * * *

(a) You are blind or you continue to have a disabling impairment

which, if drug addiction or alcoholism is a contributing factor

material to the determination of disability as described in

Sec. 416.935, has not resulted in your receiving SSI cash benefits,

special SSI cash benefits, or special SSI eligibility status for a

total of 36 months, or Social Security benefit payments when treatment

was available for a total of 36 months;

* * * * *

29. The authority citation for subpart E of part 416 is revised to

read as follows:

Authority: Secs. 1102, 1601, 1602, 1611(c), and (e), and 1631(a)

through (d) and (g) of the Social Security Act; 42 U.S.C. 1302,

1381, 1381a, 1382 (c) and (e), and 1383 (a) through (d) and (g).

30. Section 416.535 is amended by redesignating paragraphs (b) and

follows:

Sec. 416.535 Underpayments and overpayments.

* * * * *

(b) Additional rules for individuals whose drug addiction or

alcoholism is a contributing factor material to the determination of

disability. When an individual whose drug addiction or alcoholism is a

contributing factor material to the determination of disability, as

described in Sec. 416.935, receives less than the correct amount of SSI

benefits, adjustment is effected as described in Secs. 416.542 and

416.543 and the additional rule described in Sec. 416.544 applies.

* * * * *

31. Section 416.542 is amended by revising paragraph (a) to read as

follows:

Sec. 416.542 Underpayments--to whom underpaid amount is payable.

(a) Underpaid recipient alive--underpayment payable. (1) If an

underpaid recipient is alive, the amount of any underpayment due him or

her will be paid to him or her in a separate payment or by increasing

the amount of his or her monthly payment.

(2) If an underpaid recipient whose drug addiction or alcoholism is

a contributing factor material to the determination of disability (as

described in Sec. 416.935) is alive, the amount of any underpayment due

the recipient will be paid through his or her representative payee in

installment payments. No underpayment may be paid directly to the

recipient. If the recipient dies before we have paid all benefits due

through his or her representative payee, we will follow the rules which

apply to underpayments for the payment of any remaining amounts due to

any eligible survivor of a deceased recipient as described in paragraph

(b) of this section.

* * * * *

32. A new Sec. 416.544 is added to read as follows: [[Page 8150]]

Sec. 416.544 Paying benefits in installments: Drug addiction or

alcoholism.

(a) General. For disabled recipients who receive benefit payments

through a representative payee because drug addiction or alcoholism is

a contributing factor material to the determination of disability,

certain amounts due the recipient for a past period will be paid in

installments. The amounts subject to payment in installments include:

(1) benefits due but unpaid which accrued prior to the month

payment was effectuated;

(2) benefits due but unpaid which accrued during a period of

suspension for which the recipient was subsequently determined to have

been eligible; and

(3) any adjustment to benefits which results in an accrual of

unpaid benefits.

(b) Installment formula. Except as provided in paragraph (c) of

this section, the amount of the installment payment in any month is

limited so that the sum of (1) the amount due for a past period (and

payable under paragraph (a) of this section) paid in such month and (2)

the amount of any current benefit due cannot exceed twice the Federal

Benefit Rate plus any federally-administered State supplementation

payable to an eligible individual for the preceding month.

installment payment limitation in paragraph (b) of this section can be

granted for the first month in which a recipient accrues benefit

amounts subject to payment in installments if the recipient has unpaid

housing expenses which result in a high risk of homelessness for the

recipient. In that case, the benefit payment may be increased by the

amount of the unpaid housing expenses so long as that increase does not

exceed the amount of benefits which accrued during the most recent