Administrative Review Process, Testing Elimination of the Fourth Step of Administrative Review in the Disability Claim Process (Request for Review by the Appeals Council)

Federal RegisterMay 16, 1997

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

[Regulations No. 4 and 16]

RIN 0960-AE58

Administrative Review Process, Testing Elimination of the Fourth

Step of Administrative Review in the Disability Claim Process (Request

for Review by the Appeals Council)

AGENCY: Social Security Administration.

ACTION: Proposed rules.

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

elimination of the final step in the administrative review process used

in determining claims for Social Security and Supplemental Security

Income (SSI) benefits based on disability. If these proposed rules are

published in final, the right of appeal for a claimant who is included

in the test procedures and is dissatisfied with the decision of an

administrative law judge (ALJ) would be to file a civil action in

Federal district court, rather than to request the Appeals Council to

review the decision. We are proposing to test procedures that eliminate

the request for Appeals Council review in furtherance of the Plan for a

New Disability Claim Process that former Commissioner of Social

Security Chater approved in September 1994. Unless specified, all other

regulations relating to the disability determination process and the

administrative review process remain unchanged.

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

them no later than June 16, 1997.

ADDRESSES: Comments should be submitted in writing to the Commissioner

of Social Security, P.O. Box 1585, Baltimore, MD 21235; sent by telefax

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

delivered to the Division of Regulations and Rulings, Social Security

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

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

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

making arrangements with the contact person shown below.

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

Division of Regulations and Rulings, Social Security Administration,

6401 Security Boulevard, Baltimore, MD 21235, (410) 965-6243 for

information about these rules. For information on eligibility or

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

SUPPLEMENTARY INFORMATION:

Background

The Social Security Administration (SSA) currently uses a four-step

process in deciding 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. Claimants who are not satisfied with the initial

determination on their claims may request reconsideration. Claimants

who are not satisfied with the 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 four steps, and who are dissatisfied with the final

decision, may request judicial review of the decision by filing a civil

action in Federal district court. 20 CFR Secs. 404.900 and 416.1400.

SSA's Plan for a New Disability Claim Process (59 FR 47887,

September 19, 1994) anticipates establishment of a redesigned, two-step

process for deciding Social Security and SSI claims based on

disability. The redesign plan anticipates that the process for

determining disability can be significantly improved by strengthening

the steps of the process in which we make initial determinations and

provide dissatisfied claimants an opportunity for a hearing before an

ALJ, and by eliminating the reconsideration step and the step in which

claimants request the Appeals Council to review the decisions of ALJs.

In 20 CFR 404.906 and 416.1406 (60 FR 20023, April 24, 1995), we

have established authority to test, singly and in combination, several

model procedures for modifying the disability claims process. Under

that authority, we are currently testing, in isolation from other

possible changes, a modification of the initial determination step in

which a single decisionmaker, rather than a team composed of a

disability examiner and a medical consultant, makes the initial

determination of disability. In addition, under authority established

in 20 CFR 404.943 and 416.1443 (60 FR 47469, September 13, 1995), we

are also testing, in another model for evaluating a possible change in

isolation from other changes, use of an adjudication officer as the

focal point for all prehearing activities in disability cases in which

a claimant requests a hearing before an ALJ.

To assess how the above changes and other elements of the

disability redesign plan would work together in different combinations,

we initiated an integrated test on April 7, 1997, that combines model

procedures for major elements of the redesign plan. As presently

structured under existing testing authority (established in

Secs. 404.906, 404.943, 416.1406, and 416.1443 in combination), this

integrated model includes, in addition to models for the single

decisionmaker and the adjudication officer, a model for procedures to

provide a predecision interview conducted by the single decisionmaker

(at which a claimant for benefits based on disability will have an

opportunity to submit further evidence and have an interview with the

initial decisionmaker if the evidence does not support a fully

favorable initial disability determination), and a model to test

eliminating the reconsideration step in disability claims.

In order to increase our ability to assess the effects of possible

modifications of the disability claim process in combination, we are

proposing in these rules to amend our regulations to authorize testing

of an additional modification in our integrated model. We are proposing

to incorporate in this model additional

[[Page 26998]]

procedures to test elimination of the step in that process in which a

claimant requests the Appeals Council to review the hearing decision of

an ALJ.

Under the proposed rules, we will randomly select approximately one

half of the requests for an ALJ hearing in the integrated model for

potential inclusion in the proposed test procedures. The remaining

requests for hearing in the integrated model will be processed under

our existing regulations concerning the Appeals Council and judicial

review. This will enable us to assess other modifications tested in the

integrated model in association with both the proposed test procedures

for eliminating the request for Appeals Council review step and our

existing request for review procedures.

Under the proposed rules, we will eliminate the request for review

step (which has been established by agency regulations and is not

mandated by the Act) in a case in the integrated model if: (1) The case

has been randomly selected for inclusion in this aspect of the model,

and (2) an ALJ issues a decision in the case that is less than wholly

favorable to the claimant (i.e., unfavorable or only partially

favorable to the claimant). Cases in the integrated model in which an

ALJ issues a wholly favorable decision, dismisses a request for

hearing, or issues a recommended decision will not be included in the

proposed procedures. These cases will be processed under our existing

regulations concerning the Appeals Council and judicial review.

In a case to which the proposed rules apply, the appeal available

to the claimant from the ALJ's decision will be filing an action in

Federal district court. Requesting review by the Appeals Council will

be eliminated as an appeal and as a prerequisite to seeking judicial

review.

Our specific goals in testing elimination of the request for review

step will be to assess the effects of this change, as it functions in

conjunction with other modifications in the disability claim process

included in the integrated model, on: (1) Judicial workloads, and (2)

the legal sufficiency of decisions subjected to judicial review. We

consider the effects of the change in those respects to represent the

principal, practical issues bearing on the advisability of eliminating

the request for review step in connection with the planned, overall

redesign of the disability claim process.

SSA's disability redesign plan anticipates that the request for

Appeals Council review will be eliminated in conjunction with the

establishment of procedures to increase the number of ALJ decisions

that the Council will consider for quality review purposes under its

authority to review cases on its own motion. We are not including

procedures to test the enhanced own-motion functions anticipated for

the Appeals Council in these proposed rules. We are not including such

procedures because we wish to concentrate the proposed test on

producing information concerning the effects of eliminating the request

for Appeals Council review on judicial workloads and the legal

sufficiency of SSA's final decisions. In addition, we are preparing to

propose permanent rules to regulate existing procedures and establish

new procedures for referring cases to the Appeals Council for possible

review under its own-motion authority. Those proposed changes should

provide, if adopted in final, increased information regarding own-

motion review by the Council.

We propose to test the effect of eliminating the request for review

step on judicial workloads by comparing the rate at which civil actions

are filed by individuals whose claims are processed under the current

administrative review steps in the disability claims process--i.e., the

four step process--to the rate at which civil actions are filed in

cases selected for processing under the proposed test procedures. We

will also consider the rate at which civil actions are filed in cases

in the integrated model in which we retain the request for Appeals

Council review.

We propose to assess the effect of eliminating the request for

review on the legal sufficiency of final decisions by comparing the

rates at which, following the filing of civil actions in cases included

in the integrated model and in a control sample of cases processed

under the current administrative review steps in the disability claims

process, we request court-remand of a case within the period during

which the Commissioner of Social Security may file his answer to a

civil action under Sec. 205(g) of the Act. The Appeals Council, working

with agency counsel, will evaluate the claims in the integrated model

and in the control sample to identify instances in which a court should

be requested (as courts may be under existing procedures) to remand a

case for further administrative action.

We believe that, in conjunction with other modifications we are

testing in the integrated model, elimination of the request for review

step could have a significant beneficial effect on the disability

claims process and on our ability to adjudicate claims timely and

accurately. We place a high priority on speedily including a test of

the elimination of that step in our integrated model. The proposed

rules have the limited purpose of authorizing test procedures in a

relatively small number of cases (projected at approximately 1900) to

determine how elimination of the request for review step could affect

judicial workloads and the legal sufficiency of the agency's final

decisions. If we ultimately decide to proceed with elimination of this

step, we would publish a Notice of Public Rulemaking setting forth

detailed proposals concerning all the changes that would be made in the

administrative review process to eliminate the request for review by

the Appeals Council. Therefore, and because we have previously provided

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

disability redesign plan, including the elimination of the request for

review step, we are providing a 30-day comment period for these

proposed rules rather than the 60-day period we usually provide. We

believe that a 30-day comment period is sufficiently long, in this

instance, to allow the public a meaningful opportunity to comment on

the proposed rules in accordance with Executive Order (E.O) 12866.

Proposed Regulations

We propose to add new Secs. 404.966 and 416.1466 to set forth

authority to test elimination of the step in the administrative review

process in which claimants for benefits based on disability request the

Appeals Council to review the decision of an ALJ. The proposed rules

specify in Secs. 404.966(a) and 416.1466(a) that testing of elimination

of the request for review step will be conducted in randomly selected

cases in which we have tested a combination of model procedures for

modifying the disability claim process as authorized in Secs. 404.906,

404.943, 416.1406 and 416.1443, and an ALJ has issued a decision that

is less than wholly favorable to the claimant.

Under proposed Secs. 404.966(b) and 416.1466(b), which describe the

effect of an ALJ's decision, the ALJ's decision will be binding unless

a party to the decision files a civil action, the Appeals Council

reviews the decision on its own motion under the authority provided in

20 CFR 404.969 and 416.1469, or the decision is revised by the

administrative law judge or the Appeals Council under the rules on

reopening final decisions in 20 CFR 404.987 and 416.1487. Under these

provisions, the appeal available to a party who is dissatisfied with

the decision of an ALJ will be to seek judicial review. As is true of

the

[[Page 26999]]

provisions of proposed Secs. 404.966 and 416.1466 as a whole, the

proposed provisions of Secs. 404.966(b) and 416.1466(b) pertain only to

those ALJ decisions that have been identified for inclusion in that

part of our integrated model in which the request for review by the

Appeals Council is eliminated.

Proposed Secs. 404.966(c) and 416.1466(c) describe the notice an

ALJ will issue to advise a party to a decision included in this part of

the integrated model of the right to file a civil action. Proposed

Secs. 404.966(d) and 416.1466(d) describe the right a party will have

to request the Appeals Council to grant an extension of time to file a

civil action.

Electronic Version

The electronic file of this document is available on the Federal

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

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

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

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

comment period.

Regulatory Procedures

Executive Order 12866

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

and determined that these rules do not meet the criteria for a

significant regulatory action under E.O. 12866. Thus, they are 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 these

rules affect only individuals. Therefore, a regulatory flexibility

analysis as provided in the Regulatory Flexibility Act, as amended, 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: May 7, 1997.

John J. Callahan,

Acting Commissioner of Social Security.

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

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

Regulations are proposed to be amended as set forth below.

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

(1950- )

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

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

read as follows:

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

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

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

3720A; sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note);

secs. 5, 6 (c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C.

421 note).

2. New Sec. 404.966 is added under the undesignated center heading

``APPEALS COUNCIL REVIEW'' to read as follows:

Sec. 404.966 Testing elimination of the request for Appeals Council

review.

(a) Applicability and scope. Notwithstanding any other provision in

this part or part 422 of this chapter, we are establishing the

procedures set out in this section to test elimination of the request

for review by the Appeals Council. These procedures will apply in

randomly selected cases in which we have tested a combination of model

procedures for modifying the disability claim process as authorized

under Secs. 404.906 and 404.943, and an administrative law judge has

issued a decision (not including a recommended decision) that is less

than wholly favorable to you.

(b) Effect of an administrative law judge's decision. In a case to

which the procedures of this section apply, the decision of an

administrative law judge will be binding on all the parties to the

hearing unless --

(1) You or another party file an action concerning the decision in

Federal district court;

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

motion under the authority provided in Sec. 404.969; or

(3) The decision is revised by the administrative law judge or the

Appeals Council under the procedures explained in Sec. 404.987.

notice of decision the administrative law judge issues in a case

processed under this section will advise you and any other parties to

the decision that you may file an action in a Federal district court

within 60 days after the date you receive notice of the decision.

(d) Extension of time to file action in Federal district court. Any

party having a right to file a civil action under this section may

request that the time for filing an action in Federal district court be

extended. The request must be in writing and it must give the reasons

why the action was not filed within the stated time period. The request

must be filed with the Appeals Council. If you show that you had good

cause for missing the deadline, the time period will be extended. To

determine whether good cause exists, we will use the standards in

Sec. 404.911.

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

DISABLED

20 CFR Part 416, Subpart N, is amended as follows:

1. The authority citation for subpart N continues 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. 416.1466 is added under the undesignated center heading

``APPEALS COUNCIL REVIEW'' to read as follows:

Sec. 416.1466 Testing elimination of the request for Appeals Council

review.

(a) Applicability and scope. Notwithstanding any other provision in

this part or part 422 of this chapter, we are establishing the

procedures set out in this section to test elimination of the request

for review by the Appeals Council. These procedures will apply in

randomly selected cases in which we have tested a combination of model

procedures for modifying the disability claim process as authorized

under Secs. 416.1406 and 416.1443, and an administrative law judge has

issued a decision (not including a recommended decision) that is less

than wholly favorable to you.

(b) Effect of an administrative law judge's decision. In a case to

which the procedures of this section apply, the decision of an

administrative law judge will be binding on all the parties to the

hearing unless --

[[Page 27000]]

(1) You or another party file an action concerning the decision in

Federal district court;

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

motion under the authority provided in Sec. 416.1469; or

(3) The decision is revised by the administrative law judge or the

Appeals Council under the procedures explained in Sec. 416.1487.