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 RegisterSep 23, 1997

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

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)

ACTION: Final rules.

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SUMMARY: We are amending 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. Under the final rules, the

right of appeal for a claimant who is included in the test procedures

and who is dissatisfied with the decision of an administrative law

judge (ALJ) will be to file a civil action in Federal district court,

rather than to request the Appeals Council to review the decision. We

are testing 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 Shirley S. Chater approved

in September 1994. Unless specified, all other regulations relating to

the disability determination process and the administrative review

process remain unchanged.

EFFECTIVE DATE: September 23, 1997.

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 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 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 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 structured under

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 is

insufficient to support a fully favorable initial disability

determination or would require an initial determination denying the

claim), 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,

through publication of these final rules, adding new Secs. 404.966 and

416.1466 to our regulations to authorize testing of an additional

modification in our integrated model. These final rules authorize us to

incorporate in the integrated model additional procedures to test

elimination of the step in the disability claim process in which a

claimant requests the Appeals Council to review the hearing decision of

an ALJ.

Our specific goal in testing elimination of the request for Appeals

Council review will be to assess the effects of this change, as it

functions in

[[Page 49599]]

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.

Regulatory Provisions

Under new Secs. 404.966 and 416.1466, we will randomly select

approximately one half of the requests for an ALJ hearing in the

integrated model for potential inclusion in the test procedures for

eliminating the request for Appeals Council review. The remaining

requests for hearing in the integrated model will be processed under

our regulations concerning the request for Appeals Council review step

and subsequent judicial review. This will enable us to assess other

modifications tested in the integrated model in association with both

the test procedures for eliminating the request for Appeals Council

review and our existing request for review procedures.

The provisions of Secs. 404.966 and 416.1466 apply 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. Under these provisions, 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 this part of the model. These cases will be processed under

our existing procedures for requesting Appeals Council review and

judicial review.

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

claimant who is dissatisfied with the ALJ's decision will be, as the

notice of the decision will advise, filing a civil 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.

Under Secs. 404.966 and 416.1466, the ALJ's decision will be

binding unless a party to the decision files a civil action, the

Appeals Council decides within a specified time to review 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 ALJ or the Appeals Council

under the rules on reopening final decisions in 20 CFR 404.987 and

416.1487. A party to the decision will have the right to request the

Appeals Council to grant an extension of time to file a civil action.

Evaluation Procedures

We will evaluate 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 test procedures for eliminating

the request for Appeals Council review. 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. In addition, we

will collect and evaluate information on the reasons individuals

included in the elimination of the request for review decide either to

pursue or to forgo appeals to district courts.

We will 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 section 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. The information we will collect and

evaluate will include data on the agency's ability to assess the legal

sufficiency of cases on a timely basis without having to file court

motions requesting extensions of the time in which the agency's answer

may be filed.

Public Comments

These regulatory provisions were published in the Federal Register

as a notice of proposed rulemaking (NPRM) on May 16, 1997 (62 FR

26997). We provided the public a 30-day comment period. We received

statements in response to this notice from 10 individuals, including

employees of SSA and attorney and nonattorney representatives of

claimants. We also received comments from a legal services

organization, the American Bar Association, and the Administrative

Office of the United States Courts.

Many of the commenters discussed reasons for believing that the

request for Appeals Council review should be retained either as a

mandatory or an optional step in the disability claim process. These

comments can be viewed as opposing testing of the elimination of the

request for review step on the basis that the need for the step, as it

now exists or as it might be changed under the commenter's suggestions,

is sufficiently clear to rule out testing its elimination. We have

summarized these statements in a single comment to this effect that we

address below with the other substantive comments received.

The American Bar Association welcomed SSA's proposal to study the

Appeals Council's role and endorsed the plan to examine the impact of

eliminating the request for review step, without taking a position with

respect to the specific procedures proposed for testing that impact.

The Administrative Office of the United States Courts reported that the

Federal judiciary continues to be seriously concerned about the impact

of eliminating the request for review by the Appeals Council on the

caseloads of the Federal courts. However, this office supported careful

testing of the proposed changes and thorough analysis of the results as

consistent with the common interests of SSA and the courts in providing

efficient and legally sufficient decisions, and made specific

recommendations, which we address below in our responses to the

comments received, as to how to ensure such testing and analysis.

Because some of the comments were detailed, we condensed,

summarized or paraphrased them. We have, however, tried to summarize

the commenters' views accurately and respond to all of the significant

issues raised by the commenters that are within the scope of the

proposed rules. As we discuss below in responding to the comments, we

have made an addition to the proposed rules to clarify their intent. We

have also responded to comments received by adding to our planned

evaluation design.

Comment: A number of the commenters implicitly or explicitly

[[Page 49600]]

opposed testing elimination of the request for review step in the

disability claim process on the basis that the step is necessary or

worthwhile and should not be eliminated. The wide-ranging reasons cited

for this view included the following: that a shorter process is not

necessarily a fairer process, that SSA should deal with the increase in

the Appeals Council's workloads by increasing its staff and other

support, that claimants may drop out of the process prematurely because

of the costs and other difficulties involved in filing civil actions,

that SSA's workloads will be increased by the filing of new claims by

individuals who leave the administrative appeals process prematurely,

and that the change will result in large increases in caseloads in the

Federal courts.

Response: The reasons cited in support of this comment are

generally similar to reasons for not eliminating the request for review

step we received and considered in developing and publishing the Plan

for a New Disability Claim Process. Many of these reasons have merit,

to one degree or another. However, there are also sound reasons for

believing that eliminating the request for review step would improve

the disability claim process, if carried out in conjunction with other

changes to that process. After reviewing these additional statements in

opposition to eliminating the request for review step, we continue to

believe that we should test eliminating this step in conjunction with

other possible changes for the purpose of gaining additional

information needed to make a fully informed decision.

Comment: One individual opposed the proposed testing of the

elimination of the request for review step on the basis that such

testing could itself adversely affect over 30,000 claimants, lessening

their chances of receiving a favorable ALJ decision (because ALJs will

know in advance that less than wholly favorable decisions in certain

cases will not be subject to a request for Appeals Council review),

without providing the claimants involved in the testing any offsetting

benefits stemming from process unification and changes to the front-end

of the disability claim process.

Response: As we stated in the NPRM, these rules will authorize

elimination of the request for review in only a relatively small number

of cases, which we project at approximately 1900. The test will apply

only in those cases in the integrated model that give rise to a request

for an ALJ hearing (projected at approximately 10,000 cases), that are

then randomly selected for inclusion in the request for review

elimination (contingent on an ALJ's issuance of a less than wholly

favorable decision), and that result in a less than wholly favorable

decision.

We do not know that there would be, as this comment indicates, a

reduction in the likelihood of an allowance decision because the ALJ in

a case knows that the case will not be subject to a request by the

claimant for review by the Appeals Council and will, instead, be

subject to the immediate filing of a civil action to secure judicial

review. However, we believe that we should maximize the relevant,

advance notice that we can give individuals that their cases will be

included in these test procedures of the integrated model (if an ALJ

issues a decision that is less than wholly favorable) and will,

therefore, provide notice of that circumstance in the acknowledgment

letter issued by the adjudication officer at the start of the ALJ

hearing process. We also believe it is important to test these changes

at the ALJ hearing level with the advance knowledge of the participants

in that, if the request for review step were ultimately eliminated, all

the participants in the hearing process would know that the appeal

available to a dissatisfied claimant would be to file a civil action in

Federal district court.

The test of eliminating the request for review will be accompanied

by changes in the front-end of the disability claim process and by

process unification changes. Individuals participating in this test

will participate in other changes being tested in the integrated model,

including the opportunity for a face-to-face interview with the initial

decisionmaker and elimination of the reconsideration step. In addition,

like all claims for benefits based on disability, the claims involved

in the test of eliminating the request for Appeals Council review will

be decided under the significant process unification changes we have

already made to the disability claims process. These changes include

the publication of a series of Social Security Rulings on some of the

most significant issues in disability adjudication (61 FR 34466-34492,

July 2, 1996), and the training of all of our adjudicators, at all

adjudicative levels, in the correct application of these rulings.

Comment: One individual expressed doubt about the methodology of

the proposed test, questioning whether testing elimination of the

request for Appeals Council review in only about 1900 cases will

provide a statistically valid universe for deriving useful information

relative to a process that involves, at the ALJ level, hundreds of

thousands of cases and varied factors affecting case outcome.

Response: Prior to implementing the integrated model in April 1997,

we secured an independent analytical assessment of the completeness,

adequacy, and statistical soundness of our plans for conducting and

evaluating the testing to be carried out in that model, including our

plans for testing elimination of the request for Appeals Council

review. Performed by the Lewin Group, Inc., this assessment concluded

that our test design was fundamentally sound and that, even if

recommendations for improving the test were not implemented, the test

would likely produce valid findings and provide information that

decisionmakers and stakeholders need. Final Report, An Independent

Assessment of the Proposed Structure, Operation, and Evaluation Plans

of the Full Process Model Pilot (hereafter, Final Report), prepared by

the Lewin Group, Inc., March 14, 1997, p. 2. (The ``Full Process Model

Pilot'' is same test that we are herein referring to as the

``integrated model.'')

We have implemented most of the recommendations the Lewin Group

made for improving our test and evaluation procedures. The

recommendations implemented include the recommendation the Lewin Group

made relative to testing elimination of the request for Appeals Council

review (which recommendation concerned when in the process individuals

should be notified that they will not have an opportunity to request

Council review). Final Report, p. 21.

Comment: The Administrative Office of the United States Courts

requested clarification as to which judicial districts will be

affected.

Response: The test of eliminating the request for Appeals Council

review will affect claims of individuals residing in the following ten

States: Arizona, Colorado, Georgia, Kentucky, New York, Pennsylvania,

South Carolina, Tennessee, Utah, and Wisconsin. District courts in

these States will be affected by procedures for testing and evaluating

the request for Appeals Council review elimination.

Comment: The Administrative Office of the United States Courts also

recommended that follow-up surveys be conducted with participants in

the test of eliminating the request for Appeals Council review to

determine what factors went into the decisions of claimants either to

pursue or to forgo appeals to district courts.

Response: Under our evaluation design for the integrated model, we

[[Page 49601]]

intend to conduct surveys to collect information on multiple issues we

are assessing in this model. We believe it would be helpful to collect

and evaluate information regarding the factors concerning court filings

identified by this commenter, and we will do that. Collecting such

information requires no change in the regulatory provisions as

proposed.

Comment: The Administrative Office of the United States Courts also

thought that it would be advantageous to have a set period for the

test, followed by a meaningful review of the results, particularly the

impact upon Federal court filings, prior to a determination being made

as to whether permanent changes would be made to the Appeals Council

review step. This commenter also noted in this regard that the Federal

judiciary would like to be made aware of the results of the proposed

test.

Response: We project that the operational aspects of the integrated

model will be completed within two and a half to three years of our

initiation of testing in the front-end parts of the model in April

1997. This projection includes the estimated time we will require to

conduct pre-answer assessments of the legal sufficiency of new court

cases that arise in cases in the integrated model. No fixed term for

the test can be set because completion of its operational aspects will

depend on when the last civil action is filed in cases in the

integrated model in which the request for review is eliminated or the

Appeals Council denies review. We will then require an additional

period to conclude our evaluation of the test results.

We agree that we should not decide to propose elimination of the

request for review step in the disability claim process until we have

undertaken preliminary consultation with key stakeholders, including

the Administrative Office of the United States Courts, about the

results demonstrated in our testing of the integrated model, and about

the multiple issues that would be involved in proposing such a change.

If a decision were made to propose elimination of the request for

review step after analysis of the test results, we would, of course,

publish an NPRM soliciting public comments on the various changes in

our regulations that would be required to implement this change.

Comment: A private attorney representative of claimants commented

that the proposed regulations are ``contrary to the Act in that they

purport to use the first part of sentence six [of Sec. 205(g) of the

Act] to reclaim ALJ decisions the agency concludes are indefensible or

that the agency does not otherwise want to defend.'' This commenter

believes that the first part of sentence six is properly used only in

very narrow circumstances, such as when a hearing transcript cannot be

prepared, and that Congress did not enact part one of sentence six to

provide the agency with a chance to rehear or redo an inadequate ALJ

decision for the purpose of avoiding a ruling on the merits of the

decision under sentence four of Sec. 205(g).

Response: The agency's procedures for assessing the legal

defensibility of cases filed in Federal court will not be affected by

the final rules, and any court action requested in light of such

assessment will continue to be subject to the relevant provisions of

Sec. 205(g) of the Act. We do not, however, agree that the first clause

of sentence six of Sec. 205(g) must be construed in the restrictive

manner suggested by the commenter, who believed that sentence six

allows remands prior to the filing of the answer only in ``very narrow

circumstances, such as when a hearing transcript cannot be prepared.''

The first clause of sentence six expressly allows the court to remand

cases for further proceedings ``for good cause shown.'' It neither

delineates nor limits the circumstances which may be sufficient for a

demonstration of good cause. Moreover, the legislative history of this

provision recognizes the type of procedural difficulty suggested by the

commenter to be an example of ``good cause,'' not an exclusive

delineation of the circumstances that may constitute good cause. H.R.

Conf. Rep. No. 944, 96th Cong., 2d Sess. 58-59 (1980). Significantly,

virtually every court which has addressed the issue has held that the

defining characteristic of a sentence six, clause one remand lies in

the timing of the remand request, not in its characterization as either

substantive or technical, i.e., if the remand is requested by the

Commissioner prior to the filing of his answer, it falls under sentence

six, and if the Commissioner's request is made subsequent to the filing

of an answer, it may fall under sentence four.

Comment: This same individual also commented that the proposed

rules represent an implicit assertion by the agency that it may extend

the 60 days for taking own motion review to any time before the

Commissioner files his answer.

Response: It is our intent that the Appeals Council shall have

authority to review a case on its own motion under these final rules

only if it decides to review the case, and issues a notice establishing

the occurrence of such a decision, within the 60-day period prescribed

in Secs. 404.969 and 416.1469 (i.e., within 60 days of the date of the

hearing decision). We believe this intent is clear in the rules as

proposed, which indicate in Secs. 404.966(b)(2) and 416.1466(b)(2) that

the own-motion authority the Appeals Council will have under these

rules is the authority provided in Secs. 404.969 and 416.1469.

In test cases in which the request for review by the Appeals

Council is eliminated and the notice of the ALJ's decision advises the

parties of the right to file a civil action, it is also our intent that

the authority of the Appeals Council to decide to review a case on its

own motion shall cease to exist, even if 60 days have not yet lapsed

after the date of the ALJ's decision, as of the date, if any, upon

which the jurisdiction of a Federal district court is established by

the filing of a civil action as provided in the Federal Rules of Civil

Procedure. We have clarified Secs. 404.966(b)(2) and 416.1466(b)(2) to

make this intention clearer. The agency's assessment of a case

following establishment of the jurisdiction of a Federal court will

occur under the provisions of Sec. 205(g) of the Act, 42 U.S.C.

Sec. 405(g).

In a case in which we test elimination of the request for Appeals

Council review, a decision by the Appeals Council to review an ALJ's

decision under Secs. 404.969 or 416.1469 will mean that the Council has

assumed jurisdiction of the case, thereby causing the decision not to

be a final decision of the Commissioner of Social Security subject to

judicial review under Sec. 205(g) of the Act. If the Appeals Council

decides to review one of these cases on its own motion, it must issue a

notice establishing its decision to do so before a civil action is

filed establishing the jurisdiction of a Federal district court.

To clarify our intent in these respects, we have revised

Secs. 404.966(b)(2) and 416.1466(b)(2) in the final rules to include a

provision specifying that the Appeals Council must issue a notice

announcing its decision to review the case on its own motion before the

filing date of any civil action establishing the jurisdiction of a

Federal district court.

Comment: This same individual also commented that the proposed

regulations invite unnecessary litigation over motions for extension of

time to file answer.

Response: As we discussed in the NPRM, our intent is that the

Appeals Council, working with agency counsel, will evaluate the legal

sufficiency of cases in the integrated model and in a

[[Page 49602]]

control sample to determine, within the time in which the Commissioner

of Social Security may file his answer, if we should request the court

to remand the case. We do not expect that these activities will require

the agency frequently to request extensions of time to file answers in

these cases. However, our ability to carry out these evaluations in a

timely fashion is an important consideration and will be one of the

matters we assess in the testing to be conducted under these final

rules.

Based on our analysis of the comments, we are adopting the proposed

rules with the above-discussed addition to Secs. 404.966(b)(2) and

416.1466(b)(2). This addition clarifies the time during which the

Appeals Council may decide on its own motion to review a case to which

these final rules apply. We have also made the following minor

editorial changes in the rules as proposed: we have inserted the words

``in which'' in the final clause of the last sentence of

Secs. 404.966(a) and 416.1466(a), and we have made technical

corrections in the numbering of the subparagraphs of Secs. 404.966(b)

and 416.1466(b). The additions we have made to our evaluation plans

based on consideration of the comments require no changes in the

regulatory provisions as proposed.

Regulatory Procedures

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

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

U.S.C. 553(d). For the reasons set forth below, we find that it is

unnecessary and contrary to the public interest to delay the effective

date of these final rules.

We find that delay of the effective date is unnecessary because the

affected individuals will be notified of the possibility of elimination

of the Appeals Council review step more than 30 days before any such

elimination actually occurs. Under new Secs. 404.966 and 416.1466, we

will randomly select cases in the integrated model for contingent

inclusion in the test of eliminating the request for Appeals Council

review after a request for an ALJ hearing is filed and before the

adjudication officer acknowledges receipt of the request for a hearing.

In the cases selected, as we have previously discussed, the

acknowledgement letter the adjudication officer sends will notify the

individual filing the request (and any appointed representative of the

individual) that if an ALJ issues a decision that is less than wholly

favorable, the right of appeal available to the individual will be to

file a civil action in Federal district court.

Elimination of the request for Appeals Council review step will not

occur in a case, if it occurs at all, until after the adjudication

officer sends the case to an ALJ, a hearing is scheduled and held

(except where the parties waive an oral hearing), and the ALJ issues a

decision that is less than wholly favorable. Therefore, even with

elimination of the 30-day delay in the effective date of these final

rules, the substantive change authorized by Secs. 404.966 and 416.1466,

elimination of the request for Appeals Council review step for test

purposes, will not actually occur until after more than 30 days have

elapsed from the date of the publication of these final rules in the

Federal Register.

We also find that delay of the effective date is contrary to the

public interest because it would compromise our ability to evaluate the

effects of the test. By making the rules effective upon publication, we

can immediately implement the planned selection and notice procedures

and thereby make it possible to test elimination of the request for

Appeals Council review in the greatest number of cases in the

integrated model that can be used without reducing our ability also to

test, as we believe we should, use of the other new procedures in the

integrated model with the request for review step. We believe that

maximizing the number of cases in the integrated model in which we can

test elimination of the request for Appeals Council review step, while

also testing retention of that step in conjunction with the other

changes in the integrated model, will contribute to the soundness of

our evaluation of the effects of eliminating this step from the

disability claim process.

Executive Order 12866

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

and determined that these rules meet the criteria for a significant

regulatory action under Executive Order 12866. Thus, they were subject

to OMB review. These rules do not adversely affect State, local or

tribal governments. The administrative costs of the test will be

covered within budgeted resources. No program costs are expected to

result from the processing of the test cases. We have not, therefore,

prepared a cost/benefit analysis under Executive Order 12866.

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 record keeping

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 record keeping requirements.

Dated: August 26, 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 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

[[Page 49603]]

procedures for modifying the disability claim process as authorized

under Secs. 404.906 and 404.943, and in which 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, and it issues a

notice announcing its decision to review the case on its own motion no

later than the day before the filing date of a civil action

establishing the jurisdiction of a Federal district court; 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 in which 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. 416.1469, and it issues a

notice announcing its decision to review the case on its own motion no

later than the day before the filing date of a civil action

establishing the jurisdiction of a Federal district court; or

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

Appeals Council under the procedures explained in Sec. 416.1487.