AR 88-5(1): McCuin v. Secretary of Health and Human Services, 817 F.2d 161 (1st Cir. 1987) -- Reopening by the Appeals Council of Decisions of Administrative Law Judges under Titles II and XVI of the Social Security Act

(Rescinded 2-23-94)

AR 88-5(1)

EFFECTIVE DATE: 10/27/88

ISSUE:

Whether the Appeals Council of the Social Security Administration (SSA)

may reopen an administrative law judge's decision on its own initiative

more than 60 days after the date of the administrative law judge's

decision (i.e., after the own-motion review period has expired).

STATUE/REGULATION/RULING CITATION:

Sections 205 and 1631(d) of the Social Security Act (42 U.S.C. Sections

405 and 1383(d)); 20 C.F.R. Sections 404.987, 404.988, 416.1487 and

416.1488

CIRCUIT:

FIRST (MAINE, MASSACHUSETTS, NEW HAMPSHIRE, RHODE ISLAND, AND PUERTO

RICO [1] )

McCuin v. Secretary of Health and Human Services, 817 F2d 161 (1st

Cir. 1987)

APPLICABILITY OF RULING:

The court's holding affects only cases at the Appeals Council level.

Therefore, the Ruling applies only to actions at the Appeals Council level

and only to cases in which the claimant resides in Maine, Massachusetts,

New Hampshire, Rhode Island or, for title II only, in Puerto Rico.

DESCRIPTION OF CASE:

The plaintiff sought reimbursement for hospital expenses under the

Medicare, Part A, provisions of the Social Security Act, 42 U.S.C.

1395(c)-(i)(1982). Her claim was denied initially, on reconsideration, and

by an administrative law judge (ALJ). She appealed this decision to the

Appeals Council, which remanded the case to the ALJ for a new hearing.

The ALJ issued a second decision which granted coverage for part of her

hospital stay and found her not liable for the costs of noncovered

services. Eight months later, the Appeals Council informed the plaintiff

that it was reopening the ALJ's decision for good cause pursuant to 42

C.F.R. Section 405.750(b) and 20 C.F.R. Section

404.988. [2] The Appeals Council

then reversed the ALJ's decision granting waiver of liability for

noncovered services

t of her

hospital stay and found her not liable for the costs of noncovered

services. Eight months later, the Appeals Council informed the plaintiff

that it was reopening the ALJ's decision for good cause pursuant to 42

C.F.R. Section 405.750(b) and 20 C.F.R. Section

404.988. [2] The Appeals Council

then reversed the ALJ's decision granting waiver of liability for

noncovered services. Claimant filed suit in the United States District

Court for the District of New Hampshire to challenge only the propriety of

the Appeals Council's reopening of her case on its own initiative.

Claimant did not argue the merits of her Medicare claim. She alleged that

the policy which permits the Appeals Council to reopen an ALJ decision on

its own initiative violated the Social Security regulations as well as her

rights to due process of law. Claimant based her due process claim on the

lack of finality that results from allowing the Appeals Council to

initiate reopening once the 60-day own-motion review period has

expired.

The district court certified a statewide class action consisting of

Social Security (title II), Supplemental Security Income (title XVI), and

Medicare (title XVIII) claimants, and held that a reopening of a hearing

decision more than 60 days after the date of the ALJ's decision can be

initiated only by a claimant and not by the Appeals Council. The Secretary

appealed this decision to the United States Court of Appeals for the First

Circuit.

HOLDING:

The First Circuit agreed with the conclusion of the district court that,

once the 60-day period for the Appeals Council's own- motion review had

expired, 20 C.F.R. Sections 404.987 and 404.988 only allowed reopening of

an ALJ decision on the claimant's

motion. [3] While the court noted

that the regulations could be interpreted in several different ways, it

found that "there [was] no reading which would not stretch the

language of the regulations to a considerable extent." (Emphasis in the

original.)

l's own- motion review had

expired, 20 C.F.R. Sections 404.987 and 404.988 only allowed reopening of

an ALJ decision on the claimant's

motion. [3] While the court noted

that the regulations could be interpreted in several different ways, it

found that "there [was] no reading which would not stretch the

language of the regulations to a considerable extent." (Emphasis in the

original.)

The court specifically rejected the Secretary's interpretation that the

regulations allowed the Appeals Council to reopen a decision on its own

initiative. The court stated that this interpretation would take away the

"finality that adjudication normally affords." Moreover, the court found

that the lack of finality would make it impossible for SSA to give a

claimant a full and honest explanation of the status of his claim for

benefits since the Appeals Council could, on its own initiative, later

reopen cases and withdraw benefits due to errors made in the prior

determination. The court stated that the notice of a decision subject to

reopening on the Appeals Council's own initiative would be misleading and

would signify nothing other than that " a final decision [would] not occur

for at least four years." The court concluded, therefore, that, following

the 60-day period for the Appeals Council's own-motion review, the

regulations should be interpreted as allowing reopening by the Appeals

Council of ALJ decisions only on the basis of motions by claimants.

STATEMENT AS TO HOW McCuin DIFFERS FROM SOCIAL SECURITY

POLICY:

han that " a final decision [would] not occur

for at least four years." The court concluded, therefore, that, following

the 60-day period for the Appeals Council's own-motion review, the

regulations should be interpreted as allowing reopening by the Appeals

Council of ALJ decisions only on the basis of motions by claimants.

STATEMENT AS TO HOW McCuin DIFFERS FROM SOCIAL SECURITY

POLICY:

SSA has interpreted the reopening regulations (20 C.F.R. Sections 404.987

and 416.1487) to allow for reopening of ALJ decisions on the motion of a

claimant or on the Appeals Council's own initiative. Therefore, under SSA

policy the Appeals Council may reopen and revise a final decision if the

procedures and conditions set forth in 20 C.F.R. Sections 404.987 and

404.988 or 416.1487 and 416.1488 are met. Such actions are subject to the

time limits and other conditions found in those provisions.

The holding in McCuin bars the Appeals Council from reopening and

revising ALJ decisions on its own initiative under 20 C.F.R. Sections

404.987, 404.988, 416.1487 and 416.1488.

EXPLANATION OF HOW SSA WILL APPLY THE DECISION WITHIN THE CIRCUIT:

This Ruling applies only to cases in which the claimant resides in Maine,

Massachusetts, New Hampshire, Rhode Island or, for title II only, in

Puerto Rico at the time of the ALJ's decision.

Where an ALJ's decision has become final (i.e., the time for requesting

Appeals Council review of the decision has expired and no request for such

review has been filed by the claimant and the Appeals Council has not

taken own-motion review within the 60-day time limit), the Appeals Council

may not reopen and revise the decision on its own initiative under 20

C.F.R. Sections 404.987, 404.988, 416.1487 and 416.1488.

SSA intends to clarify the reopening regulations at issue in this case

through the rulemaking process. SSA will continue to apply this Ruling

until such clarification is made.

EFFECTIVE DATE:

Date of Publication 10/27/88

e 60-day time limit), the Appeals Council

may not reopen and revise the decision on its own initiative under 20

C.F.R. Sections 404.987, 404.988, 416.1487 and 416.1488.

SSA intends to clarify the reopening regulations at issue in this case

through the rulemaking process. SSA will continue to apply this Ruling

until such clarification is made.

EFFECTIVE DATE:

Date of Publication 10/27/88

[1] Since there is no

Supplemental Security Income Program in Puerto Rico, this Ruling will

apply only to title II claims there.

[2] The Social Security

regulations were at issue in this case because the Medicare regulations at

42 C.F.R. Section 405.701 provide that the Social Security regulations

governing the administrative review process also apply to determinations

as to the amount payable under Medicare, Part A, except to the extent

specific provisions are contained in the Medicare regulations. Section

405.750(b) of the Medicare regulations governing requests for reopenings

of such determinations for good cause also refers to the Social Security

regulations at 20 C.F.R. Sections 404.988(b) and 404.989.

[3] The court based its decision

on the reopening regulations applicable to title II cases. However, since

the reopening regulations applicable to title XVI cases are similar, this

Ruling extends to both title II and title XVI cases.