[Federal Register Volume 59, Number 36 (Wednesday, February 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3958]


[[Page Unknown]]

[Federal Register: February 23, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES
20 CFR Parts 404 and 416

[Regulations Nos. 4 and 16]
RIN 0960-AD12

 

Reopening Determinations and Decisions

AGENCY: Social Security Administration, HHS.

ACTION: Final rules.

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SUMMARY: These final rules revise our regulations to clarify the 
longstanding policy of the Social Security Administration (SSA) that 
the Agency on its own initiative, as well as at the request of any 
person claiming a right under the Social Security or supplemental 
security income (SSI) programs, may reopen and revise a final 
administrative determination or decision.

EFFECTIVE DATE: The final regulations are effective February 23, 1994.

FOR FURTHER INFORMATION CONTACT: Henry D. Lerner, Legal Assistant, 
Office of Regulations, Social Security Administration, 6401 Security 
Blvd., Baltimore, MD 21235, (410) 965-1762.

SUPPLEMENTARY INFORMATION: We are revising Secs. 404.987 and 416.1487 
of our regulations to clarify that we may reopen and revise a final 
administrative determination or decision either on our own initiative 
or at the request of a person who was a party to the determination or 
decision.
    Prior to August 5, 1980, our regulations expressly provided that we 
had the discretion to reopen and revise a final determination or 
decision, including a final revised determination or decision, either 
on our own motion or upon the request of any party to the determination 
or decision. See 20 CFR 404.956, 404.957, 416.1475 and 416.1477 (1980). 
On August 5, 1980, however, we published, pursuant to the notice of 
proposed rulemaking procedures, final regulations which reorganized and 
restated in simpler language our rules on the administrative review 
process, including our rules for reopening and revising final 
determinations and decisions. This recodification was undertaken as 
part of a Department-wide effort to make the rules clearer and easier 
for the public to use and understand (45 FR 52078, August 5, 1980).
    Our existing regulations on the procedures for reopening and 
revising a determination or decision were a part of the recodification 
that was published and became effective on August 5, 1980. Although no 
substantive changes were intended with regard to the authority to 
reopen on our own initiative, the regulations, as recodified, have been 
read by some to permit reopening and revision of a final determination 
or decision only when the beneficiary or claimant requests reopening.
    With respect to the reopening and the revising of a final 
determination or decision, Secs. 404.987 and 416.1487 of our existing 
regulations state that ``[y]ou may ask that a determination or a 
decision to which you were a party be revised.'' These sections have 
created some confusion and have been read by some courts to mean that 
we may not reopen and revise a final determination or decision on our 
own initiative.
    The final rules eliminate the ambiguity that exists in our 
regulations regarding our authority to reopen and revise a final 
determination or decision on our own initiative. The final rules revise 
Secs. 404.987 and 416.1487 to state explicitly that we may reopen a 
determination or decision that has become final on our own initiative 
or at the request of an individual who was a party to the determination 
or decision.

Public Comments

    We published the proposed rules with a Notice of Proposed 
Rulemaking (NPRM) in the Federal Register on October 28, 1991 (56 FR 
55477). Interested persons and organizations were given 60 days to 
comment. The comment period closed on December 27, 1991. We received 
comments from six commenters: Two State agencies which make disability 
determinations, and three legal services organizations and one private 
attorney who represent claimants and beneficiaries.
    One commenter supported the proposed rules without modification. 
This commenter agreed with our view that the proposed rules clarified 
our longstanding policy regarding our authority to reopen a final 
determination or decision on our own initiative.
    The other commenters either opposed the proposed changes to the 
regulations or conditioned their support for the proposed rules upon 
our making additional changes to our regulations. Most of these 
commenters generally perceived the proposed rules to be a policy change 
that would confer upon SSA a new or expanded authority to reopen and 
revise determinations or decisions on its own initiative. Many of the 
comments which were provided by these commenters also reflected a 
misunderstanding of the requirements and procedures for reopening a 
determination or decision. Some of these commenters recommended that 
the proposed rules be modified or withdrawn. Some recommended that they 
be expanded to clarify or further limit the specific conditions, which 
are stated elsewhere in our regulations, under which a final 
determination or decision may be reopened.
    We considered carefully all of the comments which we received on 
the proposed rules. However, for the reasons stated below, we did not 
adopt the recommendation to withdraw the proposed rules or any of the 
recommendations to modify or expand the changes to the regulations. The 
changes to the regulations do not represent a substantive change in 
policy. The sole purpose of the changes is to clarify in the 
regulations our longstanding policy that we may reopen and revise a 
final determination or decision on our own initiative as well as upon 
the request of a party to the determination or decision. Accordingly, 
the final rules are the same as the proposed rules.
    A summary of the comments that raised issues concerning the 
proposed rules and our responses to the comments are provided below. 
For ease of comprehension, we have consolidated the comments and 
organized them according to the general issues raised in the comments.
    Comment: Three commenters thought that the proposed rules would be 
inconsistent with a decision of a circuit court which had concluded 
that our regulations should be interpreted to allow the Appeals Council 
to reopen a final decision of an administrative law judge (ALJ) only on 
the basis of a request by a claimant or beneficiary. One commenter 
stated that the proposed rules would circumvent judicial decisions, but 
did not mention any specific court decisions.
    Response: As discussed earlier in this preamble and in the preamble 
to the NPRM, the regulations which we are revising, Secs. 404.987 and 
416.1487, were a part of the regulations that were published on August 
5, 1980, which reorganized and restated in simpler language all of our 
rules on the administrative review process. Although no substantive 
changes were intended with regard to our authority to reopen final 
determinations or decisions on our own initiative, this authority was 
not stated as clearly in the recodified rules as it had been in the 
longer, more detailed prior rules. As a result, several lawsuits were 
brought challenging our authority under the recodified regulations to 
continue our longstanding policy to reopen and revise final 
determinations or decisions on our own initiative. All but one of the 
circuit courts that have directly addressed this issue have concluded, 
however, that our regulations on reopening do provide authority for us 
to reopen and revise final determinations or decisions on our own 
initiative, including authority for the Appeals Council to reopen and 
revise a final decision of an ALJ on its own initiative. Only the 
circuit court mentioned by the three commenters above and some Federal 
district courts have concluded that our existing regulations should be 
interpreted to allow the reopening and revision of a final 
determination or decision only when a claimant or beneficiary requests 
reopening. These final rules revise the regulations to eliminate the 
ambiguity which led these courts to interpret the regulations to mean 
that only a claimant or beneficiary may initiate reopening. We are 
revising Secs. 404.987 and 416.1487 to state explicitly that we may 
reopen a final determination or decision either on our own initiative 
or at the request of a party to the determination or decision.
    Comment: Several commenters thought that the time periods within 
which a final decision of an ALJ may be reopened under current 
Sec. 404.988 (a) or (b) or Sec. 416.1488 (a) or (b), which we did not 
propose to change, are measured from the date of the ALJ decision. Some 
commenters opposed the proposed revisions of Secs. 404.987 and 416.1487 
because they believed that the Appeals Council would have the 
discretion under Sec. 404.988(b) or Sec. 416.1488(b) to reopen a final 
decision of an ALJ on its own initiative within 4 years of the date of 
the ALJ decision if the Council finds good cause to reopen. One 
commenter stated that the proposed rules would render meaningless the 
60-day time limit within which the Appeals Council may decide to review 
a decision by an ALJ on its own initiative under Secs. 404.969 and 
416.1469. This statement was based on the commenter's belief that 
Secs. 404.988(a) and 416.1488(a), when read together with the proposed 
rules, give the Appeals Council the discretion to reopen a final 
decision of an ALJ on its own initiative within 1 year of the date of 
the ALJ decision for any reason.
    Response: Sections 404.988 and 416.1488 state the conditions under 
which we may reopen final determinations or decisions under the Social 
Security and SSI programs, respectively. We are not making any changes 
to these sections of our regulations. Sections 404.988(a) and 
416.1488(a) provide that a determination or decision may be reopened 
within 12 months of the date of the notice of the initial determination 
for any reason. Sections 404.988(b) and 416.1488(b) provide that a 
determination or decision may be reopened within 4 years (2 years for 
SSI cases) of the date of the notice of the initial determination if we 
find good cause, as defined in Secs. 404.989 and 416.1489, to reopen 
the case. The time periods within which a final decision of an ALJ may 
be reopened under these sections, therefore, are measured from the date 
of the notice of the initial determination, not from the date of the 
ALJ decision. Under these sections, the Appeals Council may reopen a 
final decision of an ALJ within 12 months of the date of the notice of 
the initial determination for any reason, or within 4 years (only 2 
years for SSI cases) of the date of the notice of the initial 
determination if the Council finds good cause to reopen.
    These final rules, like the proposed rules, revise Secs. 404.987 
and 416.1487 to clarify that we may reopen and revise a final 
determination or decision either on our own initiative or upon the 
request of a person who was a party to the determination or decision. 
While the final rules clarify that the Appeals Council has the 
discretion to reopen a final decision of an ALJ on its own initiative, 
as well as at the request of a party to the decision, under the 
conditions specified in Secs. 404.988 and 416.1488, they do not make 
the reopening authority under Secs. 404.988(a) and 416.1488(a) 
inconsistent with the authority provided under Secs. 404.969 and 
416.1469 for Appeals Council own-motion review of an ALJ decision. 
Sections 404.988 and 416.1488 state the conditions under which a 
determination or decision that has become final may be reopened. 
Sections 404.969 and 416.1469, on the other hand, authorize the Appeals 
Council to initiate review of an ALJ decision that has not become 
final. A decision by an ALJ becomes final unless a person who was a 
party to the decision requests Appeals Council review of the decision 
within the stated time period, see Secs. 404.968 and 416.1468, or the 
Council itself decides to review the decision within the time period 
provided in Secs. 404.969 and 416.1469. The latter sections provide 
that any time within 60 days after the date of an ALJ decision or 
dismissal of a hearing request, the Appeals Council may decide on its 
own initiative to review the decision or dismissal. By contrast, 
Secs. 404.988(a) and 416.1488(a) allow the Appeals Council to reopen a 
final decision of an ALJ for any reason only within 12 months of the 
date of the notice of the initial determination made in the case. In 
almost all cases in which an ALJ decision becomes final, this 12-month 
period for reopening for any reason will have expired due to the normal 
processing time required for the disposition of the case through the 
reconsideration and ALJ hearing steps of the administrative review 
process. Therefore, a final decision of an ALJ seldom can be reopened 
under the conditions specified in Secs. 404.988(a) and 416.1488(a).
    Comment: Some commenters expressed the view that the proposed rules 
were unfair to claimants and beneficiaries because they permitted SSA 
to reopen on its own initiative a final determination or decision that 
was favorable to the individual and make a revised determination or 
decision that could be unfavorable to the individual. One commenter 
stated that fairness requires that only claimants and beneficiaries be 
permitted to initiate the reopening and revision of a final 
determination or decision.
    Response: Our authority to initiate reopening gives us the 
discretion to reopen and revise a final determination or decision on 
our own initiative under the conditions described in Secs. 404.988 and 
416.1488 whether such final determination or decision was favorable or 
unfavorable to the individual. The revised determination or decision 
which we make may be less favorable or more favorable to the individual 
than the prior determination or decision, or it may involve merely a 
technical revision that does not affect the ultimate conclusion 
regarding the individual's rights under the Social Security or SSI 
program.
    The policy that we may reopen and revise final determinations or 
decisions on our own initiative is advantageous to many claimants and 
beneficiaries. While an individual may request that a final 
determination or decision that was unfavorable to the individual be 
reopened and revised, it is often SSA, and not the individual, that 
discovers that an error was made, or that new and material evidence 
exists, that provides a basis to reopen and revise a final 
determination or decision that was unfavorable to the individual. The 
authority to reopen on our own initiative allows us to reopen and 
revise the determination or decision in these cases even though the 
individual has not requested reopening. Indeed, in many, if not most, 
cases in which we reopen and revise a final determination or decision 
on our own initiative, we do so for the sole purpose of making a 
revised determination or decision that would be more favorable to the 
individual than the prior determination or decision.
    Our longstanding policy regarding the authority to reopen on our 
own initiative is intended to ensure that the final determinations and 
decisions which we make about the rights of individuals under the 
Social Security and SSI programs are fair and proper. It enables us to 
protect the integrity of these programs by allowing us to reopen and 
revise final determinations or decisions on our own initiative, as well 
as at the request of a party to the determination or decision, in cases 
where, for example, the determination or decision was obtained by 
fraud, the evidence that was considered in making the determination or 
decision clearly shows on its face that an error was made in the 
determination or decision, or new and material evidence shows that the 
determination or decision is incorrect. See Secs. 404.988, 404.989, 
416.1488 and 416.1489. In addition, if we reopen and revise a final 
determination or decision on our own initiative, any person who was a 
party to the revised determination or decision has the opportunity 
under Secs. 404.994 and 416.1494 to request that the revision be 
reviewed. Under these sections, if an individual is dissatisfied with a 
revised determination or decision made in his or her case, he or she 
may request further administrative or judicial review, as appropriate, 
of our revised determination or decision.
    Comment: Two commenters believed that some of the conditions for 
reopening determinations and decisions provided in Secs. 404.988 and 
416.1488 are too broad. One of the commenters stated that the criteria 
in Secs. 404.989 and 416.1489 for determining whether good cause exists 
to reopen under Secs. 404.988(b) and 416.1488(b) should be clarified to 
provide more precise standards for determining good cause to reopen. 
The other commenter urged that the criteria for determining good cause 
be modified to limit further the conditions under which a determination 
or decision may be reopened. This commenter also recommended the 
elimination of the provisions of Secs. 404.988(a) and 416.1488(a) which 
permit the reopening of a determination or decision within 12 months of 
the date of the notice of the initial determination for any reason.
    Response: We do not believe that there is any need at this time to 
modify or clarify the specific criteria in Secs. 404.989 and 416.1489 
for determining whether good cause exists to reopen a determination or 
decision under Secs. 404.988(b) and 416.1488(b). In addition, we 
believe that the conditions for reopening provided in Secs. 404.988 and 
416.1488, including the provisions of Secs. 404.988(a) and 416.1488(a), 
are sufficiently restrictive. These sections of the regulations provide 
that a determination or decision may be reopened only within limited 
time periods and/or under limited circumstances. They limit the 
conditions under which we may reopen a final determination or decision 
either on our own initiative or on the request of a person who was a 
party to the determination or decision.
    The final rules, like the proposed rules, only revise Secs. 404.987 
and 416.1487. The sole purpose of the revisions is to clarify our 
longstanding policy that we may reopen and revise final determinations 
or decisions on our own initiative as well as at the request of a party 
to the determination or decision. These final rules, therefore, do not 
make any changes to Sec. 404.988, Sec. 404.989, Sec. 416.1488 or 
Sec. 416.1489. For the foregoing reasons, the proposed rules are being 
adopted as final regulations.

Regulatory Procedures

Paperwork Reduction Act

    These regulations impose no new reporting or recordkeeping 
requirements necessitating clearance by the Office of Management and 
Budget.

Regulatory Flexibility Act

    We certify that these final regulations will not have a significant 
economic impact on a substantial number of small entities because they 
affect determinations or decisions about the rights of individuals 
under the Social Security and SSI programs. Therefore, a regulatory 
flexibility analysis as provided in Pub. L. 96-354, the Regulatory 
Flexibility Act, is not required.

(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, Death benefits, Disability 
benefits, Old-Age, Reporting and recordkeeping requirements, Survivors 
and Disability Insurance.

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements, Supplemental Security Income.

    Dated: November 4, 1993.
Shirley Chater,
Commissioner of Social Security.
    Approved: February 7, 1994.
Donna E. Shalala,
Secretary of Health and Human Services.
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), and (d)-(h), 221(d), and 
1102 of the Social Security Act; 31 U.S.C. 3720A; 42 U.S.C. 401(j), 
405 (a), (b), and (d)-(h), 421(d), and 1302.

    2. Section 404.987 is revised to read as follows:


Sec. 404.987  Reopening and revising determinations and decisions.

    (a) General. Generally, if you are dissatisfied with a 
determination or decision made in the administrative review process, 
but do not request further review within the stated time period, you 
lose your right to further review and that determination or decision 
becomes final. However, a determination or a decision made in your case 
which is otherwise final and binding may be reopened and revised by us.
    (b) Procedure for reopening and revision. We may reopen a final 
determination or decision on our own initiative, or you may ask that a 
final determination or a decision to which you were a party be 
reopened. In either instance, if we reopen the determination or 
decision, we may revise that determination or decision. The conditions 
under which we may reopen a previous determination or decision, either 
on our own initiative or at your request, are explained in 
Sec. 404.988.

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 of part 416 continues to 
read as follows:

    Authority: Secs. 1102, 1631, and 1633 of the Social Security 
Act; 42 U.S.C. 1302, 1383, and 1383b; sec. 6 of Pub. L. 98-460, 98 
Stat. 1802.

    2. Section 416.1487 is revised to read as follows:


Sec. 416.1487  Reopening and revising determinations and decisions.

    (a) General. Generally, if you are dissatisfied with a 
determination or decision made in the administrative review process, 
but do not request further review within the stated time period, you 
lose your right to further review and that determination or decision 
becomes final. However, a determination or a decision made in your case 
which is otherwise final and binding may be reopened and revised by us.
    (b) Procedure for reopening and revision. We may reopen a final 
determination or decision on our own initiative, or you may ask that a 
final determination or a decision to which you were a party be 
reopened. In either instance, if we reopen the determination or 
decision, we may revise that determination or decision. The conditions 
under which we may reopen a previous determination or decision, either 
on our own initiative or at your request, are explained in 
Sec. 416.1488.

[FR Doc. 94-3958 Filed 2-22-94; 8:45 am]
BILLING CODE 4190-29-P