[Federal Register Volume 59, Number 167 (Tuesday, August 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21304]


[[Page Unknown]]

[Federal Register: August 30, 1994]


                                                   VOL. 59, NO. 167

                                           Tuesday, August 30, 1994

ADMINISTRATIVE CONFERENCE OF THE UNITED STATES

 

Adoption of Recommendations and Statement Regarding 
Administrative Practice and Procedure

AGENCY: Administrative Conference of the United States.

ACTION: Notice.

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SUMMARY: The Administrative Conference of the United States (ACUS) 
adopted two recommendations and one formal statement at its Fiftieth 
Plenary Session. The recommendations concern the use of audited self-
regulation as a regulatory technique and procedures for civil 
forfeiture of property or other assets. The statement presents the 
views of the Conference on the Social Security Administration's 
proposal to reengineer the disability benefits process.

FOR FURTHER INFORMATION: Renee Barnow, 202-254-7020.

SUPPLEMENTARY INFORMATION: The Administrative Conference of the United 
States was established by the Administrative Conference Act, 5 U.S.C. 
591-596. The Conference studies the efficiency, adequacy, and fairness 
of the administrative procedures used by federal agencies in carrying 
out administrative programs, and makes recommendations for improvements 
to the agencies, collectively or individually, and to the President, 
Congress, and the Judicial Conference of the United States (5 U.S.C. 
594(1)). At its Fiftieth Plenary Session, held June 16, 1994, the 
Assembly of the Administrative Conference of the United States adopted 
two recommendations and a formal statement.
    Recommendation 94-1, The Use of Audited Self-Regulation as a 
Regulatory Technique, suggests that when certain prerequisites and 
safeguards are present, Congress and federal agencies should consider 
the possibility of delegating regulatory power to a private self-
regulatory organization. The recommendation emphasizes the necessity of 
ensuring the effectiveness and the fairness of the process, and 
identifies standards for determining whether such a delegation may be 
appropriate.
    Recommendation 94-2, Reforming the Government's Procedure for Civil 
Forfeiture, suggests improvements in this process. The United States 
Government has in recent years made increasing use of its power to 
confiscate the property or assets of persons involved in illegal 
activities through civil forfeitures. Notice of an impending 
administrative forfeiture is sent to the last known address of the 
owner and is published in newspapers. This system has been criticized 
as unduly expensive and ineffective. The recommendation suggests that 
the establishment of a centrally maintained Civil Forfeiture Registry, 
which would be published and made widely available, would not only 
provide better and more reliable notice, it would provide a better 
overview of the entire forfeiture process, thus improving public and 
congressional oversight. The recommendation also proposes that Congress 
impose a statutory 60-day time limit on the agency to provide notice in 
the Civil Forfeiture Registry and to send written notice of a seizure 
to the last known address of the owner or interest holder in the 
property.
    Statement No. 17, Comments on the Social Security Administration's 
Proposal on Reengineering the SSA Disability Process, constitutes the 
formal comments from the Administrative Conference to the Social 
Security Administration on SSA's proposal. The Conference generally 
supported the proposed changes to SSA's procedures, which would reduce 
the number of administrative stages from four to two, while offering 
claimants increased opportunity for face-to-face interaction with 
agency staff.
    The full texts of the recommendation and statement are set out in 
the Appendix below. The recommendations will be transmitted to the 
affected agencies and to appropriate committees of the United States 
Congress. The Administrative Conference has advisory powers only, and 
the decision on whether to implement the recommendations must be made 
by the affected agencies or by Congress.
    Recommendations and statements of the Administrative Conference are 
published in full text in the Federal Register. In past years 
Conference recommendations and statements of continuing interest were 
also published in full text in the Code of Federal Regulations (1 CFR 
Parts 305 and 310). Budget constraints have required a suspension of 
this practice in 1994. However, a complete listing of past 
recommendations and statements is published in the Code of Federal 
Regulations. Copies of all past Conference recommendations and 
statements, and the research reports on which they are based, may be 
obtained from the Office of the Chairman of the Administrative 
Conference. Requests for single copies of such documents will be filled 
without charge to the extent that supplies on hand permit (see 1 CFR 
Sec. 304.2).
    The transcript of the Plenary Session is available for public 
inspection at the Conference's offices at Suite 500, 2120 L Street, NW, 
Washington, DC.

    Dated: August 22, 1994.
Jeffrey S. Lubbers,
Research Director.

Appendix Recommendations of the Administrative Conference of the United 
States

    The following recommendations were adopted by the Assembly of the 
Administrative Conference on June 16, 1994:

Recommendation 94-1, The Use of Audited Self-Regulation as a Regulatory 
Technique

    Audited self-regulation is defined as congressional or agency 
delegation of power to a private self-regulatory organization to 
implement and enforce laws or agency regulations with respect to the 
regulated entities, with powers of independent action and review 
retained by the agency. This self-regulatory organization is often an 
association of regulated entities formed for the explicit purpose of 
self-regulation. Audited self-regulation is an alternative for Congress 
to consider in legislating any regulatory program. Properly implemented 
and monitored, a program of audited self-regulation may effectively 
advance the statutory objectives consistent with the public interest 
and the interests of the regulated entities.
    In certain circumstances, this approach may result in better 
regulation because the agency's statute and rules are supplemented and 
enforced by those entities directly involved in the regulated activity, 
which may have more detailed knowledge of the operational or technical 
aspects of that activity. The regulatory program also may be more 
effective because it can be tailored to the individual industry or 
group. In addition, the agency's regulatory enforcement costs may be 
reduced by this approach, although such cost reductions should be 
considered only if they can be achieved without eroding the 
effectiveness of enforcement.
    On the other hand, audited self-regulation may present the 
significant risks of uneven enforcement, capture of the regulators by 
the regulated industry, and creating barriers to entry or competition. 
Where the potential for institutional self-interest is too great, self-
regulation is undesirable. Other risks can be lessened by requiring the 
self-regulatory organization to establish and follow procedures similar 
to those that would be applicable if the self-regulatory organization 
were an agency.\1\ For these procedures to work, effective interest 
groups must exist, and must have access to the agency, to raise 
concerns about the conduct of the self-regulatory organization. And of 
course, the agency itself must vigilantly oversee the activities of the 
self-regulatory organization and of the regulated entities themselves.
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    \1\Such procedures generally provide for public participation 
and require all points of view to be taken into account and 
addressed. For example, rulemaking ordinarily should provide notice 
and opportunity for comment to all affected parties, and 
adjudications should be open to the public and include notice and 
hearing safeguards.
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    A survey of agency experience with audited self-regulation\2\ 
reveals several common elements typically present in effective 
programs: (1) Industry members are organized, expert, and motivated to 
comply; (2) the regulatory program requires individualized application 
of clear rules which can be objectively applied; and (3) the agency 
itself has sufficient expertise to audit the self-regulatory activity 
effectively. The survey also revealed that audited self-regulation 
programs that were terminated or not implemented lacked at least one of 
these elements.
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    \2\Audited self-regulation has been used in diverse programs, 
including quality of medical care under government insurance 
programs, stock exchange and commodities regulation and trading, 
agricultural marketing agreements, and certification of medical 
testing laboratories.
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    In those cases where the prerequisites and safeguards discussed 
above are present, Congress and the agencies should consider audited 
self-regulation as a regulatory technique.\3\
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    \3\Note, for example, that Executive Order 12,866, Regulatory 
Planning and Review, 58 Fed. Reg. 51,735, 51,736 (October 4, 1993) 
states that, to the extent permitted by law, agencies should 
identify and assess alternative forms of regulation.
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Recommendation

    1. Congress and agencies should consider audited self-regulation as 
a regulatory technique when designing, revising, or reevaluating 
regulatory programs, but only where it can be effective, as specified 
in Paragraph 2 below, and only where it can operate fairly, as 
specified in Paragraph 3 below. Audited self-regulation is defined as 
congressional or agency delegation of power to a private self-
regulatory organization to implement and enforce laws or agency 
regulations with respect to the regulated entities, with powers of 
independent action and review retained by the agency.
    2. Effectiveness. Audited self-regulation can be effective if it 
meets the following requirements.
    a. The substantive standards, whether imposed by statute, 
regulation, or otherwise, are clearly stated and are capable of 
objective application, even if judgments must be made in applying them.
    b. A self-regulatory organization with the ability and incentive to 
implement these substantive standards in cooperation with the agency 
exists or can be created.
    i. Ability. The organization must have the expertise, experience, 
authority, and commitment to design, implement, and evaluate effective 
compliance measures. It must also, by itself or in combination with 
other self-regulatory organizations, have jurisdiction over all 
regulated entities.
    ii. Incentive. The organization must be motivated to undertake 
effective and fair self-regulation consistent with the public interest, 
as that interest has been articulated by Congress and the agency. This 
motivation can be provided by, among other things: (A) the members' 
common incentives; (B) effective monitoring by groups that may be 
harmed by noncompliance; (C) potential legal liability of the self-
regulated entities or the self-regulatory organization; or (D) the 
potential for direct government regulation.
    c. The agency responsible for implementation and oversight must 
have the ability and incentive to implement the substantive standards 
through a self-regulatory program.
    i. Ability. The agency must have (A) statutory authority, including 
at least the powers specified in Paragraph 2(d) below; (B) sufficient 
substantive expertise; (C) knowledge of organizational behavior and 
internal control procedures of the self-regulatory organization and its 
members; and (D) sufficient resources, including effective auditing 
capability to monitor compliance.
    ii. Incentive. The agency must have the incentive to implement the 
self-regulatory program effectively. Effective implementation requires 
that the agency be committed to achieving the objectives of the 
statutory scheme through the self-regulatory program. It also requires 
that the agency consider the rights and needs of the intended 
beneficiaries of the regulatory program, who may be harmed by 
noncompliance, as well as the rights and needs of the regulated 
entities.
    d. The self-regulatory program is expressly authorized by 
legislation that includes:
    i. an explicit statement of the scope of permitted delegation to 
the self-regulatory organization;
    ii. authority for the agency (A) independently to enforce the law, 
agency regulations, and rules of the self-regulatory organization 
relevant to the program; (B) to enforce the organic requirements of the 
self-regulatory organization against the organization, and require that 
the organization in turn enforce its own rules against its members; (C) 
to review all rules and enforcement actions of the self-regulatory 
organization relevant to the program; and (D) to amend, repeal or 
supplement the rules of the self-regulatory organization or require the 
self-regulatory organization to do so; and
    iii. a requirement that the agency, in promulgating its own rules 
or reviewing the rules of the self-regulatory organization, examine the 
effects of those rules on competition.
    3. Fairness. Audited self-regulation can operate fairly only if the 
procedures of the self-regulatory organization ensure that the 
decisionmaker is properly informed and unbiased. Procedures for 
adjudication and for establishing rules of general applicability should 
conform generally to those that would be followed if the proceeding 
were conducted by the agency. In addition to the agency's plenary 
review authority referred to in Paragraph 2(d)(ii)(C), the agency 
should provide parties with a right of appeal.
    4. Access to records and proceedings of the self-regulatory 
organization. Congress and the agency should provide public access to 
records of the self-regulatory organization relating to the 
organization's regulatory activities, to the extent such records would 
be available under the Freedom of Information Act if the self-
regulatory organization were an agency. Congress and the agency also 
should consider whether to require any nonadjudicatory proceeding of 
the organization to be open to the public.
    5. Alternative dispute resolution. The rules of the self-regulatory 
organization should provide for use of informal and consensual 
procedures to resolve disputes where appropriate.\4\
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    \4\The Administrative Conference has repeatedly encouraged 
agencies to use alternative dispute resolution and negotiated 
rulemaking techniques in appropriate circumstances. The same factors 
supporting those recommendations suggest the value of informal and 
consensual processes in the context of self-regulatory 
organizations. See, e.g., Recommendations 82-4 and 86-3.
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Recommendation 94-2, Reforming the Government's Procedure for Civil 
Forfeiture

    The United States Government has in recent years made increasing 
use of its power to confiscate the property or assets of persons 
involved in illegal activities through the civil forfeiture process.
    The law classifies forfeitures as criminal or civil according to 
the procedure by which the government perfects its title in the 
confiscated property. Criminal forfeiture follows as a consequence of 
criminal conviction of the property owner. The government cannot obtain 
clear title until a post-trial proceeding is held. Civil forfeiture is 
accomplished by civil proceedings, in rem, against the property itself. 
Civil forfeiture has numerous advantages over criminal forfeiture in 
that the property itself is the ``defendant'' in the suit, and the 
property may be forfeited even if the owner is dead or has fled the 
United States.
     Over a hundred statutes authorize civil forfeiture, with most 
involving drug, racketeering, money laundering, or immigration 
violation.
    A civil forfeiture begins with a ``seizure'' of a privately-owned 
property by the investigative/prosecutorial government agency. 
Constitutionally, the agency must meet the probable cause test showing 
that there are reasonable grounds for belief that the property has been 
used in the commission, or constitutes proceeds, of the crime.
    Civil forfeiture proceedings are of two types. Congress has 
provided for administrative forfeiture in cases where the property is 
cash, the value of the property is under $500,000 or is a boat, plane 
or car used to carry or store drugs, or if the seizure goes 
uncontested. Notice of an impending administrative forfeiture is sent 
to the last known address of the owner and is published in newspapers.
    A Judicial forfeiture proceeding is required when a claimant 
contests the seizure, when the property seized is real estate, and when 
the value of the seized property (other than cash) is over $500,000. If 
the case proceeds, it does so in federal district court where there is 
a right to a jury trial.
    This recommendation addresses a few procedural issues regarding 
civil forfeiture.\5\ Many other issues, both procedural and 
substantive, have been raised by courts and by critics of the 
forfeiture process.\6\ There is a fundamental issue about the fairness 
and effectiveness of the entire administrative civil seizure/forfeiture 
process. It currently involves an extremely informal administrative 
process and, for the small proportion of judicial forfeiture cases that 
are taken that far, a trial in the federal district court.
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    \5\This recommendation only applies to seizures by agencies 
acting under the authority of statutory administrative forfeiture 
provisions. It does not apply to agency seizures of property under 
the authority of regulatory statutes that do not have administrative 
forfeiture provisions, or to seizures of property that by its nature 
is violative of the law, such as seizures under the Federal Food, 
Drug, and Cosmetic Act.
    \6\Federal adoption of state forfeiture actions is one issue 
which has received recent scrutiny. Under the Comprehensive Crime 
Control Act of 1984, forfeited assets (property, or money derived 
from its sale) are allocated exclusively for law enforcement 
purposes rather than to the general Treasury. Additionally, the 
Department of Justice and the Customs Bureau gained authority to 
transfer forfeited property and cash to state and local agencies 
that directly participate in law enforcement efforts leading to 
seizures and forfeitures. This has led some officials in six states 
which require forfeited property to revert to the general state 
treasury, to ask federal officials to adopt state cases and convert 
them into federal forfeitures. The Department of Justice asset 
sharing program shared over $736 million in cash and $90 million in 
property with state and local agencies from the state of the program 
in fiscal year 1986 through fiscal year 1991. In Harmelin v. 
Michigan, the Supreme Court noted:
    There is good reason to be concerned that fines, uniquely of all 
punishments, will be imposed in a measure out of accord with the 
penal goals of retribution and deterrence. Imprisonment, corporal 
punishment and even capital punishment cost a State money; fines are 
a source of revenue. As we have recognized in the context of other 
constitutional provisions, it makes sense to scrutinize governmental 
action more closely when the State stands to benefit.
    501 U.S. 957, ______ 111 S. Ct. 2680, 2693, n.9 (1991).
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    After forfeiture, an owner may petition for remission (return) or 
mitigation (partial return) of the property. Of course, in many 
instances, especially those involving cash, no one claims ownership. 
According to federal common law, the authority to grant remission or 
mitigation is totally at the discretion of the seizing agency. A 
decision on the merits for remission or mitigation is non-reviewable by 
the judiciary.\7\
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    \7\Historically, the federal government has provided for 
administrative relief from forfeiture in cases where the party's 
conduct was undertaken ``without willful negligence'' or an intent 
to commit the offense. Calero-Toledo v. Pearson Yacht Leasing Co., 
416 U.S. 663, 689-90 n.27 (1974), quoting 19 U.S.C. Sec. 1618.
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    Notice. The current system of using newspaper notices of the 
proposed forfeiture action along with a letter to the last known 
address of the owner has been criticized as unduly expensive\8\ and 
ineffective. The establishment of a centrally maintained Civil 
Forfeiture Registry, which would be published and made widely 
available, would not only provide better and more reliable notice, it 
would provide a better overview of the entire forfeiture process, thus 
improving public and congressional oversight.
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    \8\The Department of Justice estimates that the government 
spends over $55 million annually on newspaper notices.
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    Time Limits. At present, federal statutes provide no time limit on 
the agency to provide notice to the owner of the seized property. 
Unlike the requirements imposed on a person contesting the seizure to 
file a claim to the property, deadlines have not been similarly imposed 
on the agency within which it must commence a forfeiture action in 
district court. Current Department of Justice policy is to send a 
notice of seizure to each person known to have an ownership or 
possessory interest in the seized article within 60 days of the 
seizure. The notice triggers the running of the time specified by the 
enabling statute (usually 30 days) within which a person may file a 
claim to the property (thus converting an administrative forfeiture 
into a judicial one).
    Congress should provide a statutory 60-day time limit on the agency 
to provide notice in the Civil Forfeiture Registry and to send written 
notice of a seizure to the last known address of the owner or interest 
holder in the property. Granting extensions or waivers of the 60-day 
notice requirement should be within the discretion of a federal judge 
or magistrate, upon a showing by the government of good cause. Failure 
to meet the filing time limit (absent a waiver or extension) should 
result in a return of the property pending further forfeiture 
proceeding.

Recommendation

    1. Congress should provide for the establishment of a Civil 
Forfeiture Registry, centrally maintained, kept current, and made 
widely available by the Department of Justice, in lieu of the current 
requirements to publish notices in specific locations or specific 
media. The Department of Justice should then maintain the Civil 
Forfeiture Registry to provide a well-known and continuing place for 
notifying owners of seized property about proposed forfeitures.
    2. Congress should modify the forfeiture laws to require the 
government to publish notice in the Civil Forfeiture Registry and mail 
specific notice to the last known address of each person known to have 
an ownership or possessory interest in the seized article within 60-
days following seizure, recognizing that extensions or waivers are 
available with appropriate safeguards against abuse. If the seizing 
agency fails to provide notice in the Civil Forfeiture Registry (absent 
good cause) or to the last known address of the party from whom the 
property was seized within the time limits, and no waiver or extension 
was granted, the seized article should be returned to the party pending 
further forfeiture proceedings.

Statement of the Administrative Conference of the United States

    The following formal statement was adopted by the Assembly of the 
Administrative Conference on June 16, 1994:

Statement No. 17 Comments on the Social Security Administration's 
Proposal on Reengineering the SSA Disability Process

    In April 1994, the Disability Process Reengineering Team of the 
U.S. Social Security Administration issued a proposal on Disability 
Process Redesign (Redesign Proposal or Proposal). The SSA has asked for 
comments on this Proposal. This Statement constitutes the official 
comments of the Administrative Conference.
    In general, the Conference supports most of the procedural changes 
that the Reengineering Team has proposed. Many of these changes have 
been recommended by the Conference as part of its past recommendations. 
In this Statement, the Conference presents its views concerning the 
Disability Process Redesign Proposal in light of these recommendations. 
This Statement does not address those aspects of the Proposal that 
relate to disability decision methodology.\9\
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    \9\The sections of the proposal that address disability decision 
methodology relate to the structure for making the substantive 
decision whether a particular claimant meets the criteria for 
disability benefits. See Disability Process Redesign. ``The Proposal 
from the SSA Disability Process Reengineering Team (April 1994) at 
15-18.
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I. Background

A. The Redesign Proposal

    The Reengineering Team has made a series of significant proposals 
to change the way that disability claims are decided. The Proposal 
eliminates two of the current four administrative stages of the 
process, and assigns responsibility for developing the record to a 
claim manager at the initial stage and to an ``adjudication officer'' 
at the appeal stage. It retains the use of an administrative law judge 
for the appeal stage.

B. Past Administrative Conference Recommendations

    The Administrative Conference has undertaken a series of studies 
over the last 15 years that address aspects of the procedures relating 
to the processing of claims for disability benefits under the Social 
Security Act. This series of recommendations has centered at least once 
on each of the many steps in the process as it currently exists. The 
focus of many of these recommendations has been to improve the quality 
of decisionmaking by making sure that as much of the necessary 
information is in the record as early in the process as possible.
    In 1978, the Conference issued Recommendation 78-2, Procedures for 
Determining Social Security Disability Claims,\10\ which primarily 
addressed the administrative appeal stage of Social Security disability 
benefit adjudications. It recommended the continued use of ALJs, and 
made suggestions concerning the development of the evidentiary hearing 
record, including recommendations that ALJs take more care in 
questioning claimants, seek to collect as much evidence prior to the 
hearing as possible, make greater use of prehearing interviews, and 
make better use of treating physicians as sources of information.
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    \10\1 CFR 305.78-2 (1993).
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    In 1986, the Conference issued a recommendation on the use of 
nonattorney representatives in agency proceedings. Recommendation 86-1, 
Nonlawyer Assistance and Representation,\11\ urged all agencies with 
``mass justice'' programs, like the Social Security disability program, 
to encourage the use of nonlawyer representatives.
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    \11\1 CFR 305.86-1 (1993).
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    In 1987, the Conference issued two recommendations relating to the 
disability program. Recommendation 87-6, State-Level Determinations in 
Social Security Disability Cases,\12\ addressed the first level of 
disability benefit determination and review. Recommendation 87-7, A New 
Role for the Social Security Appeals Council,\13\ addressed the 
organization and function of the Appeals Council. Recommendation 87-6 
was based on early results from demonstration projects involving the 
state-level disability determination process. It recommended additional 
experimentation with face-to-face procedures. Recommendation 87-7 
suggested wide-ranging and substantial changes in the working of the 
Appeals Council, including that it move away from its historical 
function as a case review panel. The recommendation suggested that the 
caseload be significantly limited, and that the Appeals Council focus 
on important issues on which it could issue precedential opinions.
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    \12\1 CFR 305.87-6 (1993).
    \13\1 CFR 305.87-7 (1993).
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    In 1989, the Conference issued two further recommendations 
affecting the disability program. Recommendation 89-10, Improved Use of 
Medical Personnel in Social Security Disability Determinations,\14\ 
addressed a variety of issues involving medical decisionmaking in 
disability claim determinations. It proposed enhancement of the role of 
medical decisionmakers, increased effort to develop medical evidence in 
the record, and improved training of the medical staff on legal and 
program issues. It recommended use of optional face-to-face interviews 
and elimination of the reconsideration step. It also recommended that 
claimants be informed of deficiencies in the medical evidence prior to 
the issuance of an initial determination, and that the opinion of a 
claimant's treating physician be given the weight required by court 
decisions and SSA rules. Recommendation 89-8, Agency Practices and 
Procedures for the Indexing and Public Availability of Adjudicatory 
Decisions,\15\ recommended that agencies index and make publicly 
available adjudicatory decisions of their highest level tribunals, and 
further urged agencies that do not treat decisions as precedential to 
reexamine that policy. This general recommendation would apply to the 
SSA.
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    \14\1 CFR 305.89-10 (1993).
    \15\1 CFR 305.89-8 (1993).
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    Recommendation 90-4, Social Security Disability Program Appeals 
Process: Supplementary Recommendations,\16\ issued in 1990, made 
suggestions about several different aspects of the appeals process, 
aimed at improving the record for decision. It recommended enhancement 
of information provided in decision documents, increased use of 
prehearing conferences in cases where claimants are represented, 
greater use of subpoenas by ALJs, and a closing of the record after the 
ALJ hearing, subject to limited opportunity to reopen based on new 
information.
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    \16\1 CFR 305.90-4 (1993).
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    In 1991, the Conference addressed the representative payee program 
for disability benefits. Recommendation 91-3, The Social Security 
Representative Payee Program,\17\ addressed a number of procedural 
issues raised by that program. Among the recommendations was that the 
opportunity for face-to-face meetings be provided.
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    \17\1 CFR 305.93-1 (1993).
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II. Discussion

    As discussed more fully below, the Conference supports most of the 
Redesign Proposal's changes in the process for adjudicating disability 
claims. This Statement will address issues categorized by the step in 
the process to which they apply.

A. Initial Decision

1. Role of Disability Claim Manager
    The proposal would assign full responsibility for claim development 
and initial decisionmaking to a disability claim manager. It also 
stresses the need to develop the record for decision as completely as 
possible at this stage. The Conference has consistently encouraged the 
development of as complete a record as possible, as early in the 
process as possible. Assigning that responsibility to a single well-
trained person is consistent with the Conference's recommendations.
    The Conference suggests that claim development practices be 
undertaken consistent with Conference Recommendation 89-10, which 
emphasizes the importance of full and complete factual development of 
disability claims, in particular the medical aspects of such claims. 
Recommendation 89-10 also supports the current team approach to 
disability decisionmaking, and suggests an enhanced role for medical 
personnel in both claim development and disability determination. As 
discussed in more detail below, the Redesign Proposal retains a role 
for medical personnel as consultants to claim managers. The Conference 
recommends that claim managers be directed to consult with medical 
sources regularly on medical matters.
    The Proposal would allow third parties to help develop the 
information necessary to decide a claim. This concept is a reasonable 
one, so long as the claim manager retains ultimate responsibility for 
developing an adequate record and for making the decision on benefits 
based on the record.
2. Role of Medical Personnel as Consultants
    The Redesign Proposal suggests that claim managers may use medical 
consultants for advice on medical issues. The Conference, in 
Recommendation 89-10, suggested that the evaluation of medical evidence 
and decisions on medical issues should be made by a medical 
professional (physician or psychologist), who should also have 
responsibility for developing such evidence in the record. This 
recommendation was based on the two-member team approach currently in 
use at the state Disability Determination Service level. The Conference 
continues to believe that medically-trained personnel should have an 
important role in the decisionmaking process on medical evidence. 
Although the Proposal does state that disability claim managers will 
call on the services of medical consultants, it contemplates that the 
final decision on all matters, including the resolution of disputed 
medical issues, would rest with the claim manager. The Conference 
continues to stress the need to ensure that adequate consultation with 
medical experts takes place. Appropriate guidelines for such 
consultation should be developed.\18\ The Conference also recommends 
the establishment of guidelines that set priorities for the use by 
claim managers of treating physicians, examining physicians, and 
nonexamining physicians, including specialists.
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    \18\See Recommendation 89-10(A)(2).
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    The Conference supports the aspects of the Proposal designed to 
improve the quality of evidence provided by medical sources for 
disability adjudications. Many of these improvements and proposals 
track suggestions included in Recommendation 89-10. For example, the 
Conference has recommended that physicians be adequately compensated 
for their work, and that all contacts be documented routinely in 
writing and included in the record.
3. Predenial Notice With Opportunity for Face-to-Face Interview
    The Conference supports instituting the opportunity for a face-to-
face interview between the claim manager and the claimant at the 
initial stage.\19\ Such an opportunity will not only provide the claim 
manager with relevant information and the chance to ask for and get 
information efficiently, but it should also give claimants more 
confidence in the fairness of the process, by giving them an 
opportunity to be heard. This may have the effect of reducing appeals, 
even when benefits are denied, because the process will be seen to have 
increased legitimacy.
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    \19\See Recommendation 89-10(4)(b); see also Recommendation 91-
3(2), and preamble at B(2).
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    The Conference also supports the Redesign Proposal's concept of a 
predenial notice. The Conference has long supported the idea that 
claimants should be made aware of the deficiencies in their 
applications, and provided the opportunity to correct them.\20\ Such 
steps are likely to lead to more accurate early decisionmaking.
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    \20\Recommendations 78-2(B)(4), 89-10(b)(4), 90-4(1), 91-3.
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4. Issuance of Full ``Statement of the Claim'' Decisions
    The Conference supports the issuance of full decisions on 
disability benefit claims. The proposed contents for ``Statement of the 
Claim'' decisions are consistent with those the Conference recommended 
in Recommendation 90-4. Providing sufficient information to claimants 
helps them make informed decisions about future action.

B. Elimination of the Reconsideration Step

    The Conference has also previously recommended that the 
reconsideration stage be eliminated if the claimant has an opportunity 
for face-to-face contact with the decisionmaker at the initial 
stage.\21\ The Reengineering Team's proposal to provide such 
opportunity and to eliminate the redundancy of reconsideration is an 
important and positive step.
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    \21\Recommendation 89-10(A)(4)(b), (B).
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C. The Administrative Appeals Process

1. Use of Prehearing\22\ Officer to Prepare Claim for Appeals
    The Conference has long supported the concept of developing the 
record for an appeal as early in the process as possible.\23\ Thus, the 
approach of designating someone to prepare the claim for appeal is one 
the Conference supports. The Conference also supports the idea that 
claims be granted based on evidence in the record without a 
hearing.\24\
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    \22\The Conference recommends using the term ``prehearing 
officer'' rather than ``adjudication officer.'' The term 
``adjudication officer'' suggests another level of decisionmaking, 
which, even under the Redesign Proposal, is not a completely 
accurate description.
    \23\Recommendations 78-2(B)(1),(2).
    \24\Recommendation 90-4(2).
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    The Conference also recommends that prehearing officers not be 
required to be attorneys, although knowledge of the legal system and of 
applicable law would appear to be relevant qualifications.
2. Use of Prehearing Conferences and Stipulations
    The Conference supports the use of prehearing conferences and 
stipulations, which could streamline the hearing process by narrowing 
issues and ensuring that the necessary evidence will be available at 
the hearing. In some cases, a prehearing conference may obviate the 
need for a hearing. It is our understanding, based on discussions with 
the Redesign Team, that the Proposal would limit prehearing conferences 
to cases where claimants are represented. This is consistent with 
Conference recommendations.\25\
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    \25\Recommendation 90-4, preamble and (2).
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3. Consultation With Medical Sources in Appeals
    The Conference believes that improved case development will result 
from the special responsibilities given to disability claim managers at 
the initial decisionmaking level and to prehearing officers at the 
administrative hearing level. At the same time, the Conference supports 
retaining authority for administrative law judges to consult with 
medical sources, as needed. The Conference believes that, in doing so, 
ALJs should follow practices similar to those set out in Recommendation 
89-10.\26\
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    \26\Recommendation 89-10(C).
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4. Retention of De Novo Hearing With an Administrative Law Judge
    The Conference supports the proposed role for prehearing officers 
in developing the record as a way to improve the effectiveness of ALJ 
decisionmaking. The Conference's recommendations, however, have been 
predicated on the presumption that an ALJ would have the ultimate 
decisionmaking responsibility. Although others may be available to 
assist, the ALJ must retain the responsibility for the content and 
quality of his or her decisions.
5. Role of the Appeals Council
    The Conference has previously recommended that the Appeals Council 
role in the disability process be limited.\27\ The Conference believes 
that, in reviewing cases, the Council should focus on cases raising 
precedential questions. The Conference supports the Proposal's idea of 
having the Appeals Council also review cases on a random basis, looking 
at both grants and denials. The Conference also believes that the 
Appeals Council should have a role in providing guidance to 
decisionmakers at all stages in the claims process, through the use of 
precedent and interpretive guidelines concerning adjudicatory 
principles and decisional standards.
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    \27\Recommendation 87-7.
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D. Other Issues

1. Training
    The Conference supports proposals to enhance training of all staff 
involved in processing and adjudicating disability benefit claims.\28\
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    \28\Recommendations 89-10(A)(6), 78-2(C).
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2. Representatives
    The Conference has recommended that claimants be provided 
information about sources of representation, both attorneys and 
nonattorneys.\29\ It also has suggested that appropriate standards be 
adopted concerning proper practice, and that nonattorney 
representatives be encouraged.\30\ The Redesign Proposal contains 
similar types of suggestions.
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    \29\Recommendation 78-2(E).
    \30\Recommendation 86-1.
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3. Precedent
    The Proposal calls for a single presentation of all substantive 
policies used for determination of eligibility for benefits. This is 
consistent with a number of Conference recommendations that SSA make 
more use of agency guidance in disability benefits cases.\31\ The 
Conference also recommends use of precedent and clear agency statements 
of policy to encourage uniform outcomes among similar cases. The 
Appeals Council could undertake, as one of its functions, the review of 
ALJ determinations for use as precedent.
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    \31\Recommendations 87-7(1)(a)(2); 78-2(c)(2); 89-8 n.2.
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4. Reopening the Record
    The Proposal implies that the record will be closed at the ALJ 
level. We support the idea that the record should close following the 
ALJ hearing, at a time set by the ALJ, and suggest that this be made 
explicit.
    The Proposal is silent on the availability of any opportunity to 
reopen the record following the ALJ hearing. While the Conference does 
not generally encourage such reopenings, SSA should consider offering a 
limited opportunity to reopen the record in appropriate cases, 
consistent with Recommendation 90-4(4), (5).

[FR Doc. 94-21304 Filed 8-29-94; 8:45 am]
BILLING CODE 6110-01-P