[Federal Register Volume 60, Number 126 (Friday, June 30, 1995)]
[Rules and Regulations]
[Pages 34126-34132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16138]



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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

RIN 0960-AE10


Administrative Review Process, Prehearing Proceedings and 
Decisions by Attorney Advisors

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: We are adding new rules which modify, on a temporary basis, 
the prehearing procedures we follow in claims for Social Security or 
Supplemental Security Income (SSI) benefits based on disability. Under 
the final rules, attorney advisors in our Office of Hearings and 
Appeals (OHA) have the authority to conduct certain prehearing 
proceedings, and where the documentary record developed as a result of 
these proceedings warrants, to issue decisions that are wholly 
favorable to the parties to the hearing. Because requests for an 
administrative law judge (ALJ) hearing have increased dramatically in 
recent years, and cases pending in our hearing offices have reached 
unprecedented levels, we have taken a number of actions designed to 
help us decide these cases more efficiently. These final rules are an 
important part of our efforts in this regard.

EFFECTIVE DATE: June 30, 1995.

FOR FURTHER INFORMATION CONTACT: Harry J. Short, Legal Assistant, 
Division of Regulations and Rulings, Social Security Administration, 
6401 Social Security Boulevard, Baltimore, Maryland 21235, (410) 965-
6243.

SUPPLEMENTARY INFORMATION:

Background

    The Social Security Administration (SSA) decides 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 in an administrative 
review process that generally consists of four steps. Claimants who are 
not satisfied with the initial determination we make on a claim may 
request reconsideration. Claimants who are not satisfied with our 
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 
steps, and who are not satisfied with our final decision, may request 
judicial review of the decision in the Federal courts.
    Generally, when a claim is filed for Social Security or SSI 
benefits based on disability, a State agency makes the initial and 
reconsideration disability determination for us. A hearing conducted 
after we have made a reconsideration determination is held by an ALJ in 
one of the 132 hearing offices we have nationwide.
    Applications for Social Security and SSI benefits based on 
disability have risen dramatically in recent years. The number of new 
disability claims SSA received in Fiscal Year (FY) 1994--3.56 million--
represented a 40 percent increase over the number received in FY 1990. 
Requests for an ALJ hearing also have increased dramatically. In FY 
1994, our hearing offices had almost 540,000 hearing receipts and the 
overwhelming majority of these were related to requests for a hearing 
filed by persons claiming disability benefits. In that year, the number 
of hearing receipts we received exceeded the number of receipts we 
received in FY 1990 by more than 70 percent. We expect hearing receipts 
to increase to more than 590,000 in FY 1995.
    Despite management initiatives that resulted in a record increase 
in ALJ productivity in FY 1994, and the hiring of more than 200 new 
ALJs and more than 650 new support staff in that year, the number of 
cases pending in our hearing offices has reached unprecedented levels--
more than 480,000 at the end of FY 1994 and more than 540,000 at the 
end of May 1995.
    On September 19, 1994, the Commissioner of Social Security 
published a Plan for a New Disability Claim Process in the Federal 
Register (59 FR 47887). That document sets forth our long term plans 
for redesigning and fundamentally improving the overall disability 
claim process. On a separate track from that longer term plan, we have 
developed a number of short term initiatives to process cases more 
efficiently and, therefore, to reduce the number of cases pending in 
our hearing offices. As part of our short term disability process 
improvements, we are issuing these final regulations that make a 
temporary change in our administrative review procedures.
    Under these final rules, attorney advisors will conduct certain 
prehearing proceedings and, where appropriate, issue decisions that are 
wholly favorable to the claimant and any other party to the hearing. 
These procedures will remain in effect for a period of time not to 
exceed two years from the effective date of these final rules unless 
they are extended by the Commissioner of Social Security by publication 
of a final rule in the Federal Register. 

[[Page 34127]]


Regulatory Provisions

    We have added new Secs. 404.942 and 416.1442 to our regulations to 
authorize attorney advisors in OHA to conduct certain prehearing 
proceedings and, where appropriate, make decisions based on the 
documentary record that are wholly favorable to the parties to the 
hearing. Our purpose in issuing these rules is to expedite the 
processing of cases pending at OHA without infringing on a claimant's 
right to a hearing before an ALJ.
    The authority of an attorney advisor to conduct prehearing 
proceedings and to make wholly favorable decisions under these final 
rules is temporary, and applies only in the limited circumstances 
described below. Also, the attorney advisor's conduct of certain 
prehearing proceedings will not delay the scheduling of a hearing 
before an ALJ. If the prehearing proceedings are not concluded before 
the hearing date, the case will be sent to the ALJ unless a decision 
wholly favorable to the claimant and all other parties is in process, 
or the claimant and all other parties to the hearing agree in writing 
to delay the hearing until the prehearing proceedings are completed.
    Prehearing proceedings may be conducted by the attorney advisor 
under this rule if new and material evidence is submitted; there is an 
indication that additional evidence is available; there is a change in 
the law or regulations; or there is an error in the file or some other 
indication that a wholly favorable decision may be issued. A decision 
by an attorney advisor will be mailed to all parties. The notice of 
decision will state the basis for the decision and advise the parties 
that an ALJ will dismiss the hearing request unless a request to 
proceed with the hearing is made by a party within 30 days after the 
date the notice of the decision is mailed.
    We believe that these temporary procedures will enable us to manage 
our pending hearing requests in a more timely manner. They also may 
provide information that can help us better identify cases that can be 
decided without a hearing before an ALJ and improve our ability to 
narrow the issues that must be resolved before a decision can be made.
    The attorney advisor's functions are not designed to change in any 
significant way the overall rate at which we allow claims for benefits 
when an individual requests a hearing before an ALJ. In order to assure 
that no unacceptable change in the overall allowance rate occurs, the 
Commissioner of Social Security will review management and quality 
assurance information on an ongoing basis. If there is evidence that 
the overall allowance rate increases or decreases unacceptably, the 
Commissioner will curtail use of, or make appropriate adjustments to 
the attorney advisor procedures, consistent with this regulatory 
authority.
    We find good cause for dispensing in this case with the 30-day 
delay in the effective date of a substantive rule, provided for by 5 
U.S.C. 553(d). As explained above, and in the notice of proposed 
rulemaking (NPRM), the number of hearing requests pending at OHA has 
reached unprecedented levels. In light of the record number of pending 
hearing requests, the importance we place on ensuring that we 
adjudicate claims timely and accurately, and the beneficial effect we 
expect these final rules to have on our ability to provide better 
service to claimants, we find that it is in the public interest to make 
these final rules effective upon publication.

Public Comments

    These regulatory provisions were published in the Federal Register 
as an NPRM on April 14, 1995 (60 FR 19008). We provided interested 
parties with a 30 day comment period. We received 82 letters 
representing the views of over 125 individuals. Most of the comments we 
received were from individuals employed either as attorney advisors or 
ALJs in OHA. However, we also received comments from a variety of other 
sources, including private citizens, claimant representatives, State 
agencies which make disability determinations for us, and union 
representatives. After carefully considering the comments received, we 
have decided to adopt the proposed rule essentially without change.
    In general, the comments either strongly supported or strongly 
opposed adoption of the proposed rule. Only a few of the comments were 
in any way equivocal, and even these can be properly categorized as 
either basically supporting or opposing the proposed rule.
    Almost all of the comments supporting adoption of the proposed rule 
did so without recommending changes. While the comments which 
recommended against adoption of the proposed rule more frequently 
suggested changes, the changes suggested were generally so substantive 
that they effectively constituted expressions of disagreement with the 
concept of the rule as proposed, rather than proposals to change the 
rule to make it function more effectively. Some of the comments we 
received were outside the scope of the proposed rule, and therefore 
have not been addressed. The substantive comments made by the 
commenters and our responses are summarized below. Because some of the 
comments were detailed, we had to condense, summarize or paraphrase 
them. We have, however, tried to summarize the commenters views 
accurately and to respond to all of the significant issues raise by the 
commenters.
    The comments from individuals employed as attorney advisors 
unanimously supported adoption of the proposed rule; all but one of the 
comments from individuals employed as ALJs recommended against adoption 
of the proposed rule. Most of the remaining comments, including most of 
those received from private citizens, claimant representatives, and 
union representatives, supported adoption of the proposed rule.
    The comments supporting the adoption of the proposed rule generally 
did so based on the view that the contemplated changes would result in 
quicker, more cost-effective service to the public. We agree with these 
comments; our intent in these final rules is to enhance our ability to 
decide cases more quickly during the period in which these rules will 
be effective and, therefore, to improve the level of service we provide 
to claimants.
    The comments from individuals who supported adoption of the 
proposed rule also stressed the serious detrimental effects the number 
of pending claims has on both claimants and our hearing offices. These 
comments also stressed that making fuller use of the experience and 
expertise of the attorney advisors in OHA constitutes the most 
effective way that SSA can promptly apply existing resources to process 
the number of cases pending at OHA in the most expeditious manner. We 
also agree with these comments.
    A number of the commenters who supported adoption of the proposed 
rule also indicated that the procedures described in the proposed rule 
should be viewed as a logical and natural extension of the prehearing 
conference program OHA has already successfully conducted under 
existing regulatory authority. Many of these comments stressed the 
importance of the procedures contained in these final rules in 
preserving the time and skill of the ALJs for use in cases that cannot 
be decided without a hearing. These comments further noted that the 
proposed rule would provide the ALJ with the benefit of a better 
developed record in cases in which an ALJ held a hearing. We concur in 
these comments.

[[Page 34128]]

    The comments received from individuals who opposed adoption of the 
proposed rule also reflected a number of common themes and views. These 
comments recommended against adoption of the proposed rule on five 
principal bases: (1) that the proposed rule violated the Administrative 
Procedure Act (APA) or the Act; (2) that it denied claimants their 
constitutional rights of due process and equal protection; (3) that it 
was impractical; (4) that it is unnecessary because of the availability 
of preferable alternatives; and (5) that it would result in decisions 
which inappropriately found that claimants were disabled and therefore 
would result in increased program costs. Our responses to these 
comments, and to the other comments we received regarding the substance 
of the rule, are set out in detail below.
    Comment: A number of comments received, primarily from individuals 
employed as ALJs, expressed the view that, for a number of reasons, the 
proposed rule violated either the APA or the Act and improperly 
delegated decision making authority to individuals who are not 
appointed as ALJs. Another commenter expressed the view, however, that 
the proposed rule was fully consistent with the Act and the APA.
    Response: We do not agree that these final rules violate either the 
APA or the Act. The Act directs the Commissioner of Social Security to 
make decisions as to the rights of any individuals applying for 
disability benefits. The Act also provides that the Commissioner shall 
provide an individual who makes a showing in writing that his or her 
rights may be prejudiced by any decision that the Commissioner has 
rendered, with an opportunity for a ``hearing'' regarding his or her 
right to benefits. Currently, by regulation, the Commissioner has 
provided that such a ``hearing'' shall be before an ALJ who shall issue 
the hearing decision.
    These final rules augment this process by authorizing attorney 
advisors to make fully favorable decisions in claims for disability 
benefits when there is no need for a hearing. No provision of the Act 
requires the Commissioner to utilize an ALJ when issuing a decision, 
nor does the APA require an agency to hold an ALJ hearing when there 
are no material facts in dispute, and the agency has decided that it is 
appropriate to issue a fully favorable decision with respect to a 
specific claim. The Act only requires that the Commissioner provide an 
individual with the opportunity for a hearing when the individual makes 
the requisite showing that his or her rights may be prejudiced by any 
decision that the Commissioner has rendered. That process is not being 
changed; the final rules explicitly preserve the individual's right to 
a hearing which will be conducted by an ALJ if the individual is 
dissatisfied with the decision made by the attorney advisor. Under 
SSA's regulations as amended by these final rules, either an attorney 
advisor or an ALJ may issue a fully favorable decision without a 
hearing in a claim for disability benefits, but if a hearing is to be 
held, the ALJ will conduct that hearing and issue a decision. This 
process is fully in accord with the Act and in no way violates the APA.
    Comment: One commenter stated the view that the proposed rule 
violated the settlement agreement between the parties in the 1979 case, 
Bono, et al. v. United States of America Social Security 
Administration, et al., Civil Action No. 77-0819-CV-W-4 (W.D. Mo.), 
regarding the rotational assignment of cases to ALJs. Another 
commenter, however, expressed the opinion that the proposed rule did 
not violate the Bono settlement agreement.
    Response: We disagree that these final rules violate the settlement 
agreement in Bono. Without conceding that any particular aspect of the 
Bono settlement is applicable here, under the Bono settlement 
agreement, OHA reserved the right to modify or change the agreed-upon 
policies after appropriate consultation with the ALJs. The Bono 
agreement also specified that the Agency could consider the number of 
cases pending before an ALJ in determining the extent to which the 
rotational assignment of cases to an ALJ immediately upon their receipt 
in the hearing office was practicable. Under our existing procedures, 
cases remain on the master docket of the hearing office until several 
prehearing procedures have been completed. The prehearing procedures we 
are adopting in these final rules represent further modifications to 
our procedures undertaken and proposed with appropriate consultation 
with our ALJs.
    Comment: Two of the commenters thought the proposed rule would 
violate a claimant's right to due process and equal protection under 
the Constitution. However, several other commenters stated that the 
proposed rule protected a claimant's right to due process under the 
Constitution.
    Response: We do not agree that these rules violate a claimant's 
right to due process or equal protection under the Constitution in any 
way. These final rules do not impair or interfere with a claimant's 
right to a hearing before an ALJ. Rather, the claimant's right to a 
hearing conducted by an ALJ is explicitly preserved if the individual 
is dissatisfied with the decision made by an attorney advisor. The 
preservation of the claimant's right to an ALJ hearing fully comports 
with due process and equal protection under the Constitution.
    Comment: Some of the commenters stated that the proposed rule was 
impractical and would not work because the effect of the rule would be 
to divert needed resources away from ALJs.
    Response: Our intent is to identify those cases meeting the 
statutory definition of disability as early in the administrative 
review process as possible. By promptly identifying these cases--
preferably before a hearing is held--SSA can avoid the costs, in terms 
of staff resources and time, of scheduling and holding unnecessary 
hearings.
    Some of the procedures we are implementing under these rules are 
based on prehearing conference and screening procedures we fully tested 
based on existing regulatory authority during a pilot study completed 
in 1993. The results of that study, which collected data from more than 
40,000 cases, showed that hearing offices could significantly reduce 
average case processing time by more effectively identifying and 
processing claims in which a hearing decision could be issued ``on-the-
record'' under our current regulations (i.e., without holding an oral 
hearing).
    The data analysis also showed that, in addition to avoiding 
unnecessary hearings, the procedures tested did not increase the time 
needed to process claims that required a hearing. The results of the 
pilot study also demonstrated that the prehearing conference and 
screening procedures did not lower hearing office productivity. 
Further, we found that the considerable savings realized in ALJ and 
staff time by avoiding unnecessary hearings more than offset the time 
spent in prehearing analysis and development.
    Although under these final rules some attorney advisors may draft 
fewer hearing decisions in cases in which a hearing before an ALJ is 
held, and provide less professional assistance to ALJs, there are a 
number of initiatives already underway that are designed to provide 
hearing offices with additional case preparation and decision writing 
support during the course of this initiative. In addition, not all 
attorney advisors assigned to hearing offices will be authorized to 
conduct prehearing proceedings and issue fully favorable decisions in 
appropriate cases under the 

[[Page 34129]]
authority contained in these final rules. Many attorney advisors, as 
well as our paralegal specialists, will be available to provide ALJs 
with research and decision drafting support.
    Comment: As an alternative to authorizing attorney advisors to 
conduct certain prehearing proceedings and issue wholly favorable 
decisions in appropriate cases, several commenters suggested that the 
proposed rule should be modified to allow OHA attorney advisors to 
conduct prehearing proceedings under the direction of an ALJ and make 
recommended decisions that the ALJ could approve or disapprove. One 
commenter suggested several specific modifications to the text of the 
proposed rule to address this issue.
    Response: We have not adopted this comment. Under current 
procedures conducted under existing regulatory authority, ALJs may 
authorize attorney advisors to review cases pending before the ALJ 
before a hearing is scheduled in order to conduct certain prehearing 
proceedings and recommend wholly favorable decisions or the scheduling 
of a hearing, as appropriate. Our experience under the 1993 pilot study 
was that ALJs agreed with and accepted the recommendations made by 
attorney advisors with very few exceptions. The procedures we are 
implementing under these final rules will allow us to process cases 
more efficiently by authorizing the attorney advisors, during the 
period in which these rules will be effective, to issue decisions which 
are wholly favorable to the claimant and any other party to the hearing 
in appropriate cases, obviating the need for duplicative review by an 
ALJ. These final rules take full advantage of the experience and 
expertise of the attorney advisor and will allow ALJs to better focus 
upon the complex cases that require their skills.
    Comment: One commenter suggested that the proposed rule be modified 
to authorize other individuals, such as adjudicators who make 
disability determinations for us in the State agencies at the initial 
and reconsideration steps of the administrative review process, to make 
revised determinations on the same basis as these final rules authorize 
attorney advisors to make decisions.
    Response: We have not adopted this comment. The provisions we are 
establishing in these final rules complement, but do not supersede, the 
provisions of Secs. 404.941 and 416.1441 of our regulations. These 
provisions allow us to refer a case after a hearing is requested, but 
before it is held, to the component that issued the determination being 
reviewed (including a State agency) so that it may conduct a prehearing 
case review to determine if a wholly or partially favorable revised 
determination should be made. The conditions for conducting prehearing 
case reviews are essentially identical to those under which attorney 
advisors may conduct prehearing proceedings under these final rules. We 
would not expect, however, that a case would be subject to both 
prehearing proceedings by an attorney advisor and a prehearing case 
review by the component that issued the determination being reviewed. 
The establishment of temporary procedures authorizing attorney advisors 
to conduct such proceedings does not limit our authority to refer cases 
for a prehearing case review under Secs. 404.941 and 416.1441.
    Furthermore, on June 9, 1995, we published an NPRM proposing to 
establish the authority to test implementation of the position of an 
adjudication officer who, under the disability redesign plan, would be 
the focal point for all prehearing activities when a request for 
hearing before an ALJ is filed (60 FR 30482). Under the tests proposed 
in the NPRM, the adjudication officer would be authorized to take a 
number of actions, including issuing a wholly favorable decision when 
warranted by the evidence in the record. The rule as proposed for 
testing permits the adjudication officer to be a qualified employee of 
SSA or a State agency that makes disability determinations for us. 
Consequently, we believe that the more appropriate course of action 
would be to address the concerns raised by this commenter in the 
context of our adjudication officer rulemaking initiative.
    Comment: A few commenters suggested other alternatives to the 
proposed rule to address the increasing number of claims pending at 
OHA, including providing ALJs with more support, hiring more ALJs and 
increasing the role of the claimant's representative in the 
administrative review process.
    Response: As discussed above in our response to the comment 
concerning the practicality of the proposed rule, we are devoting 
appropriate, additional resources to provide staff support to the ALJs 
in connection with our short term initiatives to reduce the time 
required to process the cases awaiting a hearing.
    We have no current plans to increase the number of ALJs we employ 
in any substantial way. However, we expect to hire enough additional 
ALJs so that the number on duty should, with allowances for expected 
attrition, increase slightly during this fiscal year (from 1,045 at the 
end of October 1994 to about 1,050 at the end of FY 95).
    One of our short term initiatives to process cases awaiting an ALJ 
hearing more efficiently is to encourage claimants and representatives 
to submit proposed decisional language. Under that initiative, OHA 
currently advises claimants and representatives early in the hearing 
process of the opportunity to submit arguments in the form of a 
recommended decision.
    Comment: A few commenters expressed the view that the proposed rule 
should be modified to provide adequate quality assurance review 
procedures, as an alternative to or in addition to review by the 
Appeals Council, as provided for in the proposed rule.
    Response: No change in these final rules or in other regulations is 
required to allow us to subject the decisions made by attorney advisors 
to quality assurance review procedures, in addition to the reviews the 
final rules authorize the Appeals Council to conduct on its own motion. 
We are establishing an intensive quality assurance review program that 
will supplement own motion reviews by the Appeals Council in assuring 
the accuracy of the decisions made by the attorney advisors.
    Comment: A number of commenters expressed concern that the proposed 
rule would encourage adjudicators to allow claims, and therefore would 
increase the allowance rate for cases decided at the hearing step of 
the administrative review process and increase program costs.
    Response: The attorney advisor's functions are not designed to 
increase (or decrease) in a significant way the overall rates at which 
we allow claims for benefits when an individual requests a hearing 
before an ALJ. Based on our experience with the 1993 pilot study, we 
anticipate no significant change in overall allowance rates in claims 
in which a hearing has been requested. However, we will monitor the 
impact of these final rules on overall allowance rates and decisional 
accuracy and will curtail use of, or make appropriate adjustments to 
the attorney advisor procedures consistent with this regulatory 
authority, if we determine that there is evidence of any unacceptable 
change in the rates at which we allow claims for benefits when an 
individual requests a hearing before an ALJ.

Other Comments

    Other comments involved suggestions for changing the rule in 
specific ways.

[[Page 34130]]

    Comment: One commenter recommended that SSA should adopt procedures 
to ensure that the ALJ does not know if review by an attorney advisor 
has occurred.
    Response: We have not adopted this comment. We do not believe such 
procedures could be devised or that they are required. ALJs are 
typically aware that another adjudicator has not made a wholly 
favorable determination or decision in a specific case. It has not been 
our experience that such knowledge compromises the ability of ALJs to 
hold hearings and decide cases in a fair, impartial manner. We believe 
that the attorney advisor's performance of the functions authorized by 
these final rules does not materially affect the ability of our ALJs to 
hold hearings and make decisions fairly and impartially.
    Comment: One commenter suggested that part 422 of 20 C.F.R. may 
need to be amended to give the attorney advisors decisionmaking 
authority.
    Response: We disagree with this comment. We do not believe that 
giving attorney advisors the temporary decisionmaking authority 
provided in new Secs. 404.942 and 416.1442 of our regulations requires 
amendment of part 422. The applicable regulations in part 422, 
Secs. 422.130 and 422.203, generally describe either our overall claims 
adjudication process (Sec. 422.130) or procedures followed by OHA 
(Sec. 422.203). However, Sec. 422.201 explicitly refers to the 
regulations in Secs. 404.929 through 404.983 of this chapter and 
Secs. 416.1429 through 416.1483 of this chapter for ``detailed 
provisions related to'' the hearings process. The regulations in part 
422, therefore, are intended only to describe in general terms the 
overall procedures followed by OHA. They are not intended to describe 
each provision contained in the applicable regulations of subpart J of 
part 404 of this chapter or subpart N of part 416 of this chapter. 
Consequently, we do not believe that we need to amend any provision of 
part 422 of this chapter to refer specifically to the provisions of 
these final rules.
    Comment: One commenter stated that the proposed rule should be 
clarified to establish that attorney advisors would be able to make 
fully favorable decisions in claims involving drug addiction and 
alcoholism where the claimant agrees that drug addiction and/or 
alcoholism is a contributing factor material to the finding of 
disability.
    Response: The final rules give attorney advisors authority to make 
decisions which are wholly favorable to the claimant and all other 
parties in cases in which a claimant has filed a claim for benefits 
based on disability under title II and/or title XVI. For the purposes 
of new Secs. 404.942 and 416.1442, a ``wholly favorable'' decision is 
intended to have the same definition as it is under the current 
regulations that authorize ALJs to make such a decision, Secs. 404.948 
and 416.1448. A wholly favorable decision is a decision that makes a 
finding in favor of the claimant and all the parties on every issue. 
Criteria for determining if any particular decision is wholly favorable 
would not be appropriately included in Secs. 404.942 and 416.1442. 
However, we expect that this issue will be addressed in the 
instructions we plan to issue to implement these final rules.
    Comment: Two commenters suggested extending the provisions of the 
proposed rule to include other categories of claims, including claims 
arising under the Old Age and Survivors program under title II of the 
Act and claims adjudicated by OHA on behalf of the Health Care 
Financing Administration under Parts A and B of the Medicare program 
under title XVIII of the Act.
    Response: The overwhelming majority of cases pending at OHA involve 
claims for benefits based on disability. For the purposes of this short 
term initiative, we decided that it would be best to focus these final 
rules on increasing the efficiency with which we can process the 
largest group of pending cases. Cases involving other types of claims, 
however, will benefit from the general increase in efficiency at OHA 
resulting from implementation of these rules.
    Comment: One comment expressed the view that Secs. 404.957 and 
416.1457 of subparts J and N of parts 404 and 416 of our regulations 
should be amended to specify that a claimant's agreement to postpone a 
hearing will constitute good cause for a failure to appear at a 
scheduled hearing.
    Response: This comment assumes that a case will have been assigned 
to an ALJ before an attorney advisor conducts prehearing proceedings 
under the authority contained in these rules. As discussed above, 
however, that is not our intent. The prehearing proceedings conducted 
under these provisions will not delay the scheduling of a hearing 
because those proceedings will be conducted before the case would be 
scheduled for a hearing, considering the number of cases awaiting 
hearings and our general practice of scheduling hearings according to 
the request for hearing date. The provisions concerning claimant 
agreement to delay the hearing would apply if the prehearing 
proceedings can not be completed before the case is ready to be 
scheduled for a hearing.
    Comment: Two commenters also recommended that Secs. 404.957 and 
416.1457 of our regulations be revised to clarify that an ALJ may 
dismiss a request for hearing when an attorney advisor issues a wholly 
favorable decision under Secs. 404.942 or 416.1442.
    Response: An ALJ's authority to dismiss a request for hearing under 
the circumstances set forth under Secs. 404.942 and 416.1442 is 
sufficiently well established by the provisions of these final rules. 
For many years, ALJs have exercised the authority to dismiss requests 
for hearing when revised determinations are made under the prehearing 
case review regulations found at Secs. 404.941 and 416.1441, even 
though such authority is not expressly set forth in the provisions of 
Secs. 404.957 and 416.1457. The same principles apply with respect to 
the similar, but temporary, provisions being established in these final 
rules.
    Comment: One commenter suggested that the proposed rule should be 
clarified to state whether the ALJ's dismissal of the request for 
hearing is required or only permitted after the attorney advisor issues 
a decision, and no party requests that the hearing continue.
    Response: We have not adopted this comment. An ALJ is required to 
dismiss a hearing request when the attorney advisor issues a wholly 
favorable decision and no party makes a written request to proceed with 
the hearing within 30 days of the date the notice of the decision of 
the attorney advisor is mailed. Under these rules, the attorney 
advisor's notice of decision will advise the claimant that the ALJ 
``will'' dismiss the request for hearing under those circumstances.
    Comment: Several commenters also suggested that the proposed rule 
should be amended to provide that issuance of a wholly favorable 
decision by an attorney advisor would result in immediate dismissal of 
the request for a hearing.
    Response: We have not adopted this comment. For the purposes of 
this temporary procedure, we believe it is more appropriate to make 
dismissal of the request for hearing contingent on the failure of any 
party to request to proceed with the hearing within 30 days after the 
date the notice of the attorney advisor's decision is mailed. That 
requirement clearly establishes that our intent in these temporary 
provisions is to expedite the processing of cases without infringing on 
a claimant's right to a hearing before an ALJ.
    Comment: Several comments stated that the criteria in the proposed 
rule under which attorney advisors in OHA 

[[Page 34131]]
could conduct prehearing proceedings were too broad. One commenter 
suggested that the criteria in the proposed rule under which attorney 
advisors could conduct prehearing proceedings if new and material 
evidence was submitted was vague and should be clarified.
    Response: We have not adopted these comments. Restricting the 
criteria under which an attorney advisor can conduct prehearing 
proceedings would, in our judgment, unnecessarily preclude the most 
prompt action possible on some cases. Moreover, in our experience, 
there has been no confusion over nor excessive use of the regulations 
found at Secs. 404.941 and 416.1441, which allow prehearing case 
reviews under conditions substantially the same as those set forth in 
new Secs. 404.942 and 416.1442.
    Comment: One commenter suggested changes to the proposed rules to 
clarify in several places in the regulations that attorney advisors may 
only issue fully favorable decisions.
    Response: We believe the regulations clearly limit the attorney 
advisors to making only wholly favorable decisions, and do not require 
further clarification, as suggested by the commenter.
    Comment: Two commenters suggested that the proposed rule be revised 
to clarify whether the attorney advisor can request vocational 
evidence, in addition to medical evidence, as part of the prehearing 
proceedings.
    Response: The final rules state that the attorney advisor may 
``[r]equest additional evidence that may be relevant to the claim, 
including medical evidence. * * *'' That language is sufficiently broad 
to allow the attorney advisor to request vocational evidence in 
appropriate cases. It should be noted, however, that the attorney 
advisor's ability to request additional evidence must be exercised in 
accordance with the purpose of Secs. 404.942 and 416.1442 to facilitate 
the identification and prompt processing of cases in which a wholly 
favorable decision may be made without the need for an ALJ hearing.

Regulatory Procedures

Executive Order No. 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that this rule does not meet the criteria for a 
significant regulatory action under Executive Order 12866. Thus, the 
rule is not subject to OMB review.

Regulatory Flexibility Act

    We certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
affect only individuals. Therefore, a regulatory flexibility analysis 
as provided in Pub. L. 96-354, the Regulatory Flexibility Act, is not 
required.

Paperwork Reduction Act

    These regulations impose no new reporting or recordkeeping 
requirements requiring OMB clearance.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security-Disability Insurance; 96.006, Supplemental Security Income)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Death benefits, Disability 
benefits, Old-Age, Survivors and disability insurance, Reporting and 
recordkeeping requirements, Social Security.

20 CFR Part 416

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

    Dated: June 26, 1995.
Shirley S. Chater,
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-    )

Subpart J--[Amended]

    1. The authority citation for subpart J of part 404 is revised to 
read as follows:

    Authority: Secs. 201(j), 205(a), (b), and (d)-(h), 221(d), 225 
and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 405(a), 
(b), and (d)-(h), 421(d), 425 and 902(a)(5)); 31 U.S.C. 3720A.

    2. New Sec. 404.942 is added under the undesignated center heading 
``Hearing Before an Administrative Law Judge'' to read as follows:
Sec. 404.942  Prehearing proceedings and decisions by attorney 
advisors.

    (a) General. After a hearing is requested but before it is held, an 
attorney advisor in our Office of Hearings and Appeals may conduct 
prehearing proceedings as set out in paragraph (c) of this section. If 
upon the completion of these proceedings, a decision that is wholly 
favorable to you and all other parties may be made, an attorney 
advisor, instead of an administrative law judge, may issue such a 
decision. The conduct of the prehearing proceedings by the attorney 
advisor will not delay the scheduling of a hearing. If the prehearing 
proceedings are not completed before the date of the hearing, the case 
will be sent to the administrative law judge unless a wholly favorable 
decision is in process or you and all other parties to the hearing 
agree in writing to delay the hearing until the proceedings are 
completed.
    (b) When prehearing proceedings may be conducted by an attorney 
advisor. An attorney advisor may conduct prehearing proceedings if you 
have filed a claim for benefits based on disability and--
    (1) New and material evidence is submitted;
    (2) There is an indication that additional evidence is available;
    (3) There is a change in the law or regulations; or
    (4) There is an error in the file or some other indication that a 
wholly favorable decision may be issued.
    (c) Nature of the prehearing proceedings that may be conducted by 
an attorney advisor. As part of the prehearing proceedings, the 
attorney advisor, in addition to reviewing the existing record, may--
    (1) Request additional evidence that may be relevant to the claim, 
including medical evidence; and
    (2) If necessary to clarify the record for the purpose of 
determining if a wholly favorable decision is warranted, schedule a 
conference with the parties.
    (d) Notice of a decision by an attorney advisor. If the attorney 
advisor issues a wholly favorable decision under this section, we shall 
mail a written notice of the decision to all parties at their last 
known address. We shall state the basis for the decision and advise all 
parties that an administrative law judge will dismiss the hearing 
request unless a party requests that the hearing proceed. A request to 
proceed with the hearing must be made in writing within 30 days after 
the date the notice of the decision of the attorney advisor is mailed.
    (e) Effect of actions under this section. If under this section, an 
administrative law judge dismisses a request for a hearing, the 
dismissal is binding in accordance with Sec. 404.959 unless it is 
vacated by an administrative law judge or the Appeals Council pursuant 
to Sec. 404.960. A decision made by an attorney advisor under this 
section is binding unless--

[[Page 34132]]

    (1) A party files a request to proceed with the hearing pursuant to 
paragraph (d) of this section and an administrative law judge makes a 
decision;
    (2) The Appeals Council reviews the decision on its own motion 
pursuant to Sec. 404.969 as explained in paragraph (f)(3) of this 
section; or
    (3) The decision of the attorney advisor is revised under the 
procedures explained in Sec. 404.987.
    (f) Ancillary provisions. For the purposes of the procedures 
authorized by this section, the regulations of Part 404 shall apply 
to--
    (1) Authorize an attorney advisor to exercise the functions 
performed by an administrative law judge under Secs. 404.1520a and 
404.1546;
    (2) Define the term ``decision'' to include a decision made by an 
attorney advisor, as well as the decisions identified in Sec. 404.901; 
and
    (3) Make the decision of an attorney advisor subject to review by 
the Appeals Council under Sec. 404.969 if an administrative law judge 
dismisses the request for a hearing following issuance of the decision, 
and the Appeals Council decides to review the decision of the attorney 
advisor anytime within 60 days after the date of the dismissal.
    (g) Sunset provision. The provisions of this section will no longer 
be effective on June 30, 1997 unless they are extended by the 
Commissioner of Social Security by publication of a final rule in the 
Federal Register.

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

Subpart N--[Amended]

    1. The authority citation for subpart N of part 416 is revised 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. 416.1442 is added under the undesignated center heading 
``Hearing Before an Administrative Law Judge'' to read as follows:


Sec. 416.1442  Prehearing proceedings and decisions by attorney 
advisors.

    (a) General. After a hearing is requested but before it is held, an 
attorney advisor in our Office of Hearings and Appeals may conduct 
prehearing proceedings as set out in paragraph (c) of this section. If 
upon the completion of these proceedings, a decision that is wholly 
favorable to you and all other parties may be made, an attorney 
advisor, instead of an administrative law judge, may issue such a 
decision. The conduct of the prehearing proceedings by the attorney 
advisor will not delay the scheduling of a hearing. If the prehearing 
proceedings are not completed before the date of the hearing, the case 
will be sent to the administrative law judge unless a wholly favorable 
decision is in process or you and all other parties to the hearing 
agree in writing to delay the hearing until the proceedings are 
completed.
     (b) When prehearing proceedings may be conducted by an attorney 
advisor. An attorney advisor may conduct prehearing proceedings if you 
have filed a claim for SSI benefits based on disability and--
    (1) New and material evidence is submitted;
    (2) There is an indication that additional evidence is available;
    (3) There is a change in the law or regulations; or
    (4) There is an error in the file or some other indication that a 
wholly favorable decision may be issued.
    (c) Nature of the prehearing proceedings that may be conducted by 
an attorney advisor. As part of the prehearing proceedings, the 
attorney advisor, in addition to reviewing the existing record, may--
    (1) Request additional evidence that may be relevant to the claim, 
including medical evidence; and
    (2) If necessary to clarify the record for the purpose of 
determining if a wholly favorable decision is warranted, schedule a 
conference with the parties.
    (d) Notice of a decision by an attorney advisor. If the attorney 
advisor issues a wholly favorable decision under this section, we shall 
mail a written notice of the decision to all parties at their last 
known address. We shall state the basis for the decision and advise all 
parties that an administrative law judge will dismiss the hearing 
request unless a party requests that the hearing proceed. A request to 
proceed with the hearing must be made in writing within 30 days after 
the date the notice of the decision of the attorney advisor is mailed.
    (e) Effect of actions under this section. If under this section, an 
administrative law judge dismisses a request for a hearing, the 
dismissal is binding in accordance with Sec. 416.1459 unless it is 
vacated by an administrative law judge or the Appeals Council pursuant 
to Sec. 416.1460. A decision made by an attorney advisor under this 
section is binding unless--
    (1) A party files a request to proceed with the hearing pursuant to 
paragraph (d) of this section and an administrative law judge makes a 
decision;
    (2) The Appeals Council reviews the decision on its own motion 
pursuant to Sec. 416.1469 as explained in paragraph (f)(3) of this 
section; or
    (3) The decision of the attorney advisor is revised under the 
procedures explained in Sec. 416.1487.
    (f) Ancillary provisions. For the purposes of the procedures 
authorized by this section, the regulations of part 416 shall apply 
to--
    (1) Authorize an attorney advisor to exercise the functions 
performed by an administrative law judge under Secs. 416.920a, 
416.924d(b), and 416.946;
    (2) Define the term ``decision'' to include a decision made by an 
attorney advisor, as well as the decisions identified in Sec. 416.1401; 
and
    (3) Make the decision of an attorney advisor subject to review by 
the Appeals Council under Sec. 416.1469 if an administrative law judge 
dismisses the request for a hearing following issuance of the decision, 
and the Appeals Council decides to review the decision of the attorney 
advisor anytime within 60 days after the date of the dismissal.
    (g) Sunset provision. The provisions of this section will no longer 
be effective on June 30, 1997 unless they are extended by the 
Commissioner of Social Security by publication of a final rule in the 
Federal Register.

[FR Doc. 95-16138 Filed 6-29-95; 8:45 am]
BILLING CODE 4190-29-P