[Federal Register Volume 60, Number 177 (Wednesday, September 13, 1995)]
[Rules and Regulations]
[Pages 47469-47477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22579]



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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

RIN 0960-AE06


Administrative Review Process, Testing Modifications to 
Prehearing Procedures and Decisions by Adjudication Officers

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: We are amending our rules to establish authority to test use 
of an adjudication officer who, under the Plan for a New Disability 
Claim Process approved by the Commissioner of Social Security in 
September 1994 (the disability redesign plan), would be the focal point 
for all prehearing activities when a request for a hearing before an 
administrative law judge (ALJ) is filed. The adjudication officer 
position is an integral part of the disability redesign plan. We expect 
that our tests of this position will provide us with sufficient 
information to determine the effect of the position on the hearing 
process. These final rules add two new sections setting out, for 
purposes of the tests we will conduct, the responsibilities of the 
adjudication officer in connection with a claim for Social Security or 
Supplemental Security Income (SSI) benefits based on disability. Unless 
specified, all other regulations related to our administrative review 
process and the disability determination process remain unchanged.

EFFECTIVE DATE: September 13, 1995.

FOR FURTHER INFORMATION CONTACT: Harry J. Short, Legal Assistant, 
Division of Regulations and Rulings, Social Security Administration, 
6401 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 requested 
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--
2.55 million. 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 receipts 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 by 
the close of 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 554,000 at the end of 
July 1995.
    In order to process this workload, the disability redesign plan 
contains other changes to the disability determination process by which 
SSA plans to decrease processing times while providing world-class 
service. For example, the disability redesign plan envisions a 
streamlined initial disability determination process which will result 
in more timely determinations and the elimination of the 
reconsideration step in the administrative review process for 
disability claims. We expect that one consequence of these initiatives 
will be an increase in the number of requests for hearings filed over 
the next several years. In light of these growing workload 
expectations, and to process more efficiently the hearing requests now 
pending at our hearing offices, we are issuing these final rules 
establishing the authority to test having an adjudication officer 
conduct prehearing development and, if appropriate, issue a decision 
wholly favorable to the claimant.
    We expect that use of an adjudication officer, as described in our 
disability redesign plan, will enable us to ensure development of a 
more complete record and to issue decisions in a more efficient manner 
when a request for a hearing has been filed. We anticipate that our 
tests of the adjudication officer position will provide us with 
information regarding the effect use of an adjudication officer has on 
the current hearing process, and how to best use an adjudication 
officer under the redesigned disability process. We will do this by 
testing the adjudication officer position alone and in combination with 
one or more of the tests we are conducting pursuant to the final rules 
``Testing Modifications to the Disability Determination Procedures,'' 
which were published in the Federal Register on April 24, 1995 (60 FR 
20023) (to be codified at 20 CFR 404.906 and 416.1406).
    We consider testing and subsequently implementing use of an 
adjudication officer to be a high agency priority. It is a 
complementary approach to the short-term disability initiatives we 
currently are undertaking. Our short-term initiatives are designed to 
process more efficiently pending requests for hearings and reduce the 
number of pending hearings to 375,000 at the end of calendar year 1996. 
One key short-term initiative is set out in the final regulations we 
published in the Federal Register on June 30, 1995 (60 FR 34126), which 
temporarily authorize attorney advisors in our Office of Hearings and 
Appeals (OHA) to conduct certain prehearing proceedings and, where 
appropriate, issue decisions which are wholly favorable to the claimant 
and any other party to the hearing. Our attorney advisor rules 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. The principal aim of the final rules authorizing 
attorney advisors to conduct certain proceedings and issue wholly 
favorable decisions is to expedite decisions on pending requests for 
hearings. The use of an adjudication officer is focused on making 
better use 

[[Page 47470]]
of existing resources, so that ongoing cases are processed more timely 
and in a more efficient manner. These final rules authorizing us to 
test use of an adjudication officer will allow us to test the effect of 
a process that we expect will allow us to better manage the hearing 
process in the years to come.
    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, and the number of requests for hearings 
filed over the next several years is expected to continue to increase. 
In view of the number of pending and expected hearing requests, the 
beneficial effect we expect this rule to have on our ability to improve 
our service to claimants, and the importance we place on ensuring that 
we adjudicate claims timely and accurately, we find that it is in the 
public interest to make these final rules effective upon publication.

Prehearing Procedures Under the Disability Redesign Plan

    On April 15, 1994, SSA published a notice in the Federal Register 
(59 FR 18188), setting out a proposal to reengineer the initial and 
administrative review process we use to determine an individual's 
entitlement to Social Security and SSI benefits based on disability. 
Comments on this comprehensive and far-reaching proposal were 
requested, and during the comment period that began on April 1, 1994, 
and ended on June 14, 1994, SSA received, from a broad spectrum of 
respondents, over 6,000 written responses and extensive oral comments. 
The commenters expressed their belief that improvements were needed to 
provide better service and to manage the claims process more 
effectively. While some concerns were expressed, the commenters praised 
SSA for taking on the task of redesigning the disability claim process.
    On September 7, 1994, the Commissioner of Social Security accepted 
the revised disability redesign plan that was submitted for her 
approval on June 30, 1994, with the full understanding that some 
aspects of the proposal would require research and testing. The plan as 
approved by the Commissioner was published in the Federal Register on 
September 19, 1994 (59 FR 47887).
    The plan anticipates a redesigned, two-step process for deciding 
Social Security and SSI claims based on disability. Under this process, 
the claimant will receive an initial determination, and if the claimant 
is not satisfied with this determination he or she may request an ALJ 
hearing. When a hearing is requested in the redesigned process, the 
focal point for prehearing activities will be an adjudication officer 
who will work with, among others, claimants and their representatives. 
Adjudication officers will have authority to make decisions wholly 
favorable to the claimant after the hearing is requested but before it 
is held where such decisions are warranted by the evidence.
    The adjudication officer, together with the claimant and his or her 
representative, will have responsibility for ensuring that claims 
coming before ALJs are fully developed. The procedures outlined in the 
disability redesign plan make the best use of the services of 
representatives by more clearly defining the responsibility of 
claimants and their representatives to submit evidence. In addition, we 
anticipate that the hearing process will function more efficiently 
under the disability redesign plan because the adjudication officer 
will conduct an informal conference with a claimant's representative to 
identify the issues in dispute and to prepare proposed written 
agreements for the approval of the ALJ regarding those issues which are 
not in dispute and those issues proposed for hearing. We would not ask 
a claimant who does not have a representative to limit issues prior to 
the hearing. However, if the claimant obtains representation after the 
adjudication officer concludes that the case is ready for a hearing, 
the ALJ will return the case to the adjudication officer who will 
conduct an informal conference with the claimant and his 
representative.
    In these final rules we are adding new Secs. 404.943 and 416.1443. 
These sections set out, for purposes of the tests we will conduct, the 
responsibilities of the adjudication officer when a request for an ALJ 
hearing is filed.
    For many years, our hearing offices have productively used various 
forms of prehearing development. We have conducted tests of a standard 
prehearing development process under our existing regulatory authority. 
This experience has given us some information about the effect the 
establishment of an adjudication officer position may have on the 
administrative review process. However, as we believe that further 
information will allow us to better evaluate the effect the position 
may have on the administrative review process, we will begin testing 
use of the adjudication officer as soon as possible. The tests are 
intended to assess whether the position meets the goals of the 
disability redesign process and whether it will have an effect on 
administrative and program expenditures. We also will manage closely 
the tests of the adjudication officer position to ensure that the 
procedures are consistently and effectively applied at all locations.
    In accordance with the goals and directives of the National 
Performance Review's Reinventing Government Programs I and II, and our 
disability redesign plan, the role of the adjudication officer must be 
flexible to make the best use of our available program resources and 
also be consistent with providing world-class service to our customers. 
Accordingly, under these final rules, the adjudication officer may 
either be a qualified employee of SSA or an employee of a State agency 
that makes disability determinations for us. The adjudication officer 
may be located in our field offices or program service centers, in 
State agencies that make disability determinations for us, in OHA, or 
in our Regional Office of Program and Integrity Reviews.
Adjudication Officer Qualifications

    The adjudication officer will be expected to bring relevant 
experience to the position, with additional training provided as may be 
necessary to complete the preparation of the individual to assume the 
full range of duties. The adjudication officer must have a thorough 
knowledge of the disability provisions, and be able to communicate 
effectively in informal conferences and in writing. The adjudication 
officer must be able to manage a substantial caseload, review 
independently the information in the claims file, determine the need 
for additional evidence, and evaluate the evidence under the applicable 
provisions of the Act, our regulations and rulings. In addition, the 
adjudication officer must be able to write factually and legally 
correct decisions that can be readily understood by the claimant.

Evaluation of Tests of Prehearing Procedures and Decisions by 
Adjudication Officers

    These final rules establish the authority to test new prehearing 
procedures involving use of an adjudication officer. We plan to test 
the procedures in multiple sites, including our field offices and 
program service centers, State agencies that make disability 
determination for us, OHA, and our other regional offices to provide a 
means of determining the effect of the procedures in those sites. Each 
test will 

[[Page 47471]]
involve a representative mix of geographic areas and caseloads. Before 
we commence each test, we will publish a notice in the Federal Register 
designating the test site(s) and duration of the test. The notice will 
also describe when the test will be conducted alone or in combination 
with one or more of the tests we are conducting pursuant to the final 
rules ``Testing Modifications to the Disability Determination 
Procedures'' which we published in the Federal Register on April 24, 
1995 (60 FR 20023) (to be codified at 20 CFR 404.906 and 416.1406). We 
will evaluate test outcomes against the objectives of the disability 
redesign:
     Is the process user friendly?
     Does the process maintain a high level of payment quality?
     Does the process take less time?
     Is the process efficient?
     Does the process result in satisfying work for employees?
    One of the most important aspects of our evaluation plan is to 
measure the effect the procedures used by the adjudication officer has 
on overall disability allowance rates. The responsibilities of an 
adjudication officer are not designed to change the overall allowance 
rates. In order to determine whether the actions taken by adjudication 
officers result in processing improvements consistent with expected 
outcomes, we will review evaluation results on a quarterly basis. If 
our evaluation shows that overall allowance rates increase or decrease 
unacceptably, we will cease use of, or make appropriate adjustments to 
the prehearing procedures, consistent with this regulatory authority.
    In the preamble to the final rules on ``Testing Modifications to 
the Disability Determination Procedures,'' we indicated that we plan to 
test the adjudication officer prehearing procedures, as well as other 
aspects of the disability redesign which do not require regulatory 
changes, in combination with one or more of the four models described 
in those final rules at some test sites. This continues to be our 
intention. Such tests will provide us with a body of information about 
each individual part of the redesign, as well as whether the combined 
effect of the redesign meets our goals of making the disability process 
user friendly, more timely and more accurate and efficient. It will 
also provide us with information about program expenditures in 
connection with the overall redesign.

Public Comments

    These regulatory provisions were published in the Federal Register 
as an NPRM on June 9, 1995 (60 FR 30482). We provided the public with a 
30-day comment period. We received 21 letters in response to this 
notice from a variety of sources, including individuals employed by SSA 
as attorney advisors or ALJs, State agencies which make disability 
determinations for us, representatives of legal services organizations, 
union representatives, and a private attorney.
    In general, the comments expressed concerns regarding several 
aspects of the proposed rule and requested that we not promulgate the 
rule as proposed. Some comments suggested changes to the rules, or 
identified provisions in the rule that the commenters believed required 
clarification. 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 set 
out below. Because some of the comments were detailed, we condensed, 
summarized or paraphrased them. We have, however, tried to summarize 
the commenters's views accurately and respond to all of the significant 
issues raised by the commenters.
    As discussed in our responses to the comments we received, we have 
made some changes to the proposed rule to clarify certain aspects of 
the rule. However, as most of the comments we received related to 
issues that we had considered previously in the development of the 
disability redesign plan, we are issuing these final rules with no 
substantive changes.
    Comment: A number of commenters expressed concern that the proposed 
rule would change the responsibilities of claimants and their 
representatives for obtaining and submitting evidence.
    Response: This is not our intent. Under the provisions of titles II 
and XVI of the Act and our existing regulations, a claimant will not be 
found disabled unless he or she submits evidence to support his or her 
claim for disability benefits or SSI payments based on disability. (See 
sections 223(d)(5)(A) and 1614(a)(3)(G) of the Act, and 20 CFR 404.704-
404.705, 404.935, 404.1512, 404.1514, 416.912(c), and 416.1435). The 
claimant's responsibility regarding the submission of evidence to 
support the claim for benefits is equally the responsibility of a 
representative appointed by the claimant. (See 20 CFR 404.1710, 
404.1715, 416.1510 and 416.1515).
    The disability redesign plan reflects the principle of claimant and 
claimant representative responsibility in the submission of evidence 
while defining new procedures to promote effective cooperation between 
SSA and claimants and their representatives in ensuring the development 
of complete evidentiary records. The plan makes the best use of a 
representative's services early in the process, and these final rules 
do not impose on claimants or their representatives significant 
responsibilities that they do not currently have.
    Testing use of an adjudication officer as part of the prehearing 
procedures we follow will allow us to assess the extent to which having 
an adjudication officer work with claimants and representatives in 
developing complete evidentiary records will contribute to improved and 
more expeditious claims development and, thereby, a more effective 
adjudication process.
    Comment: Several commenters stated that the proposed rule would 
result in different treatment of represented and unrepresented 
claimants and encourage representation. Other commenters thought the 
proposed rule would discourage representation.
    Response: Like the proposed rule, these final rules contain 
slightly different procedures in two areas--the development of 
additional evidence and the holding of prehearing conferences. These 
differences in procedures result from a claimant's decision to proceed 
without representation. We believe that the differences in procedures 
are warranted in both instances and that these final rules will not 
result in unfair treatment of any claimants. The procedures reflected 
in these final rules also involve a continuance of existing practices 
in our hearing offices.
    Our intent is neither to encourage nor discourage representation. 
Rather, under these final rules, and as contemplated by the disability 
redesign plan, we will remind the claimant of his or her right to 
representation. The information regarding the right to representation 
provided by the adjudication officer is designed to prevent delays 
caused by a lack of understanding of that right and to encourage the 
claimant to decide about the need for representation and choice of 
representative as soon as practicable. In all cases, however, the 
adjudication officer retains his responsibility to ensure complete 
evidentiary development with the claimant and any appointed 
representative and will work with the claimant and/or the 
representative in developing evidence. The adjudication officer will 
assist unrepresented claimants and, if necessary, claimant 
representatives in securing evidence. Generally, unrepresented 
claimants will more frequently need assistance than represented 
claimants. However, all 

[[Page 47472]]
claimants will be treated fairly and will be assisted if necessary in 
meeting their obligations to produce evidence. That approach continues 
current practices under which ALJs exercise a heightened responsibility 
in assisting unrepresented claimants.
    The adjudication officer and the claimant's representative will 
participate in an informal conference. One of the purposes of this 
informal conference is to attempt to reach proposed agreements for the 
approval of the ALJ regarding the issues which are not in dispute and 
those issues proposed for the hearing. However, the adjudication 
officer may conduct an informal conference with an unrepresented 
claimant, the main purpose of which will be to explain to the claimant 
the issues which may arise at the hearing. In addition, if a claimant 
obtains representation after the adjudication officer has concluded 
that the case is ready for a hearing, the ALJ will return the case for 
an informal conference with the adjudication officer. Under current 
practice, personnel in our OHA hearing offices generally do not request 
unrepresented claimants to participate in prehearing conferences, and 
prehearing conferences are sometimes scheduled after a claimant who was 
unrepresented obtains representation. The final rules do not contain 
specific criteria regarding when an adjudication officer will hold an 
informal conference with an unrepresented claimant so that the 
adjudication officer will have some discretion in this area.
    An essential function of the adjudication officer is to provide a 
point of contact for unrepresented claimants in order to explain the 
hearing process and the right to representation. The adjudication 
officer also will give unrepresented claimants referral sources for 
obtaining representation and copies of documents needed in appointing a 
representative. Under current practice, personnel in our OHA hearing 
offices remind claimants about their right to representation and 
provide information about referral sources in acknowledging requests 
for a hearing. The purpose of those actions, like the similar actions 
to be taken by the adjudication officers, is to encourage prompt and 
fully informed decisions about securing representation. There is no 
attempt on our part to encourage or discourage representation. Under 
the redesigned process, as under the current process, the decision to 
proceed with or without representation will continue to be a decision 
for the claimant to make.
    Comment: Some commenters thought that the proposed rule would 
create a new step in the administrative review process, would reduce 
claimant access to an ALJ, and delay the adjudication of claims.
    Response: An overriding purpose of the disability redesign plan is 
to shorten and expedite the administrative process. To reach that goal, 
the plan contemplates eventual elimination of the reconsideration step 
and the creation of the adjudication officer position. Use of an 
adjudication officer is not intended to serve as a replacement for 
reconsideration, as some commenters thought. Instead, the disability 
redesign plan contemplates the elimination of reconsideration because 
the initial determination will be the result of a process that ensures 
a more fully developed evidentiary record and provides an opportunity 
for the claimant to present additional evidence at a predecision 
interview. When a claimant is dissatisfied with the initial 
determination and requests an ALJ hearing, the adjudication officer's 
role will be to expedite the completion of any necessary prehearing 
activities and to issue, where warranted by the evidence, a decision 
which is wholly favorable to the claimant without the need for a 
hearing.
    Under these final rules, adjudication officers will not have 
authority to deny claims or to dismiss requests for an ALJ hearing. The 
intent of the redesign plan, and these final rules, is to increase 
claimant access to the ALJ by reducing the time required to receive an 
ALJ hearing in cases in which a hearing is necessary. Moreover, these 
final rules preserve a claimant's right to a hearing which will be 
conducted by an ALJ, if he or she is dissatisfied with the adjudication 
officer's decision.
    Comment: Other commenters expressed concern that the proposed rule 
would force ALJs to hear cases that are improperly developed. These 
commenters stated that the ALJ's authority to consider additional 
evidence or issues should be clarified.
    Response: We do not agree with the commenters' concerns that these 
rules would force ALJs to hear and decide improperly developed cases. 
Sections 404.943(b)(4) and 416.1443(b)(4) of the proposed rule stated 
that at the point at which a case is referred for a hearing, ``the 
administrative law judge conducts all further hearing proceedings, 
including scheduling and holding a hearing and issuing a decision or 
dismissal of your request for a hearing.'' New Secs. 404.943 and 
416.1443 do not deny to an ALJ any authority he or she may exercise 
under existing regulations. In order to make this point clearer, 
however, we have clarified in these final rules that the proceeding an 
ALJ may conduct can include the development of additional evidence.
    Comment: Several commenters stated that the provision of the 
proposed rule providing that the case would be returned to the 
adjudication officer if the claimant obtained representation after the 
AO concluded that the case was ready for a hearing, would create delays 
and discourage representation.
    Response: We do not agree with the commenters, and it is certainly 
not our intent to create delays or to discourage representation. We 
believe that this procedure will enable us to interact with the 
claimant's representative in a better and more timely manner and that 
the AO, working with the claimant's representative, will be able to 
ensure that the evidentiary record is as complete as possible prior to 
the hearing. By ensuring the development of a complete record before 
the hearing, we intend that this procedure will expedite both the 
hearing and the issuance of a hearing decision.
    Comment: A number of commenters thought that the proposed rule was 
purposely vague or unclear on how certain issues will be handled in the 
process, e.g., the return of cases by an ALJ to an adjudication officer 
and whether and how new evidence and issues could be considered by an 
ALJ.
    Response: As noted above and in the NPRM (60 FR 30482, 30483), new 
Secs. 404.943 and 416.1443 establish authority to test having an 
adjudication officer be the focal point of prehearing activities, as 
described in the disability redesign plan. The redesign plan set forth 
a broad description of a new disability process and of the adjudication 
officer position and left operational, organizational and other details 
of the process to be developed (59 FR 18188). Our intent is not to be 
vague or unclear; rather, our intent is to authorize testing in which 
detailed operating procedures may be addressed and developed 
incrementally. As noted above, however, we have clarified in these 
final rules that the ALJ may consider additional evidence, and is not 
limited to the record developed by the claimant, his or her 
representative and the adjudication officer. We also have clarified 
that the written agreements prepared by the adjudication officer with 
the claimant's representative are only proposed agreements for the 
approval of the ALJ. These agreements are subject to acceptance by and/
or further development by the ALJ at the hearing. In addition, we have 
clarified that the ALJ may return the case to the adjudication officer 
for further development or to obtain additional 

[[Page 47473]]
evidence at any point on or before the date of the hearing.
    Comment: Several commenters objected to a perceived acceleration of 
the implementation of the adjudication officer, particularly before 
other parts of the disability redesign were in place, including the 
disability claims manager position called for in the disability 
redesign plan.
    Response: These final rules establish authority to test the use of 
an adjudication officer; they do not establish the authority to 
implement the use of the adjudication officer position on a nationwide 
basis. The purpose of the rules is to test the use of an adjudication 
officer position and its procedures in a variety of sites and 
circumstances. We will test the position alone and in combination with 
one or more of the tests we are conducting pursuant to the final rules 
we recently published on ``Testing Modifications to the Disability 
Determination Procedures'' (60 FR 20023). The modifications to be 
tested under those rules include the position of disability claims 
manager and elimination of the reconsideration level of the existing 
disability claims process.
    Comment: Two commenters expressed the view that DDS employees are 
best suited for the adjudication officer position; five other 
commenters stated that the adjudication officer should be an attorney 
or have legal training.
    Response: Comments regarding the qualifications of the adjudication 
officer, throughout the planning process as well as in response to the 
NPRM, essentially have fallen into the two categories reflected above. 
The Commissioner has made a decision that for testing purposes the 
adjudication officer may be an employee of SSA or a State agency that 
makes disability determinations for us. The adjudication officer will 
be expected to bring relevant experience to the position. While legal 
experience is deemed desirable, it is not required, provided the 
individual is qualified to communicate effectively in informal 
conferences and in writing. The issues regarding whether the 
adjudication officer must have the qualifications for an attorney 
position are issues upon which testing information is required.
    Comment: Two commenters expressed the view that the adjudication 
officer should be located in OHA offices only.
    Response: We have not adopted this comment. We believe the testing 
of the adjudication officer position should not be limited to OHA 
sites. Testing the position in a variety of sites will provide 
information on the most effective location(s) for the adjudication 
officers. We also wish to assess the feasibility of increasing 
accessibility to claimants and their representatives by locating the 
adjudication officers in community based sites.
    Comment: Some of the commenters thought the proposed rule would 
violate a claimant's right to due process under the Constitution and a 
full and fair hearing under the Act if the rule precluded the ALJ from 
considering new evidence or issues at the hearing.
    Response: We do not agree that these rules violate a claimant's 
right to due process under the Constitution or a full and fair hearing 
under the Act in any way. These final rules do not preclude or 
interfere with a claimant's right to a full and fair hearing before an 
ALJ. Rather, the claimant's right to a hearing conducted by an ALJ is 
explicitly preserved even in instances in which the adjudication 
officer makes a wholly favorable decision. The preservation of the 
claimant's right to an ALJ hearing is consistent with due process and 
equal protection under the Constitution. Moreover, the due process 
concerns expressed by the commenters were premised on the commenters' 
belief that the proposed rule limited the ALJ's ability to consider 
additional evidence or issues at the hearing. As we have discussed 
above and clarified in these final rules, the ALJ's ability to consider 
additional evidence or issues under these final rules remains the same 
as it is under our current regulations.
    Comment: A number of commenters expressed the view that the 
adjudication officer is unnecessary because of the availability of 
preferable alternatives, specifically the short-term disability 
initiatives we are currently undertaking. Other commenters requested 
that we clarify the relationship between the adjudication officer and 
the attorney advisors in OHA who have been temporarily authorized to 
make fully favorable decisions in certain instances pursuant to the 
short-term disability initiatives.
    Response: The adjudication officer is part of SSA's long term plans 
for redesigning and fundamentally improving the disability claim 
process. Our short-term initiatives are designed to process pending 
workloads more efficiently, not to bring about the kind of changes that 
will fundamentally improve the disability claim process.
    The short-term disability initiatives include final rules issued on 
June 30, 1995 (60 FR 34126) which temporarily authorize attorney 
advisors in OHA to conduct certain prehearing proceedings and, where 
appropriate based on the documentary record developed as a result of 
these proceedings, to issue decisions that are wholly favorable to the 
parties to the hearing. Although there are similarities in functions 
under this short-term initiative and the adjudication officer process, 
there are substantial differences as well. The primary focus of the 
attorney advisor process is on the rapid identification of pending 
cases in which a wholly favorable decision can be made without a 
hearing. The adjudication officer also will identify claims in which a 
wholly favorable decision may be made, but the adjudication officer's 
functions are more broadly concerned with the full range of prehearing 
activities, particularly development of the record.
    Comment: A few commenters expressed concern that the proposed rule 
provided no study protocol.
    Response: We will have a study and evaluation plan in place to 
assure a valid and accurate assessment of the degree to which use of an 
adjudication officer attains the goals we wish to achieve before any 
national implementation of the process. The approach we are following 
in this regard is similar to the approach we are following in the 
related testing to be conducted under final rules on ``Testing 
Modifications to the Disability Determination Procedures'' (60 FR 
20023, 20025).
    Comment: Some commenters expressed concern that the proposed rule 
provided no clearly defined decision-making standard.
    Response: Adjudication officers will be bound by the Social 
Security Act, the regulations, and Social Security Rulings, including 
Social Security Acquiescence Rulings. They will also rely on other 
guidance published by the agency. This is consistent with established 
standards of decision making in SSA.
    Comment: Other commenters expressed concern that the proposed rule 
provided no specific quality assurance review procedures.
    Response: We are establishing an intensive quality assurance review 
program that will provide us with information regarding the quality of 
the adjudication officer work process, as well as the procedures, sites 
and the assumptions set out in detail in the disability redesign plan. 
In addition, the final rules authorize the Appeals Council to review 
the adjudication officer's decision on its own motion. No additional 
changes in these final rules or existing regulations are required to 
allow us to subject the decisions made by adjudication officers to 
quality assurance review procedures.

[[Page 47474]]

    Comment: Several commenters expressed concerns that the 
adjudication officer position as proposed for testing violated Federal/
State principles applicable in the administration of the Social 
Security disability programs, including the principle that States 
cannot make decisions.
    Response: We are of the opinion that sections 205(b)(1) and 
221(a)(1) of the Act give the Commissioner, or her agents, broad 
authority to determine rights to benefits under the Act. These sections 
contain no language specifically excluding State DDS employees who 
adjudicate disability claims for us from acting as agents of the 
Commissioner in this regard. Moreover, having DDS employees as 
adjudication officers is consistent with SSA's current regulations at 
20 CFR 404.1613 and 416.1013 governing Federal and State jurisdiction 
with respect to disability determination workloads and adding new 
classes of cases and decision-makers.
    Comment: Some commenters also expressed concern that the 
adjudication officer process would require Federal oversight of 
decisions made by employees of State agencies.
    Response: The Social Security disability programs under titles II 
and XVI of the Act establish a Federal program which includes a role 
for the States in the adjudication process. As in all other areas of 
the disability programs, the adjudication officer will be subject to 
SSA oversight, both in effectuating the adjudication officer's wholly 
favorable decisions and in quality assurance functions.
    Comment: Several commenters expressed the view that the 
adjudication officer process will increase administrative and program 
costs, particularly on the basis that the process will not decrease OHA 
workloads unless it results in the allowance of many cases.
    Response: We are conducting these tests to determine whether use of 
an adjudication officer will have an effect on program and 
administrative expenditures. The adjudication officer's function is to 
provide a focal point for all prehearing activities. While adjudication 
officers may issue wholly favorable decisions where warranted, they can 
contribute to the improvement of the disability process in other ways 
as well. Use of an adjudication officer is not designed to change the 
overall allowance rates. Moreover, as set out in the NPRM and above, in 
order to determine whether the prehearing procedures result in 
processing improvements consistent with expected outcomes, we will 
review evaluation results on a quarterly basis and make appropriate 
adjustments to, or cease use of, the prehearing procedures consistent 
with this regulatory authority if there is evidence that overall 
allowance rates increase or decrease unacceptably.
    Comment: One commenter suggested changes to the proposed rules to 
clarify in several places in the regulations that adjudication officers 
may only issue wholly favorable decisions.
    Response: We believe these final rules clearly limit the 
adjudication officers to making wholly favorable decisions, and do not 
require further clarification as suggested by the commenter.
    Comment: Two commenters expressed the view that the 30-day comment 
period was too short.
    Response: We do not agree that a longer comment period was 
warranted. We provided a shorter comment period than the 60-day period 
we usually provide because of the salutary effect we expect these rules 
to have on our ability to improve our service to claimants, and the 
importance we place on ensuring that we adjudicate claims timely and 
accurately. We also believe that the 30-day period is appropriate in 
this instance because we previously provided the public an extended 
opportunity to comment on all aspects of the disability redesign plan, 
including the establishment of the adjudication officer position.
    Comment: One commenter suggested that we add a sentence in 
Sec. 404.943(b)(1) to clarify that a claimant's representative will be 
allowed to participate in the interview with the claimant.
    Response: We have not adopted this comment because the final rules 
we are issuing provide authority for us to test the use of an 
adjudication officer. They do not change in any way the rules we follow 
regarding representation. Our existing regulations at 20 CFR 404.1705 
and 416.1505 provide that claimants may obtain representation at any 
time. We notify the claimant's representative of any administrative 
actions we take, and we also afford the representative the opportunity 
to participate in any meetings or interviews which we conduct with the 
claimant he or she represents.
    Comment: We were also asked by a commenter to clarify in 
Sec. 404.943(a)(2) of the regulations that some persons would be 
assigned to a control group for purposes of the tests we will conduct 
under these final rules.
    Response: Although we will have a control group, cases in this 
group will be processed in accordance with our current regulations, and 
the control group will be used to provide comparative data when we 
evaluate the records of cases that were used in our tests. For these 
reasons, a specific reference to the control group procedures is not 
needed in these final rules, and the change suggested by the commenter 
has not been made.
    Comment: Two commenters asked us to clarify whether the 
adjudication officer would schedule a date for the hearing with an ALJ.
    Response: The answer to this question is no. These final rules do 
not change our current procedures under which the ALJ schedules the 
hearing. However, we will use two new methods in conjunction with the 
tests we will conduct under these final rules to facilitate the ability 
of the ALJ to schedule a hearing. Under the first method, before the 
prehearing procedures are completed, the adjudication officer will ask 
the claimant or the claimant's representative to provide two or three 
dates within the following 35-50 days on which the claimant and his or 
her representative could be available for a hearing. These dates will 
be part of the record the adjudication officer forwards to the hearing 
office, where the case will be reviewed and a hearing scheduled for one 
of the dates in the file. The second method which we intend to test is 
one where the adjudication officer will arrange the time and date for 
the hearing by having the adjudication officer match a time acceptable 
to the claimant and his or her representative with an available hearing 
time out of a block of times for a hearing provided by the hearing 
office. The block of times will be the time periods within the 
following 2 to 3 months when time is available to hold hearings. The 
adjudication officer, however, will not access individual ALJ 
scheduling calendars and will not schedule a case with a specific ALJ. 
Under either procedure, the hearing office will prepare and send out 
the hearing notice 20 days prior to the hearing. The objective of both 
methods is to ensure that the hearing is scheduled and held in a timely 
and efficient manner following the conclusion of the prehearing 
procedures.
    Comment: One commenter requested that the provision in 
Sec. 404.943(c)(1) be revised to clarify the authority of the 
adjudication officer to issue a decision after a claim has been 
referred to an ALJ, but before the hearing is held.
    Response: We have revised Secs. 404.943(b)(4) and 416.1443(b)(4) to 
clarify that an ALJ may return a claim to the adjudication officer for 
further development prior to the hearing. Under 

[[Page 47475]]
the final rules, the ALJ may return the claim to the adjudication 
officer on or before the date of the hearing to complete the 
development of the evidence and for such other action as necessary. If 
the ALJ exercises this authority, the adjudication officer may make a 
decision that is wholly favorable to the claimant if it is warranted by 
the evidence, or the adjudication officer may refer the claim to the 
ALJ when the additional prehearing procedures are completed.
    Comment: One commenter requested us to clarify that, when the 
claimant or representative is unable to agree with the adjudication 
officer that the development of the evidence is complete, the 
adjudication officer will note the disagreement and refer the claim to 
the administrative law judge for further proceedings.
    Response: We agree with the comment and have clarified 
Sec. Sec. 404.943(b)(4) and 416.1443(b)(4).

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these final rules meet the criteria for a 
significant regulatory action under Executive Order 12866. Thus, they 
were subject to OMB review. These rules do not adversely affect State, 
local or tribal governments. The administrative costs of the tests will 
be covered within budgeted resources. No program costs are expected to 
result from processing of the test cases. We have not, therefore, 
prepared a cost/benefit analysis under Executive Order 12866.

Regulatory Flexibility Act

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

Paperwork Reduction Act

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

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

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Death benefits, Disability 
benefits, Old-Age, Survivors and Disability Insurance, Reporting and 
recordkeeping requirements, Social security.

20 CFR Part 416

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

    Dated: August 23, 1995.
Shirley 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 continues 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. 404.943 is added under the undesignated center heading 
``Hearing Before an Administrative Law Judge'' to read as follows:


Sec. 404.943  Responsibilities of the adjudication officer.

    (a)(1) General. Under the procedures set out in this section we 
will test modifications to the procedures we follow when you file a 
request for a hearing before an administrative law judge in connection 
with a claim for benefits based on disability where the question of 
whether you are under a disability as defined in Sec. 404.1505 is at 
issue. These modifications will enable us to test the effect of having 
an adjudication officer be your primary point of contact after you file 
a hearing request and before you have a hearing with an administrative 
law judge. The tests may be conducted alone, or in combination with the 
tests of the modifications to the disability determination procedures 
which we conduct under Sec. 404.906. The adjudication officer, working 
with you and your representative, if any, will identify issues in 
dispute, develop evidence, conduct informal conferences, and conduct 
any other prehearing proceeding as may be necessary. The adjudication 
officer has the authority to make a decision wholly favorable to you if 
the evidence so warrants. If the adjudication officer does not make a 
decision on your claim, your hearing request will be assigned to an 
administrative law judge for further proceedings.
    (2) Procedures for cases included in the tests. Prior to commencing 
tests of the adjudication officer position in selected site(s), we will 
publish a notice in the Federal Register. The notice will describe 
where the specific test site(s) will be and the duration of the 
test(s). We will also state whether the tests of the adjudication 
officer position in each site will be conducted alone, or in 
combination with the tests of the modifications to the disability 
determination procedures which we conduct under Sec. 404.906. The 
individuals who participate in the test(s) will be assigned randomly to 
a test group in each site where the tests are conducted.
    (b)(1) Prehearing procedures conducted by an Adjudication Officer. 
When you file a request for a hearing before an administrative law 
judge in connection with a claim for benefits based on disability where 
the question of whether you are under a disability as defined in 
Sec. 404.1505 is at issue, the adjudication officer will conduct an 
interview with you. The interview may take place in person, by 
telephone, or by videoconference, as the adjudication officer 
determines is appropriate under the circumstances of your case. If you 
file a request for an extension of time to request a hearing in 
accordance with Sec. 404.933(c), the adjudication officer may develop 
information on, and may decide where the adjudication officer issues a 
wholly favorable decision to you that you had good cause for missing 
the deadline for requesting a hearing. To determine whether you had 
good cause for missing the deadline, the adjudication officer will use 
the standards contained in Sec. 404.911.
    (2) Representation. The adjudication officer will provide you with 
information regarding the hearing process, including your right to 
representation. As may be appropriate, the adjudication officer will 
provide you with referral sources for representation, and give you 
copies of necessary documents to facilitate the appointment of a 
representative. If you have a representative, the adjudication officer 
will conduct an informal conference with the representative, in person 
or by telephone, to identify the issues in dispute and prepare proposed 
written agreements for the approval of the administrative law judge 
regarding those issues which are not in dispute and those issues 
proposed for the 

[[Page 47476]]
hearing. If you decide to proceed without representation, the 
adjudication officer may hold an informal conference with you. If you 
obtain representation after the adjudication officer has concluded that 
your case is ready for a hearing, the administrative law judge will 
return your case to the adjudication officer who will conduct an 
informal conference with you and your representative.
    (3) Evidence. You, or your representative, may submit, or may be 
asked to obtain and submit, additional evidence to the adjudication 
officer. As the adjudication officer determines is appropriate under 
the circumstances of your case, the adjudication officer may refer the 
claim for further medical or vocational evidence.
    (4) Referral for a hearing. The adjudication officer will refer the 
claim to the administrative law judge for further proceedings when the 
development of evidence is complete, and you or your representative 
agree that a hearing is ready to be held. If you or your representative 
are unable to agree with the adjudication officer that the development 
of evidence is complete, the adjudication officer will note your 
disagreement and refer the claim to the administrative law judge for 
further proceedings. At this point, the administrative law judge 
conducts all further hearing proceedings, including scheduling and 
holding a hearing (Sec. 404.936), considering any additional evidence 
or arguments submitted (Secs. 404.935, 404.944, 404.949, 404.950), and 
issuing a decision or dismissal of your request for a hearing, as may 
be appropriate (Secs. 404.948, 404.953, 404.957). In addition, if the 
administrative law judge determines on or before the date of your 
hearing that the development of evidence is not complete, the 
administrative law judge may return the claim to the adjudication 
officer to complete the development of the evidence and for such other 
action as necessary.
    (c)(1) Wholly favorable decisions issued by an adjudication 
officer. If, after a hearing is requested but before it is held, the 
adjudication officer decides that the evidence in your case warrants a 
decision which is wholly favorable to you, the adjudication officer may 
issue such a decision. For purposes of the tests authorized under this 
section, the adjudication officer's decision shall be considered to be 
a decision as defined in Sec. 404.901. If the adjudication officer 
issues a decision under this section, it will be in writing and will 
give the findings of fact and the reasons for the decision. The 
adjudication officer will evaluate the issues relevant to determining 
whether or not you are disabled in accordance with the provisions of 
the Social Security Act, the rules in this part and part 422 of this 
chapter and applicable Social Security Rulings. For cases in which the 
adjudication officer issues a decision, he or she may determine your 
residual functional capacity in the same manner that an administrative 
law judge is authorized to do so in Sec. 404.1546. The adjudication 
officer may also evaluate the severity of your mental impairments in 
the same manner that an administrative law judge is authorized to do so 
under Sec. 404.1520a. The adjudication officer's decision will be based 
on the evidence which is included in the record and, subject to 
paragraph (c)(2) of this section, will complete the actions that will 
be taken on your request for hearing. A copy of the decision will be 
mailed to all parties at their last known address. We will tell you in 
the notice that the administrative law judge will not hold a hearing 
unless a party to the hearing 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 adjudication 
officer is mailed.
    (2) Effect of a decision by an adjudication officer. A decision by 
an adjudication officer which is wholly favorable to you under this 
section, and notification thereof, completes the administrative action 
on your request for hearing and is binding on all parties to the 
hearing and not subject to further review, unless--
    (i) You or another party requests that the hearing continue, as 
provided in paragraph (c)(1) of this section;
    (ii) The Appeals Council decides to review the decision on its own 
motion under the authority provided in Sec. 404.969;
    (iii) The decision is revised under the procedures explained in 
Secs. 404.987 through 404.989; or
    (iv) In a case remanded by a Federal court, the Appeals Council 
assumes jurisdiction under the procedures in Sec. 404.984.
    (3) Fee for a representative's services. The adjudication officer 
may authorize a fee for your representative's services if the 
adjudication officer makes a decision on your claim that is wholly 
favorable to you, and you are represented. The actions of, and any fee 
authorization made by, the adjudication officer with respect to 
representation will be made in accordance with the provisions of 
subpart R of this part.
    (d) Who may be an adjudication officer. The adjudication officer 
described in this section may be an employee of the Social Security 
Administration or a State agency that makes disability determinations 
for us.

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

    1. The authority citation for subpart N continues to read as 
follows:

    Authority: Sec. 702(a)(5), 1631, and 1633 of the Social Security 
Act (42 U.S.C. 902(a)(5), 1383, and 1383b).

    2. New Sec. 416.1443 is added under the undesignated center heading 
``Hearing Before an Administrative Law Judge'' to read as follows:
Sec. 416.1443  Responsibilities of the adjudication officer.

    (a)(1) General. Under the procedures set out in this section we 
will test modifications to the procedures we follow when you file a 
request for a hearing before an administrative law judge in connection 
with a claim for benefits based on disability where the question of 
whether you are under a disability as defined in Secs. 416.905 and 
416.906 is at issue. These modifications will enable us to test the 
effect of having an adjudication officer be your primary point of 
contact after you file a hearing request and before you have a hearing 
with an administrative law judge. The tests may be conducted alone, or 
in combination with the tests of the modifications to the disability 
determination procedures which we conduct under Sec. 416.1406. The 
adjudication officer, working with you and your representative, if any, 
will identify issues in dispute, develop evidence, conduct informal 
conferences, and conduct any other prehearing proceeding as may be 
necessary. The adjudication officer has the authority to make a 
decision wholly favorable to you if the evidence so warrants. If the 
adjudication officer does not make a decision on your claim, your 
hearing request will be assigned to an administrative law judge for 
further proceedings.
    (2) Procedures for cases included in the tests. Prior to commencing 
tests of the adjudication officer position in selected site(s), we will 
publish a notice in the Federal Register. The notice will describe 
where the specific test site(s) will be and the duration of the 
test(s). We will also state whether the tests of the adjudication 
officer position in each site will be conducted alone, or in 
combination with the tests of the modifications to the disability 
determination procedures which we conduct under Sec. 416.1406. The 
individuals who participate in the 

[[Page 47477]]
test(s) will be assigned randomly to a test group in each site where 
the tests are conducted.
    (b)(1) Prehearing procedures conducted by an Adjudication Officer. 
When you file a request for a hearing before an administrative law 
judge in connection with a claim for benefits based on disability where 
the question of whether you are under a disability as defined in 
Secs. 416.905 and 416.906 is at issue, the adjudication officer will 
conduct an interview with you. The interview may take place in person, 
by telephone, or by videoconference, as the adjudication officer 
determines is appropriate under the circumstances of your case. If you 
file a request for an extension of time to request a hearing in 
accordance with Sec. 416.1433(c), the adjudication officer may develop 
information on, and may decide where the adjudication officer issues a 
wholly favorable decision to you that you had good cause for missing 
the deadline for requesting a hearing. To determine whether you had 
good cause for missing the deadline, the adjudication officer will use 
the standards contained in Sec. 416.1411.
    (2) Representation. The adjudication officer will provide you with 
information regarding the hearing process, including your right to 
representation. As may be appropriate, the adjudication officer will 
provide you with referral sources for representation, and give you 
copies of necessary documents to facilitate the appointment of a 
representative. If you have a representative, the adjudication officer 
will conduct an informal conference with the representative, in person 
or by telephone, to identify the issues in dispute and prepare proposed 
written agreements for the approval of the administrative law judge 
regarding those issues which are not in dispute and those issues 
proposed for the hearing. If you decide to proceed without 
representation, the adjudication officer may hold an informal 
conference with you. If you obtain representation after the 
adjudication officer has concluded that your case is ready for a 
hearing, the administrative law judge will return your case to the 
adjudication officer who will conduct an informal conference with you 
and your representative.
    (3) Evidence. You, or your representative, may submit, or may be 
asked to obtain and submit, additional evidence to the adjudication 
officer. As the adjudication officer determines is appropriate under 
the circumstances of your case, the adjudication officer may refer the 
claim for further medical or vocational evidence.
    (4) Referral for a hearing. The adjudication officer will refer the 
claim to the administrative law judge for further proceedings when the 
development of evidence is complete, and you or your representative 
agree that a hearing is ready to be held. If you or your representative 
are unable to agree with the adjudication officer that the development 
of evidence is complete, the adjudication officer will note your 
disagreement and refer the claim to the administrative law judge for 
further proceedings. At this point, the administrative law judge 
conducts all further hearing proceedings, including scheduling and 
holding a hearing, (Sec. 416.1436), considering any additional evidence 
or arguments submitted (Secs. 416.1435, 416.1444, 416.1449, 416.1450), 
and issuing a decision or dismissal of your request for a hearing, as 
may be appropriate (Secs. 416.1448, 416.1453, 416.1457). In addition, 
if the administrative law judge determines on or before the date of 
your hearing that the development of evidence is not complete, the 
administrative law judge may return the claim to the adjudication 
officer to complete the development of the evidence and for such other 
action as necessary.
    (c)(1) Wholly favorable decisions issued by an adjudication 
officer. If, after a hearing is requested but before it is held, the 
adjudication officer decides that the evidence in your case warrants a 
decision which is wholly favorable to you, the adjudication officer may 
issue such a decision. For purposes of the tests authorized under this 
section, the adjudication officer's decision shall be considered to be 
a decision as defined in Sec. 416.1401. If the adjudication officer 
issues a decision under this section, it will be in writing and will 
give the findings of fact and the reasons for the decision. The 
adjudication officer will evaluate the issues relevant to determining 
whether or not you are disabled in accordance with the provisions of 
the Social Security Act, the rules in this part and part 422 of this 
chapter and applicable Social Security Rulings. For cases in which the 
adjudication officer issues a decision, he or she may determine your 
residual functional capacity in the same manner that an administrative 
law judge is authorized to do so in Sec. 416.946. The adjudication 
officer may also evaluate the severity of your mental impairments in 
the same manner that an administrative law judge is authorized to do so 
under Sec. 416.920a. The adjudication officer's decision will be based 
on the evidence which is included in the record and, subject to 
paragraph (c)(2) of this section, will complete the actions that will 
be taken on your request for hearing. A copy of the decision will be 
mailed to all parties at their last known address. We will tell you in 
the notice that the administrative law judge will not hold a hearing 
unless a party to the hearing 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 adjudication 
officer is mailed.
    (2) Effect of a decision by an adjudication officer. A decision by 
an adjudication officer which is wholly favorable to you under this 
section, and notification thereof, completes the administrative action 
on your request for hearing and is binding on all parties to the 
hearing and not subject to further review, unless--
    (i) You or another party requests that the hearing continue, as 
provided in paragraph (c)(1) of this section;
    (ii) The Appeals Council decides to review the decision on its own 
motion under the authority provided in Sec. 416.1469;
    (iii) The decision is revised under the procedures explained in 
Secs. 416.1487 through 416.1489; or
    (iv) In a case remanded by a Federal court, the Appeals Council 
assumes jurisdiction under the procedures in Sec. 416.1484.
    (3) Fee for a representative's services. The adjudication officer 
may authorize a fee for your representative's services if the 
adjudication officer makes a decision on your claim that is wholly 
favorable to you, and you are represented. The actions of, and any fee 
authorization made by, the adjudication officer with respect to 
representation will be made in accordance with the provisions of 
subpart O of this part.
    (d) Who may be an adjudication officer. The adjudication officer 
described in this section may be an employee of the Social Security 
Administration or a State agency that makes disability determinations 
for us.

[FR Doc. 95-22579 Filed 9-12-95; 8:45 am]
BILLING CODE 4190-29-P