[Federal Register Volume 62, Number 95 (Friday, May 16, 1997)]
[Proposed Rules]
[Pages 26997-27000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12938]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

[Regulations No. 4 and 16]
RIN 0960-AE58


Administrative Review Process, Testing Elimination of the Fourth 
Step of Administrative Review in the Disability Claim Process (Request 
for Review by the Appeals Council)

AGENCY: Social Security Administration.

ACTION: Proposed rules.

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SUMMARY: We propose to amend our rules to establish authority to test 
elimination of the final step in the administrative review process used 
in determining claims for Social Security and Supplemental Security 
Income (SSI) benefits based on disability. If these proposed rules are 
published in final, the right of appeal for a claimant who is included 
in the test procedures and is dissatisfied with the decision of an 
administrative law judge (ALJ) would be to file a civil action in 
Federal district court, rather than to request the Appeals Council to 
review the decision. We are proposing to test procedures that eliminate 
the request for Appeals Council review in furtherance of the Plan for a 
New Disability Claim Process that former Commissioner of Social 
Security Chater approved in September 1994. Unless specified, all other 
regulations relating to the disability determination process and the 
administrative review process remain unchanged.

DATES: To be sure that your comments are considered, we must receive 
them no later than June 16, 1997.

ADDRESSES: Comments should be submitted in writing to the Commissioner 
of Social Security, P.O. Box 1585, Baltimore, MD 21235; sent by telefax 
to (410) 966-2830; sent by E-mail to ``[email protected]''; or, 
delivered to the Division of Regulations and Rulings, Social Security 
Administration, 3-B-1 Operations Building, 6401 Security Boulevard, 
Baltimore, MD 21235, between 8:00 a.m. and 4:30 p.m. on regular 
business days. Comments may be inspected during these same hours by 
making arrangements with the contact person shown below.

FOR FURTHER INFORMATION CONTACT: Harry J. Short, Legal Assistant, 
Division of Regulations and Rulings, Social Security Administration, 
6401 Security Boulevard, Baltimore, MD 21235, (410) 965-6243 for 
information about these rules. For information on eligibility or 
claiming benefits, call our national toll-free number, 1-800-772-1213.

SUPPLEMENTARY INFORMATION:

Background

    The Social Security Administration (SSA) currently uses a four-step 
process in deciding 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. Claimants who are not satisfied with the initial 
determination on their claims may request reconsideration. Claimants 
who are not satisfied with the 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 four steps, and who are dissatisfied with the final 
decision, may request judicial review of the decision by filing a civil 
action in Federal district court. 20 CFR Secs. 404.900 and 416.1400.
    SSA's Plan for a New Disability Claim Process (59 FR 47887, 
September 19, 1994) anticipates establishment of a redesigned, two-step 
process for deciding Social Security and SSI claims based on 
disability. The redesign plan anticipates that the process for 
determining disability can be significantly improved by strengthening 
the steps of the process in which we make initial determinations and 
provide dissatisfied claimants an opportunity for a hearing before an 
ALJ, and by eliminating the reconsideration step and the step in which 
claimants request the Appeals Council to review the decisions of ALJs.
    In 20 CFR 404.906 and 416.1406 (60 FR 20023, April 24, 1995), we 
have established authority to test, singly and in combination, several 
model procedures for modifying the disability claims process. Under 
that authority, we are currently testing, in isolation from other 
possible changes, a modification of the initial determination step in 
which a single decisionmaker, rather than a team composed of a 
disability examiner and a medical consultant, makes the initial 
determination of disability. In addition, under authority established 
in 20 CFR 404.943 and 416.1443 (60 FR 47469, September 13, 1995), we 
are also testing, in another model for evaluating a possible change in 
isolation from other changes, use of an adjudication officer as the 
focal point for all prehearing activities in disability cases in which 
a claimant requests a hearing before an ALJ.
    To assess how the above changes and other elements of the 
disability redesign plan would work together in different combinations, 
we initiated an integrated test on April 7, 1997, that combines model 
procedures for major elements of the redesign plan. As presently 
structured under existing testing authority (established in 
Secs. 404.906, 404.943, 416.1406, and 416.1443 in combination), this 
integrated model includes, in addition to models for the single 
decisionmaker and the adjudication officer, a model for procedures to 
provide a predecision interview conducted by the single decisionmaker 
(at which a claimant for benefits based on disability will have an 
opportunity to submit further evidence and have an interview with the 
initial decisionmaker if the evidence does not support a fully 
favorable initial disability determination), and a model to test 
eliminating the reconsideration step in disability claims.
    In order to increase our ability to assess the effects of possible 
modifications of the disability claim process in combination, we are 
proposing in these rules to amend our regulations to authorize testing 
of an additional modification in our integrated model. We are proposing 
to incorporate in this model additional

[[Page 26998]]

procedures to test elimination of the step in that process in which a 
claimant requests the Appeals Council to review the hearing decision of 
an ALJ.
    Under the proposed rules, we will randomly select approximately one 
half of the requests for an ALJ hearing in the integrated model for 
potential inclusion in the proposed test procedures. The remaining 
requests for hearing in the integrated model will be processed under 
our existing regulations concerning the Appeals Council and judicial 
review. This will enable us to assess other modifications tested in the 
integrated model in association with both the proposed test procedures 
for eliminating the request for Appeals Council review step and our 
existing request for review procedures.
    Under the proposed rules, we will eliminate the request for review 
step (which has been established by agency regulations and is not 
mandated by the Act) in a case in the integrated model if: (1) The case 
has been randomly selected for inclusion in this aspect of the model, 
and (2) an ALJ issues a decision in the case that is less than wholly 
favorable to the claimant (i.e., unfavorable or only partially 
favorable to the claimant). Cases in the integrated model in which an 
ALJ issues a wholly favorable decision, dismisses a request for 
hearing, or issues a recommended decision will not be included in the 
proposed procedures. These cases will be processed under our existing 
regulations concerning the Appeals Council and judicial review.
    In a case to which the proposed rules apply, the appeal available 
to the claimant from the ALJ's decision will be filing an action in 
Federal district court. Requesting review by the Appeals Council will 
be eliminated as an appeal and as a prerequisite to seeking judicial 
review.
    Our specific goals in testing elimination of the request for review 
step will be to assess the effects of this change, as it functions in 
conjunction with other modifications in the disability claim process 
included in the integrated model, on: (1) Judicial workloads, and (2) 
the legal sufficiency of decisions subjected to judicial review. We 
consider the effects of the change in those respects to represent the 
principal, practical issues bearing on the advisability of eliminating 
the request for review step in connection with the planned, overall 
redesign of the disability claim process.
    SSA's disability redesign plan anticipates that the request for 
Appeals Council review will be eliminated in conjunction with the 
establishment of procedures to increase the number of ALJ decisions 
that the Council will consider for quality review purposes under its 
authority to review cases on its own motion. We are not including 
procedures to test the enhanced own-motion functions anticipated for 
the Appeals Council in these proposed rules. We are not including such 
procedures because we wish to concentrate the proposed test on 
producing information concerning the effects of eliminating the request 
for Appeals Council review on judicial workloads and the legal 
sufficiency of SSA's final decisions. In addition, we are preparing to 
propose permanent rules to regulate existing procedures and establish 
new procedures for referring cases to the Appeals Council for possible 
review under its own-motion authority. Those proposed changes should 
provide, if adopted in final, increased information regarding own-
motion review by the Council.
    We propose to test the effect of eliminating the request for review 
step on judicial workloads by comparing the rate at which civil actions 
are filed by individuals whose claims are processed under the current 
administrative review steps in the disability claims process--i.e., the 
four step process--to the rate at which civil actions are filed in 
cases selected for processing under the proposed test procedures. We 
will also consider the rate at which civil actions are filed in cases 
in the integrated model in which we retain the request for Appeals 
Council review.
    We propose to assess the effect of eliminating the request for 
review on the legal sufficiency of final decisions by comparing the 
rates at which, following the filing of civil actions in cases included 
in the integrated model and in a control sample of cases processed 
under the current administrative review steps in the disability claims 
process, we request court-remand of a case within the period during 
which the Commissioner of Social Security may file his answer to a 
civil action under Sec. 205(g) of the Act. The Appeals Council, working 
with agency counsel, will evaluate the claims in the integrated model 
and in the control sample to identify instances in which a court should 
be requested (as courts may be under existing procedures) to remand a 
case for further administrative action.
    We believe that, in conjunction with other modifications we are 
testing in the integrated model, elimination of the request for review 
step could have a significant beneficial effect on the disability 
claims process and on our ability to adjudicate claims timely and 
accurately. We place a high priority on speedily including a test of 
the elimination of that step in our integrated model. The proposed 
rules have the limited purpose of authorizing test procedures in a 
relatively small number of cases (projected at approximately 1900) to 
determine how elimination of the request for review step could affect 
judicial workloads and the legal sufficiency of the agency's final 
decisions. If we ultimately decide to proceed with elimination of this 
step, we would publish a Notice of Public Rulemaking setting forth 
detailed proposals concerning all the changes that would be made in the 
administrative review process to eliminate the request for review by 
the Appeals Council. Therefore, and because we have previously provided 
the public with the opportunity to comment on all aspects of our basic 
disability redesign plan, including the elimination of the request for 
review step, we are providing a 30-day comment period for these 
proposed rules rather than the 60-day period we usually provide. We 
believe that a 30-day comment period is sufficiently long, in this 
instance, to allow the public a meaningful opportunity to comment on 
the proposed rules in accordance with Executive Order (E.O) 12866.

Proposed Regulations

    We propose to add new Secs. 404.966 and 416.1466 to set forth 
authority to test elimination of the step in the administrative review 
process in which claimants for benefits based on disability request the 
Appeals Council to review the decision of an ALJ. The proposed rules 
specify in Secs. 404.966(a) and 416.1466(a) that testing of elimination 
of the request for review step will be conducted in randomly selected 
cases in which we have tested a combination of model procedures for 
modifying the disability claim process as authorized in Secs. 404.906, 
404.943, 416.1406 and 416.1443, and an ALJ has issued a decision that 
is less than wholly favorable to the claimant.
    Under proposed Secs. 404.966(b) and 416.1466(b), which describe the 
effect of an ALJ's decision, the ALJ's decision will be binding unless 
a party to the decision files a civil action, the Appeals Council 
reviews the decision on its own motion under the authority provided in 
20 CFR 404.969 and 416.1469, or the decision is revised by the 
administrative law judge or the Appeals Council under the rules on 
reopening final decisions in 20 CFR 404.987 and 416.1487. Under these 
provisions, the appeal available to a party who is dissatisfied with 
the decision of an ALJ will be to seek judicial review. As is true of 
the

[[Page 26999]]

provisions of proposed Secs. 404.966 and 416.1466 as a whole, the 
proposed provisions of Secs. 404.966(b) and 416.1466(b) pertain only to 
those ALJ decisions that have been identified for inclusion in that 
part of our integrated model in which the request for review by the 
Appeals Council is eliminated.
    Proposed Secs. 404.966(c) and 416.1466(c) describe the notice an 
ALJ will issue to advise a party to a decision included in this part of 
the integrated model of the right to file a civil action. Proposed 
Secs. 404.966(d) and 416.1466(d) describe the right a party will have 
to request the Appeals Council to grant an extension of time to file a 
civil action.

Electronic Version

    The electronic file of this document is available on the Federal 
Bulletin Board (FBB) at 9:00 a.m. on the date of publication in the 
Federal Register. To download the file, modem dial (202) 512-1387. The 
FBB instructions will explain how to download the file and the fee. 
This file is in WordPerfect and will remain on the FBB during the 
comment period.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these rules do not meet the criteria for a 
significant regulatory action under E.O. 12866. Thus, they are 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 these 
rules affect only individuals. Therefore, a regulatory flexibility 
analysis as provided in the Regulatory Flexibility Act, as amended, 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: May 7, 1997.
John J. Callahan,
Acting 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 proposed to be amended as set forth below.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-  )

    20 CFR part 404, Subpart J, is amended as follows:
    1. The authority citation for subpart J of part 404 continues to 
read as follows:

    Authority: Secs. 201(j), 205 (a), (b), (d)-(h), and (j), 221, 
225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 405 
(a), (b), (d)-(h), and (j), 421, 425, and 902(a)(5)); 31 U.S.C. 
3720A; sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); 
secs. 5, 6 (c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 
421 note).

    2. New Sec. 404.966 is added under the undesignated center heading 
``APPEALS COUNCIL REVIEW'' to read as follows:


Sec. 404.966  Testing elimination of the request for Appeals Council 
review.

    (a) Applicability and scope. Notwithstanding any other provision in 
this part or part 422 of this chapter, we are establishing the 
procedures set out in this section to test elimination of the request 
for review by the Appeals Council. These procedures will apply in 
randomly selected cases in which we have tested a combination of model 
procedures for modifying the disability claim process as authorized 
under Secs. 404.906 and 404.943, and an administrative law judge has 
issued a decision (not including a recommended decision) that is less 
than wholly favorable to you.
    (b) Effect of an administrative law judge's decision. In a case to 
which the procedures of this section apply, the decision of an 
administrative law judge will be binding on all the parties to the 
hearing unless --
    (1) You or another party file an action concerning the decision in 
Federal district court;
    (2) The Appeals Council decides to review the decision on its own 
motion under the authority provided in Sec. 404.969; or
    (3) The decision is revised by the administrative law judge or the 
Appeals Council under the procedures explained in Sec. 404.987.
    (c) Notice of the decision of an administrative law judge. The 
notice of decision the administrative law judge issues in a case 
processed under this section will advise you and any other parties to 
the decision that you may file an action in a Federal district court 
within 60 days after the date you receive notice of the decision.
    (d) Extension of time to file action in Federal district court. Any 
party having a right to file a civil action under this section may 
request that the time for filing an action in Federal district court be 
extended. The request must be in writing and it must give the reasons 
why the action was not filed within the stated time period. The request 
must be filed with the Appeals Council. If you show that you had good 
cause for missing the deadline, the time period will be extended. To 
determine whether good cause exists, we will use the standards in 
Sec. 404.911.

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

    20 CFR Part 416, Subpart N, is amended as follows:
    1. The authority citation for subpart N 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. 416.1466 is added under the undesignated center heading 
``APPEALS COUNCIL REVIEW'' to read as follows:


Sec. 416.1466  Testing elimination of the request for Appeals Council 
review.

    (a) Applicability and scope. Notwithstanding any other provision in 
this part or part 422 of this chapter, we are establishing the 
procedures set out in this section to test elimination of the request 
for review by the Appeals Council. These procedures will apply in 
randomly selected cases in which we have tested a combination of model 
procedures for modifying the disability claim process as authorized 
under Secs. 416.1406 and 416.1443, and an administrative law judge has 
issued a decision (not including a recommended decision) that is less 
than wholly favorable to you.
    (b) Effect of an administrative law judge's decision. In a case to 
which the procedures of this section apply, the decision of an 
administrative law judge will be binding on all the parties to the 
hearing unless --

[[Page 27000]]

    (1) You or another party file an action concerning the decision in 
Federal district court;
    (2) The Appeals Council decides to review the decision on its own 
motion under the authority provided in Sec. 416.1469; or
    (3) The decision is revised by the administrative law judge or the 
Appeals Council under the procedures explained in Sec. 416.1487.
    (c) Notice of the decision of an administrative law judge. The 
notice of decision the administrative law judge issues in a case 
processed under this section will advise you and any other parties to 
the decision that you may file an action in a Federal district court 
within 60 days after the date you receive notice of the decision.
    (d) Extension of time to file action in Federal district court. Any 
party having a right to file a civil action under this section may 
request that the time for filing an action in Federal district court be 
extended. The request must be in writing and it must give the reasons 
why the action was not filed within the stated time period. The request 
must be filed with the Appeals Council. If you show that you had good 
cause for missing the deadline, the time period will be extended. To 
determine whether good cause exists, we will use the standards in 
Sec. 416.1411.

[FR Doc. 97-12938 Filed 5-15-97; 8:45 am]
BILLING CODE 4190-29-P