[Federal Register Volume 65, Number 8 (Wednesday, January 12, 2000)]
[Notices]
[Pages 1936-1938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-702]



[[Page 1936]]

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SOCIAL SECURITY ADMINISTRATION

[Social Security Acquiescence Ruling 00-1(4); Rescission of Social 
Security Acquiescence Ruling 94-2(4)]


Albright v. Commissioner of the Social Security Administration 
(Interpreting Lively v. Secretary of Health and Human Services); Effect 
of Prior Disability Findings on Adjudication of a Subsequent Disability 
Claim--Titles II and XVI of the Social Security Act; Rescission of 
Social Security Acquiescence Ruling 94-2(4), Lively v. Secretary of 
Health and Human Services

AGENCY: Social Security Administration.

ACTION: Notice of Social Security Acquiescence Ruling and Rescission of 
Social Security Acquiescence Ruling.

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SUMMARY: In accordance with 20 CFR 402.35(b)(2), the Commissioner of 
Social Security gives notice of Social Security Acquiescence Ruling 00-
1(4) and rescission of Social Security Acquiescence Ruling 94-2(4).

EFFECTIVE DATE: January 12, 2000.

FOR FURTHER INFORMATION CONTACT:
Gary Sargent, Litigation Staff, Social Security Administration, 6401 
Security Boulevard, Baltimore, MD 21235-6401, (410) 965-1695.

SUPPLEMENTARY INFORMATION: We are rescinding Social Security 
Acquiescence Ruling 94-2(4) and publishing this Acquiescence Ruling in 
accordance with 20 CFR 402.35(b)(2).
    A Social Security Acquiescence Ruling explains how we will apply a 
holding in a decision of a United States Court of Appeals that we 
determine conflicts with our interpretation of a provision of the 
Social Security Act (the Act) or regulations when the Government has 
decided not to seek further review of that decision or is unsuccessful 
on further review.
    On July 7, 1994, we issued Acquiescence Ruling 94-2(4) (59 FR 
34849) to reflect the holding in Lively v. Secretary of Health and 
Human Services, 820 F.2d 1391 (4th Cir. 1987). Acquiescence Ruling 94-
2(4) provided that, in making a disability determination or decision on 
a subsequent disability claim with respect to an unadjudicated period, 
the Social Security Administration (SSA) must adopt a finding regarding 
a claimant's residual functional capacity, or other finding required 
under the applicable sequential evaluation process for determining 
disability, made in a final decision by an Administrative Law Judge or 
the Appeals Council on a prior disability claim. Acquiescence Ruling 
94-2(4) provided that SSA adjudicators must adopt such a finding from a 
final decision on the prior claim unless there was new and material 
evidence relating to that finding.
    On April 22, 1999, the United States Court of Appeals for the 
Fourth Circuit issued a decision in Albright v. Commissioner of the 
Social Security Administration, 174 F.3d 473 (4th Cir. 1999), in which 
it clarified its intent in Lively and interpreted the holding to be 
more limited than that reflected in Acquiescence Ruling 94-2(4). 
Furthermore, the court stated that ``SSA's treatment of later-filed 
applications as separate claims is eminently logical and sensible, 
reflecting the reality that the mere passage of time often has a 
deleterious effect on a claimant's physical or mental condition.''
    Because the Fourth Circuit's decision in Albright concluded that 
Acquiescence Ruling 94-2(4) is not an accurate statement of its holding 
in Lively, we are rescinding that Acquiescence Ruling and publishing 
this Acquiescence Ruling to reflect the Albright court's interpretation 
of the holding in Lively, and to acquiesce in that portion of the 
Albright holding that conflicts with our interpretation of our 
regulations. We also provide in this Acquiescence Ruling an explanation 
of how SSA's adjudicators will apply the Albright holding to claims 
within the Fourth Circuit.
    We will apply the holding of the Court of Appeals' decision as 
explained in this Social Security Acquiescence Ruling to claims at all 
levels of administrative adjudication within the Fourth Circuit. This 
Social Security Acquiescence Ruling will apply to all determinations 
and decisions made on or after January 12, 2000. If we made a 
determination or decision on an application for benefits between April 
22, 1999, the date of the Court of Appeals' decision in Albright v. 
Commissioner of the Social Security Administration, 174 F.3d 473 (4th 
Cir. 1999), and January 12, 2000, the effective date of this Social 
Security Acquiescence Ruling, you may request application of the Social 
Security Acquiescence Ruling to your claim if you first demonstrate, 
pursuant to 20 CFR 404.985(b)(2) or 416.1485(b)(2), that application of 
the Ruling could change our prior determination or decision.
    If this Social Security Acquiescence Ruling is later rescinded as 
obsolete, we will publish a notice in the Federal Register to that 
effect as provided in 20 CFR 404.985(e) or 416.1485(e). If we decide to 
relitigate the issue covered by this Social Security Acquiescence 
Ruling as provided by 20 CFR 404.985(c) or 416.1485(c), we will publish 
a notice in the Federal Register stating that we will apply our 
interpretation of the Act or regulations involved and explaining why we 
have decided to relitigate the issue.

(Catalog of Federal Domestic Assistance Program Nos. 96.001 Social 
Security - Disability Insurance; 96.002 Social Security - Retirement 
Insurance; 96.004 Social Security - Survivors Insurance; 96.005 - 
Special Benefits for Disabled Coal Miners; 96.006 - Supplemental 
Security Income.)

    Dated: December 1, 1999.
Kenneth S. Apfel,
Commissioner of Social Security.

Acquiescence Ruling 00-1(4)

    Albright v. Commissioner of the Social Security Administration, 174 
F.3d 473 (4th Cir. 1999) (Interpreting Lively v. Secretary of Health 
and Human Services)--Effect of Prior Disability Findings on 
Adjudication of a Subsequent Disability Claim--Titles II and XVI of the 
Social Security Act.
    Issue: Whether, in making a disability determination or decision on 
a subsequent disability claim with respect to an unadjudicated period, 
the Social Security Administration (SSA)1 must consider a 
finding of a claimant's residual functional capacity or other finding 
required under the applicable sequential evaluation process for 
determining disability, made in a final decision by an Administrative 
Law Judge (ALJ) or the Appeals Council on the prior disability claim.
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    \1\ Under the Social Security Independence and Program 
Improvements Act of 1994, Pub. L. No. 103-296, effective March 31, 
1995, SSA became an independent Agency in the Executive Branch of 
the United States Government and was provided ultimate 
responsibility for administering the Social Security and 
Supplemental Security Income programs under titles II and XVI of the 
Social Security Act. Prior to March 31, 1995, the Secretary of 
Health and Human Services had such responsibility.
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    Statute/Regulation/Ruling Citation: Sections 205(a) and (h) and 
702(a)(5) of the Social Security Act (42 U.S.C. 405(a) and (h) and 
902(a)(5)), 20 CFR 404.900(a), 404.957(c)(1), 416.1400(a), 
416.1457(c)(1), Acquiescence Ruling (AR) 94-2(4) (rescinded).
    Circuit: Fourth (Maryland, North Carolina, South Carolina, 
Virginia, West Virginia).
    Albright v. Commissioner of the Social Security Administration, 174 
F.3d 473 (4th Cir. 1999) (Interpreting Lively v. Secretary of Health 
and Human Services, 820 F.2d 1391 (4th Cir. 1987)).
    Applicability of Ruling: This Ruling applies to determinations or 
decisions at

[[Page 1937]]

all levels of the administrative review process (i.e., initial, 
reconsideration, ALJ hearing and Appeals Council).
    Lively2
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    \2\ The decision of the Fourth Circuit in Albright (the subject 
of this AR) was based, in part, upon the panel's interpretation of 
the Fourth Circuit's prior decision in Lively. Accordingly, the 
following discussion of that earlier case is provided as background 
material.
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    Description of Case: In a decision dated October 19, 1981, an ALJ 
found that the plaintiff, Mr. Lively, was not disabled under Rule 
202.10 of the medical-vocational guidelines, 20 CFR Part 404, Subpart 
P, Appendix 2, and denied his application for disability insurance 
benefits. In applying Rule 202.10, the ALJ found that Mr. Lively had 
the residual functional capacity for light work. The decision that Mr. 
Lively was not entitled to disability insurance benefits became the 
final decision of SSA and was affirmed by the district court.
    The plaintiff filed a second application for disability insurance 
benefits on December 14, 1983. After holding a hearing, an ALJ 
concluded that the plaintiff was not entitled to disability insurance 
benefits. The ALJ determined that Mr. Lively retained the functional 
capacity for the performance of work activity at any exertional level 
on and prior to December 31, 1981, the date his insured status expired. 
The ALJ did not discuss in his decision the 1981 finding by another ALJ 
that the plaintiff had the residual functional capacity to do only 
light work. This decision became the final decision of SSA and was 
appealed to the district court. The case was referred to a United 
States Magistrate who found that the evidence before the ALJ on the 
plaintiff's 1983 application was sufficient to sustain SSA's decision 
that the plaintiff was not disabled as of December 31, 1981. The 
district court adopted the Magistrate's Report and Recommendation. Mr. 
Lively then appealed to the United States Court of Appeals for the 
Fourth Circuit.
    Holding: The Fourth Circuit reversed and remanded the decision of 
the district court. The court stated that:

    Congress has clearly provided by statute that res judicata 
prevents reappraisal of both [SSA]'s findings and * * * decision in 
Social Security cases that have become final, 42 U.S.C. Sec. 405(h), 
and the courts have readily applied res judicata to prevent * * * 
[SSA] from reaching an inconsistent result in a second proceeding 
based on evidence that has already been weighed in a claimant's 
favor in an earlier proceeding.

    The court noted that the plaintiff became 55 years of age two weeks 
after the ALJ, in connection with the first application for benefits, 
found that Mr. Lively was limited to light work. The court further 
noted that a person with the plaintiff's education and vocational 
background who is 55 years of age or older and limited to light work 
would be considered disabled under Rule 202.02 of the medical-
vocational guidelines, 20 CFR Part 404, Subpart P, Appendix 2. The 
court found it inconceivable that Mr. Lively's condition had improved 
so much in two weeks as to enable him to perform medium work. 
Accordingly the court held:

    Principles of finality and fundamental fairness * * * indicate 
that * * * [SSA] must shoulder the burden of demonstrating that the 
claimant's condition had improved sufficiently to indicate that the 
claimant was capable of performing medium work. * * * [E]vidence, 
not considered in the earlier proceeding, would be needed as an 
independent basis to sustain a finding contrary to the final earlier 
finding.

    Albright
    Description of Case: William Albright applied for disability 
insurance benefits and Supplemental Security Income on April 17, 1991, 
alleging that he had been unable to work since March 31, 1990, because 
of neck and back injuries. The claims were denied initially and upon 
reconsideration. In a decision issued on May 28, 1992, that denied 
benefits, an ALJ determined Mr. Albright's testimony about the 
intensity of his pain was not credible and found that his impairment 
had been ``not severe''3 since at least January 3, 1991. Mr. 
Albright did not appeal this decision.
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    \3\ 20 CFR 404.1520 and 416.920 provide a sequential evaluation 
process for evaluating disability. These regulations provide at step 
two that if an individual does not have any impairment or 
combination of impairments that is ``severe,'' the individual is not 
disabled.
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    In November and December 1992, Mr. Albright filed subsequent 
applications for disability insurance benefits and Supplemental 
Security Income. These claims were denied initially and again upon 
reconsideration. On October 26, 1994, an ALJ found that Mr. Albright's 
prior claims had been denied at the second step of the sequential 
evaluation process and that there was an absence of new and material 
evidence regarding the severity of his impairment. Accordingly, the ALJ 
applied AR 94-2(4) which was published on July 7, 1994, and found that 
Mr. Albright was not disabled.4
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    \4\ In an action that was uncontested on appeal and later termed 
``entirely proper'' by the Fourth Circuit in Albright, the ALJ 
dismissed Mr. Albright's claims insofar as they related to the 
period up to and including May 28, 1992, the date of the prior ALJ's 
decision on Mr. Albright's earlier claims.
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    After the Appeals Council denied the claimant's request for review, 
he sought judicial review. The district court referred the case to a 
magistrate judge who found that SSA had interpreted the holding in 
Lively too broadly in promulgating AR 94-2(4). The district court 
adopted the magistrate judge's findings and conclusions, and remanded 
Mr. Albright's claims for de novo consideration by SSA. After the 
district court's denial of SSA's motion to alter or amend the judgment, 
SSA appealed to the United States Court of Appeals for the Fourth 
Circuit.
    Holding: The Fourth Circuit affirmed the district court's decision 
and held that AR 94-2(4) was not an accurate statement of the holding 
in Lively. The court further stated that Lively was a ``rare case'' 
involving ``a finding that initially disqualified the claimant from an 
award of benefits [which later] convincingly demonstrated his 
entitlement thereto as of two weeks hence.'' The court then stated that 
``[u]nlike the [Acquiescence] Ruling at issue in * * * [Albright's] 
case, however, the prior adjudication in Lively -- though highly 
probative -- was not conclusive.'' The court further held that:

    We therefore disagree with the Commissioner that Lively 
abrogated the established law of preclusion * * * . At its essence, 
Lively really has very little to do with preclusion. Although we 
discussed the doctrine of res judicata generally, and more 
particularly its incorporation into the Social Security Act through 
42 U.S.C. 405(h), Lively is not directly predicated on the statute, 
but on ``[p]rinciples of finality and fundamental fairness drawn 
from Sec. 405(h).'' [Lively, 820 F.2d at 1392] (emphasis added). The 
distinction is subtle, but important.

    Rather than signaling a sea change in the law of preclusion, the 
result in Lively is instead best understood as a practical 
illustration of the substantial evidence rule. In other words, we 
determined that the finding of a qualified and disinterested 
tribunal that Lively was capable of performing only light work as of 
a certain date was such an important and probative fact as to render 
the subsequent finding to the contrary [relating to a period that 
began two weeks later] unsupported by substantial evidence. To have 
held otherwise would have thwarted the legitimate expectations of 
claimants * * * that final agency adjudications should carry 
considerable weight. [Footnotes omitted.]

    The court observed that the prior residual functional capacity 
finding in Lively was ``highly probative'' of the claimant's residual 
functional capacity for the period that began two weeks after the 
previously adjudicated period because, absent evidence to the contrary, 
``a claimant's condition very likely remains unchanged within a 
discrete two-week period.'' The court

[[Page 1938]]

indicated that the probative value of a prior finding relating to a 
claimant's medical condition will likely diminish ``as the timeframe 
expands,'' and that ``[t]he logic so evident in Lively * * * applies 
with nowhere near the force in Albright's situation'' where ``the 
relevant period exceeds three years.''
    The court also stated that SSA's ``treatment of later-filed 
applications as separate claims is eminently logical and sensible, 
reflecting the reality that the mere passage of time often has a 
deleterious effect on a claimant's physical or mental condition.''

Statement as to How Albright Differs From SSA's Interpretation of the 
Regulations

    In a subsequent disability claim, SSA considers the issue of 
disability with respect to a period of time that was not adjudicated in 
the final determination or decision on the prior claim to be a new 
issue that requires an independent evaluation from that made in the 
prior adjudication. Thus, when adjudicating a subsequent disability 
claim involving an unadjudicated period, SSA considers the facts and 
issues de novo in determining disability with respect to the 
unadjudicated period. SSA does not consider prior findings made in the 
final determination or decision on the prior claim as evidence in 
determining disability with respect to the unadjudicated period 
involved in the subsequent claim.
    SSA interprets the decision by the United States Court of Appeals 
for the Fourth Circuit in Albright to hold that where a final decision 
of SSA after a hearing on a prior disability claim contains a finding 
required at a step in the sequential evaluation process for determining 
disability, SSA must consider such finding as evidence and give it 
appropriate weight in light of all relevant facts and circumstances 
when adjudicating a subsequent disability claim involving an 
unadjudicated period.

Explanation of How SSA Will Apply The Albright Decision Within The 
Circuit

    This Ruling applies only to disability findings in cases involving 
claimants who reside in Maryland, North Carolina, South Carolina, 
Virginia or West Virginia at the time of the determination or decision 
on the subsequent claim at the initial, reconsideration, ALJ hearing or 
Appeals Council level. It applies only to a finding of a claimant's 
residual functional capacity or other finding required at a step in the 
sequential evaluation process for determining disability provided under 
20 CFR 404.1520, 416.920 or 416.924, as appropriate, which was made in 
a final decision by an ALJ or the Appeals Council on a prior disability 
claim.5
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    \5\ In making a finding of a claimant's residual functional 
capacity or other finding required to be made at a step in the 
applicable sequential evaluation process for determining disability 
provided under the specific sections of the regulations described 
above, an ALJ or the Appeals Council may have made certain 
subsidiary findings, such as a finding concerning the credibility of 
a claimant's testimony or statements. A subsidiary finding does not 
constitute a finding that is required at a step in the sequential 
evaluation process for determining disability provided under 20 CFR 
404.1520, 416.920 or 416.924.
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    When adjudicating a subsequent disability claim arising under the 
same or a different title of the Act as the prior claim, an adjudicator 
determining whether a claimant is disabled during a previously 
unadjudicated period must consider such a prior finding as evidence and 
give it appropriate weight in light of all relevant facts and 
circumstances. In determining the weight to be given such a prior 
finding, an adjudicator will consider such factors as:
    (1) whether the fact on which the prior finding was based is 
subject to change with the passage of time, such as a fact relating to 
the severity of a claimant's medical condition;
    (2) the likelihood of such a change, considering the length of time 
that has elapsed between the period previously adjudicated and the 
period being adjudicated in the subsequent claim; and
    (3) the extent that evidence not considered in the final decision 
on the prior claim provides a basis for making a different finding with 
respect to the period being adjudicated in the subsequent claim.
    Where the prior finding was about a fact which is subject to change 
with the passage of time, such as a claimant's residual functional 
capacity, or that a claimant does or does not have an impairment(s) 
which is severe, the likelihood that such fact has changed generally 
increases as the interval of time between the previously adjudicated 
period and the period being adjudicated increases. An adjudicator 
should give greater weight to such a prior finding when the previously 
adjudicated period is close in time to the period being adjudicated in 
the subsequent claim, e.g., a few weeks as in Lively. An adjudicator 
generally should give less weight to such a prior finding as the 
proximity of the period previously adjudicated to the period being 
adjudicated in the subsequent claim becomes more remote, e.g., where 
the relevant time period exceeds three years as in Albright. In 
determining the weight to be given such a prior finding, an adjudicator 
must consider all relevant facts and circumstances on a case-by-case 
basis.
[FR Doc. 00-702 Filed 1-11-00; 8:45 am]
BILLING CODE 4191-02-F