[Federal Register Volume 72, Number 157 (Wednesday, August 15, 2007)]
[Proposed Rules]
[Pages 45701-45705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16071]


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SOCIAL SECURITY ADMINISTRATION

[Docket No. SSA-2007-0045]

20 CFR Part 405

RIN 0960-AG53


Proposed Suspension of New Claims to the Federal Reviewing 
Official Review Level, Changes to the Role of the Medical and 
Vocational Expert System, and Future Demonstration Projects

AGENCY: Social Security Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: We propose to modify our disability administrative 
adjudication processes to suspend new claims to the Federal reviewing 
official (FedRO) level, now operating in the Boston region. Claims 
already received will continue to be processed by the FedRO and a 
related component of the disability determination process, the Medical 
and Vocational Expert System (MVES), commonly known as the Office of 
Medical and Vocational Expertise (OMVE). We also propose to remove the 
MVES/OMVE from the disability adjudication process for new claims. We 
are making these proposals to ensure that we continually improve our 
disability adjudication process. Lastly, we are requesting comments on 
using the MVES/OMVE to develop and manage a national registry of 
experts.

DATES: To be sure that we consider your comments on our proposed 
changes, we must receive them no later than September 14, 2007. 
However, we also invite comments by November 13, 2007 on the merits of 
a national registry of experts, including MVES/OMVE management of the 
registry, and the rates to be paid to the experts affiliated with the 
registry.

ADDRESSES: You may give us your comments by: Internet through the 
Federal eRulemaking Portal at http://www.regulations.gov; e-mail to 
[email protected]; telefax to (410) 966-2830; or letter to the 
Commissioner of Social Security, P.O. Box 17703, Baltimore, MD 21235-
7703. You may also deliver them to the Office of Regulations, Social 
Security Administration, 960 Altmeyer Building, 6401 Security 
Boulevard, Baltimore, MD 21235-6401, between 8 a.m. and 4:30 p.m. on 
regular business days. Comments are posted on the Federal eRulemaking 
Portal, or you may inspect them on regular business days by making 
arrangements with the contact person shown in this preamble.

FOR FURTHER INFORMATION CONTACT: James A. Winn, Social Security 
Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, 
(410) 965-0600 for information about this notice. For information on 
eligibility or filing for benefits, call our national toll-free number, 
1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet site, 
Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register at http://www.gpoaccess.gov/fr/index.html.

Introduction

    We are dedicated to providing high-quality service to the American 
public. When in March 2006 we announced changes to our administrative 
review process for initial disability claims, we explained that we 
expected that the changes would improve disability service. Our 
commitment to continuous improvement in the way we process disability 
claims did not end with the publication of those rules as we 
continually explore ways to improve service to some of the most 
vulnerable in our society. We face, now and in the foreseeable future, 
significant challenges to our ability to provide the level of service 
that disability benefit claimants deserve because of the increased 
complexity of and growth in claims for those benefits. Consequently, we 
propose modifications to our administrative review process that will 
further help us evaluate changes put in place in March 2006 and help us 
provide accurate and timely service to claimants for Social Security 
disability benefits and supplemental security income payments based on 
disability or blindness.
    The importance of these disability benefits to the lives and 
subsistence of many Americans cannot be underestimated. Nearly 15 
million disabled Social Security beneficiaries and supplemental 
security income recipients receive over $10 billion in Federal monthly 
payments. The adjudication of disability claims requires evaluating 
complex medical and vocational evidence.
    The number of claims and requests for hearings that we receive has 
continued to expand. In 2004-2006, we received an annual average of 2.6 
million disability claims that required decisions on medical grounds, 
the most time and labor intensive basis for deciding such claims. Along 
with this expansion in the number of claims, there has been a 
concomitant increase in the number of hearing requests. Our hearing 
offices

[[Page 45702]]

have received an average of over 564,000 titles II and XVI disability 
hearing requests each year from 2002 through 2006, a significant 
increase from the annual average of almost 472,000 hearing requests in 
1997-2001. As these figures show, over the 5-year period from 2002 
through 2006, we received each year over 90,000 more requests for 
titles II and XVI hearings than we annually received during the period 
from 1997 through 2001. The vast number of disability claims now filed 
each year, as well as other factors such as the expected increase in 
disability claims as the baby boomers move into their disability-prone 
years, probable limitations on our resources to process these claims, 
and the projected impending increase in filings for retirement and 
survivors benefits as baby boomers retire, will continue to place an 
even greater strain on the system.
    We expected that the spring 2006 changes to the administrative 
review process for initial disability claims would ``improve the 
accuracy, consistency, and timeliness of decision-making throughout the 
disability determination process.'' 71 FR 16424 (March 31, 2006). We 
planned a gradual roll-out of the changes so that we could determine 
their effect on the disability process overall. As we explained then, 
``Gradual implementation will allow us to monitor the effects that our 
changes are having on the entire disability determination process * * * 
We will carefully monitor the implementation process in the Boston 
region and quickly address any problems that may arise.'' 71 FR at 
16440-41. Based on initial reviews of the quick disability 
determination (QDD) and FedRO elements of that process, and mindful of 
the workload challenges that we now face--especially at the hearing 
level--we believe we need to modify some of the changes made last 
spring.
    As we explain in our recently published notice of proposed 
rulemaking on the QDD process (July 10, 2007; 72 FR 37496), we are 
proposing to retain and expand the QDD process, and, as we explain 
here, we propose to suspend new claims going through the FedRO and the 
MVES, organizationally known as the OMVE. However, claims already 
received will continue through the FedRO and MVES so we can continue to 
evaluate their effectiveness. These proposals are based on our 
commitment to outstanding service and to continuously improving our 
service as we realign our resources to ensure that we are capable of 
processing the current and anticipated number of disability claims and 
reducing the number of pending hearings.

1. Suspending OFedRO and MVES/OMVE Allows Reallocation of Resources to 
the Backlog at the Hearings Level

    In the March 2006 final rule, we replaced the State agency 
reconsideration level with a Federal adjudicative level, called the 
FedRO. Attorneys staff the FedRO positions, and they, along with the 
managerial, support, and administrative staff, make up the Office of 
the FedRO (OFedRO). OFedRO uses the MVES/OMVE to develop the medical 
and vocational evidence in the claims before them. The goal of FedRO 
and OMVE is to have this level of review help ensure more accurate and 
consistent decision making earlier in the process. We are continuing to 
evaluate the effect of these new components on our program and 
administrative functions. Our experience over the last year in the 
Boston region demonstrates that the administrative costs associated 
with OFedRO and its consequent use of the MVES/OMVE to develop medical 
and vocational evidence is greater over the foreseeable future than 
originally anticipated. We do not yet have sufficient results to fully 
evaluate the potential improvements in program efficacy that are the 
goals of the FedRO and OMVE. Therefore, we propose to suspend new 
claims going through the FedRO and OMVE, so that we can reallocate 
resources to reduce the backlog at the hearing level, while we evaluate 
the FedRO and OMVE through the processing of claims already received. 
Once this evaluation is completed and alternative approaches analyzed, 
we will make a decision whether to reinstate the processing of new 
claims at the FedRO or to pursue an alternative approach to improving 
the disability determination process.
    Under this proposal, we are amending part 405 with provisions that 
will suspend new claims to the OFedRO and MVES/OMVE. This change will 
allow us to continue to evaluate the FedRO and OMVE through the 
processing of claims already received. We expect to have approximately 
15,500 cases pending FedRO review when this rule becomes effective. We 
will complete the processing of those pending cases, but will not 
assign to FedRO any more cases originally filed under the new process 
in Boston that otherwise would have been slated for FedRO review. 
Instead, if cases are at the initial level in Boston or not assigned to 
FedRO on the effective date of this rule, those cases will be assigned 
to State agencies for reconsidered determinations or to administrative 
law judges for hearing, whichever is applicable in that particular New 
England State. In other words, States in the Boston region, where the 
FedRO and MVES/OMVE are currently functioning, would return to the same 
process they were following before August 2006, whether that process 
was reconsideration under 20 CFR 404.907 and 416.1407 or the testing 
procedures under 20 CFR 404.906 and 416.1406.

2. Request for Comments on a National Registry of Experts

    Even though we propose to suspend new claims to the MVES/OMVE from 
the administrative review process under part 405 of our rules, we are 
considering using the MVES/OMVE in a more limited role to develop and 
manage a national registry of medical, psychological, and vocational 
experts to assist disability adjudicators in developing and/or 
clarifying information within the record. Once the MVES/OMVE has 
developed the registry, the MVES/OMVE would continue to manage the 
registry. Disability adjudicators at the State and Federal levels would 
be able to directly access the experts affiliated with the registry 
without having to go through the MVES/OMVE to arrange for expert 
assistance.
    We ask for comments on the merits of such a registry, including 
MVES/OMVE management of the registry, and the rates to be paid to the 
experts affiliated with the registry. Questions upon which you may wish 
to comment include, but are not limited to: What qualifications should 
experts on the national registry have? Should experts be required to 
have experience or training related to our disability programs? Should 
disability adjudicators be required to use the registry when they 
require expert assistance? Should we pay experts flat rates nationally 
or should the rates be based on locality? If rates are based on 
locality, what factors should we consider in setting those rates? 
Regardless of whether the rates we pay the experts are based on 
national or local rates, should we vary rates to account for the 
individual's level of expertise, and if so, how should that be done? 
Should we build in an automatic adjustment for inflation and, if so, 
which measure would be most appropriate for this function? We would be 
very interested in your thoughts regarding these issues and request 
that they be submitted within 90 days of the publication of this 
notice. We will consider comments submitted within this time period as 
we continue to develop our plans for a national registry.

[[Page 45703]]

We will not respond to these comments until such time as we may publish 
a notice of proposed rulemaking setting out more detailed plans for 
such a registry.

Clarity of These Proposed Rules

    Executive Order 12866, as amended, requires each agency to write 
all rules in plain language. In addition to your substantive comments 
on these final rules, we invite your comments on how to make them 
easier to understand. For example:
     Have we organized the material to suit your needs?
     Are the requirements in the rules clearly stated?
     Do the rules contain technical language or jargon that 
isn't clear?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
     Would more (but shorter) sections be better?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     What else could we do to make the rules easier to 
understand?

Regulatory Procedures

    Pursuant to sections 205(a), 702(a)(5), and 1631(d)(1) of the 
Social Security Act, 42 U.S.C. 405(a), 902(a)(5), and 1383(d)(1), we 
follow the Administrative Procedure Act (APA) rulemaking procedures 
specified in 5 U.S.C. 553 in the development of our regulations. We 
ordinarily publish a notice of proposed rulemaking in the Federal 
Register and permit a 60-day comment period. This period, however, may 
be shortened when the agency finds good cause that a 60-day comment 
period would be impracticable, unnecessary, or contrary to the public 
interest and incorporates a statement of the finding and its reasons in 
the rule issued. For this proposed rule, we find that there is good 
cause for allowing a 30-day comment period on the issue of suspending 
OFedRO and MVES/OMVE (section 1 above) because we believe that it would 
be contrary to the public interest not to effectuate these rules as 
quickly as we can. However, if it appears that 30 days is not 
sufficient time to comment--for example, if the volume of comments 
indicates that there is great public interest in this rule--we will 
consider extending the comment period to 60 days.
    We intend to shift the resources required for the FedRO and MVES/
OMVE to the effort to reduce the pending hearing requests to a 
manageable level. In order to shift those resources as quickly as we 
can, we must suspend new claims to the appeal procedure to the FedRO, 
and thereby, stem the flow of cases to the FedRO and the MVES/OMVE. 
Upon the effective date of the final rules, the first level of appeal 
would be reconsideration for any claimant who has not yet requested 
FedRO review, unless the State is a part of the prototype test in which 
case the first level of review would be to an administrative law judge. 
Claimants who have not yet been issued an initial determination would 
be advised in the initial determination notice that their first level 
of appeal would be reconsideration or a hearing, whichever applies. 
This would allow the FedRO and the MVES/OMVE to complete the processing 
of the cases in the pipeline, allow us to redirect resources to other 
tasks, including assisting us in reducing the backlog at the hearing 
level.
    However, we are providing a 90-day comment period on the issue of a 
national registry of experts (section 2 above).

Executive Order 12866, as Amended

    We have consulted with the Office of Management and Budget (OMB) 
and determined that this proposed rule meets the criteria for an 
economically significant regulatory action under Executive Order 12866, 
as amended. Thus, it was reviewed by OMB.
    The Office of the Chief Actuary (OCACT) estimates that this rule 
will result in program savings of roughly $1.0 billion in OASDI benefit 
payments and cost of $0.1 billion in Federal SSI payments over the next 
10 years, as shown below (in millions of dollars):

  Table 1.--Estimated Effect on OASDI and Federal SSI Benefit Payments of a Proposed Regulation Eliminating New
  Claims to the Federal Reviewing Official and Modifying the Role of the Medical and Vocational Expert System,
                                              Fiscal Years 2008-17
                                                  [In millions]
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                           Fiscal year                                 OASDI            SSI            Total
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2008............................................................            -$14             -$3            -$18
2009............................................................             -42              -9             -51
2010............................................................             -51              -8             -60
2011............................................................             -57             -15             -72
2012............................................................             -45              -6             -51
2013............................................................             -53               9             -44
2014............................................................            -122              22            -100
2015............................................................            -192              29            -163
2016............................................................            -248              40            -208
2017............................................................            -219              82            -137
Totals:
    2008-12.....................................................            -209             -41            -251
    2008-17.....................................................          -1,042             140            -902
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Notes:
1. The estimates are based on the assumptions underlying the President's FY 2008 Budget.
2. Federal SSI payments due on October 1st in fiscal years 2012, 2017 and 2018 are included with payments for
  the prior fiscal year.
3. Totals may not equal sum of components due to rounding.

    Table 1 above presents the estimated short-range effects on OASDI 
benefit payments and Federal SSI payments that would result from 
implementation of this NPRM, measured relative to the baseline used for 
the President's Fiscal Year 2008 Budget and assuming that a final rule 
implementing these changes would become effective for initial 
determinations made on or after April 1, 2008. The FY 2008 Budget 
assumed that DSI would be gradually implemented at the pace of one 
region per year and be fully implemented for new claims in all regions 
by the beginning of FY 2016. For the 10 States where the Prototype 
determination process has been or is being tested, the effect of this 
NPRM

[[Page 45704]]

would be to retain or restore the Prototype process so that the first 
level of appeal of an initial disability decision would be to an 
administrative law judge.
    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 2, we have 
prepared an accounting statement showing the annualized economic impact 
of suspending new claims to the FedRO level. All estimated impacts are 
classified as transfers.

 Table 2.--Accounting Statement: Estimated Economic Impact of Suspending
      New Claims to the FedRO Level From 2008-2016 in 2007 Dollars
------------------------------------------------------------------------
                Category                            Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers.........  $81.3 million (7% discount
                                          rate).
                                         $86.4 million (3% discount
                                          rate).
From Whom To Whom?.....................  From SSA beneficiaries to the
                                          Social Security trust fund and
                                          the general fund.
------------------------------------------------------------------------

    Suspending new claims going through the FedRO and OMVE will allow 
us to reallocate resources to reduce the backlog at the hearing level 
by holding more hearings and making system improvements to increase the 
efficiency of our hearings process.
    We will also continue to evaluate the FedRO and OMVE through the 
processing of claims already received. This evaluation will include an 
assessment of DSI, as the pilot is currently implemented in the Boston 
region, with existing claims. In the analysis we will analyze DSI's 
impact on the timeliness of disability determinations, on overall 
program costs, as well as its impact on the administrative costs 
required to implement this new process. Once this evaluation is 
complete and alternative approaches analyzed, we will make a decision 
whether to reinstate the processing of new claims into the FedRO or 
pursue an alternative approach to improving the disability 
determination process.

Regulatory Flexibility Act

    We certify that this proposed rule, when published in final, will 
not have a significant economic impact on a substantial number of small 
entities as it affects only States and individuals. Therefore, a 
regulatory flexibility analysis as provided in the Regulatory 
Flexibility Act, as amended, is not required.

Paperwork Reduction Act

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

Federalism Impact and Unfunded Mandates Impact

    We have reviewed this proposed rule under the threshold criteria of 
Executive Order 13132 and the Unfunded Mandates Reform Act and have 
determined that it does not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, on the distribution of power and responsibilities among the 
various levels of government, or on imposing any costs on State, local, 
or tribal governments. This proposed rule does not affect the roles of 
the State, local, or tribal governments. However, the proposed rule 
takes administrative notice of existing statutes governing the roles 
and relationships of the State agencies with us with respect to 
disability determinations under the Act.

(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; 96.006, 
Supplemental Security Income)

List of Subjects in 20 CFR Part 405

    Administrative practice and procedure; Blind, Disability benefits; 
Old-Age, Survivors, and Disability Insurance; Public assistance 
programs, Reporting and recordkeeping requirements; Social Security; 
Supplemental Security Income (SSI).

    Dated: August 7, 2007.
Michael J. Astrue,
Commissioner of Social Security.

    For the reasons set out in the preamble, we are amending subparts A 
and C of part 405 as set forth below:

PART 405--ADMINISTRATIVE REVIEW PROCESS FOR ADJUDICATING INITIAL 
DISABILITY CLAIMS

    1. The authority citation for part 405 continues to read as 
follows:

    Authority: Secs. 201(j), 205(a)-(b), (d)-(h), and (s), 221, 
223(a)-(b), 702(a)(5), 1601, 1602, 1631, and 1633 of the Social 
Security Act (42 U.S.C. 401(j), 405(a)-(b), (d)-(h), and (s), 421, 
423(a)-(b), 902(a)(5), 1381, 1381a, 1383, and 1383b).

Subpart A--[Amended]

    2. Amend Sec.  405.10 by adding paragraph (d) to read as follows:


Sec.  405.10  Medical and Vocational Expert System.

* * * * *
    (d) This section will no longer be effective on the same date as 
described in Sec.  405.240(c) of this part unless the Commissioner 
decides that the Medical and Vocational Expert System should be 
continued and extends the sunset date as described in Sec.  405.240(d) 
of this part by publishing a notice of proposed rulemaking in the 
Federal Register before that date.
    3. Revise the appendix to subpart A of part 405 to read as follows:

Appendix to Subpart A of Part 405--Claims That Will Be Handled Under 
the Procedures in This Part

    (a) We will apply the procedures in this part to disability 
claims (as defined in Sec.  405.5) filed in Maine, New Hampshire, 
Vermont, Massachusetts, Rhode Island, or Connecticut.
    (b) If you move from one State to another after your disability 
claim has been filed, adjudicators at subsequent levels of review 
will apply the regulations that initially applied to the disability 
claim. For example, if you file a claim in a State in which we apply 
the procedures in this part, the procedures in this part will apply 
to the disability claim at subsequent levels of review, even if you 
move to a State where we would otherwise not apply these procedures. 
Conversely, if you file a claim in a State where we do not apply the 
procedures in this part, we will adjudicate the claim using the 
procedures in part 404 or 416 of this chapter, as appropriate, even 
if you subsequently move to a State where we would otherwise apply 
the procedures in this part.

Subpart C--[Amended]

    4. Add Sec.  405.240 to read as follows:


Sec.  405.240  Sunset of this Subpart.

    (a) If you have filed a request for review by a Federal reviewing 
official on or before the effective date of this section, the Federal 
reviewing official will review and issue a decision on your claim.

[[Page 45705]]

    (b) If you have not filed a request for review by a Federal 
reviewing official on or before the effective date of this section and 
you have received an initial determination under subpart B of this 
part, we will process any request for additional administrative review 
filed after the effective date as either a request for reconsideration 
by the State agency or a request for hearing before an administrative 
law judge if your State uses the testing procedures under Sec. Sec.  
404.906 and 416.1406 of this title.
    (c) This subpart will no longer be effective the day after a 
Federal reviewing official issues a decision on the last of the claims 
accepted for review under paragraph (a) of this section.
    (d) If compelling evidence shows that the Federal reviewing 
official process is efficient, effective, and sustainable given 
available Agency resources, the Commissioner may reinstate the Federal 
reviewing official process by publishing a notice of proposed 
rulemaking in the Federal Register.

 [FR Doc. E7-16071 Filed 8-14-07; 8:45 am]
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