Administrative Review Process for Adjudicating Initial Disability Claims, 43590-43624 [05-14845]

Agencies

• Social Security Administration

[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Proposed Rules]
[Pages 43590-43624]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-14845]



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Part V





Social Security Administration





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20 CFR Parts 404, 405, 416, and 422



Administrative Review Process for Adjudicating Initial Disability 
Claims; Proposed Rule

Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / 
Proposed Rules

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404, 405, 416, and 422

[Regulation Nos. 4, 5, 16, and 22]
RIN 0960-AG31


Administrative Review Process for Adjudicating Initial Disability 
Claims

AGENCY: Social Security Administration (SSA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Social Security Administration is committed to providing 
the type of service the American people expect and deserve. In light of 
the significant growth in disability claims, the increased complexity 
of those claims, and the younger age of beneficiaries in recent years, 
the need to make substantial changes in our disability determination 
process has become urgent. We propose to amend our administrative 
review process for benefit claims you file under title II of the Social 
Security Act (Act) based on disability, and for applications you file 
for supplemental security income (SSI) payments based on disability or 
blindness under title XVI of the Act. We expect that the changes we are 
proposing will improve the accuracy, consistency, and timeliness of 
decision making throughout the disability determination process.

DATES: To be sure that we consider your comments, we must receive them 
by October 25, 2005.

ADDRESSES: You may give us your comments by: using our Internet site 
facility (i.e., Social Security Online) at https://policy.ssa.gov/
pnpublic.nsf/LawsRegs or the Federal eRulemaking Portal at https://
www.regulations.gov; e-mail to regulations@ssa.gov; telefax to (410) 
966-2830; or letter to the Commissioner of Social Security, PO Box 
17703, Baltimore, MD 21235-7703. You may also deliver them to the 
Office of Disability and Income Security Programs, Office of 
Regulations, Social Security Administration, 100 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 our Internet 
site. You also may inspect the comments on regular business days by 
making arrangements with the contact person shown in the preamble.

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register on the Internet site for the 
Government Printing Office at www.gpoaccess.gov/fr/. It is 
also available on the Internet site for SSA (i.e., Social Security 
Online) at https://policy.ssa.gov/pnpublic.nsf/LawsRegs.

FOR FURTHER INFORMATION CONTACT: Mary Chatel, Executive Director, 
Disability Service Improvement, Social Security Administration, 500 E 
Street, SW, Suite 854, Washington DC, 20254, 202-358-6094 or TTY 410-
966-5609, 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 www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Background

    We propose to amend our administrative review process for Social 
Security benefit claims based on disability and for applications for 
SSI payments based on disability or blindness in order to improve the 
accuracy, consistency, and timeliness of decision making throughout the 
disability determination process. We expect that our proposed changes 
will significantly reduce average disability determination processing 
time, increase decisional consistency and accuracy, and ensure that the 
right determination or decision is made as early in the disability 
determination process as possible. Our proposed changes will ensure 
that beneficiaries who are clearly disabled receive determinations 
within 20 calendar days or less of the date that their completed 
application for benefits is sent to the State agency for adjudication. 
We believe that our proposed changes will ensure that adjudicators are 
held accountable for the quality of disability adjudications made at 
every step of the process. In addition, we believe that our proposed 
changes will help ensure that disability claimants provide all material 
evidence to adjudicators in a timely manner, resulting in a more 
efficient disability determination process.

Program Trends

    We currently decide claims for Social Security benefits based on 
disability under title II of the Act and for SSI based on disability or 
blindness under title XVI of the Act using an administrative review 
process that consists of four levels. Initial determinations as to 
whether or not you are disabled are made by a State agency. If you are 
dissatisfied with the initial determination, you may request 
reconsideration by the State agency. If you are dissatisfied with the 
reconsidered determination, you may request a hearing, which is held by 
an administrative law judge. Finally, if you are dissatisfied with the 
administrative law judge's decision, you may request review by the 
Appeals Council. Once you have completed these administrative steps and 
received our final decision, you may request judicial review of the 
final decision in Federal district court.
    Over the years the Social Security and SSI disability programs have 
grown in size and complexity. There has been significant growth in the 
number of individuals who file claims for disability benefits each 
year. During the early years of the Social Security disability program, 
the number of claims for disability benefits filed each year was 
measured in the hundreds of thousands. Currently, more than two and a 
half million individuals apply for Social Security and SSI benefits 
based on disability each year. The volume of claims will grow even more 
in future years as baby boomers move into their disability-prone years.
    The factors involved in determining disability claims have also 
changed. Since the beginning of the disability programs, the percentage 
of claims involving allegations of mental impairments has increased 
dramatically, particularly in the SSI program. Claims of disability 
involving mental impairments raise particular administrative resource 
issues because they involve complex psychological issues, and the 
evidence for these claims may be difficult to develop. The number of 
claims being decided on the basis of vocational considerations rather 
than meeting or equaling more readily determinable medical factors has 
also been increasing steadily. Thus, in addition to the exponential 
growth in the number of disability claims that must be adjudicated each 
year, there has been a corresponding increase in the complexity of 
those claims.
    In addition, the average age of beneficiaries has fallen over the 
years because an increasing number of younger individuals have been 
found to be disabled. This trend has heightened the importance of 
improving our efforts to assist disabled individuals in returning to 
the workforce.
    All of these trends have underscored the need for substantial 
change if our disability decision making process is to be able to 
provide claimants with accurate, fair, and consistent adjudications as 
early in the adjudication process as possible, and also provide them 
with the assistance they need to overcome barriers to employment.

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The Service Delivery Budget Assessment

    In 2001, we established a Service Delivery Budget Assessment Team 
to thoroughly investigate the current disability determination process 
from the perspective of an applicant for disability benefits. We hoped 
that this process would help us to understand and effectively manage 
the administrative challenges posed by growth and other changes in the 
disability programs. The team's research revealed that: (1) State 
Disability Determination Services (DDS) generally made an initial 
eligibility determination within three and a half months of a 
claimant's application; (2) forty percent of disability claimants were 
determined to be eligible for benefits at this initial stage; and (3) 
it took an average of 1153 days to pursue a disability claim through 
all stages of administrative appeal to obtain a final Agency decision.
    The Team discovered that only seven days of this 1153-day period 
were spent actually working on the claim. Six hundred and twenty one 
days of this period were associated with delays in the administrative 
process, such as time spent waiting for an appointment or hearing, time 
spent waiting for forms to be sent in the mail, time spent waiting for 
medical reports and consultative examinations to be completed and 
received, and time spent attempting to locate misrouted or lost paper 
folders. One-third of these 621 days involved the mandatory delays 
associated with the due process rights of claimants, such as the 60-day 
time periods established in the Act and in our regulations for filing 
appeals after each of the first three adjudicatory levels. The Team 
also discovered that 525 days of the 1153-day period were related to 
the backlog of cases that are pending at each level of the 
administrative review process. As the backlogs are reduced, the amount 
of time spent waiting for the next action in the case will also be 
reduced.

Transition to an Electronic Disability Process

    In an effort to improve the efficiency and timeliness of our 
disability determination process, we decided to accelerate our 
transition to an electronic disability process--one we usually refer to 
as eDib. In an electronic disability process, applications, claimant 
information, and medical evidence that have been processed in paper 
form in the past are processed in electronic form instead. Each 
adjudicative component involved in the disability determination process 
is able to work with claims by electronically accessing and retrieving 
information that is collected, produced, and stored as part of an 
electronic disability folder. This significantly reduces the delays 
that result from mailing, locating, and organizing paper folders. In 
addition, an electronic disability process allows more than one Agency 
component to work on a single claim at the same time if necessary, 
which alleviates the delays associated with transferring paper records 
from one component to another.
    We also believe that the transition to an electronic disability 
process will improve the accuracy and integrity of our disability 
determination process. We have been impressed with the successful 
efforts of the Department of Veterans Affairs to offer patients an 
electronic health record. We understand that their reliance on an 
electronic health record has reduced errors and streamlined their 
record keeping process. We expect that our transition to an electronic 
disability process will help us avoid the kind of errors that result 
from misunderstanding handwritten notes, or misplacing or improperly 
filing important documents that are part of the record.
    We expect that as eDib continues to be implemented throughout the 
country, the amount of time needed to process disability claims will 
decrease because claim files will be transferred instantly in 
electronic form between our offices. As eDib is implemented, we expect 
to reduce and eventually eliminate the delays currently associated with 
waiting for forms to be sent in the mail and with time spent attempting 
to locate misrouted or lost paper folders.
    The transition to this new electronic disability process is 
currently taking place throughout the country. All of our field offices 
across the nation are now using the Electronic Disability Collect 
System (EDCS) that provides State agencies with an electronic folder. 
EDib was implemented at the first State agency DDS in January 2004, and 
additional State agency DDSs have continued to implement eDib ever 
since. Currently, all State agency DDSs, except New York, which is 
scheduled for rollout in November 2005, are adjudicating disability 
claims using an electronic folder.
    At the same time, our Office of Hearings and Appeals (OHA) has 
begun using the Case Processing and Management System (CPMS), which is 
a new software system for processing cases and managing OHA office 
workloads. CPMS will enable OHA to work with the electronic file. 
Currently, all 140 hearing offices across the country are using CPMS 
and 73 hearing offices have been trained to begin adjudicating cases 
using an electronic folder.
    The complete implementation of eDib throughout the country and at 
every level of the adjudicatory process will assist us in addressing to 
a significant degree the unacceptably long case processing times 
described earlier. EDib provides opportunities to manage and process 
workloads in ways that have not existed until now. However, eDib alone 
is not enough to improve the current process to the level that we 
believe is necessary. Further actions must be taken to improve our 
ability to adjudicate every claim in a prompt, fair, and accurate 
manner. We have concluded that to significantly improve disability 
adjudications, we must change the process itself. In addition, we 
believe we must revisit and update some of our policies regarding 
disability adjudications, including the revision and updating of 
medical listings, in order to sufficiently improve the entire process.

Answering the President's Questions

    In formulating a new approach to improving the disability 
determination process, we were guided by three questions that the 
President of the United States posed during a meeting with the 
Commissioner in the spring of 2002. These questions were: (1) Why does 
it take so long to make a disability decision?
    (2) Why can't people who are obviously disabled get a decision 
immediately?
    (3) Why would a disability program beneficiary risk attempting to 
work after having gone through such a long disability determination 
process and having been found to be disabled?
    In order to fully address the central and important issues raised 
by the President's three questions, we designed an approach that 
focuses on two over-arching goals: (1) to make the right decision as 
early in the process as possible; and (2) to foster return to work at 
all stages of the process.

New Approach To Improve the Disability Determination Process

    At a September 25, 2003 hearing before the House Ways and Means 
Subcommittee on Social Security, we first presented a new approach to 
improve the disability determination process. This new approach 
maintained some of the significant features of the current disability 
determination process:
     Initial claims for disability would continue to be handled 
by our field offices;

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     The State DDSs would continue to adjudicate claims for 
benefits;
     Administrative law judges would continue to conduct de 
novo hearings and issue decisions; and
     Claimants would still be able to appeal the Agency's final 
decision to the Federal courts.
    As we outlined in September 2003, the new approach also reflected 
some important differences from the current system:
     A Quick Disability Determination process would be 
established at the outset of the claims process to identify people who 
are clearly disabled;
     Medical and vocational expertise within a new Federal 
expert unit would be available to disability decision makers at all 
levels of the process, including the DDSs, reviewing officials, and 
administrative law judges;
     We would eliminate the reconsideration step of the 
administrative review process and end the disability prototype test 
being conducted in 10 States;
     We would institute both in-line and end-of-line quality 
assurance programs at every step of the process (but the hearing level 
in-line quality assurance program would not apply to administrative law 
judge decision making);
     Following the initial determination made by the DDS, a 
Federal reviewing official would review the claim upon the claimant's 
request. The reviewing official would be authorized to issue an 
allowance or to deny the claim. If the reviewing official did not allow 
the claim, he or she would be required to explain why the disability 
claim should be denied;
     If requested by a claimant who was dissatisfied with the 
reviewing official's decision, an administrative law judge would 
conduct an administrative hearing. If the administrative law judge 
determined that a favorable decision should be made, the administrative 
law judge would explain the basis for disagreeing with the reviewing 
official's decision;
     Claimants could continue to submit evidence to support 
their claim through the administrative law judge level of review. 
However, the record would be closed after the administrative law judge 
decision was issued;
     The Appeals Council stage of the current process would be 
eliminated. A portion of administrative law judge decisions would be 
reviewed by a centralized quality control staff. If the administrative 
law judge's decision was not chosen to be reviewed by the centralized 
quality control staff, the decision of the administrative law judge 
would become the final Agency decision;
     If the centralized quality control staff disagreed with an 
administrative law judge's decision, the disability claim would be 
referred to an Oversight Panel, consisting of two administrative law 
judges and one Administrative Appeals Judge. The Oversight Panel could 
affirm, modify, or reverse the administrative law judge's decision, 
making the panel's decision the final Agency decision;
     We would improve the quality of the administrative record 
by ensuring that evidence development is performed early in the 
disability determination process, and by ensuring that adjudicators 
sufficiently articulate the basis of their adjudications.

The Work Opportunity Initiative

    We have recently implemented a number of work incentive programs 
that are designed to encourage an individual's return to work. 
Currently, beneficiaries may take advantage of several work incentive 
programs, including our Ticket to Work and Self-Sufficiency (TTW) 
program, our plans for achieving self-support (PASS) under the SSI 
program, and our Benefits Planning, Assistance, and Outreach (BPAO) 
program. Recognizing the importance of encouraging a return to work, 
the Act contains a number of other provisions that help us assist 
beneficiaries who would like to work, such as the provisions that allow 
us to provide expedited reinstatement of benefits, or continue benefit 
payments to certain individuals who recover medically while 
participating in an appropriate program of services. Despite these 
current work incentives, however, disability program beneficiaries 
still face significant barriers to work. These barriers may include:
     The adverse psychological impact of the lengthy disability 
determination process;
     The delays experienced when attempting to obtain needed 
health care, including the 24-month waiting period for Medicare 
benefits;
     Lack of access to the training, employment services, and 
other supports actually needed to obtain work;
     Strict SSI asset limits and strict disability insurance 
benefit offset rules; and
     The fear of work-related overpayments.
    At the same time that we presented the new approach in September 
2003, we outlined our Work Opportunity Initiative to foster voluntary 
return to work. This initiative responded to the President's third 
question (why would a disability program beneficiary risk returning to 
work after going through such a long process to receive benefits?). The 
initiative incorporates several demonstration projects designed to 
overcome the current barriers to work listed above and provides greater 
opportunities for disability beneficiaries and applicants who want to 
work.
    Within the Work Opportunity Initiative, we targeted three different 
demonstration programs to provide supports, incentives, and work 
opportunities to people with disabilities at the early stages of the 
disability determination process. The Early Intervention demonstration 
project would provide immediate medical and cash benefits and 
employment supports to disability insurance applicants with certain 
impairments presumed disabling who elect to pursue work rather than 
proceed through the disability determination process. An Accelerated 
Benefits demonstration project would provide immediate cash and medical 
benefits for a two-to three-year period to applicants who are highly 
likely to benefit from aggressive medical care and, as a result, return 
to work. The Interim Medical Benefits demonstration project would 
provide immediate health insurance coverage to applicants who otherwise 
would not have insurance but whose medical condition is likely to 
improve with medical treatment.
    Other demonstration projects within the initiative would provide 
ongoing employment supports and incentives to assist disability program 
beneficiaries obtain and sustain employment. A national benefit offset 
demonstration would test the effects of allowing disability insurance 
beneficiaries to work without total loss of benefits by reducing their 
monthly benefit one dollar for every two dollars of earnings above a 
specified level. Two different ongoing medical benefits demonstration 
projects would test the effects of providing ongoing health insurance 
coverage to disabled beneficiaries with (1) HIV/immune disorders and 
(2) mood and affective disorders who want to work, but who would 
otherwise lose access to affordable health insurance if they returned 
to work.
    We believe that these demonstration projects will help people with 
disabilities return to work, and that they will help remove barriers 
for those disability applicants and beneficiaries who can and want to 
work.

Ideas, Concerns, and Comments on the New Approach

    At the same time that we presented the new approach, we announced 
that

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we wanted to hear the views and suggestions of all interested parties, 
so that we could take them into account as we continued to refine the 
new approach and develop proposed rules to improve the disability 
process. We also established an Internet site in order to hear from all 
interested parties and consider a wide variety of perspectives as we 
continued to develop proposed rules. Since that time, we have met with 
hundreds of interested organizations, groups, and individuals to hear 
their views regarding the new approach, including:
     Members of Congress and congressional staff;
     Groups and organizations representing claimants, 
beneficiaries, retired individuals, and members of the public;
     Organizations representing legal and medical 
professionals, including Federal judges and administrative law judges; 
and
     Organizations representing SSA and State agency employees 
who are engaged in the disability determination process.
    A list of the groups and organizations with whom we met appears 
near the end of this preamble.
    These interested parties provided views, suggestions, and 
recommendations that we considered as we developed our proposal to 
create an improved disability process. We particularly appreciate the 
interest that members of Congress expressed regarding our desire to 
improve the disability determination process and are thankful for the 
suggestions that they have provided to us. We also received hundreds of 
e-mails from individuals currently receiving disability benefits, 
individuals currently applying for benefits, and other interested 
citizens providing recommendations on how to refine the process.
    In general, those commenting on the new approach were supportive. 
Most agreed that we need a disability process that is quicker and more 
responsive to the needs of disability applicants and beneficiaries. 
Some noted that the current disability determination process is too 
complicated and difficult to navigate. Others suggested that we should 
strive to achieve greater consistency in the determinations and 
decisions issued at different levels of review, as well as greater 
consistency in determinations and decisions issued throughout the 
country.
    We are deeply indebted to all of the individuals and organizations 
who expended substantial time and resources both to consider and 
analyze the current disability determination process and to share with 
us their views, suggestions, and recommendations about how to improve 
that process. Our ability to propose an effective and comprehensive 
strategy for improving the disability determination process was greatly 
enhanced by these views, suggestions, and recommendations.

Proposal To Improve the Disability Determination Process

    We believe that the changes we are proposing now will improve the 
overall disability determination process by shortening decision times, 
providing benefits and payments to people who are clearly disabled much 
earlier in the process, and improving quality, efficiency, adjudicatory 
consistency, and accountability throughout every step of that process. 
These changes will also help ensure that adjudicators have a complete 
administrative record when issuing the determination or decision and 
that there is proper documentation to support the determination or 
decision.
    In a further effort to improve our disability programs, we will 
establish a Disability Program Policy Council to provide a forum for 
policy issues to be discussed in a collaborative fashion and to make 
policy and procedural recommendations. Council members will include a 
mix of disability adjudicators at all levels of the process as well as 
representatives from the Office of the General Counsel, the Disability 
Review Board, program analysts, operations, including field office 
personnel, etc. The Deputy Commissioner of Disability and Income 
Support Programs will serve as chair of the Council. The Council will 
meet on a regular basis, and the Deputy Commissioner will routinely 
report on policy recommendations to the Commissioner. The Council will 
be a channel for experts to escalate disability policy and procedural 
issues.
    This proposed disability process is contingent on the eDib system. 
As with eDib rollout, we plan to roll out the proposed disability 
process carefully and gradually to ensure any problems can be 
corrected. We will start in one region and will expand to other regions 
over time. If the rollout goes well, we may accelerate the phased 
implementation of our new disability process.
    As a result of our proposed improvements to the disability 
determination process, we expect:
     Average disability determination processing time to be 
reduced by at least 25 percent;
     Decisional consistency and accuracy to increase;
     Quick Disability Determination units in State agencies to 
provide favorable determinations within 20 calendar days for 
beneficiaries who are clearly disabled; and
     Accountability for the quality of decision making and 
documentation of the record to be reinforced at every step of the 
process.
    We propose to apply these revised regulations when we administer 
claims for benefits and payments under title II and title XVI of the 
Act. Specifically, these improvements will:
     Establish a Quick Disability Determination process through 
which State agencies will expedite initial determinations for claimants 
who are clearly disabled;
     Create a Federal Expert Unit to augment and strengthen 
medical and vocational expertise for disability adjudicators at all 
levels of the disability determination process;
     Eliminate the State agency reconsideration step and 
terminate the disability prototype that we are currently conducting in 
10 States;
     Establish Federal reviewing officials to review State 
agency initial determinations upon the request of claimants;
     Preserve the right of claimants to request and be provided 
a de novo hearing, which will be conducted by an administrative law 
judge;
     Close the record after the administrative law judge issues 
a decision, but allow for the consideration of new and material 
evidence under certain limited circumstances;
     Gradually shift certain Appeals Council functions to a 
newly established Decision Review Board; and
     Strengthen in-line and end-of-line quality review 
mechanisms at the State agency, reviewing official, hearing, and 
Decision Review Board levels of the disability determination process.

Quick Disability Determinations

    We believe that many individuals who are obviously disabled wait 
too long to get Social Security disability benefits or SSI payments 
based on disability or blindness under our current disability 
determination process. Therefore, we propose to establish at the 
initial determination level a screening system for disability claims to 
identify those claims in which a wholly favorable decision may be made 
quickly. These claims will be processed in an expedited manner by State 
agencies and will be called Quick Disability Determination claims. 
State agencies will create special units

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comprised of experienced disability examiners whose sole focus will be 
the efficient, accurate, and timely adjudication of Quick Disability 
Determination claims.
    We initially believed that Quick Disability Determination claims 
should be adjudicated in regional units across the country, and not in 
the State agencies. However, many of the groups we met with and 
numerous individuals who submitted suggestions to us asserted that the 
State agencies could effectively adjudicate Quick Disability 
Determination claims. We have decided to propose that the State 
agencies be allowed to adjudicate these claims. We propose that a State 
agency adjudicating Quick Disability Determination claims must create a 
separate Quick Disability Determination unit that will be comprised of 
experienced examiners who will work exclusively on these claims and 
complete adjudication of these claims within the timeframes we have 
established.
    We expect that the range of claims that will qualify to be 
adjudicated as Quick Disability Determination claims will be relatively 
small when we first begin implementing the proposed changes. However, 
as we gain experience with the Quick Disability Determination process 
and as we improve and fine-tune our case-selection tools, we expect 
that the range of potential Quick Disability Determination claims will 
increase over time.
    We will make use of a predictive model screening software tool that 
will identify claims that indicate a high degree of probability that an 
individual both meets our definition of disability and has readily 
available medical evidence. This software will utilize data from the 
initial disability application and provide an alert to the State agency 
that the disability claim meets the criteria to be adjudicated as a 
Quick Disability Determination claim.
    In these proposed regulations we require that the State agencies 
comply with timeliness standards for processing Quick Disability 
Determination claims in order to maintain their Quick Disability 
Determination adjudication responsibilities. We propose that the Quick 
Disability Determination units will provide favorable determinations of 
disability in 20 days or less to disability applicants who are clearly 
disabled and who meet our disability criteria. The Quick Disability 
Determination units will not make unfavorable determinations when 
processing potential Quick Disability Determination cases. Our proposed 
rules provide that if a favorable quick disability determination cannot 
be made within 20 days (either because the particular Quick Disability 
Determination criteria have not been met in the case or because the 
case involves impairments that require more than 20 days to properly 
evaluate), the case will be adjudicated by the State agency in the 
normal manner using our existing procedures.
    Our proposed rules also provide that the State agency Quick 
Disability Determination units must ensure that a medical or 
psychological expert who has the qualifications required by the 
Commissioner verifies the particular diagnosis that is the basis of the 
claim in each case.
    Our proposed rules explain that we will monitor the performance of 
the Quick Disability Determination units to ensure that these claims 
are being processed in a timely manner. We propose to establish special 
processing standards that the Quick Disability Determination units must 
meet in order to perform this important workload. Although these 
proposed rules do not change our existing rules regarding State agency 
responsibilities for performing the disability determination function, 
we intend to modify those rules, currently promulgated in subpart Q of 
part 404 and subpart J of part 416, in the future.

State Agency Determinations

    We also propose to require the State agency to document and explain 
the basis for the determination made in every claim it adjudicates. We 
believe that more complete documentation and explanation of the basis 
for the determination will result in more accurate initial 
determinations and will assist adjudicators in claims that are reviewed 
by a Federal reviewing official or considered by an administrative law 
judge.

Medical and Vocational Expertise and the Federal Expert Unit

    Making correct disability determinations and decisions in a 
consistent and timely manner is critically important to disability 
claimants, as well as to the general public. Ultimately, whether 
someone is disabled within the meaning of the Act is a legal question 
that often requires consideration of complicated medical and vocational 
evidence. In crafting the new approach, we realized from the beginning 
that having sufficient expertise to help us consider the medical and 
vocational issues in claims filed throughout the country would be 
essential to an efficient, accurate, and fair adjudication process. 
However, we realized that under our current disability adjudication 
process, medical, psychological, and vocational experts are not 
consistently available to all adjudicators at every level or in all 
parts of the country.
    We are therefore proposing to establish and operate a Federal 
Expert Unit, which we believe will help to ensure the full development 
of the record, enable adjudicators to make accurate determinations or 
decisions as early in the process as possible, and facilitate 
subsequent review should a case be appealed to a higher level. We 
propose to create a national network of medical, psychological, and 
vocational experts who will be available to assist adjudicators 
throughout the country. This national network may include experts 
employed by or under contract with the State agencies; however, all 
experts affiliated with the national network must meet qualifications 
prescribed by the Commissioner.
    The Federal Expert Unit will organize and maintain this network 
comprised of medical, psychological, and vocational experts who will 
provide medical, psychological, and vocational expertise to State 
agencies, reviewing officials, administrative law judges, and the 
Decision Review Board. We want to ensure that the right set of medical 
eyes reviews medical records and answers questions about the wide 
variety of impairments seen in disability claims. We believe that the 
expert network affiliated with the Federal Expert Unit will help ensure 
that a medical, psychological, and vocational expert who has the 
qualifications required by the Commissioner assists in adjudicating 
disability claims. With the assistance of the Institute of Medicine, we 
plan to develop standards that define the medical and psychological 
expertise necessary for experts to qualify for participation in the 
national network.
    We will also establish standards with respect to the qualifications 
of vocational experts employed by the State agencies and affiliated 
with the Federal Expert Unit because we are committed to employing 
consistent, high quality vocational expertise in the disability 
determination process. To that end, we plan to undertake a study to 
enhance the expertise needed to make decisions on a claimant's 
functional limitations and his/her ability to perform jobs available in 
the national economy. Among other things, the study will help determine 
(1) how best to provide vocational and occupational medical expertise 
at all levels of the disability determination process to improve the 
quality of case adjudication

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and (2) what qualifications vocational and occupational medical experts 
should have.
    Several organizations and numerous individuals urged us to allow 
the State agencies to continue to use State agency medical consultants 
when making initial disability determinations under the new approach. 
While we agree that the State agencies should continue to employ 
medical and psychological consultants, we believe that it is essential 
that every medical and psychological expert meet our qualification 
standards in order to participate in the disability adjudication 
process.
    Therefore, experts who are affiliated with the Federal Expert Unit 
and experts who are under contract with a State agency must meet these 
qualification standards on the effective date of these regulations or 
when we publish the qualifications, whichever is later. We expect to 
publish expert qualification standards on or before issuing a final 
rule, but will publish them no later than six months after the 
effective date of this final rule. Experts who are employed by a State 
agency must meet them no later than one year after the effective date 
of these regulations or no later than one year after the date we 
publish the qualifications, whichever is later. Our proposed 
regulations also provide that we will not reimburse State agencies for 
the costs associated with work performed on our behalf by experts 
employed by, or under contract with, the State agencies who do not meet 
our qualification standards. However, we intend to implement this 
reimbursement provision on a region-by-region basis as we implement our 
new approach. Therefore, our reimbursement policy will be applied only 
to State agencies where we have implemented these proposed regulations.
    We further propose that in those instances where an administrative 
law judge requires medical, psychological, or vocational testimony in 
order to hear a case or make a decision, the administrative law judge 
must use a medical or vocational expert from the network. However, in 
order to ensure the independence of the administrative law judge 
process, if the State agency or the reviewing official has used an 
expert from the network and the administrative law judge needs an 
expert in the case as well, the administrative law judge must use a 
different expert.
    When requested by an administrative law judge or the Decision 
Review Board, appropriate medical, psychological, and vocational 
expertise will be made available by the Federal Expert Unit from the 
national network on a rotational basis, taking into account the 
decision maker's potential need to have an expert who is physically 
located nearby. We propose to pay these medical, psychological, and 
vocational experts at rates that we will establish.

Reviewing Official

    Several of the interested organizations and individuals who 
contacted us expressed the view that, under the current disability 
determination process, there are inconsistencies in initial 
determinations made by State agencies which are not being corrected at 
the State agency reconsideration step. Some of these interested parties 
also expressed the belief that the reconsideration step was merely a 
``rubber stamp'' of the initial State agency determination. We believe 
that the remarkably high percentage of claimants who pursue further 
review of their determinations perceive the reconsideration step as a 
burdensome step in the process which adds no appreciable value to the 
process.
    Under our proposed rules, if a claimant is dissatisfied with the 
determination made by the State agency, the claimant may appeal the 
determination to a Federal reviewing official, who will conduct a 
review of the claim. The reviewing official will review the 
administrative record and issue a decision in your case or return your 
case to the State agency. The reviewing official will not conduct a 
hearing or meet with you in person.
    We received a considerable number of comments from interested 
parties regarding whether or not the reviewing official should be an 
attorney. Some interested parties stated that the effective performance 
of reviewing official duties required certain legal and analytical 
skills that only licensed attorneys possess. In addition, some argued 
that the reviewing official's decision would have greater credibility 
if it were made by an attorney. However, others argued that the 
responsibilities of the reviewing official could be met by a non-
attorney with experience making disability determinations.
    We believe that attorneys are ideally suited to perform certain 
critical reviewing official functions such as garnering the requisite 
evidence to compile a complete case record and drafting a well-
supported, legally-sound decision. We believe that attorneys will be 
able to effectively adjudicate claims in a manner that ensures that the 
right decision is made early in the administrative review process. We 
also believe that using attorneys as reviewing officials will help 
improve the level of confidence that applicants, members of the pubic, 
administrative law judges, and other interested parties have regarding 
the integrity of our first level of administrative review. For these 
reasons, we plan to hire attorneys to serve as Federal reviewing 
officials.
    Under our proposed rules, the reviewing official may reverse, 
remand, modify, or affirm your initial determination. The reviewing 
official's action on your claim will be made only on the basis of a 
review of the record; you will not have any right to a hearing before 
the reviewing official. We propose that if additional evidence is 
necessary, the reviewing official may obtain such evidence from other 
sources, including ordering a consultative examination with the 
assistance of the Federal Expert Unit. In addition, if additional 
evidence is necessary, we propose that a reviewing official may remand 
a claim back to the State agency so that the State agency can 
readjudicate the claim. The reviewing official may also, while 
retaining jurisdiction of the claim, return the claim to the State 
agency so that it can obtain the additional evidence.
    Under our proposed rules, if the reviewing official disagrees with 
the State agency's determination that you did not meet our definition 
of disability, the reviewing official must have a qualified medical or 
psychological expert affiliated with the Federal Expert Unit evaluate 
the evidence to determine the medical severity of the impairment before 
the reviewing official can issue his or her decision. In addition, if 
there is new and material evidence that the State agency did not 
consider, the reviewing official must make a decision in consultation 
with a medical or psychological expert affiliated with the Federal 
Expert Unit.
    We propose to require that the reviewing official issue a written 
decision in every case that he or she adjudicates. The reviewing 
official will explain in this decision why he or she agrees or 
disagrees with the State agency's determination that you did not meet 
our definition of disability. The reviewing official's decision will be 
sent to the State agency and used by us for quality management 
purposes.
    A major objective of using Federal reviewing officials to review 
disability claims is to ensure to the maximum extent possible the 
accuracy and consistency--and thus the fairness--of determinations made 
at the front end of the process. We intend to provide careful 
administration of the reviewing official function. We plan to employ 
highly qualified individuals who will be thoroughly trained in the 
policies and

[[Page 43596]]

procedures of our disability determination process.

Administrative Law Judge Hearings and Decisions

    We are proposing some changes to the hearing level process as part 
of our overall effort to improve disability decision making. Under 
these proposed rules, administrative law judges will continue to hold 
de novo hearings and issue decisions based on all the evidence 
presented. They will not be required to give any legal deference or 
particular weight to the determinations previously made by the State 
agency or by the reviewing official.
    Under the new process, the administrative law judge's hearing 
decision will generally become our final decision, and you will no 
longer be able to request that the Appeals Council review the decision. 
Recognizing the importance of this change, and consistent with our goal 
to improve all aspects of the administrative review process, we are 
proposing to make some changes to the hearing process that we expect 
will improve the timeliness of the process and the quality of the 
administrative law judge's decision.
    For example, we propose to improve the timeliness of the hearing 
process by revising the rules that address the time frames for 
submitting evidence to us. Our current rules state that, if possible, 
you should submit the evidence, or a summary of the evidence, that you 
wish to have considered at the hearing to the administrative law judge 
with the request for a hearing or within 10 days after filing the 
request for a hearing. In many cases, however, claimants submit 
evidence to us well after that time frame.
    Our program experience, as well as our discussions with interested 
parties, has convinced us that the late submission of evidence to the 
administrative law judge significantly impedes our ability to issue 
hearing decisions in a timelier manner. When new and voluminous medical 
evidence is presented either at the hearing, or shortly before the 
hearing, the administrative law judge needs time to review and consider 
that evidence. The late submission of evidence reduces the efficiency 
of the hearing process because we often must reschedule hearings to 
give the administrative law judge an opportunity to perform that 
review. Rescheduling hearings not only delays decisions on individual 
claims, but also delays the hearings of other claimants for benefits.
    To manage our hearing process more effectively, we propose time 
limits for submitting evidence to the administrative law judge as well 
as consequences for failing to abide by the time limits. The lack of 
any consequences for violating the time limits is a major shortcoming 
of our current rules. We propose, as described in more detail below, 
that generally, you must submit evidence 20 days before the hearing. 
Nevertheless, recognizing that there may be situations where it is 
impossible to comply with the time limits for submitting evidence, we 
propose specific exceptions to them.
    Another proposed change that we anticipate will improve the 
timeliness of our hearing process is that within 90 days of the date we 
receive your hearing request, the administrative law judge will set the 
time and place for the hearing. Our current rules do not provide any 
date by which the administrative law judge should schedule a hearing. 
This proposed 90-day time frame represents a management goal for us and 
does not provide you with a substantive right to have a hearing 
scheduled within this period. Given the size and magnitude of our 
hearing process, it simply would not be administratively feasible for 
us to hold a hearing within 90 days for every claimant who filed a 
hearing request. Indeed, it would not be appropriate for us to do so, 
because some claims will inevitably require more development than 
others. Nevertheless, by including this provision in the rules, we are 
stressing to our adjudicators our commitment to providing timely 
service. We also propose that the administrative law judge must notify 
you of your hearing date at least 45 days before the date of the 
scheduled hearing, unless you agree that the administrative law judge 
may provide you with less notice.
    One of our major goals in proposing these rules is to improve the 
quality and consistency of decision making at all levels of our 
administrative review process. As noted above, one of the new features 
of the administrative review process is the use of a Federal reviewing 
official who (after the filing of a request for review) will review the 
State agency's initial determination and make a decision on your 
disability claim. As we noted earlier in the preamble, we expect that 
the use of Federal reviewing officials will help improve the quality of 
determinations by State agencies, because the reviewing official will 
explain why he or she agrees or disagrees with the State agency's 
determination. We propose to include a similar rule at the 
administrative law judge hearing level. Under the proposed rules, an 
administrative law judge will provide in his or her decision an 
explanation for why he or she agrees or disagrees with the reviewing 
official's rationale in the written decision. We expect that the 
administrative law judge's explanation will provide information for the 
reviewing official and for management and that this type of feedback 
from administrative law judges to reviewing officials and from 
reviewing officials to the State agencies will be important to 
accomplishing our goal of improving the quality of the decision making 
process.
    We propose that the administrative law judge decision in your 
disability claim will become our final decision, unless we select your 
disability claim for review by a new administrative body we propose to 
create called the Decision Review Board. We explain the purpose and 
functions of the Decision Review Board below. If your claim is not sent 
to the Decision Review Board for review, the administrative law judge's 
decision will stand as the final Agency decision, and you may seek 
review of the administrative law judge's decision in Federal district 
court.

Closing the Record

    We received many comments from interested parties about closing the 
record. Some interested parties argued that the record should not be 
closed after the issuance of the administrative law judge decision. 
These parties believed that claimants should have the right to submit 
additional evidence at any time. Some stated that if we decided to 
close the record after the issuance of the administrative law judge 
decision, we should provide for a good cause exception that would allow 
the submission of new evidence in certain circumstances. Other 
interested parties argued that the record should firmly close after the 
issuance of the administrative law judge decision, believing that this 
would encourage more efficient collection of evidence and more timely 
and efficient processing of claims.
    Every reasonable effort should be made to submit evidence as early 
in the adjudicative process as possible. We are proposing to close the 
record after the administrative law judge issues a decision on your 
claim. A consistent policy of closing the record after the issuance of 
the administrative law judge decision will promote administrative 
efficiency and timely claims processing. However, we agree that there 
are certain limited circumstances where a claimant may have good 
reasons for failing to provide evidence in a timely manner to the 
administrative law judge. Consequently, we propose to close the record 
after the administrative law judge

[[Page 43597]]

issues a decision in a case, but to allow the consideration of new and 
material evidence under certain limited circumstances.
    We propose that you must submit all of the evidence you will rely 
upon in your case to the administrative law judge no later than 20 days 
before the hearing. This time limit should be easily met because we 
also are proposing that the administrative law judge must notify you of 
your hearing date at least 45 days before the hearing.
    The 20-day time limit for submitting evidence is subject to only 
two exceptions, both of which must be raised at the hearing. If you are 
aware of any additional evidence that you could not timely obtain and 
submit or if you are scheduled to undergo additional medical evaluation 
after the hearing for any impairment that forms the basis of your 
disability claim, you must inform the administrative law judge of 
either of these circumstances during your hearing. If you request 
additional time to submit the evidence, the administrative law judge 
may exercise his or her discretion and choose to keep the record open 
for a defined period of time to give you the opportunity to obtain and 
submit the additional evidence. If the extension is granted, once he or 
she receives this additional evidence, the administrative law judge 
will close the record and issue a decision.
    After the record is closed, we will not consider additional 
evidence unless you establish good cause for failing to submit the 
evidence during the extended time period that the administrative law 
judge granted to you. In these situations, you must have informed the 
administrative law judge during the hearing that you were attempting to 
obtain this evidence or that you anticipated receiving such evidence 
after the hearing. You must submit your evidence and provide your good 
cause explanation to the administration law judge within 10 days of 
receiving the administrative law judge's decision. However, if your 
case has been selected for review by the Decision Review Board, you 
will be notified that the administrative law judge's decision is not 
our final administrative decision, and you must submit your additional 
evidence and provide your explanation of good cause to the Decision 
Review Board within 10 days of receiving the administrative law judge's 
decision.
    We will find good cause only when you were prevented from obtaining 
or presenting your evidence during the extended time period due to 
unusual and unavoidable circumstances beyond your control. For example, 
if an administrative law judge grants you an extended time period to 
submit a doctor's report and you receive the report during the extended 
period, but could not provide it to the administrative law judge 
because you were hospitalized, we may find that you had good cause for 
failing to submit the evidence. However, we will not find good cause in 
instances where your additional medical evidence is obtained during the 
extended period but your representative fails to submit it in a timely 
manner as we hold you accountable for the actions of your 
representative pertaining to the submission of evidence. Although we 
will not consider the additional evidence in such cases, you will 
continue to have the right to file a new application for disability 
benefits for the time period beginning on the date after the 
administrative law judge's decision in your case.
    Finally, in very limited situations, we may consider evidence after 
the record is closed and when you did not inform the administrative law 
judge at the hearing that additional evidence may exist. We are aware 
that there may be instances when a claimant attends a hearing and 
complies with all of our proposed rules regarding submission of 
evidence, but then experiences a significant worsening of condition or 
experiences the onset of a new impairment after the hearing, but before 
the decision is issued. In such circumstances, material evidence 
regarding a worsening or an onset of a new impairment may become 
available that the claimant could not have been expected to identify or 
discuss during the hearing. Since the period being reviewed by an 
administrative law judge includes the period of time between the date 
of the hearing and the date that the administrative law judge issues a 
decision, we believe that material evidence regarding your condition 
during this period should be considered.
    Therefore, if you obtain new evidence after your hearing that shows 
your impairment(s) or condition changed materially during the period 
after the hearing and before the issuance of the administrative law 
judge's decision, you must submit this evidence to us as soon as 
possible, but no later than 10 days after the date of you receive the 
administrative law judge's decision in your case.
    If you have not yet received your administrative law judge 
decision, you should submit this evidence to the administrative law 
judge, who will review the evidence and, if it is material to your 
claim, consider it when deciding your claim.
    If the administrative law judge has already issued your decision 
and your case has not been selected for review by the Decision Review 
Board, you must submit this evidence to the administrative law judge no 
later than 10 days after the date you receive notice of the decision 
and request that the administrative law judge reconsider his or her 
decision. Upon your timely request, the administrative law judge will 
review and consider the evidence as appropriate. The administrative law 
judge may reconsider the decision on your claim and revise it based on 
the new evidence if warranted or vacate your decision and order a new 
hearing if warranted. However, if you submit this evidence more than 10 
days after the date you receive notice of the decision, the 
administrative law judge will not consider the new evidence.
    If the administrative law judge has already issued your decision 
and your case has been selected for review by the Decision Review 
Board, you must submit this evidence to the Decision Review Board (not 
to the administrative law judge) within 10 days after the date you 
receive notice of the administrative law judge's decision. The Decision 
Review Board will review and consider the evidence as appropriate.

Decision Review Board

    The question of whether or not to eliminate the Appeals Council 
generated a considerable number of comments from a wide variety of 
interested parties. Some interested parties argued that the Appeals 
Council should be retained because it identifies erroneous 
administrative law judge decisions and provides recourse in a 
significant number of instances. They argued that, as a result, the 
elimination of the Appeals Council would result in an unacceptable 
increase in the number of cases filed in Federal district court, 
particularly those problematic or erroneous cases that are currently 
identified and resolved by the Appeals Council. Interested parties also 
observed that elimination of the Appeals Council would effectively 
prevent any review of dismissals made by administrative law judges 
because claimants would have no right to file for Federal district 
court review.
    On the other hand, many other interested parties expressed the 
belief that the Appeals Council should be eliminated, arguing that the 
Appeals Council does not effectively identify and address erroneous 
administrative law judge decisions. These and other interested parties 
further expressed the

[[Page 43598]]

view that the delays associated with Appeals Council review outweighed 
any benefits provided by this level of review. Others believed that the 
impact of our eliminating the Appeals Council would be ameliorated to a 
significant degree because the new approach already contemplated the 
ability of claimants to receive two separate levels of Federal 
administrative review after the initial State agency determination--the 
Federal reviewing official level and the administrative law judge 
level.
    While we agree that the Appeals Council has identified erroneous 
administrative law judge decisions and provides recourse in some 
instances, we believe that the current Appeals Council review process 
adds substantial processing time to the disability adjudication process 
without intercepting large numbers of claims that do not withstand 
Federal district court review. The district courts are currently 
remanding more than 50 percent of the disability cases filed against 
us.
    We believe that the important and critical functions pertaining to 
the review of disability claims currently performed by the Appeals 
Council can be performed more effectively by a smaller review body that 
will focus on promptly identifying decision making errors and 
identifying policies and procedures that will improve decision making 
at all levels of the disability determination process. We propose to 
establish a new Decision Review Board to perform these functions.
    The Decision Review Board will be an administrative review body 
comprised of experienced adjudicators who can advance the objective of 
ensuring fair, consistent, and efficient decision making. The members 
of the Decision Review Board will be appointed by the Commissioner and 
will consist of administrative law judges and administrative appeals 
judges. Decision Review Board members will have staggered terms and 
serve on a rotational basis. The Decision Review Board will select and 
review both favorable and unfavorable administrative law judge 
decisions that are likely to be error-prone, and it will generally 
select and review an equal share of each type of case.
    Under our proposal, you will no longer have the right to request 
administrative review of a disability decision issued by an 
administrative law judge. However, you will have the right to request 
review by the Decision Review Board of the dismissal of your request 
for hearing, an action that is not subject to Federal court review. In 
addition, you will continue to have the right to seek further 
administrative review of any administrative law judge decision 
pertaining to your nondisability case. These cases will continue to be 
reviewed by the Appeals Council while we implement our proposed rules. 
Once our proposed rules are fully implemented nationwide, this review 
function will be transferred to the Decision Review Board.
    We anticipate that the Decision Review Board will review a wide 
range of decisions and identify decision-making errors, provide advice 
regarding the nature and magnitude of these errors, identify policies 
and procedures that could be used to address such errors, and develop 
information mechanisms aimed at improving decision making at all levels 
of the disability determination process. The Decision Review Board will 
have the authority to affirm, reverse, or remand an administrative law 
judge's decision. The wide range of decisions that the Decision Review 
Board will review include:
     Cases that are likely to be the subject of requests for 
voluntary remand or judicial remand;
     Allowance and denial cases where error is likely, 
including cases that involve the interpretation of new policy or 
procedural issuances; and
     A selection of decisions that are issued after remand by 
the Decision Review Board or a Federal district court.
    We intend to screen every administrative law judge decision, using 
computer-based predictive screening tools and individual case record 
examination performed by skilled reviewers, to identify cases for 
Decision Review Board review. The Decision Review Board will select 
cases for review based, in part, on its identification of problematic 
policies or on its own experience with processing cases that have been 
identified as error-prone by our Office of the General Counsel or by 
the Federal co