Administrative Review Process for Adjudicating Initial Disability Claims, 16424-16462 [06-3011]

Agencies

• Social Security Administration

[Federal Register Volume 71, Number 62 (Friday, March 31, 2006)]
[Rules and Regulations]
[Pages 16424-16462]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3011]



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Part II





Social Security Administration





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20 CFR Parts 404, 405, 416, and 422



Administrative Review Process for Adjudicating Initial Disability 
Claims; Final Rule

Federal Register / Vol. 71, No. 62 / Friday, March 31, 2006 / Rules 
and Regulations

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404, 405, 416, and 422

RIN 0960-AG31


Administrative Review Process for Adjudicating Initial Disability 
Claims

AGENCY: Social Security Administration.

ACTION: Final rule.

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SUMMARY: The Social Security Administration is committed to providing 
the high quality of service the American people expect and deserve. In 
light of the significant growth in the number of disability claims and 
the increased complexity of those claims, the need to make substantial 
changes in our disability determination process has become urgent. We 
are publishing a final rule that amends our administrative review 
process for applications for benefits that are based on whether you are 
disabled under title II of the Social Security Act (the Act), or 
applications for supplemental security income (SSI) payments that are 
based on whether you are disabled or blind under title XVI of the Act. 
We expect that this final rule will improve the accuracy, consistency, 
and timeliness of decision-making throughout the disability 
determination process.

DATES: This rule is effective August 1, 2006.

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 https://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 https://www.gpoaccess.gov/fr/
index.html.

Introduction

    Today, as part of our continuing efforts to make fundamental 
improvements in our disability decision-making, we are publishing this 
rule establishing our new disability determination process, known as 
the Disability Service Improvement (DSI) process. This rule explains 
our new procedures for adjudicating the disability portion of initial 
claims for Social Security disability insurance (DI) benefits and for 
supplemental security income (SSI) based on disability or blindness. 
The purpose of the rule is to improve the accuracy, consistency, and 
fairness of our disability determination process and to make the right 
decision as early in the process as possible.
    Under this rule, the administrative review process consists of 
several steps, which must be requested within certain time periods. 
When you file for benefits, we will make an initial determination on 
your claim, and in certain circumstances refer your claim for a quick 
disability determination (QDD). If you are dissatisfied with our 
initial determination, you may request review by a Federal reviewing 
official. If you are dissatisfied with the Federal reviewing official's 
decision, you may request a hearing before an administrative law judge. 
The administrative law judge's decision becomes our final decision, 
unless your claim is referred to the Decision Review Board (DRB). When 
the DRB reviews your claim and issues a decision, that decision is our 
final decision. If you are dissatisfied with our final decision, you 
may seek judicial review in Federal district court.
    Following is a description of our various initiatives towards 
improving the disability process, an explanation of the new process 
created by this rule, and a discussion of the comments that we received 
in response to our notice of proposed rulemaking (NPRM), 70 FR 43590 
(July 27, 2005).

Background

    During the five decades that have elapsed since its enactment, the 
DI program has provided many millions of disabled American workers and 
their families with critically needed income support. The SSI program, 
enacted 34 years ago, has similarly helped many millions of low income 
disabled individuals meet their basic needs. These two programs are a 
vital part of the nation's social insurance and income support systems.
    The number of disability beneficiaries in our programs has grown 
significantly over the years. In January 2005, nearly eight million 
disabled workers and their dependents received DI benefits, double the 
number of beneficiaries in 1985 (about a 100% increase). Nearly six 
million disabled adults and children received SSI disability payments, 
more than double the number in 1985 (a 130% increase).
    The adjudication of disability claims now constitutes the major 
part of our workload and nearly every one of our components has a role 
in administering the disability programs. In fiscal year 2005, the 
State disability determination services (DDSs) processed more than 2.6 
million initial claims for DI benefits and SSI based on disability or 
blindness. Our hearing offices processed approximately 500,000 
disability claims on behalf of claimants who appealed their denials.
    As the disability programs have grown in both size and complexity, 
we have been increasingly challenged to provide the high quality of 
service that disabled claimants and the public expect and deserve. Over 
the last four years we have undertaken a number of major initiatives 
designed to fundamentally improve the administration of these programs.
    To further one of those initiatives, on July 27, 2005, we published 
an NPRM that described the changes we have already begun and those we 
intend to make in the months to come to improve the accuracy, 
consistency, and fairness of our disability determination process, to 
make the right decision as early in the process as possible, and to 
assist disabled individuals who want to work to do so.
    We determined that to accomplish these objectives, we needed a two-
pronged strategy: (1) Strengthen our disability determination process 
through structural and qualitative change, and (2) make important 
institutional improvements to better support our disability programs. 
The important institutional improvements we are making include:
     Implementing a new electronic disability system;
     Establishing a new, integrated, and more comprehensive 
quality system;
     Enhancing our management information;
     Updating medical and vocational policy and strengthening 
our ability to address policy issues; and
     Implementing new work opportunity initiatives.
    These improvements go hand-in-hand with the process changes that we 
are making in this rule. Both are essential if our disability programs 
are to meet the needs of the claimants and public whom we serve.

A New Electronic Disability System

    At this time, we are well along in replacing our old paper 
disability approach with an electronic system that will enable us to 
handle all new claims in an expedited manner. Each component in our 
adjudicative process, from beginning to end, is increasingly able to 
process claims electronically. This new electronic system, which we

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call eDib, permits us to avoid delays that result from having to mail, 
locate, and organize paper folders. It also enables more than one 
employee or component to work on a claim at the same time, thus 
speeding up the process. Medical records can be quickly scanned into 
the system and made readily accessible to adjudicators. The electronic 
system also includes safeguards to help adjudicators avoid mistakes, 
which will result in more accurate decision-making. It also protects 
the confidentiality of claimant information.
    The implementation of this new electronic system has progressed 
rapidly. All of our 1,338 field offices are now using the Electronic 
Disability Collect System (EDCS), taking 20,000 claims per day. This 
system enables them to immediately transfer a disability claim to a 
DDS, thus avoiding delays.
    The rollout of eDib in the DDSs has been phased in gradually so 
that we can provide each DDS with the support needed for successful 
implementation. Once rollout begins in a DDS, the number of DDS 
decision-makers working with electronic folders gradually expands as 
the DDS develops expertise with the process. To date, all of the 50 
States have rolled out the electronic disability folder. Nationally, 
over 80% of DDS decision-makers are now adjudicating cases in an 
electronic environment.
    In January 2005, the Mississippi DDS became the first in the nation 
to start processing its cases in a totally electronic environment. 
Another 20 States have joined Mississippi and are processing all new 
disability claims in a totally electronic environment, thus eliminating 
the need for a paper folder. We plan to continue implementation in the 
DDSs in 2006.
    Within the Office of Hearings and Appeals (OHA), all of our hearing 
offices are outfitted with our new electronic Case Processing and 
Management System (CPMS), which controls case flow and provides current 
management information. In addition, hearing offices in 47 States are 
equipped to work cases electronically.
    eDib also improves our ability to manage decisional quality. Access 
to the electronic folder provides quality reviewers greater 
flexibility. This will allow us to transition to our new quality system 
that will rely on both in-line and end-of-line reviews and will provide 
timely and efficient feedback to decision-makers to enable them to 
improve how we administer our programs.
    In 2006, each of the field offices, DDSs, and hearing offices will 
be processing workloads with electronic disability folders on a regular 
basis.

A New Quality System

    Over the last two years we have been designing a new integrated 
quality system that we believe will significantly improve our 
disability determination process as well as other program areas within 
our responsibility, including the Social Security retirement program 
and the SSI age-based program. We expect to begin the implementation of 
our new quality system this spring. This system employs a multi-
dimensional definition of quality that includes five elements: 
accuracy, service, timeliness, productivity, and cost. It will 
emphasize in-line, as well as end-of-line, quality assurance.
    The new, comprehensive quality system will be implemented 
throughout our Agency, including in teleservice centers, program 
service centers, field offices, DDSs, and hearing offices, as well as 
for the Federal reviewing official, Medical and Vocational Expert 
System (MVES), and the DRB. The centrally-managed quality system will 
replace the current regionally-based Disability Quality Branches that 
review State DDS determinations.
    Data will be gathered in-line and end-of-line to provide timely, 
meaningful feedback. Specialized units comprised of trained employees 
who will be responsible for fostering continuous improvements in the 
Agency's work products will work together with employees in all 
components to improve the process on an ongoing basis. Quality will not 
be separate from, but will be integrated into every step of, the 
process.
    The new quality system is being designed to improve accountability 
and to provide feedback to adjudicators at all administrative levels, 
including the individual, unit, component, State, region, and 
headquarters. The system will provide administrators with the detailed 
data they need to understand the strengths and weaknesses of their 
performance, and what they need to do to improve it. To ensure 
successful implementation, we will be providing training so that 
employees will understand what is expected of them and will be able to 
fulfill their responsibilities. This will improve the quality of our 
decisions throughout the disability determination process.

Improving Management Information

    The new DSI process that we describe below is intended to improve 
our service to the public. Critical to achieving this objective is 
having the management information that is needed to measure both the 
overall impact of the new disability determination process and the 
effectiveness of its component parts.
    We are currently undertaking a major effort to enhance our 
management information capacity. We anticipate that these enhancements 
will not only improve our current capability to perform such ongoing 
functions as tracking program and administrative costs, but will also 
help us measure the success of the new DSI process. These enhancements 
will enable us to determine whether our performance matches our 
business goals, and whether these changes result in the intended 
objectives.
    For example, we will be able to answer the following types of 
questions:
     Did overall disability processing time improve? Did the 
new QDD process contribute to that improvement?
     Did our new Medical and Vocational Expert System (MVES) 
enhance adjudicators' access to the medical and vocational expertise 
they need to make better decisions?
     Did the accuracy, timeliness, and consistency of decisions 
improve as a result of our new in-line and end-of-line quality 
initiatives?
    We intend to use our improved management information tools 
dynamically, resolving management problems as we find them, and making 
continuous improvements as the new process is rolled out.

Improvements in Policy

    We are undertaking a major effort to review, and update if 
necessary, our medical and vocational policies and to improve our 
capacity to identify and make needed changes in our disability policies 
and procedures.
    Medical Policy. As part of this effort, we have implemented a new 
business process to streamline the updating of our medical listings.
    In fiscal year 2005, we published revised medical criteria for 
malignant neoplastic diseases, impairments that affect multiple body 
systems, and genitourinary impairments. In addition, we provided timely 
cross-component training and guidance on these provisions. We also 
published an NPRM for vision impairments. We will continue to update 
additional medical listings throughout fiscal year 2006. For example, 
the final cardiovascular listing was published in January 2006.
    We have taken steps to increase outside participation in the 
development of our medical listings. As a first step, we now publish an 
advance

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NPRM to encourage members of the public to comment on the current 
medical criteria and to provide suggestions on how the medical criteria 
could be updated.
    In fiscal year 2005, we published advance notices involving 
impairments related to the respiratory and endocrine systems, growth 
impairments, and neurological impairments, as well as portions of the 
special senses (hearing impairments and disturbances of the 
labyrinthine-vestibular function). We also proposed the development of 
a new listing covering language and speech impairments.
    Following up on the advance notices, we have held numerous public 
outreach events. These sessions provide an opportunity for medical 
experts, claimants, and advocates to comment on our current policies 
and to advise us on the future content of the medical criteria.
    Vocational Policy. We are working to update and clarify our 
vocational policy to assist adjudicators in the field. We recently 
published a Social Security Ruling to communicate the Supreme Court's 
decision on how adjudicators should apply our rules when determining 
whether a claimant can return to his/her past relevant work. We are 
also building a comprehensive policy access tool, known as Disability 
Online, which will give our adjudicators electronic access to all 
vocational rules and training materials.
    Disability Program Policy Council. Recognizing the need for a more 
integrated approach in addressing policy issues, we are establishing a 
new Disability Program Policy Council (DPPC) that will be responsible 
for recommending changes in our disability policies and procedures to 
improve the quality of our disability determination process. This 
Council will be chaired by the Deputy Commissioner for Disability and 
Income Security Programs. It will include representatives from 
components that are responsible for policy and for the operations of 
the disability determination process, as well as the Office of Quality, 
the Office of the General Counsel, and the DRB. The Council will serve 
as a forum for making policy recommendations for consideration by the 
Commissioner.
    Electronic Disability Guide. In support of our eDib initiative, we 
have created an electronic disability guide (eDG) for use by 
adjudicators. This guide consolidates disability policies and 
procedures in one convenient place and serves as an instructional 
manual for processing disability claims as we transition from paper to 
an electronic environment. This electronic repository is also 
accessible to the public. It has proven to be extremely helpful when we 
discover policy or procedural weaknesses that arise with the conversion 
from our paper approach to our new electronic system. In such 
instances, we identify the problem, make necessary changes, and update 
our eDG repository accordingly so that they can be implemented 
immediately.

Our Work Opportunity Initiatives

    In addition to the above improvements in our infrastructure, we are 
implementing a number of initiatives designed to encourage and assist 
individuals to participate in employment opportunities.
    Our initiatives recognize that the DI and SSI programs serve a 
diverse population of individuals with disabilities. Our beneficiaries 
are from various age groups with different impairments, levels of 
education, work experience, and capacities for working. While many 
cannot work at all on a sustained basis, others may be able to work 
part time or full time with reasonable accommodations and/or ongoing 
supports. As we have been developing our return-to-work initiatives, we 
have been mindful that the unique needs of every beneficiary cannot be 
met by one return-to-work program. In conjunction with our plans to 
improve our disability determination process, we will be conducting a 
number of diverse demonstration projects aimed at helping individuals 
who want to work to do so. Our demonstration projects are as follows:
    DI Benefit Offset Demonstration Project. We are developing a 
benefit offset demonstration that will reduce DI benefits by $1 for 
every $2 earned over a certain threshold. Currently, a beneficiary 
could lose DI entitlement, and therefore all benefit payments, as soon 
as earnings exceed the substantial gainful activity level. This 
potential loss of benefits and eventually the corresponding access to 
Medicare benefits is thought to discourage many beneficiaries from 
attempting to work. We are working with a contractor on the design, 
implementation, and evaluation of the project. The contractor also will 
develop a model that will test an early intervention strategy focusing 
on DI benefit applicants. Enrollments in the national project are 
expected by the end of this year.
    At the same time, we are conducting a small DI benefit offset 
demonstration project in four States: Connecticut, Utah, Vermont, and 
Wisconsin. To date, approximately 200 beneficiaries are enrolled.
    Youth Transition Projects. We have cooperative agreements in six 
States for the purpose of assisting youths with disabilities to 
successfully transition from school, which may include post-secondary 
education, to employment and ultimately economic self-sufficiency. The 
States have formed partnerships with Federal, State, and local entities 
to improve employment outcomes for persons who are age 14-25 and who 
receive SSI or DI benefits on the basis of their own disability. The 
projects are providing a broad array of transition-related services and 
supports for these individuals.
    Accelerated Benefits. Under current law, there is a 24-month wait 
before Medicare is available to a person whom we determine to be 
disabled and eligible for DI. A contract was recently awarded to 
implement and evaluate the accelerated benefits demonstration project, 
which will provide immediate private health insurance to individuals 
who have medical impairments expected to improve within two to three 
years. Project participants will be recruited at the point that 
disability beneficiaries are informed of their benefit allowance. 
Participants will also be provided with employment supports with return 
to work as the goal at the end of the two to three-year time frame. At 
the end of the time frame, participants will be assessed to see whether 
they have medically improved. Enrollments are expected by the end of 
this year.
    Mental Health Treatment Study. We will provide comprehensive health 
care to DI beneficiaries who have schizophrenia or affective disorders. 
The purpose of this study is to determine what treatment and support 
variables for persons with mental illness lead to better employment 
outcomes. The project will use provider networks that offer a range of 
psychiatric, pharmaceutical, and employment supports. The project will 
provide an individualized, comprehensive care and support plan for each 
participant. Services will be provided in 21 nationally representative 
sites across the United States. We expect participants will be enrolled 
by summer 2006.
    Human Immunodeficiency Virus/Auto-Immune Disorder (HIV/AI) 
Demonstration. The HIV/AI demonstration will provide support services 
and private health benefits to current DI beneficiaries with a 
diagnosis of HIV, immune disorder, and/or auto-immune disorder. The 
purpose of this California-based demonstration is to provide immediate 
access to comprehensive health care services and resources required for 
a successful

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return to work. The health benefits will be designed to provide 
beneficiaries with HIV or other immune-related disorders with health 
coverage to ensure they receive necessary medical treatment for their 
impairments. Project participants will also receive employment service 
coordination. Each beneficiary enrolled will be assessed to determine 
the types of services and/or interventions needed for a sustained and 
successful return to work. An expert medical unit, comprised of medical 
specialists in the HIV/auto-immune field, will be established to 
provide expert guidance regarding issues relevant to this population.

Development of the New Disability Service Improvement Process

    We believe that the improvements described above will provide a 
strong underpinning for the successful operation of our new DSI 
process. The new process will apply to claims for DI benefits and for 
SSI payments based on disability or blindness.
    The new approach was presented to the Subcommittee on Social 
Security of the House Committee on Ways and Means in September 2003. As 
we discussed in the July 2005 NPRM, this initial presentation was 
followed by extensive discussions with all interested parties so that 
we could have the benefit of their views and recommendations in 
developing our new proposed rules. We met with hundreds of interested 
organizations, groups, and individuals, including Members of Congress 
and congressional staff; representatives of claimants and 
beneficiaries; organizations representing the legal and medical 
professions, including Federal judges; and organizations representing 
State and Federal employees who are engaged in the disability 
determination process. We also established an Internet site to provide 
additional access to individuals and organizations who wanted to submit 
their views and recommendations.
    As a result of this outreach effort, the July 27, 2005 NPRM 
included numerous improvements over our original proposal. During the 
90-day comment period after our NPRM was published, we received nearly 
900 new written comments from interested individuals and organizations. 
We have carefully read and considered each of them. They are available 
on our Web site, https://www.ssa.gov.
    The comments we received were detailed and insightful, and they 
have been extremely helpful to our deliberations. We deeply appreciate 
the extraordinary effort that was expended to help us make the 
decisions that are needed to bring about fundamental improvement in our 
disability process. The final rule that we are publishing today 
contains a number of changes from our NPRM and reflects the thoughtful 
input that the many individuals and organizations have provided. Below 
we discuss and respond to the significant comments; we have not 
addressed, however, most technical comments, those comments that are 
outside the scope of the NPRM, or those comments that do not otherwise 
require a response.

Summary of Differences Between the Proposed Rule and the Final Rule

Quick Disability Determinations

    The proposed rule stated that in order for a State DDS to make a 
quick disability determination, a medical or psychological expert must 
verify the claimant's diagnosis. The final rule clarifies this language 
by providing that the expert must ``verify that the medical evidence in 
the file is sufficient to determine'' that the claimant's impairments 
meet the standards we establish for making QDDs. The final rule 
provides further that if there is disagreement between the examiner and 
the expert as to whether a claim meets the QDD standards, the claim 
will not be allowed as a quick disability determination. Rather, it 
will be transferred out of the QDD unit to be processed by the DDS in 
the normal manner.
    The proposed rule established a 20-day processing standard for 
States to make QDDs, but did not address performance support for the 
States. The final rule keeps the 20-day processing standard but adds a 
provision stating that we may offer, or the State may request, 
performance support to assist a DDS in enhancing performance. If 
monitoring and review reveal that the processing standard is not met 
for one calendar quarter, we will provide mandatory performance support 
to a DDS. The preamble to the final rule also makes clear that we will 
not find that a State has substantially failed to meet our processing 
standard until the predictive model that is used to identify QDDs has 
been implemented and tested for one year. Thereafter, as new States 
begin implementation of the QDD process they will be given a six-month 
grace period before sanction provisions will be applied to them.
    The proposed rule stated that when we provide notice of the initial 
determination, we would inform the claimant of the right to review by a 
Federal reviewing official. The final rule adds that the notice will 
also explain that the claimant has the right to be represented.

Medical and Vocational Expertise

    The name of the expert system was changed in the final rule from 
Federal Expert Unit to Medical and Vocational Expert System (MVES). The 
rule clarifies the organizational structure to provide that the MVES 
will be comprised of a Medical and Vocational Expert Unit that will 
oversee a national network of medical, psychological, and vocational 
experts and will also maintain a national registry of vocational 
experts.
    The proposed rule stated that the expert system would provide 
assistance to adjudicators at all levels of the disability review 
process. The final rule does not provide for assistance from the MVES 
in reviewing a claim at the DRB level.
    The preamble to the proposed rule stated that we expect to issue 
qualification standards for experts on or before the issuance of a 
final rule, but that they would be published no later than six months 
after the effective date of the final rule. The preamble to the final 
rule states that we expect to issue initial qualification standards in 
the near future.

Federal Reviewing Official Level

    We added language to the final rule to make it clear that a 
claimant may submit additional evidence to the Federal reviewing 
official even if that evidence is not originally submitted by the 
claimant when the claimant requests review. In addition, we added 
language in the final rule to make clear that a claimant may request 
additional time to file a request for Federal reviewing official review 
before the 60-day period has ended as well as after it has ended.
    The proposed rule provided that a Federal reviewing official may 
remand a claim to the State DDS under specified circumstances. The 
final rule does not permit a Federal reviewing official to remand a 
claim to a State DDS but does permit the Federal reviewing official to 
ask the State agency to clarify or provide additional information about 
the basis for its determination. In such a situation, the Federal 
reviewing official retains the authority to make the decision as to 
whether a claimant is disabled.
    The proposed rule did not address subpoena authority at the Federal 
reviewing official level. The final rule adds subpoena authority and 
states that the Office of the General Counsel may seek enforcement of 
the subpoena.

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Administrative Law Judge Hearing Level

    The proposed rule stated that claimants must submit evidence no 
later than 20 days before a hearing. The final rule provides that 
claimants must submit evidence no later than five business days before 
the hearing. The proposed rule stated that there were only two 
exceptions to the 20-day limit and both had to be raised at the 
hearing. The final rule makes clear that the five-day limit is subject 
to several exceptions, depending on when the claimant attempts to 
submit the additional evidence and expands the range of circumstances 
under which an administrative law judge may accept and consider 
evidence that the claimant does not submit timely.
    The proposed rule stated that the administrative law judge must 
notify the claimant of the hearing date at least 45 days before the 
date of the hearing. The final rule states that the administrative law 
judge will notify the claimant of the time and place of the hearing at 
least 75 days before the date of the hearing.
    The proposed rule provided that claimants must submit all available 
evidence that supports the claim, even evidence that might undermine or 
appear contrary to the allegations. The final rule states that 
claimants must provide evidence, without redaction, showing how their 
impairments affect functioning during the time they say they are 
disabled.

Decision Review Board

    The final rule allows claimants whose claims are reviewed by the 
DRB to submit statements explaining why they agree or disagree with the 
administrative law judge's decision, regardless of whether the DRB 
requests the statement. The proposed rule provided that such statements 
may be no longer than three pages with typeface no smaller than 12 
point font. The final rule provides that such statements may be no 
longer than 2,000 words and, if typed, that the typeface must be 12 
point font or larger.

Reopening; Other Provisions

    The proposed rule revised the current reopening criteria that allow 
us to reopen a determination or decision within one year of the date of 
the notice of initial determination for any reason. The proposed rule 
also deleted new and material evidence as a basis for finding good 
cause to reopen. Under the final rule, our existing reopening rules 
continue to operate for all claims adjudicated prior to the hearing 
level. The final rule only makes changes at the post-administrative law 
judge decision level so that once a decision is issued, reopening for 
good cause is limited to six months. Under the final rule, ``new and 
material evidence'' is not a basis for finding good cause in such 
circumstances.
    The proposed rule stated that claimants may establish good cause 
for missing a deadline if they show that ``some other unusual and 
unavoidable circumstance'' beyond their control prevented timely 
filing. The final rule states that claimants can establish good cause 
for missing a deadline if they can show that ``some other unusual, 
unexpected, or unavoidable circumstance'' beyond their control 
prevented timely filing.
    The proposed rule provided that discrimination complaints must be 
filed by a claimant within 60 days of the date upon which the claimant 
becomes aware of the discrimination. The final rule changes the date by 
which a claimant must file a discrimination claim with us from 60 days 
to 180 days of the date upon which the claimant becomes aware of the 
discrimination.

Implementation

    The final rule changes this section by specifying that Boston is 
the first region for implementation and that we will wait at least one 
year after implementing in Boston before we implement in a second 
region. We added a provision to the final rule to address instances 
where a claimant moves from a region where DSI has been implemented to 
a region where it has not, and visa versa. In such situations, the 
claim will continue to be reviewed using the same procedures under 
which the claim was originally filed.
    The final rule adds language making it clear that throughout the 
period during which we are implementing these new rules across the 
country, the Appeals Council will continue to perform the non-
disability review functions and some of the other review functions that 
it currently performs (e.g., review of retirement and survivors 
insurance cases and overpayment waiver claims).

Overview of the New DSI Process

    In summary, the rule we are publishing today provides for the 
following:
     Individuals who are clearly disabled will have a process 
through which favorable determinations can be made within 20 calendar 
days after the date the DDS receives the claim.
     The Medical and Vocational Expert System will enhance the 
quality and availability of medical and vocational expertise that our 
adjudicators need to make accurate and timely decisions.
     A new position at the Federal level--the Federal reviewing 
official--will be established to review DDS initial determinations upon 
the request of the claimant.
     The right of claimants to request and be provided a de 
novo hearing conducted by an administrative law judge is preserved.
     The record will be closed after the administrative law 
judge issues a decision, with provision for good cause exceptions to 
this rule.
     A new body, the Decision Review Board, will be created to 
identify and correct decisional errors and to identify issues that may 
impede consistent adjudication at all levels of the process.
     The Appeals Council will be gradually phased out as the 
new process is implemented throughout the nation.
    This final rule contains a significant number of changes designed 
to provide the high quality of service that the public expects and 
deserves. In drafting this final rule, we understood that, although 
there was broad agreement on the need for change, numerous commenters 
perceived our proposed rule as favoring administrative efficiency over 
fairness. Our expectation is that the changes we are making will give 
claimants a meaningful opportunity to present their claim and at the 
same time provide them with more accurate, consistent, fair, and timely 
decisions. Our improvements are aimed at strengthening the disability 
determination process from beginning to end. If, as implementation 
proceeds, we find that further improvements are needed, we will make 
them.
    We also recognize that for various reasons many of our claimants 
need assistance in pursuing their claims, and we continually assist 
claimants throughout the claims process by:
     Obtaining information needed to support a claim;
     Arranging for a representative payee to assist in the 
development of the information for the claim and to administer the 
benefit payment, if a claimant is mentally incompetent;
     Providing extra assistance to the homeless to complete the 
proper forms and obtain evidence and an interpreter if the claimant has 
limited English proficiency, or is hearing impaired;
     Using the expedited procedures in place for terminal 
illness cases, military service casualties, severe impairment, and 
disaster cases;
     Explaining denial notices and how to file an appeal; and
     Referring claimants for services outside the scope of the 
Social Security

[[Page 16429]]

program using information and referral files that detail public and 
private agencies available in the service area to assist with housing, 
food, clothing, counseling, child care, medical needs, legal services, 
and other needs.
    DDSs and hearing offices also have the responsibility of helping 
claimants who need assistance in collecting medical evidence. They 
request evidence from treating sources and arrange and pay for 
consultative examinations when medical evidence from a treating source 
is unobtainable or incomplete. Some field offices also have special 
arrangements with hospitals and mental institutions to obtain medical 
evidence. We are currently working with medical sources to encourage 
the submission of evidence electronically whenever possible in order to 
expedite the decisional process. Special arrangements are in place to 
obtain both medical and non-medical records from large governmental 
agencies such as the Department of Veterans Affairs, the Military 
Personnel Records Center, and the Division of Vital Statistics. 
Additionally, in 2005 we sponsored a national training conference to 
help educate DDS employees on how best to secure electronic medical 
evidence (EME). We also recently hosted a national outreach conference 
for major providers of EME to help them gain familiarity with new 
options for submitting EME.
    As we roll out the new DSI process, we intend to continue and 
expand our efforts to ensure that all adjudicators make their 
disability determinations and decisions based upon a record that is as 
complete as possible. We intend to review and improve our informational 
services to claimants and to medical providers so that they will better 
understand what adjudicators need to make accurate determinations or 
decisions. As noted below, we also intend to develop requirements for 
training and certification of physicians who perform our consultative 
examinations to make certain that they understand our disability 
determination process and the information we need to make accurate 
determinations and decisions. We are developing templates that 
adjudicators will use when they request consultative examinations for 
common types of cases to ensure that the appropriate information is 
requested.
    We have also been developing decisional templates for use by 
adjudicators at the DDS, Federal reviewing official, and administrative 
law judge levels that will assist them in writing decisions. Each of 
these levels of adjudication will have a template that is appropriate 
for that level. We believe that the use of these templates will help to 
ensure that disability claims are properly developed and that decisions 
are legally sustainable and consistent with our policies. These 
templates are being developed and tested in close consultation with 
adjudicators in the field. All adjudicators will receive training in 
their use.

Initial Determination Level

Quick Disability Determinations (QDDs)

    We believe that many individuals who are clearly disabled are being 
required to wait too long to get DI or SSI payments based on disability 
or blindness. Therefore, as we proposed in our NPRM, this rule provides 
for establishing at the initial claims level a system for expediting 
fully favorable decisions for those individuals.
    A predictive model will identify claims that involve a high 
potential that the claimant is disabled and that evidence of the 
claimant's allegations can be easily and quickly obtained. Through the 
predictive model, selected claims will be automatically referred from 
the field office to a State QDD unit. This rule provides that any State 
that currently performs the disability determination function will be 
deemed to have given us notice that it wishes to perform the QDD 
function. In order to participate in the QDD process, however, each DDS 
must establish a separate QDD unit to process the QDD claims.
    Given the importance we assign to the QDD process, we believe that 
the DDS employees who are involved in making these decisions must be 
examiners who are experienced in making disability determinations. 
Several commenters opposed our decision to use experienced disability 
examiners for the QDD process. One commenter thought it would be a 
waste of resources, while another thought that we could use 
inexperienced examiners if we clearly delineated a set of conditions 
and symptoms that would establish disability. It was also suggested 
that this requirement might lead to a decline in the quality of cases 
that are not adjudicated by the QDD units. It is critical that QDDs be 
made both quickly and accurately. We intend that DDS administrators 
should use their considered judgment, assigning to the QDD unit those 
examiners who have demonstrated that they have the skills that are 
needed to meet our performance requirements. QDDs will be subject to 
both processing and quality standards, and it is important to us, to 
DDSs, and claimants that these standards be met.
    We understand the concern expressed by smaller DDSs that have 
limited numbers of staff and want flexibility to assign them to where 
they are most needed. We intend that they will have that flexibility. 
For example, if the DDS director determines that an examiner is needed 
only half-time to carry out the QDD assignment, the DDS examiner may be 
assigned to non-QDD work as well as to the QDD unit.
    The objective is to ensure that QDDs are processed by individuals 
with the knowledge, training, and experience to effectively carry out 
the QDD function and that they will be held accountable for performing 
this important task.
    This rule makes clear that a QDD will be made using a team approach 
involving sign-off by both an examiner and a medical expert. The 
medical expert may be employed by or under contract with the DDS, or be 
part of the national network of medical experts that we maintain. The 
role of the expert will be to verify that the medical evidence that has 
been provided is sufficient to determine that a claim meets the 
standards relating to a claimant's medical condition established by us 
for making a QDD. If there is disagreement between the examiner and the 
expert as to whether a claim meets our QDD standards, the claim will 
not be allowed. Instead, it will be transferred out of the QDD unit to 
be processed by the DDS according to the date the claim originally was 
received by the QDD unit so that there will be no delay in making a 
determination regarding those claims.
    This rule requires that the DDS meet timeliness standards for 
processing QDDs in order to retain their QDD adjudication 
responsibilities. We provide that QDD units must make favorable 
determinations for those who meet our QDD criteria within 20 calendar 
days after they receive a claim from the field office. (We also plan to 
carry out expedited pre-effectuation reviews of some of these 
determinations within this 20-day period.) If the QDD unit determines 
that a fully favorable determination cannot be made within 20 days of 
receiving the claim or if there is disagreement between the disability 
examiner and the medical or psychological expert, the DDS will transfer 
the claim out of the QDD unit and adjudicate it using its regular claim 
determination procedures.
    One commenter indicated that the proposed regulation was not clear 
as to whether the 20-day restriction means 20 working days or 20 
calendar days. The rule clearly defines ``day'' to mean calendar day, 
unless otherwise indicated. Thus, the 20-day time frame

[[Page 16430]]

for a QDD includes all weekends and holidays.
    We will monitor the performance of the QDD units to ensure that 
these claims are being processed in conformance with our regulations. 
As with other claims, QDDs will be subject to quality review by the 
Office of Quality. We will also review claims that are transferred out 
of the QDD unit for regular adjudication to ascertain that these 
transfers are being made appropriately.
    We will be issuing administrative guidance to the States which will 
further explain how we expect DDSs to carry out these requirements and 
the flexibility that they will be given to ensure that they can perform 
as required.
    We anticipate that the number of QDD claims will initially be 
relatively small. As we gain experience with the new QDD system, we 
expect that the number and characteristics of claims that are 
identified as potential QDDs will gradually increase.
    The predictive model that we will use to identify potential QDD 
claims will score claims by taking into account such factors as medical 
history, treatment protocols, and medical signs and findings. As noted 
above, those claims with scores that indicate a high likelihood of a 
quick allowance will be referred to a QDD unit.
    We intend to carefully test the QDD predictive model to ensure its 
efficacy and integrity before we will implement the provision in this 
rule that requires a DDS to meet our processing requirements or be 
subject to sanction. In addition, this rule provides for performance 
support at any time that the regular monitoring and review process 
reveals that support could enhance performance. However, if for two or 
more consecutive calendar quarters a State agency falls below our 20-
day QDD processing standard without good cause, we will notify the 
State agency that we propose to find that it has substantially failed 
to comply with our standards. After notice and opportunity for a 
hearing, if it is found that a State agency has substantially failed to 
meet our standards, we will assume responsibility for performing the 
QDD function. However, we will not make this finding with respect to 
any State agency until the model has been initially implemented and 
tested for one year. Additionally, as new States begin implementation 
of the QDD process they will be given a six-month grace period before 
our sanction provisions will be applied to them.
    This rule provides that we will not impose sanctions if we 
determine that a State agency's failure to meet our requirements is the 
result of: a natural disaster that affects the agency's ability to 
carry out its work; strikes of State agency staff or other government 
or private personnel necessary to the performance of the disability 
determination function; or sudden and unanticipated workload changes 
that result from changes in Federal law, regulations, or written 
guidelines, systems modification or systems malfunctions, or rapid, 
unpredictable caseload growth for a six-month period or longer.
    We intend to process presumptive disability and terminally ill 
cases under current procedures.

Requirements for DDS Determination Notices

    This rule requires that DDS notices sent to claimants will explain 
in clear and understandable language the specific reasons for and the 
effect of the initial determination. Claimants must also be informed of 
the right to review by a Federal reviewing official and their right to 
representation. We believe that better articulation of the reasons for 
the determination will result in more accurate decisions and will 
assist in any further adjudication by a Federal reviewing official, an 
administrative law judge, or the DRB.

Response to Public Comments About Initial Determinations Including QDDs

    While many commenters voiced broad support for the QDD process 
generally, some had questions about how it would operate. We have 
clarified that DDSs will adjudicate QDDs, using the same definition and 
procedural rules as are applied to all other initial determinations. 
Some comments suggested that State adjudicators should have the power 
to make determinations without the use of a medical or psychological 
expert. We are making clear that QDDs will require sign-off by both a 
disability examiner and a medical expert, reflecting our decision to 
maintain a team approach. Other comments revealed confusion regarding 
the role of the expert in making a QDD, and for clarity we have revised 
the rule. Instead of indicating that the expert will be used to verify 
a claimant's diagnosis, our final rule states that the expert will 
verify that the medical evidence in the file is sufficient to determine 
that as of the claimant's alleged onset date, the claimant's 
impairment(s) meets the standards we establish.
    A number of commenters supported, but provided suggestions 
regarding, our proposal to use a predictive model software tool to 
identify claims for processing by the QDD units. Additionally, several 
commenters asked us to provide a list of conditions that would be 
identified by the predictive model. The predictive model will not 
necessarily identify specific conditions. Instead, as described above, 
it will consider a variety of factors, including medical history, 
treatment protocols, and medical signs and findings.
    Some commenters suggested that implementation of the new process be 
delayed until the predictive model software is fully tested and one 
commenter stated that we should not require that State agencies 
establish separate QDD units until we have sufficient data and workload 
estimates. We have decided not to postpone implementation of the QDD 
because we believe the new, expedited process will be of such great 
benefit to many claimants. However, as noted above, we do have a 
careful rollout plan that should alleviate any concerns. Finally, we 
had invited comments on whether to accelerate the rollout of the QDD 
process and we received only one comment on the issue. We will continue 
to examine the issue of the manner in which the QDD process should be 
rolled out.
    We agree with those commenters who recommended that we give State 
agencies input as we complete the development of the predictive model 
screening software. In fact, the QDD predictive model will be based 
upon the analysis of actual DDS determination data: nearly two million 
initial DDS determinations were analyzed to determine factors which 
consistently resulted in quick allowances.
    A number of commenters thought that the 20-day time period in which 
to make a QDD was impractical because it would be difficult for some 
applicants, especially individuals with low incomes or those who are 
homeless and have little or no medical care, to obtain necessary 
documentation in that time frame. Claimants will not have an unusual 
burden to obtain medical evidence under the QDD process. In fact, 
because the predictive model is designed to identify those applicants 
with obvious, severe, disabling conditions that do not require an 
assessment of residual functional capacity, it is likely that the 
available or readily obtainable medical records of individuals whose 
cases have been selected for the QDD process will be sufficient.
    Given the difficulty and complexity of implementing this proposal, 
we will not implement suggestions by other commenters to have pre-
determination contact, either face-to-face or via video

[[Page 16431]]

teleconference, with the State agency. As noted elsewhere in this 
preamble, however, we do regard as a high priority the adequate 
development of the evidence so that our adjudicators can make accurate 
determinations and decisions and we are including in this rule a number 
of requirements that we believe will help to achieve this objective. In 
addition, claimants will retain the right to a face-to-face hearing 
before an administrative law judge.
    Additionally, although the comments revealed some confusion 
regarding the public availability of any expert opinions we receive 
during the initial determination process, we intend that all expert 
evidence will be made part of the record to assist both the claimant 
and our adjudicators with any further review.
    Commenters disagreed about whether a standardized decision-writing 
format should be utilized for QDDs or whether a detailed rationale is 
necessary for initial determination notices. We believe that better 
articulation of the reasons for the determination is central to more 
accurate decisions and will assist in any further adjudication by 
Federal reviewing officials, administrative law judges, or the DRB. 
Accordingly, we are developing and intend to use standardized decision-
writing formats at each level of adjudication, including QDDs. We 
agreed with the suggestion that our initial determination notices 
should include information regarding a claimant's right to 
representation, and, as noted above, we have revised Sec.  405.115 to 
state this requirement.
    Several commenters opposed Sec.  405.835, under which we would 
notify the State agency that it has failed to comply with our QDD 
standards, and suggested that we provide technical assistance to the 
State agency before we propose to take action. We agree and have 
changed the rules to provide for mandatory and optional technical 
assistance to State agencies. As explained above, we also intend to 
test thoroughly the QDD predictive model before implementing our 
sanction provisions. State agencies will be given a grace period before 
any sanctions will be applied to them.

Enhanced Medical and Vocational Expertise

Description of the Medical and Vocational Expert System (MVES)

    We believe that the quality of the disability determination process 
at all levels of adjudication will be significantly enhanced if we 
provide adjudicators with the medical, psychological, and vocational 
expertise they need to make accurate and consistent decisions. We have 
studied the approaches used by other entities that must make these 
complex decisions, including those in the private sector. We have also 
sought the advice of the Institute of Medicine (IOM), National Academy 
of Sciences. The IOM established a Committee on Improving the 
Disability Process in January 2005 and published an interim report with 
recommendations to us in December 2005.
    We have heard broad agreement on the part of persons both within 
our Agency and without, that the expertise needed by our disability 
adjudicators is currently not available at all levels of the process or 
in all parts of the country. We have therefore determined that we need 
to make major changes both in our institutional arrangements and 
procedures. The changes we are making in this rule are based on careful 
study and analysis of our needs.
    While many disability impairments may be properly evaluated by 
medical generalists, claims that involve difficult or complex issues 
require medical specialist or subspecialist expertise. We therefore 
provide in this rule for the establishment of an MVES, which will 
provide the expert assistance that adjudicators need to render 
disability determinations and decisions that are accurate, consistent, 
and fair. The MVES will be composed of a Medical and Vocational Expert 
Unit (MVEU) and a national network of medical, psychological, and 
vocational experts who meet qualification standards required by the 
Commissioner. After we establish qualification standards for vocational 
experts, the MVEU will maintain a separate registry of vocational 
experts who meet those standards which will be available for use by 
DDSs.
    The MVEU will be staffed by individuals who will be able to advise 
adjudicators on the nature of the expertise that they may need and to 
arrange for the provision of that expertise. It will develop and 
oversee a national network of medical and psychological experts who 
will be available to advise on complex medical issues, and it will 
arrange for consultative examinations that are requested by Federal 
reviewing officials and administrative law judges. Federal reviewing 
officials and administrative law judges who request the assistance of a 
medical, psychological, or vocational expert must do so through the 
MVEU. When the MVEU arranges for medical, psychological, or vocational 
expertise needed by Federal reviewing officials and administrative law 
judges, it will do so on a rotational basis, ensuring that the expert 
has not been involved in the claim at a prior level of adjudication.
    We are currently reviewing the IOM's interim report and expect to 
issue our initial qualification standards within the near future. We 
anticipate that over time we will establish additional qualification 
standards that experts will be required to meet in order to participate 
in the adjudication of claims involving those impairments that require 
special expertise. These qualification standards for specialists and 
subspecialists will apply to medical expert participation at all levels 
of the adjudication process, including DDSs, Federal reviewing 
officials, and administrative law judges. Experts who are employed by a 
State agency will have to meet qualification standards established by 
us no later than one year after the date such standards are published. 
Thereafter, we will neither accept a medical sign-off from an expert 
who does not meet applicable qualification standards nor reimburse 
State agencies for the costs associated with work performed on our 
behalf by such experts.
    Our plan is to develop a network capable of serving adjudicators 
throughout the country. Our electronic record will enable experts to 
examine case records regardless of the location of the claimant or the 
expert. We will establish safeguards to keep such information secure. 
Medical experts will be drawn from various sources, including medical 
schools and academic clinical research centers that focus on conditions 
that are difficult to evaluate. DDS physicians and psychologists who 
meet our standards will also qualify for service with the network. 
Medical, psychological, and vocational experts who are in the network 
will be compensated according to a fee schedule that we establish for 
services arranged by the MVEU.
    In summary, this rule provides for use of the MVES by DDSs and by 
Federal reviewing officials and administrative law judges as follows:
    If the DDS does not have a medical or psychological expert who 
meets our qualification standards, once they are established, for 
adjudicating a claim involving a specific impairment, the MVES will 
provide such an expert. If the DDS otherwise requests the assistance of 
a medical or psychological expert, the MVES will, to the extent 
practicable, provide such assistance. After standards for vocational 
experts are established, the DDSs may use the national registry of 
vocational experts maintained by the MVEU.

[[Page 16432]]

    The Federal reviewing official must consult with an MVES medical or 
psychological expert (1) if the claim involves new medical evidence or 
(2) if the Federal reviewing official disagrees with the DDS 
determination.
    Both Federal reviewing officials and administrative law judges may 
request evidence from a claimant's treating source, including 
requesting a treating physician to conduct a consultative examination. 
However, if they need additional medical, psychological, or vocational 
documentary or testimonial evidence to adjudicate a claim, they must 
use the MVES.
    We are currently studying the recommendation by the IOM Committee 
that we should encourage the use of licensed medical personnel other 
than physicians or psychologists in appropriate cases, such as 
occupational therapists, physical therapists, registered nurses, and 
psychiatric social workers.
    As noted above, a national registry of vocational experts will also 
be maintained by the MVEU. The Commissioner will issue qualification 
standards for participation in the registry. DDSs may arrange for 
vocational services by individuals on the registry and will be 
responsible for payment.
    The IOM Committee also expressed the view that fuller case 
development at the front end of the process should reduce the impetus 
for appeal, reduce the number of reversals on appeal, and shorten the 
average length of time before reaching final adjudication. The 
Committee made recommendations for strengthening claim development, 
beginning at the DDS level.
    We believe there are a number of steps that we should take as 
quickly as possible. We agree with the IOM Committee that fully 
performing the DDS medical consultant role requires mastery of three 
domains of knowledge. Medical consultants must be experts in their 
medical field (e.g., cardiology and orthopedics); they need to 
understand how to evaluate disability; and they must be knowledgeable 
about SSA's policies and procedures. We believe that a nationally 
standardized training program for medical experts who are part of the 
national network will improve both the accuracy and consistency of our 
disability determinations. To achieve that objective, we intend to 
develop a program to provide both initial and ongoing training that all 
medical consultants and experts will attend. This training will 
concentrate on the second and third domains cited above.
    We also intend to develop requirements for training and 
certification of physicians who perform our consultative examinations. 
The IOM report recommends that consultative examiner training should 
focus on two competencies: (1) Evaluation of limitations on ability to 
work resulting from impairments; and (2) evidentiary and other 
requirements of our disability decision-making process. As another step 
in improving our consultative examination process, we are developing 
templates that adjudicators will use when they request consultative 
examinations for common types of cases to help ensure that the 
appropriate information is requested. In addition, we expect to develop 
qualification standards that consultative examiners must meet in order 
to perform consultative examinations in the case of impairments that 
require special expertise.
    Recognizing the need of the DDSs for improved vocational expertise, 
we are also planning a standardized national training program for DDS 
personnel so that they will be better able to adjudicate claims that 
involve vocational issues. DDSs may also use the national registry of 
vocational experts that is maintained by the MVEU if they need 
expertise that is not otherwise available to them regarding vocational 
issues.
    We will be consulting closely with adjudicators throughout the 
disability process as we move forward with these efforts.

Response to Public Comments About Enhanced Medical and Vocational 
Expertise

    Many commenters supported our plan to establish a Federal Expert 
Unit with medical and psychological experts who have needed 
specialties. Some commenters raised concerns about our plan to use a 
centralized Federal Expert Unit. These commenters pointed out that 
having experts in only one part of the country would not be useful 
because the experts would not know how medicine is practiced in another 
part of the country. One commenter recommended that we continue to rely 
on ``generalist'' medical consultants in the State agencies, but 
supplement their expertise with regionally-based Federal Expert Units.
    We expect that, through the network, we will be able to draw from 
expertise throughout the country. It is not necessary that medical 
experts are licensed to practice in the State in which a claimant lives 
or receives medical treatment. Our experience with the Federal 
Disability Determination Services, which handles DDS cases from around 
the nation, also indicates that the lack of familiarity with local 
medical practice is not a barrier to providing the needed medical 
expertise. Using a national network will allow us to use