[Federal Register Volume 59, Number 6 (Monday, January 10, 1994)]
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From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 94-481]


[[Page Unknown]]

[Federal Register: January 10, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Social Security Administration

20 CFR Part 422

RIN 0960-AD45

 

Organization and Procedures; Procedures of the Office of Hearings 
and Appeals; Authority of Appeals Officers to Deny a Request for 
Appeals Council Review

AGENCY: Social Security Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend 20 CFR 422.205, which describes 
the organization and procedures of the Appeals Council, to authorize 
Appeals Officers, as well as members of the Appeals Council, to deny a 
request for review of a decision by an Administrative Law Judge (ALJ).

DATES: To be sure that your comments are considered, we must receive 
them no later than March 11, 1994.

ADDRESSEES: Comments should be submitted in writing to the Commissioner 
of Social Security, Department of Health and Human Services, P.O. Box 
1585, Baltimore, Maryland 21235, or delivered to the Office of 
Regulations, Social Security Administration, 3-B-1 Operations Building, 
6401 Security Boulevard, Baltimore, Maryland 21235, between 8 a.m. and 
4:30 p.m. on regular business days. Comments received may be inspected 
during these same hours by making arrangements with the contact person 
shown below.

FOR FURTHER INFORMATION CONTACT: Philip Berge, Legal Assistant, 3-B-4 
Operations Building, 6401 Security Boulevard, Baltimore, Maryland 21235 
(410) 965-1769.

SUPPLEMENTARY INFORMATION:

Background

    Part 422 of 20 CFR provides information regarding the organization 
and procedures of the Social Security Administration (SSA). Subpart C 
of part 422 describes the procedures of the Office of Hearings and 
Appeals (OHA). Section 422.205 describes the organization and functions 
of the Appeals Council, a part of OHA.
    By direct delegation of authority from the Secretary of Health and 
Human Services (Secretary), the Appeals Council is authorized to review 
hearing decisions and orders of dismissal issued by SSA's ALJs. Through 
the exercise of this authority, the Appeals Council is responsible for 
ensuring that the final decisions of the Secretary involving benefits 
under titles II, XI, XVI and XVIII of the Social Security Act (the Act) 
and part B of title IV of the Federal Mine Safety and Health Act of 
1977, as amended, are proper and in accordance with the law, 
regulations, and binding agency policy established in Social Security 
Rulings and Acquiescence Rulings.
    Currently, 20 Appeals Council members, hereinafter referred to as 
either ``Administrative Appeals Judges (AAJs)'' or ``members,'' 
comprise the membership of the Appeals Council. The Associate 
Commissioner for OHA is the Chair of the Appeals Council and is the 
administrative officer directly responsible to the Commissioner of 
Social Security for carrying out OHA's mission of holding ALJ hearings 
and deciding appeals. Each AAJ, other than the Chair, is assisted by an 
Appeals Officer who serves as a legal clerk. Organizationally, Appeals 
Officers are a part of the Appeals Council.
    The Appeals Council considers appeals under titles II, XI, XVI, and 
XVIII of the Act, and under part B of title IV of the Federal Mine 
Safety and Health Act of 1977, as amended. The regulations setting 
forth the responsibilities of the Appeals Council appear in 20 CFR part 
404 (subpart J, Secs. 404.967 et seq.), part 410 (subpart F, 
Secs. 410.657 et seq.), part 416 (subpart N, Secs. 416.1467 et seq.), 
and 42 CFR part 405 (subpart G, Secs. 405.701(c) and 405.724), part 417 
(subpart Q, Sec. 417.634 and part 473 (subpart B, Secs. 473.46 and 
473.48(b)). These regulations provide that after an ALJ has issued a 
decision or dismissed a request for a hearing, the Appeals Council may 
review a case on its own motion or at the request of a party to the 
hearing decision or dismissal. The Council may deny or dismiss a 
party's request for review, or it may grant the request and either 
issue a decision or remand the case to an ALJ. If the Appeals Council 
denies a request for review of a decision by an ALJ, the ALJ's decision 
becomes the final decision of the Secretary subject to judicial review 
under the provisions of section 205(g) of the Act. If the Appeals 
Council grants a request for review and issues a decision, that 
decision becomes the final decision of the Secretary subject to 
judicial review pursuant to section 205(g) of the Act.
    Sections 404.970 and 416.1470 describe cases involving Social 
Security and supplemental security income benefits payable under title 
II and title XVI of the Act that the Appeals Council will review. Those 
sections provide that the Appeals Council will review a case if the 
action, findings or conclusions of the ALJ are not supported by 
substantial evidence; there is an error of law; or there appears to be 
an abuse of discretion by the ALJ. Those sections also provide that the 
Appeals Council will review a case that presents a broad policy or 
procedural issue that may affect the general public interest. The same 
standards apply to determine if the Appeals Council will review a case 
under title XVIII of the Act or under part B of title IV of the Federal 
Mine Safety and Health Act of 1977.
    Over the years, there have been questions about the functions and 
operations of the Appeals Council. Some commenters have questioned the 
usefulness of review by the Appeals Council. Several studies have 
addressed the role of the Appeals Council, resulting in many 
recommendations for improving the Council's structure and operations.
    In its Recommendation 87-7: A New Role for the Social Security 
Appeals Council (adopted December 18, 1987), the Administrative 
Conference of the United States (ACUS) concluded that the high volume 
of work of the Council (up to 500 cases per member per month) precluded 
it from detecting emerging problems, identifying new issues to be 
resolved, and identifying and developing needed policies. ACUS 
recommended that the Secretary and SSA restructure the Appeals Council 
in ``a fashion that redirects the institution's goals and operations 
from an exclusive focus on processing the stream of individual cases 
and toward an emphasis on improved organizational effectiveness'' (1 
CFR 305.87-7). To this end, ACUS recommended that ``the Appeals Council 
should be provided the authority to reduce significantly its caseload 
and also be given, as its principal mandate, the responsibility to 
recommend and, where appropriate, develop and implement adjudicatory 
principles and decisional standards for the disability determination 
process.'' ACUS also recommended that the agency enhance the status of 
the Appeals Council and provide law clerks to its members.
    To address the workload problems ACUS discussed in its 
recommendation, SSA decided, in 1988, to add Appeals Officers to the 
Council to enable the members to focus their attention on the more 
complex and significant cases, including those cases presenting 
important policy or procedural issues.
    Appeals Officers presently assist AAJs in considering 
recommendations made by the Council's support staff in OHA's Office of 
Appellate Operations. Appeals Officers, who are attorneys, also act as 
the AAJs' staff attorneys, researching and providing legal memoranda on 
issues arising from cases that come to the attention of the Appeals 
Council. However, because the Appeals Officers do not have authority 
under our existing regulations to carry out any of the decision making 
responsibilities of the AAJs, one or more AAJs must make these 
decisions.
    Research we have supported since we established the Appeals Officer 
position has persuaded us that if the Appeals Officers are authorized 
to assume some of the responsibilities of the AAJs, the AAJs will be 
able to focus more of their attention on cases that present broad 
policy or procedural issues. In a report commissioned by ACUS in 1989 
(Report and Recommendations on the Social Security Administration's 
Administrative Appeals Process), Professor Frank S. Block discussed the 
Appeals Council's workload and stated that the Council could not be 
expected to assume a meaningful review function for all claims that 
might be presented to it. One of the recommendations in the report was 
that the Appeals Council be authorized ``to use staff or lower level 
Council members to deny a request for review, and limit the review of 
cases by the Appeals Council to those raising significant policy 
issues.'' See Recommendation No. 12.
    To complete the changes we contemplated when we established the 
Appeals Officer position, we propose to amend Sec. 422.205 to authorize 
Appeals Officers to deny a request for review of an ALJ hearing 
decision. Because an ALJ's dismissal of a request for a hearing is not 
subject to judicial review, AAJs will continue to decide whether to 
grant or deny a request for review of a hearing dismissal. Appeals 
Officers will continue to receive guidance, direction and supervision 
from AAJs, including instructions as to specific issues or kinds of 
cases requiring the attention of the AAJ.
    We believe this proposed change, which provides Appeals Officers a 
specific and limited authority, will improve both the quality and 
efficiency of the service the Appeals Council is able to provide. The 
proposed change should allow the Council to give the public a more 
timely response to their requests for review and increase the ability 
of the AAJs to carry out their important function of providing review 
of many ALJ decisions.
    Although the Appeals Officer under the proposed rule would have 
authority to deny a request for review of an ALJ decision, he or she 
may also refer a particular case to an AAJ with a recommendation if it 
involves complex factual issues or complicated interpretative issues of 
law and/or regulations. In addition, all cases in which an analyst in 
OHA's Office of Appellate Operations prepares a recommendation to grant 
a request for review will be submitted directly to an AAJ for 
disposition. We believe this process will serve two purposes: (1) It 
will expedite bringing the ``close cases,'' which are normally more 
complex, to the AAJ's attention; and (2) it will allow the AAJs to 
focus on those cases raising significant issues.
    We propose to make this change in the regulation concerning the 
operating procedures of the Appeals Council under the provisions of 
sections 205, 1102, and 1631 of the Act. These statutory sections give 
the Secretary broad regulatory authority to establish procedures that 
are necessary and appropriate to carry out the Act's provisions.

Regulatory Provisions

    The proposed rule will enable the Appeals Officers to decide 
whether a request for review of an ALJ decision should be denied, 
thereby making the decision of the ALJ the final decision of the 
Secretary for the purpose of any request for judicial review which a 
party to the decision may decide to file under section 205(g) of the 
Act. The Appeals Officers will not have authority to grant a request 
for review, to decide to review a case on the Appeals Council's own 
motion, to remand a case to an ALJ, to grant or to deny a request to 
review a hearing dismissal, or to issue a final decision. The authority 
to exercise those powers of the Council will remain exclusively with 
the AAJs.
    Appeals Officers will be required to apply the same criteria as the 
AAJs in determining whether to deny a request for review. The Appeals 
Officers will apply the provisions of Secs. 404.970 and 416.1470, which 
specify when the Appeals Council will review a case, in determining the 
appropriate action.
Judges,'' or by the proposed change to expand the authority of the 
Appeals Officers, who organizationally are part of the Council.

Regulatory Procedures

Regulatory Flexibility Act

    We generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612) unless the Secretary certifies that a rule will not have a 
significant economic impact on a substantial number of small entities. 
Individuals are not included in the definition of a small entity. 
However, for purposes of the RFA, we consider the majority of Medicare 
providers, physicians and suppliers to be small entities.
    Inasmuch as the proposed rule does not alter the standards for 
Appeals Council review, we believe that it will have little, if any, 
effect on providers, physicians and suppliers which substantial number 
of small entities. Individuals are not included in the definition of a 
small entity. However, for purposes of the RFA, we consider the 
majority of Medicare providers, physicians and suppliers to be small 
entities.
    Inasmuch as the proposed rule does not alter the standards for 
Appeals Council review, we believe that it will have little, if any, 
effect on providers, physicians and suppliers which request Appeals 
Council review of Medicare claims. Accordingly, we have determined, and 
the Secretary certifies, that this proposed rule will not result in a 
significant economic impact on a substantial number of small entities. 
Therefore, we have not prepared an RFA analysis.

Paperwork Reduction Act

    This regulation imposes no new reporting or recordkeeping 
requirements requiring Office of Management and Budget clearance.

(Catalog of Federal Domestic Assistance Program Nos. 93.773 and 
93.774, Medicare; Reporting and recordkeeping requirements; 93.802-
93.805 Social Security; and 93.807 Supplemental Security.)

List of Subjects in 20 CFR Part 422

    Administrative practice and procedure, Freedom of information, 
Organization and functions (government agencies), Social security.

    Dated: September 1, 1993.
Lawrence H. Thompson,
Principal Deputy Commissioner of Social Security.
    Approved: December 22, 1993.
Donna E. Shalala,
Secretary of Health and Human Services.
    For the reasons set out in the preamble, we propose to amend part 
422 of chapter III of title 20 of the Code of Federal Regulations as 
follows:

PART 422--ORGANIZATION AND PROCEDURES

    1. The authority citation for Subpart C continues to read as 
follows:

    Authority: Secs. 205, 221, 1102, 1869, and 1871 of the Social 
Security Act; 42 U.S.C. 405, 421, 1302, 1395ff, and 1395hh; sec. 
413(b) of the Federal Mine Safety and Health Act of 1977; 30 U.S.C. 
923(b).

    2. Section 422.205 is amended by revising paragraph (c) to read as 
follows:


Sec. 422.205  Review by Appeals Council.

* * * * *
    (c) The denial of a request for review of a hearing decision 
concerning a determination under Sec. 422.203(a)(1) shall be by such 
appeals officer or appeals officers or by such member or members of the 
Appeals Council as may be designated in the manner prescribed by the 
Chair or Deputy Chair. The denial of a request for review of a hearing 
dismissal, the dismissal of a request for review, or the refusal of a 
request to reopen a hearing or Appeals Council decision concerning a 
determination under Sec. 422.203(a)(1) shall be by such member or 
members of the Appeals Council as may be designated in the manner 
prescribed by the Chair or Deputy Chair.
* * * * *
[FR Doc. 94-481 Filed 1-7-94; 8:45 am]
BILLING CODE 4190-29-P