## F I L E D United States Court of Appeals Tenth Circuit 

### DEC 31 2003 

### PATRICK FISHER Clerk PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

SARAH J. THREET,

Plaintiff-Appellant,

v. JO ANNE B. BARNHART, Commissioner, Social Security Administration,

Defendant-Appellee. No. 03-7015

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF OKLAHOMA

(D.C. No. 01-CV-620-S)

Submitted on the briefs: Catherine Zilahy of Perrine, McGivern, Redemann, Re id, Berry & Taylor, P.L.L.C., Tulsa, Oklahoma, for Plaintiff-Appellant. Shelton J. Sperling, United States Attorney; Tina M . Waddell, Chief Counsel, Region VI; Michael McGaughran, Deputy Chief Regiona l Counsel; Linda H. Green, Assistant Regional Counsel, Office of the Ge neral Counsel, United States Social Security Administration, Dallas, Texas, for Defendant-Appellee.

Before SEYMOUR , BRISCOE , and LUCERO , Circuit Judges.

SEYMOUR , Circuit Judge.1 After examining the briefs and appellate record, t his panel has determined

unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. -2- Plaintiff appellant Sarah Threet is a disability cl aimant who filed an application for benefits in February 1999 alleging disability since November 15, 1995, due to left shoulder and neck limitations and related pain. 1 Ms. Threet’s claim was initially denied, but an Administrative L aw Judge (ALJ) approved Ms. Threet for a closed period of disability spanni ng from March 11, 1997 through September 16, 1998. Ms. Threet applied forreview by the Appeals Council and, in conjunction therewith, submitted ad ditional evidence of disability which had not been available at the time of the hea ring before the ALJ. The Appeals Council denied the request for review, maki ng the decision of the ALJ the final decision of the Commissioner for purposes of this appeal. O’Dell v. Shalala , 44 F.3d 855, 858 (10th Cir. 1994). Ms. Threet ap peals and, for the reasons stated below, we reverse and remand for further proceedings.

I On November 15, 1995, Ms. Threet fell into a hole w hile working for a plumbing contractor, injuring her left shoulder andneck. An x-ray taken the day-3-

of the accident showed Ms. Threet’s left shoulder t o be normal. Aplt. App. at 83. The doctor who examined Ms. Threet two days later diagnosed tendinitis. Id. at 175. Approximately two weeks after the accident, an arthrogram showed no evidence of a rotator cuff tear. Id. at 89. Ms. Threet embarked on a course of physical therapy and was given trigger point inject ions which helped somewhat to ease her pain and further her recovery. During the early months of 1996, Ms. Threet’s shoulder was improving but she was still d iagnosed with severe muscle spasms of the trapezius and paraspinal cervical muscles (her neck). Id. at 158. In August of 1996, Ms. Threet was still complaining of pain in her neck and shoulder, id. 157, and by the end of that year she had been diag nosed by her doctor as having a sprain of the cervical spine andwas referred to an orthopedic specialist, id. at 249. On December 19, 1996, Ms. Threet was admi tted to the emergency room at the McQuistion Regional Medical C enter where an x-ray revealed moderately advanced degeneration of the di sc spaces between the C5 and C6 neck vertebrae (spondylosis at C5-C6), bony outg rowths as a result of her inflamed tendons (posterior spurring) and muscle sp asm, with the ontoid and cervical spine otherwise normal. Id. at 244-45. After an MRI on March 11, 1997, Ms. Threet’s ortho pedic surgeon recommended a cervical fusion to address the neck p ain and an evaluation of her shoulder, which showed “rotator cuff tendinopathy w ith tendinitis and a down2Tendinopathy is a condition in which the tendons b egin to degenerate. The

acromion process is commonly known as the outer edg e of the shoulder.

3 A discectomy is a surgical process in which degene rative disc and shoulder material is removed from the body, and replaced with a bone graft.

4During an arthroscopy procedure, the internal stru cture of a joint is examined through a scope inserted into the body. In a debri dement procedure, degenerative material is removed from the joint. A capsular shi ft procedure seeks to tighten the sack around the shoulder joint in order to keep the joint in place. -4- sloping acromion process.” 2 Id. at 265. On June 26, 1997, Ms. Threet had a discectomy 3 and fusion at C5-C6. Throughout the balance of 1997, Ms. Threet’s neck p ain lessened, but she continued to complain of shoulder pain. On Decembe r 8, 1997, Ms. Threet had a local anesthetic injected into her left shoulder. Because this injection provided relief for only five to six hours, Ms. Threet underwent arthroscopy with debridement of partial undersurface rotator cuff te ar and open anterior/inferior capsular shift procedure. 4 Id. at 122, 303. After another course of physical therapy, the shoulder surgeon, Dr. Jimmy Conway, no ted that Ms. Threet was “not having any significant change in her symptoms.” Id. at 202. He felt she had reached maximum medical benefit and that she shouldbe permanently restricted from lifting more than twenty pounds or performing work functions which required her to raise her hands above her head. Id. Ms. Threet’s last visit with a treating physician prior to her disability hearing before the ALJ occurred on September 16, 1998.5 The subacromial decompression procedure seeks to p rovide more room in an

individual’s shoulder for the rotator cuff tendons to move. A part of the underportion of the shoulder bone is removed to cre ate more space for the tendons. Likewise, a distal clavical excision proc edure removes a small amount of bone from what is commonly called the collar bon e.

6Ms. Threet was insured for disability through Marc h 31, 1997. -5- On March 23, 2000, the day before the ALJ issued hi s decision, Ms. Threet underwent another MRI of her left shoulder. That t est revealed a partial rotator cuff tear with AC joint arthrosis. Dr. Conway stat ed that “in light of her continued symptoms, which are increasing, [Ms. Thre et] should again undergo arthroscopy of her shoulder with debridement of the partial rotator cuff tear, possible repair and probable subacromial decompress ion, distal clavical excision.” 5 Id. at 303. Dr. Conway believed that, following surge ry, Ms. Threet would reach maximum medical improvement in three months. Id. Ms. Threet presented this evidence to the Appeals Council. Relying on the date of Ms. Threet’s first MRI for astart date and the date of her last appointment with a treating physician a s an end date, the ALJ awarded Ms. Threet a closed period of disability from March11, 1997 through September 16, 1998. 6Outside that period, the ALJ found Ms. Threet cou ld not do her past relevant work but had the residual functio nal capacity for sedentary work. Relying on testimony from a vocational expert, the ALJ concluded that because there were other jobs in significant number s in the national economy that-6-

a person with Ms. Threet’s characteristics could pe rform, she was not disabled before March 11, 1997, or after September 16, 1998. In reaching his conclusion, the ALJ disregarded the opinion of Dr. John Ellis, a state agency medical consultant who examin ed Ms. Threet and her medical file for the purposes of her workers’ compe nsation claim, but did not treat Ms. Threet in any way. The ALJ found Dr. Ell is’s restrictive residual functional capacity assessment (RFC) to be “inconsi stent with [Ms. Threet’s] record of having received no medical care/treatmentfor her injury since September 16, 1998.” Id. at 353-54. The ALJ also refused to fully credit M s. Threet’s testimony about limits to her daily activi ties as a result of her injury, thereby concluding Ms. Threet’s medical condition h ad improved and that, after September 16, 1998, she was no longer disabled. Id. at 356. In response to Ms. Threet’s testimony that she did not get medical tre atment after September 16, 1998, because the most she could afford was over-th e-counter Tylenol, the ALJ concluded such evidence suggested “that her pain ha s been relatively amenable to control.” Id. at 354. As mentioned above, Ms. Threet presented evidence o f her March 23, 2000 MRI and her surgeon’s medical opinion to the Appeal s Council as she was allowed to do pursuant to 20 C.F.R. 404.970(b). Th e Council acknowledged that “where new and material evidence is submitted with the request for review, the-7-

entire record will be evaluated and review will be granted where the Appeals Council finds that the Administrative Law Judge’s a ctions, findings, or conclusion is [sic] contrary to the weight of the evidence currently of record.” Id. at 11 (citing 20 C.F.R. 404.970). Without analysis , the Council concluded there was “no basis under the above regulations for grant ing your request for review.” Id. The Council further noted that it had “considered the applicable statutes, regulations, and rulings in effect as of the date of this action.” Id. The district court affirmed the decision of the ALJ to award a closed period of disability, finding it supported by substantial evidence. Id. at 378. The court did not cite or discuss 20 C.F.R. 404.970(b).

II We review the Commissioner’s decision to determine whether the factual findings are supported by substantial evidence in l ight of the entire record, and to determine whether the correct legal standards were applied. Hargis v. Sullivan , 945 F.2d 1482, 1486 (10th Cir. 1991). “Substantial evidence is such relevant evidence as a reasonable mind might accept as adequ ate to support a conclusion.” Id. (citation omitted). “Evidence is insubstantial if it is overwhelmingly contradicted by other evidence.” O’Dell , 44 F.3d at 858 (citation omitted). Finally, in the course of our review, we may “neith er reweigh the evidence nor-8-

substitute our judgment for that of the agency.” Casias v. Sec’y of Health & Human Servs. , 933 F.2d 799, 800 (10th Cir. 1991). Ms. Threet argues that she has been disabled since November 15, 1995, the date of her accident, and continues to be disabled at present. She thus contends the ALJ’s decision to award only a closed period of disability is not supported by substantial evidence. As part of this argument, Ms . Threet asserts the ALJ committed reversible error by failing to articulate reasons for disregarding the opinions of her treating physicians. She further a sserts the ALJ erroneously found that objective medical evidence established there h ad been improvement in her medical condition since September 16, 1998. Finally, she contends “[t]he Administrative Law Jud ge erred in finding that Threet required ‘no further treatment’ when the sub stantial medical evidence mandates further surgery.” Aplt. Br. at 16. As de veloped in her brief, this argument is essentially a challenge to the decisionof the Appeals Council to deny review of the ALJ’s decision and a challenge to the conclusion of the district court that Walton, 535 U.S. 212, mandates a finding of no disability. We are unable to address Ms. Threet’s first content ion that the ALJ erred in failing to articulate reasons for disregarding the opinions of her treating physicians, because that argument is insufficientlydeveloped in Ms. Threet’s brief. Ms. Threet does not identify which treating physician she feels was ignored,-9-

and we will not speculate on her behalf. The only medical opinions explicitly rejected were those of Dr. John Ellis, a nontreatin g physician. The ALJ properly articulated reasons for rejecting Dr. Ellis’s concl usions. Turning to Ms. Threet’s general challenge to the cl osed period of disability, we agree the ALJ overlooked uncontroverted evidence that may indicate disability before March 11, 1997. As discussed above, the ALJ selected March 11, 1997, as the start date for the period of disability because that was the date on which Ms. Threet had her first MRI indicating she was a candi date for a discectomy and fusion. The ALJ stated that “[s]tudies prior to March 1997, failed to show evidence of left shoulder injury of a surgical natu re.” Aplt. App. at 354. This reasoning suffers from two problems. First, we hav e never held that evidence of disability is limited to instances where surgery is required. Second, while the ALJ is correct that no medical studies showed the need for shoulder surgery prior to March 1997, there is evidence that on November 29, 1995, Ms. Threet was diagnosed with a severe sprain of the rotator cuff, id. at 170, and on January 11, 1996, with a severe spasm of the trapezius and paraspinal cervical muscles, id. at 158. With respect to her neck, there is evidence t hat on December 19, 1996, Ms. Threet was admitted to the emergency room at McQuis tion Regional Medical Center complaining of neck and shoulder pain. An x -ray taken that day revealed “moderately advanced spondylosis at C5-6 narrowing the interspace, creating7 If the ALJ holds to his original conclusion on remand, he will need to

address problems with his analysis of how the medic al improvement standards apply to Ms. Threet. See Shepherd v. Apfel , 184 F.3d 1196, 1200-01 (10th Cir. 1999). As part of the medical improvement standards analys is, the ALJ concluded Ms. Threet regained a residual functional capacity for sedentary work by the end of the disability period. In reaching this conclus ion, however, the ALJ did not rely on any objective medical evidence. Rather, he relied on the fact that he did not believe Ms. Threet’s testimony regarding limitations on her daily activities and the fact that she had not received any medical attention since September 16, 1998. As a cautionary note, we find this reasoning dubious. First, the lack of evidence of medical treatment do es not constitute objective medical evidence of improvement. A decre ase in the medical severity of an impairment sufficient to constitute medical i mprovement must be (continued...) -10- posterior spurring, and creating moderate spurring into the foramen on the left at 5-6.” Id. at 245. Moreover, Ms. Threet sought medical care at least twenty-eight times (including physical therapy sessions) betweenthe occurrence of her injury and her first MRI in March 1997. The ALJ did not re fer to this evidence, and while he is not required to discuss every piece of evidence in the record, he “must discuss the uncontroverted evidence he chooses not to rely on, as well as significantly probative evidence he rejects.” Clifton v. Chater , 79 F.3d 1007, 1010 (10th Cir. 1996). Without the benefit of the ALJ’s findings supported by the weighing of this relevant evidence, we cannot determine whether his conclusion that Ms. Threet’s disability began on March 11, 199 7, is itself supported by substantial evidence. We therefore remand for the ALJ to articulate specific findings and his reasons for ignoring this evidence. 77 (...continued)

substantiated by changes in signs, symptoms, or lab oratory findings. Id. at 1201- 02. Second, Ms. Threet testified that all she coul d afford was over-the-counter Tylenol. Aplt. App. at 335. Instead of acknowledg ing that inability to pay may provide a justification for a claimant’s failure to seek treatment, see Thompson v. Sullivan , 987 F.2d 1482, 1489-90 (10th Cir. 1993), the ALJ concluded this evidence meant that Ms. Threet’s pain was amenable to control. The record appears to indicate otherwise. During the early st ages of Ms. Threet’s treatment, one of her physicians refused to continue treating her because she had no money and no proof of insurance. Aplt. App. at 149. She was also unable to get an MRI in September 1996 because she could not afford one. Id. at 151. -11- We turn now to Ms. Threet’s challenge to the Appeal s Council’s denial of review. As discussed above, Ms. Threet had a secon d MRI on March 23, 2000, the day before the ALJ released his decision. Accordin g to Ms. Threet’s orthopedic surgeon, that test revealed the need for further su rgery. This evidence was presented to the Appeals Council. We have joined the majority of circuits in holding, pursuant to 20 C.F.R. 404.970(b), that “new evidence [submitted to the Ap peals Council] becomes a part of the administrative record to be considered when evaluating the Secretary’s decision for substantial evidence.” O’Dell , 44 F.3d at 859. The cited regulation specifically requires the Appeals Council to consid er evidence submitted with a request for review “if the additional evidence is ( a) new, (b) material, and (c) relate[d] to the period on or before the date of the ALJ’s decision.” Box v. Shalala , 52 F.3d 168, 171 (8th Cir. 1995) (internal quote omitted); see also O’Dell , 44 F.3d at 858. If the Appeals Council fails to consider qualifying new-12-

evidence, the case should be remanded for further proceedings. Box , 52 F.3d at 171. Whether the March 2000 MRI and the accompanying med ical opinions qualify as new, material, and chronologically perti nent is a question of law subject

to our de novo review. Id. “Evidence is new within the meaning of [404.970(b )] if it is not duplicative or cumulative.” Wilkins v. Sec’y, Dep’t of Health & Human Servs., 953 F.2d 93, 96 (4th Cir. 1991). Ms. Threet’s evid ence of further deterioration of her shoulder is new and objectivel y verifiable medical evidence of her alleged disabling condition. This evidence was not available to the ALJ at the time he made his decision, and is thus neither dupl icative nor cumulative. Evidence is material to the determination of disabi lity “if there is a reasonable possibility that [it] would have changed the outcome.” Id. at 96. Ms. Threet’s new evidence meets this standard by re asonably calling into question the disposition of the case in light of the ALJ’s d etermination that her disability had ended as of September 16, 1998, based on his co nclusion that she had no further medical treatment and the medical evidence showed her condition had improved. Finally, timeliness is no problem here b ecause the evidence relates to the period before the ALJ’s decision. In its letter denying review, the Appeals Council g ave no indication that it followed 20 C.F.R. 404.970(b). Although it cited the regulation, the Council-13-

simply stated, without any reference to the newly s ubmitted materials, that “there is no basis under the above regulations for grantin g your request for review.” Aplt. App. at 11. If this means that the Appeals C ouncil did not evaluate the entire record including the new evidence, that fail ure constitutes substantial legal error necessitating a remand for further proceeding s consistent with the principles discussed herein. The judgment of the district court is REVERSED , and the case is REMANDED to the district court with directions to remand, i n turn, to the Commissioner.