[Federal Register Volume 62, Number 186 (Thursday, September 25, 1997)]
[Proposed Rules]
[Pages 50266-50270]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25365]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

RIN 0960-AE53


Administrative Review Process; Identification and Referral of 
Cases for Quality Review Under the Appeals Council's Authority To 
Review Cases on Its Own Motion

AGENCY: Social Security Administration.

ACTION: Proposed rules.

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SUMMARY: We propose to amend our regulations to include the rules under 
which a decision or order of dismissal that is issued after the filing 
of a request for a hearing by an administrative law judge (ALJ) will be 
referred to the Appeals Council for possible review under the Appeals 
Council's existing authority to review cases on its own motion. The 
proposed rules concern identification and referral procedures that we 
currently follow to ensure the accuracy of decisions at the ALJ-hearing 
step (hearing level) of the administrative review process, and new 
quality assurance procedures that we are proposing under the Plan for a 
New Disability Claim Process approved by the Commissioner of Social 
Security in September 1994 (59 FR 47887). The procedures set forth in 
the proposed rules apply to dispositions at the hearing level of the 
administrative review process that are made by ALJs, and also to 
dispositions at the hearing level that are not made by ALJs but are 
subject to review under the Appeals Council's own-motion authority. The 
latter type of dispositions currently consist of wholly favorable 
decisions issued by attorney advisors and adjudication officers.

DATES: To be sure that your comments are considered, we must receive 
them no later than November 24, 1997.

ADDRESSES: Comments should be submitted in writing to the Commissioner 
of Social Security, P.O. Box 1585, Baltimore, MD 21235; sent by telefax 
to (410) 966-2830; sent by E-mail to <a href="/cdn-cgi/l/email-protection#fc9c9c8e999b89909d889593928fbc8f8f9dd29b938a">``<span class="__cf_email__" data-cfemail="6f1d0a081a030e1b0600011c2f1c1c0e41080019">[email protected]</span></a>''; or, 
delivered to the Division of Regulations and Rulings, Social Security 
Administration, 3-B-1 Operations Building, 6401 Security Boulevard, 
Baltimore, MD 21235, between 8:00 A.M. and 4:30 P.M. on regular 
business days. Comments may be inspected during these same hours by 
making arrangements with the contact person shown below.

FOR FURTHER INFORMATION CONTACT: Harry J. Short, Legal Assistant, 
Division of Regulations and Rulings, Social Security Administration, 
6401 Security Boulevard, Baltimore, MD 21235, (410) 965-6243 for 
information about these rules. For information on eligibility or 
claiming benefits, call our national toll-free number, 1-800-772-1213.

SUPPLEMENTARY INFORMATION:

Background

    Under procedures set forth in Secs. 404.967 ff. and 416.1467 ff., 
and pursuant to a direct delegation of authority from the Commissioner 
of Social Security (see 61 FR 35844, 35852, July 8, 1996), the Appeals 
Council, a component in our Office of Hearings and Appeals (OHA), 
reviews hearing decisions and orders of dismissal issued by ALJs of the 
Social Security Administration (SSA). The Appeals Council may review a 
decision or dismissal action of an ALJ at the request of a party to the 
action or, under authority provided in Secs. 404.969 and 416.1469, on 
its own motion. Through the exercise of its authority to review cases, 
the Appeals Council is responsible for ensuring that the final 
decisions of the Commissioner of Social Security under titles II and 
XVI of the Social Security Act (the Act), as amended, are proper and in 
accordance with the law, regulations, and binding agency policy.
    The Appeals Council's authority to review cases on its own motion 
also applies, at present, to two types of hearing-level cases that do 
not result in decisions by ALJs. Under Secs. 404.942 and 416.1442, 
attorney advisors of OHA are temporarily authorized to conduct certain 
prehearing proceedings and to issue, where warranted by the documentary 
evidence, wholly favorable decisions. Under the provisions of 
Secs. 404.942 (e)(2) and (f)(3) and 416.1442 (e)(2) and (f)(3), such 
decisions are subject to review under the own-motion authority of the 
Appeals Council established in Secs. 404.969 and 416.1469. In addition, 
under Secs. 404.943 and 416.1443, adjudication officers are authorized, 
for test purposes, to conduct certain prehearing proceedings and to 
issue, where warranted by the documentary evidence, wholly favorable 
decisions. Under the provisions of Secs. 404.943(c)(2)(ii) and 
416.1443(c)(2)(ii), such decisions are also subject to review on the 
Appeals Council's own motion.
    Under our regulations on the Appeals Council's procedures, if the 
Appeals Council decides to review a case in response to a request for 
review or on its own motion, it may issue a decision or remand the case 
to an ALJ. The Appeals Council may also dismiss a request for hearing 
for any reason that the ALJ could have dismissed the request.
    A decision by the Appeals Council ``to review'' a hearing-level 
decision means that the Appeals Council assumes jurisdiction to cause 
that decision not to be the final decision of the Commissioner of 
Social Security. A decision that the Appeals Council ``reviews'' will 
be replaced by a new final action in the case, either by a decision or 
dismissal order of the

[[Page 50267]]

Appeals Council or, if a hearing or other hearing-level proceedings are 
required, by a decision or dismissal order issued following remand of 
the case from the Council to an ALJ.
    A decision by the Appeals Council to review a case is made when, 
following a preliminary consideration of all aspects of the case to 
determine if review is appropriate, the Council issues a notice 
announcing a decision to review. The Council's standard notice of 
review advises the parties of the reasons for the review and (unless 
the Council issues a wholly favorable decision upon taking review) the 
issues to be considered in proceedings before the Council or before an 
ALJ on remand. In instances in which the Council reviews a hearing 
level decision that has been issued based on the documentary evidence 
without the holding of an oral hearing by an ALJ, the parties have the 
right to such a hearing, except where the parties waive that right in 
writing.
    The existing provisions in Secs. 404.969 and 416.1469 on the 
Appeals Council's authority to review cases on its own motion provide 
that the Appeals Council itself may decide to review a case within 60 
days after the date of the hearing decision or dismissal and that, if 
the Council does review a case under this authority, it will provide 
notice to the parties to the hearing decision or dismissal action. 
Sections 404.969 and 416.1469 do not currently address the procedures 
we use in identifying and referring cases to the Appeals Council for it 
to consider for possible review on its own motion.
    The Appeals Council has broad authority to review any case on its 
own motion pursuant to Secs. 404.969 and 416.1469. The conditions under 
which the Appeals Council will review a case, on request for review or 
on its own motion, are set forth in Secs. 404.970 and 416.1470. Those 
sections provide that the Council will review a case if: (1) There 
appears to be an abuse of discretion by the ALJ; (2) there is an error 
of law; (3) the action, findings or conclusions of the ALJ are not 
supported by substantial evidence; or (4) there is a broad policy or 
procedural issue that may affect the general public interest. Sections 
404.970 and 416.1470 further provide that the Council will also review 
a case if new and material evidence is submitted that relates to the 
period on or before the date of the ALJ's decision and the Council 
finds, upon evaluating the evidence of record and the additional 
evidence, that an action, a finding or a conclusion of the ALJ is 
contrary to the weight of the evidence currently of record as a whole.
    In fiscal year 1996 (FY '96), the Appeals Council received 99,735 
requests for review filed by parties to the actions of ALJs. Most of 
the requests were for review of unfavorable decisions and dismissal 
actions; some concerned partially favorable decisions. In FY '96, the 
Council also considered 8,602 cases for possible review on its own 
motion. Almost all of these cases involved favorable hearing-level 
decisions that were referred to the Appeals Council under one of two 
types of identification and referral procedures we currently use--
random sample procedures, which generated the majority of this workload 
in FY '96, and ``protest'' procedures.

Existing Identification and Referral Procedures

    Section 304(g) of Public Law 96-265 (1980) required SSA to 
implement a program for initiating review of ALJ decisions in 
disability claims. Under section 304(g), the Appeals Council considers, 
for possible review on its own motion, a national random sample of 
favorable ALJ decisions that have not been implemented, and, as 
resources permit, a random sample of unappealed denial decisions and 
dismissals. (See Social Security Ruling 82-13.)
    The Appeals Council also considers, for possible review on its own 
motion, a random sample of wholly favorable decisions issued by 
attorney advisors under the time-limited provisions of Secs. 404.942 
and 416.1442. Wholly favorable decisions issued by adjudication 
officers under the testing provisions of Secs. 404.943 and 416.1443 are 
also identified by random sampling for referral to the Appeals Council 
for possible own-motion review. These procedures have been established 
in accordance with commitments we made, in publishing the final rules 
for the attorney advisor and adjudication officer provisions, to assess 
carefully the quality of the decisions issued by the attorney advisors 
and the adjudication officers (see 60 FR 34127 and 60 FR 47471, 
respectively).
    Our existing identification and referral procedures also include 
those under which the SSA components responsible for implementing 
hearing-level decisions--SSA Processing Centers (PCs) and Field Offices 
(FOs)--refer (``protest'') certain cases to the Appeals Council for 
possible review under its own motion authority. The PCs, which include 
our Program Service Centers and the Office of Disability and 
International Operations, refer cases directly to the Appeals Council; 
FOs forward cases to a PC or an SSA Regional Office, which decides if 
the PC or the Regional Commissioner should make a referral to the 
Council.
    The decisions of ALJs and the decisions currently issued by 
attorney advisors and adjudication officers are subject to referral to 
the Appeals Council under our protest procedures. Almost all protested 
decisions are favorable decisions because almost all of the ALJ 
decisions that require implementation are wholly or partially favorable 
decisions under which benefit payments are to be effectuated (initiated 
or continued), and because all decisions issued by attorney advisors 
and adjudication officers are favorable. In protesting a decision, an 
effectuating component may recommend that the decision be made more or 
less favorable or unfavorable.
    Effectuating components refer a case if the need for referral is 
believed to be clear (not dependent on a judgment factor) because of 
one of the following circumstances: (1) The decision contains a 
clerical error which affects the outcome of the claim; (2) the decision 
is clearly contrary to the Act, regulations or rulings; or (3) the 
decision cannot be effectuated because its intent is unclear as to an 
issue affecting the claim's outcome.
    Effectuating components refer cases to the Appeals Council by 
written memoranda. If the Council decides to review a referred case, it 
provides the parties a copy of the effectuating component's referral 
memorandum with the notice by which it advises the parties that it will 
review the case.
    We are proposing to amend our regulations to include rules on the 
existing random sample and protest procedures discussed above. We have 
decided to propose rules setting forth these procedures in connection 
with our decision to propose, in furtherance of the Plan for a New 
Disability Claim Process, that the Appeals Council's own-motion 
functions be strengthened by establishment of a new process for 
identifying and referring cases for possible review under the Council's 
existing own-motion authority.

New Identification and Referral Procedures

    The Appeals Council currently considers only a small percentage of 
all favorable decisions issued at the hearing level for possible review 
under its own-motion authority. (In FY '96, the Council's workload in 
this area represented fewer than 3 percent of such decisions in that 
year.) In addition, the processes we currently use to select decisions 
for possible review on the Appeals Council's own motion are generally 
not designed to identify, in

[[Page 50268]]

any systematic way, hearing-level decisions that are likely to be 
incorrect. The random sample processes bringing cases before the 
Appeals Council do not identify cases other than by techniques designed 
to assure randomness of selection within broadly identified categories 
(i.e., allowances, unappealed denials, and dismissals). The 
identification of ``protest'' cases that occurs in the effectuation 
process is a secondary function of a process that is principally 
focused on the prompt payment of benefits.
    Based on the above considerations, we are proposing to establish 
procedures under which our Office of Program and Integrity Reviews 
(OPIR), the SSA component that oversees the review of State agency 
determinations made under section 221(c) of the Act, will examine 
certain allowance decisions at the hearing level and refer to the 
Appeals Council the decisions that may not be supported by the record. 
Decisions that have been issued at the hearing level will be included 
in the OPIR-conducted examination process by random sampling and, as we 
develop the computer systems and other technical capacities needed to 
support this function, selective sampling that will rely on case 
profiling and other sampling techniques to identify cases that involve 
problematic issues or fact patterns that increase the likelihood of 
error.
    Under the proposed process, upon referral of a case by OPIR, the 
Appeals Council would consider the case and OPIR's reasons for 
believing the decision is not supported by the record and decide 
whether to review the case in accordance with Secs. 404.969-404.970 
and/or 416.1469-416.1470. If the Appeals Council decides to review an 
OPIR-referred case, it would provide the parties a copy of OPIR's 
referral with its notice of review. The 60-day time limit for the 
Appeals Council to initiate review of a case under the authority and 
standards provided in Secs. 404.969-404.970 and 416.1469-416.1470 would 
apply to cases the Council considers for review in response to 
referrals from OPIR.
    Section 304(g) of Public Law 96-265 (see above) does not specify 
the kind of identification and referral procedures that SSA should use 
in implementing a program for initiating review of ALJ decisions in 
disability cases. We believe that use of the new procedures we are 
proposing, in combination with the existing identification and referral 
procedures that we are proposing to regulate, would be consistent with 
the kind of review contemplated by section 304.
    An important purpose of the new procedures we are proposing is to 
increase our ability to identify policy issues that should be clarified 
through publication of regulations or rulings. We plan to monitor how 
our policies are understood and implemented by post-adjudicative 
evaluation of cases that are shown, as a result of their referral to 
the Appeals Council, to pose significant policy or program issues.

Proposed Regulations

    We propose to revise Secs. 404.969 and 416.1469, the regulations 
that set forth the Appeals Council's authority to review cases on its 
own motion, to state that we refer cases to the Appeals Council for it 
to consider reviewing on its own motion. As proposed for revision, 
Secs. 404.969 and 416.1469 describe the identification and referral 
procedures we will follow and the action of the Appeals Council in 
cases it considers for possible review on its own motion.
    Sections 404.969 and 416.1469 as proposed will apply to all cases 
that our regulations make subject to review on the Appeals Council's 
own motion. These currently include, in addition to cases involving ALJ 
decisions and dismissals, cases involving wholly favorable decisions 
issued by attorney advisors under the time-limited provisions of 
Secs. 404.942 and 416.1442, and cases involving wholly favorable 
decisions issued by adjudication officers under the test procedures set 
out in Secs. 404.943 and 416.1443.
    Proposed Secs. 404.969(b) and 416.1469(b) specify that we will 
identify a case for referral to the Appeals Council for possible review 
under its own-motion authority before we effectuate a decision in the 
case. These sections also provide that we will identify cases for 
referral through random and selective sampling techniques, that we may 
use these techniques in association with examination of the cases 
identified by sampling, and that we will also identify cases for 
referral through the evaluation of cases we conduct in order to 
effectuate decisions.
    Under Secs. 404.969(b)(1) and 416.1469(b)(1) as proposed, we may 
conduct random and selective sampling of cases involving all types of 
actions that occur at the hearing level of the administrative review 
process (i.e., wholly or partially favorable decisions, unfavorable 
decisions, or dismissals) and any type of title II or title XVI 
benefits (i.e., different types of benefits based on disability and 
benefits not based on disability). Our decision to propose these rules 
rests on our conclusion that we should increase the number of favorable 
disability decisions the Appeals Council considers for possible review 
on its own motion to better balance review of favorable and unfavorable 
decisions. However, the Council's existing authority to review cases on 
its own motion covers all types of title II and title XVI cases 
adjudicated at the hearing level, and these proposed rules will allow 
use of the identification and referral procedures being set forth with 
respect to all such cases.
    Sections 404.969(b)(1) and 416.1469(b)(1) as proposed specify that 
we will use selective sampling to identify cases that exhibit 
problematic issues or fact patterns that increase the likelihood of 
error. Under the provisions as proposed, the factors considered in 
selective sampling will not include the identity of the decisionmaker 
or the identity of the office issuing the decision.
    Proposed Secs. 404.969(b)(1) and 416.1469(b)(1) also authorize but 
do not require that we examine cases that have been identified through 
random or selective sampling. Cases may be identified for referral by 
random or selective sampling. The purpose of the examination of cases 
that we may conduct is to refine the identification of cases in which 
the action that has been taken is not supported.
    Proposed Secs. 404.969(b)(2) and 416.1469(b)(2) provide that 
effectuating components will identify cases for referral under criteria 
presently used to identify clear error and circumstances preventing 
effectuation of a decision. Any type of decision requiring effectuation 
may be identified for referral under these provisions.
    Under Secs. 404.969(c) and 416.1469(c), as proposed, we will make 
referrals that occur as the result of a case examination or the 
effectuation process in writing. The written referral will state the 
referring component's reasons for believing that the Appeals Council 
should review the case on its own motion. Sections 404.969(c) and 
416.1469(c) as proposed also provide that referrals resulting from 
selective sampling without a case examination may be accompanied by a 
written statement identifying the issue(s) or fact pattern that caused 
the referral, and that referrals resulting from random sampling without 
a case examination will only identify the case as a random sample case. 
A statement of the issue(s) or fact pattern identified in selective 
sampling may be computer generated.
    Proposed Secs. 404.969(d) and 416.1469(d) specify that the Appeals 
Council's notice of review will include a copy of any written referral 
provided

[[Page 50269]]

to the Appeals Council. These provisions also include language to state 
clearly our long-standing policy that issuance of the notice of review 
establishes when a decision to conduct a review occurs.
    We are also proposing to include in Secs. 404.969(d) and 
416.1469(d) a statement specifying our policy that, when the Appeals 
Council is unable to decide whether to review a case on its own motion 
within the 60-day period in which it may do so, it may consider whether 
the decision should be reopened under the provisions of Secs. 404.987 
and/or 416.1487, which authorize the Council to reopen a final decision 
on its own initiative or at the request of a party to the decision, if 
a condition for reopening stated in Secs. 404.988 and/or 416.1488 is 
present. We are including this statement in the regulations to clarify 
our long-standing policy that the Appeals Council may also reopen final 
decisions in accordance with Secs. 404.987 and 416.1487 after the 60 
days for initiating review under Secs. 404.969 and 416.1469 have 
expired.

Electronic Version

    The electronic file of this document is available on the Federal 
Bulletin Board (FBB) at 9:00 a.m. on the date of publication in the 
Federal Register. To download the file, modem dial (202) 512-1387. The 
FBB instructions will explain how to download the file and the fee. 
This file is in WordPerfect and will remain on the FBB during the 
comment period.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these rules do meet the criteria for a significant 
regulatory action under Executive Order 12866. They were therefore 
submitted to OMB for review.

Regulatory Flexibility Act

    We certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because these 
rules affect only individuals. Therefore, a regulatory flexibility 
analysis as provided in the Regulatory Flexibility Act, as amended, is 
not required.

Paperwork Reduction Act

    These regulations impose no new reporting or record keeping 
requirements requiring OMB clearance.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security-Disability Insurance; 96.002, Social Security-Retirement 
Insurance; 96.003, Social Security-Special Benefits for Persons Aged 
72 and Over; 96.004, Social Security-Survivors Insurance; 96.006, 
Supplemental Security Income)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Death benefits, Disability 
benefits, Old-Age, Survivors and Disability Insurance, Reporting and 
recordkeeping requirements, Social Security.

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Supplemental Security Income 
(SSI), Reporting and recordkeeping requirements.

    Dated: September 12, 1997.
John J. Callahan,
Acting Commissioner of Social Security.

    For the reasons set out in the preamble, subpart J of part 404 and 
subpart N of part 416 of chapter III of title 20 of the Code of Federal 
Regulations are proposed to be amended as set forth below.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-    )

    20 CFR part 404, subpart J, is amended as follows:
    1. The authority citation for subpart J of part 404 is revised to 
read as follows:

    Authority: Secs. 201(j), 205 (a), (b), (d)-(h), and (j), 221, 
225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 405 
(a), (b), (d)-(h), and (j), 421, 425, and 902(a)(5)); 31 U.S.C. 
3720A; sec. 304(g), Pub. L. 96-265, 94 Stat. 456 (42 U.S.C. 421 
note); sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); 
secs. 5, 6 (c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 
421 note).

    2. Section 404.969 is revised to read as follows:


Sec. 404.969  Appeals Council initiates review.

    (a) General. Anytime within 60 days after the date of a decision or 
dismissal that is subject to review under this section, the Appeals 
Council may decide on its own motion to review the action that was 
taken in your case. We may refer your case to the Appeals Council for 
it to consider reviewing under this authority.
    (b) Identification of cases. We will identify a case for referral 
to the Appeals Council for possible review under its own-motion 
authority before we effectuate a decision in the case. We will identify 
cases for referral to the Appeals Council through random and selective 
sampling techniques, which we may use in association with examination 
of the cases identified by sampling. We will also identify cases for 
referral to the Appeals Council through the evaluation of cases we 
conduct in order to effectuate decisions.
    (1) Random and selective sampling and case examinations. We may use 
random and selective sampling to identify cases involving any type of 
action (i.e., wholly or partially favorable decisions, unfavorable 
decisions, or dismissals) and any type of benefits (i.e., benefits 
based on disability and benefits not based on disability). We will use 
selective sampling to identify cases that exhibit problematic issues or 
fact patterns that increase the likelihood of error. Our selective 
sampling procedures will not identify cases based on the identity of 
the decisionmaker or the identity of the office issuing the decision. 
We may examine cases that have been identified through random or 
selective sampling to refine the identification of cases in which the 
action taken may not be supported by the record.
    (2) Identification as a result of the effectuation process. We may 
refer a case requiring effectuation to the Appeals Council if the 
decision cannot be effectuated because it contains a clerical error 
affecting the outcome of the claim; the decision is clearly 
inconsistent with the Social Security Act, the regulations, or a 
published ruling; or the decision is unclear regarding a matter that 
affects the claim's outcome.
    (c) Referral of cases. We will make referrals that occur as the 
result of a case examination or the effectuation process in writing. 
The written referral based on the results of such a case examination or 
the effectuation process will state the referring component's reasons 
for believing that the Appeals Council should review the case on its 
own motion. Referrals that result from selective sampling without a 
case examination may be accompanied by a written statement identifying 
the issue(s) or fact pattern that caused the referral. Referrals that 
result from random sampling without a case examination will only 
identify the case as a random sample case.
    (d) Appeals Council's action. If the Appeals Council decides to 
review a decision or dismissal on its own motion, it will mail a notice 
of review to all the parties as provided in Sec. 404.973. The Appeals 
Council will include with that notice a copy of any written referral it 
has received under paragraph (c) of this section. The Appeals Council's 
decision

[[Page 50270]]

to review a case is established by its issuance of the notice of 
review. If it is unable to decide within the applicable 60-day period 
whether to review a decision or a dismissal, the Appeals Council may 
consider the case to determine if the decision or dismissal should be 
reopened pursuant to Sec. 404.987.

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

    20 CFR part 416, subpart N, is amended as follows:
    1. The authority citation for subpart N is revised to read as 
follows:

    Authority: Sec. 702(a)(5), 1631, and 1633 of the Social Security 
Act (42 U.S.C. 902(a)(5), 1383, and 1383b); sec. 304(g), Pub. L. 96-
265, 94 Stat. 456 (42 U.S.C. 421 note).

    2. Section 416.1469 is revised to read as follows:


Sec. 416.1469  Appeals Council initiates review.

    (a) General. Anytime within 60 days after the date of a decision or 
dismissal that is subject to review under this section, the Appeals 
Council may decide on its own motion to review the action that was 
taken in your case. We may refer your case to the Appeals Council for 
it to consider reviewing under this authority.
    (b) Identification of cases. We will identify a case for referral 
to the Appeals Council for possible review under its own-motion 
authority before we effectuate a decision in the case. We will identify 
cases for referral to the Appeals Council through random and selective 
sampling techniques, which we may use in association with examination 
of the cases identified by sampling. We will also identify cases for 
referral to the Appeals Council through the evaluation of cases we 
conduct in order to effectuate decisions.
    (1) Random and selective sampling and case examinations. We may use 
random and selective sampling to identify cases involving any type of 
action (i.e., wholly or partially favorable decisions, unfavorable 
decisions, or dismissals) and any type of benefits (i.e., benefits 
based on disability and benefits not based on disability). We will use 
selective sampling to identify cases that exhibit problematic issues or 
fact patterns that increase the likelihood of error. Our selective 
sampling procedures will not identify cases based on the identity of 
the decisionmaker or the identity of the office issuing the decision. 
We may examine cases that have been identified through random or 
selective sampling to refine the identification of cases in which the 
action taken may not be supported by the record.
    (2) Identification as a result of the effectuation process. We may 
refer a case requiring effectuation to the Appeals Council if the 
decision cannot be effectuated because it contains a clerical error 
affecting the outcome of the claim; the decision is clearly 
inconsistent with the Social Security Act, the regulations, or a 
published ruling; or the decision is unclear regarding a matter that 
affects the claim's outcome.
    (c) Referral of cases. We will make referrals that occur as the 
result of a case examination or the effectuation process in writing. 
The written referral based on the results of such a case examination or 
the effectuation process will state the referring component's reasons 
for believing that the Appeals Council should review the case on its 
own motion. Referrals that result from selective sampling without a 
case examination may be accompanied by a written statement identifying 
the issue(s) or fact pattern that caused the referral. Referrals that 
result from random sampling without a case examination will only 
identify the case as a random sample case.
    (d) Appeals Council's action. If the Appeals Council decides to 
review a decision or dismissal on its own motion, it will mail a notice 
of review to all the parties as provided in Sec. 416.1473. The Appeals 
Council will include with that notice a copy of any written referral it 
has received under paragraph (c) of this section. The Appeals Council's 
decision to review a case is established by its issuance of the notice 
of review. If it is unable to decide within the applicable 60-day 
period whether to review a decision or dismissal, the Appeals Council 
may consider the case to determine if the decision or dismissal should 
be reopened pursuant to Sec. 416.1487.

[FR Doc. 97-25365 Filed 9-24-97; 8:45 am]
BILLING CODE 4190-29-U


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