[Federal Register Volume 66, Number 13 (Friday, January 19, 2001)]
[Proposed Rules]
[Pages 5494-5507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-1442]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404, 416, and 422

[Regulations Nos. 4 and 16]
RIN 0960-AF44


New Disability Claims Process

AGENCY: Social Security Administration (SSA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: We are proposing to revise our regulations that pertain to the 
processing of initial claims for disability benefits under title II 
(Social Security Disability Insurance) and title XVI (Supplemental 
Security Income) of the Social Security Act (the Act). The proposed 
rules would incorporate modifications to our administrative review 
process and disability determination procedures based on testing that 
we are conducting. The changes, which would apply to initial 
applications for disability benefits, would:
    <bullet> First, permit disability examiners in our State agencies 
the flexibility to decide whether input from a medical or psychological 
consultant is needed to make a disability determination, so that our 
State agencies may use the expertise of the disability examiners and 
medical and psychological consultants more effectively;
    <bullet> Second, provide claimants with an opportunity for an 
informal disability conference with the adjudicators of their claims at 
the initial level in cases in which it appears that the evidence does 
not support a fully favorable determination; and
    <bullet> Third, eliminate the reconsideration step of the 
administrative review process.
    We plan to phase in these changes over a period of 1 year until 
they apply in every State.

DATES: To be sure that your comments are considered, we must receive 
them no later than March 20, 2001.

ADDRESSES: Comments should be submitted to the Commissioner of Social 
Security, P.O. Box 17703, Baltimore, Maryland 21235-7703; sent by 
telefax to (410) 966-2830; sent by e-mail to <a href="/cdn-cgi/l/email-protection#45372022302924312c2a2b36053636246b222a33"><span class="__cf_email__" data-cfemail="d3a1b6b4a6bfb2a7babcbda093a0a0b2fdb4bca5">[email protected]</span></a>; or 
delivered to the Office of Process and Innovation Management, Social 
Security Administration, L2109 West Low Rise Building, 6401 Security 
Boulevard, Baltimore, MD 21235-6401, between 8:00 a.m. and 4:30 p.m. on 
regular business days. During these same hours, you may inspect the 
comments that we receive by making arrangements with the contact person 
shown below.

FOR FURTHER INFORMATION CONTACT: Georgia E. Myers, Regulations Officer, 
Office of Process and Innovation Management, L2109 West Low Rise 
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 965-
3632 or TTY (410) 966-5609, for information about this notice. For 
information on eligibility or claiming benefits, call our national 
toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our 
Internet web site, Social Security Online, at www.ssa.gov.

SUPPLEMENTARY INFORMATION:

In Brief, What Are We Proposing To Do?

    We are proposing to change our rules in three ways:
    1. We are proposing to change our rules for how State agencies make 
disability determinations for us. The change would allow State agency 
adjudicators, called ``disability examiners,'' to decide whether input 
from a medical or psychological consultant is needed to make a 
disability determination. The medical or psychological consultant would 
not be responsible for the determination; i.e., would not be an 
adjudicator of the claim.
    2. We are proposing to add rules providing that disability 
examiners will offer claimants an opportunity for an informal 
conference whenever it appears that the evidence does not support a 
fully favorable determination.
    3. We are proposing to eliminate the reconsideration step of our 
administrative review process.
    On August 30, 1999, we published a notice in the Federal Register 
announcing a ``prototype'' involving these three major modifications to 
our disability determination process for initial applications under 
titles II and XVI of the Act. (See 64 FR 47218.) In the notice, we 
stated that, before proceeding to national implementation, we expected 
that the prototype would provide a body of information about the impact 
of these modifications on agency operations, notice and other 
procedures, and the quality and timeliness of our determinations and 
decisions. Although the prototype is continuing and we continue to 
gather information and gain operational experience, we believe that we 
now have sufficient information to propose changes to our regulations. 
Public comments received on these proposed changes will assist us in 
fine-tuning these changes.
    Because we now know that implementation of the process in each 
State agency requires support during the period of transition, we are 
considering a plan by which we would implement the process in groups of 
State agencies until all States use the new process. Our projected 
completion date will be in 2003. We explain our current plan in more 
detail later in this preamble, and invite public comment.

What Is the Current Process?

    Sections 404.1503 and 416.903 of our regulations provide that State 
agencies make disability and blindness determinations, following rules 
that we provide. Sections 404.1615(c) and 416.1015(c) of our 
regulations provide with respect to initial disability claims that, in 
most cases, these disability determinations must be made by a State 
agency medical or psychological consultant and a State agency 
disability examiner, a lay adjudicator with expertise in evaluating 
disability. The medical or psychological consultant and the disability 
examiner work together as a team and are jointly responsible for the 
determination. Under current rules, a disability examiner alone may 
make a determination only in the very unusual circumstance in which:
    <bullet> There is no medical evidence to be evaluated (i.e., no 
medical evidence exists or we are unable, despite making every 
reasonable effort, to obtain any medical evidence that may exist); and
    <bullet> The individual fails or refuses, without good reason, to 
attend a consultative examination.
    State agency determinations in initial claims are generally based 
on review of the written information in a claimant's case record. 
Although our procedures permit disability examiners and medical and 
psychological consultants to speak to claimants to obtain more 
information, there are no formal requirements for such contact. Also, 
we have no procedures requiring a State agency adjudicator to explain 
and discuss our disability standards with claimants or to

[[Page 5495]]

explain the determination, apart from the information that we provide 
in the written notice of determination; i.e., after we have already 
made the determination.
    Sections 205(b)(1) and 1631(c)(1)(A) of the Act provide that an 
individual who disagrees with our initial determination has a right to 
a hearing. However, Secs. 404.900 and 404.907 (for title II) and 
416.1400 and 416.1407 (for title XVI) of our regulations have long 
provided that, when an individual is dissatisfied with an initial 
determination, he or she may appeal the determination first to the 
``reconsideration'' level of our administrative review process. In 
initial disability claims, the reconsideration determination consists 
of a case review of evidence from the initial claim as well as evidence 
obtained subsequently. Only after the reconsideration determination may 
individuals who are dissatisfied with their determinations appeal to a 
hearing before an administrative law judge.

What Led Us to These Proposed Rules?

    For many years, we have been exploring methods for improving the 
disability determination process to make it more consistent, accurate, 
efficient, and timely. For example, for several years we have engaged 
in what we call ``process unification'' activities aimed at improving 
our ability to achieve similar results in similar cases at all stages 
of the administrative review process. In 1995, we also published 
Sec. Sec. 404.906 and 416.1406, ``Testing modifications to the 
disability determination procedures,'' which permitted us to test a 
number of variations to our current processes. We called the various 
test processes ``models.'' (See 60 FR 20023, April 24, 1995.)
    Among the models that we included in Sec. Sec. 404.906 and 416.1406 
were revisions to our current process that would permit a disability 
examiner in the State agency to assume sole authority for making 
disability determinations in certain cases, thereby giving examiners 
the flexibility to decide whether to obtain input from a medical or 
psychological consultant when making the disability determination. One 
of the models also included a ``predecision interview'' with the 
claimant to ensure that the case record was complete and that the 
claimant understood our disability standards. In the preamble to the 
Notice of Proposed Rulemaking (NPRM) for these rules, we indicated that 
in recent years we had conducted various studies on how to improve the 
disability determination process, and that we had a number of goals in 
proposing the models. We stated that our goals were:
    <bullet> To provide assistance to the disability applicant by 
making the filing of a disability claim simpler;
    <bullet> To promote fairness in each disability determination by 
ensuring that each disability applicant is given an opportunity to 
provide all of the necessary information to complete the claim and is 
aware of his or her rights under the program; and
    <bullet> To ensure that our determination is equitable. (See 58 FR 
54532, 54533, October 22, 1993.)
    In 1994, we included a number of similar features in our proposal 
to redesign the disability claims process and the subsequent final 
redesign plan. (See 59 FR 18188, April 15, 1994, and 59 FR 47887, 
September 19, 1994.) Both the redesign proposal and the final plan were 
especially critical of:
    <bullet> The time it takes for us to adjudicate some disability 
claims,
    <bullet> The number of SSA and State agency employees who may be 
involved in processing a claim initially and throughout the appeals 
process,
    <bullet> The lack of interaction between the claimant and the 
decisionmaker, and
    <bullet> The lack of thorough explanations, in many cases, of the 
basis for the disability determinations.
    Therefore, the redesign of the disability process included the 
following goals that are important to this NPRM:
    <bullet> To ensure that claims that should be allowed are allowed 
at the earliest point in the process;
    <bullet> To provide more opportunity for claimant interaction with 
the decisionmaker; and
    <bullet> To reduce the amount of time required processing a claim 
to a final disability determination or decision.
    Over the years since 1994, we have tested various ideas for 
addressing these goals and improving the claims process. For example, 
in 1997, we integrated several of the redesign proposals into what we 
called the ``Full Process Model.'' We tested this model in eight States 
and got especially positive results from several features of the model:
    <bullet> We allowed disability examiners the flexibility to decide 
whether to obtain medical or psychological consultant input in making a 
disability determination. (This did not apply to certain cases, 
described below, in which the Act requires a medical or psychological 
consultant or other health care professional to participate in making 
the determination.) This process change revised the role of the medical 
and psychological consultants to act as true consultants in these 
cases, to be used as needed.
    <bullet> We provided claimants with an opportunity for a conference 
with the disability examiners who were deciding their claims when it 
appeared that the evidence was not sufficient to support a fully 
favorable determination. This gave claimants an opportunity to provide 
additional explanations and evidence, or sources of evidence. The 
disability examiners also explained the Social Security definition of 
disability and why it appeared that the claimants did not meet that 
definition or why it did not appear that the evidence supported a fully 
favorable determination.
    <bullet> Finally, we eliminated the reconsideration step of the 
administrative review process. Claimants who were dissatisfied with 
their initial determinations appealed directly to the administrative 
law judge hearing level.
    We found that these actions resulted in better determinations at 
the initial level, with more allowances of claims that should have been 
allowed. We believe that many claims that would have been allowed only 
after appeal under the old process were allowed at the initial step 
under the new process. These claimants were able to receive benefits 
months sooner than they otherwise would have, an important protection 
for individuals who are unable to work. By eliminating the 
reconsideration step, claimants who appealed reached the hearing level 
an average of 2 months sooner than claimants who went through the 
reconsideration step and therefore had an opportunity to receive their 
hearing decisions sooner. Also, the quality of our determinations 
improved. Reviews of disability determinations from the FPM by SSA's 
Office of Quality Assessment indicated that the new process improved 
the accuracy of initial decisions to deny claims from 92.6 percent to 
94.8 percent. If implemented nationally, this would translate to 
approximately 34,000 fewer disabled claimants being erroneously denied 
benefits and facing the prospect of a lengthy appeal.
    We believe that these positive results were due to a number of 
factors. For example, we know that removing the reconsideration step 
permitted the State agencies to redirect their resources so that the 
individuals who formerly worked on reconsideration claims could work on 
initial claims. This permitted increased contact with the claimants and 
improved documentation of the disability determinations.
    The success of the Full Process Model provided the impetus for our 
current

[[Page 5496]]

prototype, which includes the three most successful elements of the 
Full Process Model, the elements we are proposing in this Notice of 
Proposed Rulemaking (NPRM). We have been operating the prototype in 10 
States since October 1999. The States are: Alabama, Alaska, California, 
Colorado, Louisiana, Michigan, Missouri, New Hampshire, New York, and 
Pennsylvania. In New York at this time, the prototype applies only to 
residents in areas served by the Albany and Brooklyn branches of the 
State agency. In California, it applies only to residents in areas 
served by the Los Angeles North and Los Angeles West branches of the 
State agency.
    This notice pertains to features that have been used in these 
Prototype States. We continue testing other features that were part of 
the 1995 proposal separately from the prototype process, but this 
notice does not pertain to those features.

What Are the Key Features of the Proposed Rules?

    The process we are proposing in this NPRM is similar to the 
prototype process with some modifications based on our experience with 
the Full Process Model and in the prototype States. The following are 
the key features and our reasons for proposing them. We explain the 
specific changes in the proposed rules in detail later in this 
preamble.

1. Enhanced Roles of State Agency Disability Examiners and Medical and 
Psychological Consultants

    By ``enhanced roles'' of these individuals, we mean that disability 
examiners would be responsible for making the disability determination 
in many claims, and may decide whether medical consultant or 
psychological consultant input is needed. We also mean that medical or 
psychological consultants will serve as true consultants in these 
claims by providing review and advice in cases with difficult or 
complex medical issues. Medical and psychological consultants would be 
expected to participate in training and mentoring the disability 
examiners. This change would let us better use the expertise of our 
adjudicators and medical resources, minimize file handoffs and allow 
State agencies to make disability determinations in a more timely and 
cost-effective manner.
    However, the proposed rules provide two situations in which a 
medical or psychological consultant must be involved in assessing 
disability because of requirements in the Act:
    <bullet> Sections 221(h) and 1614(a)(3)(H) of the Act, and 
Secs. 404.1503(e), 404.1615(d), 416.903(e), and 416.1015(e) of our 
regulations require that, before we may find an individual ``not 
disabled'' in any case in which there is evidence of a mental 
impairment, we will make every reasonable effort to ensure that a 
qualified psychiatrist or psychologist has completed the medical 
portion of the case review and any applicable residual functional 
capacity assessment. Therefore, the proposed rules provide that a 
disability examiner alone may make a fully favorable determination, but 
that any determination that is less than fully favorable must be made 
by a team that includes a medical or psychological consultant, as under 
current procedures. However, in these cases, the disability examiner 
will still offer a claimant conference, and the first stage of appeal 
will be to the administrative law judge hearing level.
    <bullet> Section 1614(a)(3)(I) of the Act and Secs. 416.903(f) and 
416.1015(e) of our regulations require that, for all claims for 
childhood disability benefits under title XVI, we will make reasonable 
efforts to ensure that a qualified pediatrician or other individual who 
specializes in a field of medicine appropriate to the child's 
impairment(s) evaluates the case of the child. Therefore, the proposed 
rules provide that we must use disability examiners and medical or 
psychological consultants as a team in all determinations of childhood 
disability under title XVI, including fully favorable determinations. 
However, the disability examiner will still offer a claimant 
conference, and appeal will be to the administrative law judge hearing 
level.
    We also provide that, in addition to these two mandatory situations 
in which a determination is made by a disability examiner and medical 
or psychological consultant team, State agencies may require medical or 
psychological consultant involvement in other cases. For example, we 
would expect a State agency to require its trainees and other less 
experienced disability examiners to work in teams with medical and 
psychological consultants until they have become sufficiently expert to 
determine cases alone.
    <bullet> We are proposing this change because our experience in the 
prototype States continues to affirm the successes we had in the Full 
Process Model. We believe that enhancing the roles of disability 
examiners and medical and psychological consultants will maximize the 
effectiveness of adjudicative resources, focusing State agency medical 
and psychological consultants on duties and responsibilities 
commensurate with their training and experience. Furthermore, evidence 
from the Full Process Model as well as the prototype States shows that 
the accuracy of initial determinations improves, reducing the 
likelihood that a disabled claimant will have to go through the appeals 
process in order to receive benefits for which he or she is eligible.

2. Increased Contact Between Claimants and Adjudicators

    The proposed rules would require disability examiners to provide 
claimants with an opportunity for an ``informal disability conference'' 
in any claim in which the evidence does not appear to support a fully 
favorable determination. By ``fully favorable'' we mean a determination 
that the claimant is (1) disabled and (2) that the determination 
matches the claimant's allegations about onset of disability and (3) 
that the claimant is still disabled at the time of the determination.
    The purpose of the conference would be to:
    <bullet> Explain our disability requirements to the claimant;
    <bullet> Explain why the facts currently in the case record 
indicate that the determination should be less than fully favorable; 
and
    <bullet> Ensure that we have identified and made every reasonable 
effort to obtain relevant evidence from all appropriate sources.
    The proposed rules do not prohibit a disability examiner from 
contacting a claimant at other times. For example, a disability 
examiner may contact a claimant before he or she requests any evidence 
to ensure that the information in the case file about the claimant's 
medical sources is complete. However, under the proposed rules, the 
disability examiner must still make contact with the claimant at or 
near the end of the process, when the disability examiner believes that 
he or she has obtained sufficient evidence on which to base a 
determination and it appears that the determination will be less than 
fully favorable.
    Our experience in the Full Process Model and the prototype States 
has shown that increased interaction between claimants and disability 
examiners makes the process more personal, and it changes the 
determinations in some claims because of new information provided by 
claimants during their conferences.

[[Page 5497]]

3. Eliminate the Reconsideration Step of the Administrative Review 
Process for Initial Disability Claims

    We are proposing to remove the reconsideration step of our 
administrative review process in all determinations on initial 
disability applications except appeals of determinations based on a 
finding that the claimant is engaging in, or has engaged in, 
substantial gainful activity. Findings about substantial gainful 
activity are made in our field offices, not in the State agencies, and 
the appropriate appeal will continue to be to the reconsideration 
level.
    We are proposing this change primarily because evidence indicates 
that the reconsideration step adds little value to the disability 
determination process, at a great cost of staffing resources and 
processing time. Eliminating the reconsideration step permits State 
agencies to use their resources to make better determinations at the 
initial level, thereby increasing the accuracy of initial 
determinations. It will also provide an opportunity for denied 
claimants to request a hearing sooner than under the current process 
and, therefore, result in earlier administrative law judge decisions in 
many claims.

How Do We Plan To Implement the New Disability Claims Process?

    We have determined that it is not feasible to change over to the 
new process in all of our State agencies all at once. As we have 
already noted, it is clear from both the Full Process Model and the 
Prototype that each State will need substantial lead time for training 
and preparation, and we must retain our capacity to process new claims 
as timely as possible during implementation.
    We believe that our only option for accomplishing this goal is to 
implement the redesigned process in smaller groups of States in several 
stages over approximately a 1-year period beginning with the 
publication of the final rules that result from this NPRM. This will 
permit us to plan and conduct critical activities in each group of 
States, such as training, systems enhancement, staffing, and workload 
management. Most importantly, a staged implementation will also allow 
us to minimize delays in processing claims. Our goal is to ensure to 
the extent possible that, while we implement the new process, we 
continue to make all of our disability determinations timely.
    Therefore, the proposed rules explain that only individuals whose 
cases are adjudicated by State agencies that have implemented the new 
process will be subject to the new rules. In the proposed revisions, we 
have described which cases are subject to the new rules and which will 
continue to be adjudicated under the current rules.
    To make clear which cases will be handled using the new rules, we 
are proposing to include a new temporary appendix 1 to subpart J of 
part 404 that lists participating State agencies and the criteria for 
identifying which cases will be handled under the proposed rules. We 
are printing the appendix only in part 404 to save space; the proposed 
rules in part 416 cross-refer to the appendix in part 404. As we add 
more State agencies, we will publish an appropriate notice in the 
Federal Register changing the appendix to include them.
    When all State agencies are using the new rules, we will publish 
rules removing the appendix and all language in the proposed rules that 
indicates that there are two processes.

What Are the Specific Provisions of the Proposed Rules?

    The following are the major revisions of the proposed rules:

Proposed Secs. 404.904 and 416.1404  Informal Disability Conference

    We are proposing to redesignate current Secs. 404.904 and 416.1404, 
``Notice of the initial determination,'' as Secs. 404.904a and 
416.1404a so that we can insert these new provisions. Proposed 
Secs. 404.904 and 416.1404 would provide our rules explaining:
    <bullet> Who will be offered an informal disability conference;
    <bullet> What a disability conference is; and
    <bullet> The procedures associated with the informal disability 
conference.
    Paragraph (a), ``What is an informal disability conference?'' 
explains that we will offer a claimant an informal disability 
conference in a case of an initial application for benefits if the 
individual meets all of the following factors:
    1. Based on the evidence in the individual's case record, it 
appears that we will not be able to make a ``fully favorable'' 
determination, except if the determination will be based on a finding 
that the individual is, or was, engaging in substantial gainful 
activity. We provide an explanation of what we mean by a ``fully 
favorable'' determination and to specify what is ``not fully 
favorable'' for purposes of this section. We adopted the language for 
the definition of a ``fully favorable'' determination from 
Secs. 404.948(a) and 416.1448(a).
    2. The individual's case is being determined according to the 
identifying criteria listed in proposed appendix 1 to subpart J of part 
404. These criteria involve people who have filed applications for 
benefits based on disability and whose claims are handled by one of the 
State agencies that is using the new rules. As already noted, we intend 
this proposed provision to be temporary. When all State agencies are 
participating in the new process, we will delete appendix 1 to subpart 
J.
    Other paragraphs in these proposed sections provide more 
information about the procedures we would require in connection with 
the informal disability conference.
    <bullet> In paragraph (b)--``How will I be contacted?''--we explain 
how we will notify the individual of the date, time, and place or 
method (e.g., telephone) of the informal disability conference. We also 
explain that we will notify the claimant's representative when he or 
she is represented.
    In paragraph (c)--``Where will my informal disability conference be 
held?--we explain that we may hold the conference by telephone, in 
person, or using videoconferencing technology but that in most cases we 
will hold the conference by telephone. We also explain that we will 
decide the method we will use for the conference.
    <bullet> In paragraph (d)--``Can an attorney or other 
representative participate in the informal disability conference?''--we 
indicate that the individual has the right to have an attorney or other 
representative present at the informal disability conference.

Sections 404.908 and 416.1408  Parties to a Reconsideration

    We propose to revise the first sentence of paragraph (a), ``Who may 
request a reconsideration,'' to add an exception to the statement that 
the first level of appeal from an initial determination is a 
reconsideration. The proposed language includes cross-references to the 
new appendix and to Sec. 404.930.

Sections 404.930 and 416.1430  Availability of a Hearing Before an 
Administrative Law Judge

    We propose to add a new subparagraph (a)(2) to explain that 
individuals who meet the criteria in the new appendix appeal their 
initial determinations to the administrative law judge hearing level. 
Because of this, we would redesignate the numbers of the other 
subparagraphs within these paragraphs.

[[Page 5498]]

Sections 404.948 and 416.1448  Deciding a Case Without an Oral Hearing 
Before an Administrative Law Judge

    We propose to revise the heading of paragraph (a) from ``Decision 
wholly favorable'' to ``Decision fully favorable.'' This will make the 
heading consistent with the text of current Secs. 404.948(c) and 
404.1448(c) and these proposed rules. The change is only editorial.

Proposed Appendix 1 to Subpart J of Part 404

    As we explained earlier in this preamble, we are proposing to add 
this new appendix to list the types of claims that will be handled 
under the new disability claims process and the State agencies that 
will be using the new process. The proposed appendix includes three 
paragraphs. In paragraph (a)--``What is this appendix for?''--we 
briefly note the three major differences between the new process and 
the current process.
    In paragraph (b)--``Why aren't all State agencies using the new 
disability claims process?''--we explain briefly how we are 
implementing the rules gradually in the States. We also explain that 
the appendix is temporary and that we will remove it when all State 
agencies are using the new process.
    Paragraph (c)--``Which claims will be handled under the new 
disability claims process?''--explains that applications for benefits 
based on disability processed in certain state agencies come under the 
new rules. It is central to all of the other rules in this NPRM because 
we refer back to it to provide the basic criteria for all three of the 
major features of these proposed rules: The informal disability 
conference, no reconsideration appeal step, and permitting disability 
examiners the flexibility to decide whether to obtain medical or 
psychological consultant input when making the disability determination 
except in cases in which the Act requires that a medical or 
psychological consultant participate in making the determination. For 
example, in proposed Secs. 404.930(a)(2) and 416.1430(a)(2), we explain 
that the first level of appeal for a person who meets the criteria in 
the proposed appendix is the administrative law judge hearing. (We also 
include this provision in proposed Secs. 404.904(g) and 416.1404(g).) 
Likewise, we explain in proposed Secs. 404.1615(c)(1) and 
416.1015(c)(1) that a disability examiner may make the determination in 
the case of an individual who meets the criteria in the proposed 
appendix, except in cases requiring by statute participation by a 
medical or psychological consultant.
    Paragraph (d)--``Which State agencies are using the new disability 
claims process?''--lists the participating State agencies. The State 
agencies listed in this NPRM are the same State agencies and branches 
of State agencies that have been participating in the Prototype test. 
When we decide which State agencies will be in the next group to begin 
using the new process, we will publish an appropriate notice in the 
Federal Register revising the list.

Sections 404.1512 and 416.912  Evidence of Your Impairment

    We propose to revise paragraph (b)(6) of these sections for 
consistency with the changes we are proposing in Secs. 404.1615 and 
416.1015. In current Secs. 404.1527(f) and 416.927(f), we recognize 
that State agency medical and psychological consultants are members of 
the teams that make determinations of disability under the current 
process. Therefore, we do not consider their administrative findings of 
fact (e.g., about residual functional capacity) at the initial level to 
be medical opinions that must be weighed together with the evidence in 
the case record. However, our regulations have long provided that at 
the administrative law judge hearing and Appeals Council levels of 
administrative review, administrative law judges and administrative 
appeal judges must consider these findings as opinions of nonexamining 
sources. For this reason, current Secs. 404.1512(b)(6) and 
416.912(b)(6) provide that our term ``evidence'' includes opinions from 
State agency medical and psychological consultants when a case is at 
the administrative law judge hearing or Appeals Council level.
    Under the proposed rules, there will now be cases in which 
disability examiners will make initial determinations when there are 
opinions from state agency medical or psychological consultants in the 
claims file. In these cases, we will expect disability examiners to 
consider these opinions as evidence from nonexamining sources in the 
same way as administrative law judges and administrative appeals 
judges. Therefore, we propose to revise Secs. 404.1512(b)(6) and 
416.912(b)(6) to include disability examiners who make decisions alone.

Sections 404.1526 and 416.926  Medical Equivalence

    We propose to revise paragraph (b), ``Medical equivalence must be 
based on medical findings,'' to be consistent with the changes in these 
proposed rules that provide an enhanced role for disability examiners 
in making disability determinations. The current provision requires 
that in every case we must consider the medical opinion given by one or 
more medical or psychological consultants designated by the 
Commissioner in deciding medical equivalence. Under the current 
process, this requirement is always satisfied at the initial level of 
administrative review because medical and psychological consultants are 
always members of teams that make the initial determination and are 
responsible for this finding.
    In view of the changes we are proposing to our process, we now 
propose to remove this requirement for cases that are adjudicated under 
the new process. Proposed paragraph (b) would provide that we ``may'' 
consider the opinion of a medical or psychological consultant 
designated by the Commissioner, i.e., when a medical consultant 
provides an opinion on equivalency we will consider it. Under the Full 
Process Model and the Prototype, we found no evidence that omitting a 
medical or psychological consultant's opinion from the determination 
whether an impairment(s) medically equaled a listing lowered the 
quality of the determinations.
    The proposed change would also affect adjudication at the 
administrative law judge hearing and Appeals Council levels of 
administrative review (when the Appeals Council makes a decision). 
Under Secs. 404.1526(b) and 416.926(b), and Social Security Ruling 
(SSR) 96-6p, we require that administrative law judges and 
administrative appeals judges (when the Appeals Council makes a 
decision) must also consider the opinion of a medical or psychological 
consultant designated by the Commissioner when they consider whether an 
individual's impairment or combination of impairments medically equals 
a listing. See SSR 96-6p, ``Titles II and XVI: Consideration of 
Administrative Findings of Fact by State Agency Medical and 
Psychological Consultants and Other Program Physicians and 
Psychologists at the Administrative Law Judge and Appeals Council 
Levels of Administrative Review; Medical Equivalence,'' (61 FR 34466, 
July 2, 1996). In many cases, this requirement is satisfied because 
State agency medical and psychological consultants have already 
considered the issue and provided this opinion in connection with the 
initial and reconsideration determinations. SSR 96-6p provides that 
their signatures on the determinations satisfy the

[[Page 5499]]

requirement to obtain an opinion from a medical or psychological 
consultant designated by the Commissioner at the administrative law 
judge hearing and Appeals Council levels of administrative review when 
an administrative law judge or the Appeals Council finds that an 
individual's impairment(s) does not medically equal a listing.
    However, SSR 96-6p requires that, when an administrative law judge 
or administrative appeals judge determines that he or she may make a 
finding that an individual's impairment(s) medically equals a listing, 
he or she must obtain an updated medical opinion from a medical expert. 
If the proposed revision in Secs. 404.1526(b) and 416.926(b) becomes 
final, we will remove this requirement for administrative law judges 
and the Appeals Council, in order to be consistent with the changes for 
disability examiners.
    In current Sec. 416.926, we include a paragraph (d), 
``Responsibility for determining medical equivalence,'' which we do not 
now include in Sec. 404.1526. We propose to add a new paragraph (d) in 
Sec. 404.1526 that is identical to the paragraph in Sec. 416.926, and 
to revise the paragraph to incorporate reference to disability 
examiners who make determinations. The new language would explain that 
in such cases, the disability examiner is responsible for determining 
medical equivalence.

Sections 404.1527 and 416.927  Evaluating Opinion Evidence

    We propose to revise paragraph (f), ``Opinions of nonexamining 
sources,'' to include disability examiners when they make disability 
determinations. As we have already explained under the explanation of 
the proposed revisions to Secs. 404.1512(b)(6) and 416.912(b)(6), these 
individuals must consider opinions from medical and psychological 
consultants to be opinion evidence from nonexamining sources in the 
same way that administrative law judges and the administrative appeals 
judges do (when the Appeals Council makes a decision).
    To reflect this change, we propose to add a new paragraph (f)(2) 
for disability examiners who make disability determinations. The 
language in the proposed provision is similar to the provisions for 
administrative law judges in current paragraph (f)(2). Because we would 
add a new paragraph (f)(2), we would redesignate current paragraphs 
(f)(2) and (f)(3) as paragraphs (f)(3) and (f)(4).
    We propose minor revisions in paragraph (f)(1) to make clear that 
the current rules would continue to apply to cases that are adjudicated 
in State agencies that are not using the new process.

Sections 404.1546 and 416.946  Responsibility for Assessing and 
Determining Residual Functional Capacity

    We propose to revise this section to clarify the responsibility for 
making assessments of a claimant's residual functional capacity.
    The existing, unnumbered paragraph will be replaced by numbered 
paragraphs that will clarify the responsibility for making assessments 
of residual functional capacity in various types of claims. We will add 
a paragraph that will state that a State agency disability examiner may 
make assessments of residual functional capacity.

Sections 404.1615 and 416.1015  Making Disability Determinations

    In paragraph (c) of these sections, we propose to add the rules 
that will permit disability examiners to make disability determinations 
in certain cases.
    In proposed paragraph (c)(1)(i), we explain that a State agency 
disability examiner may make the disability determination in cases of 
individuals who meet the criteria in the appendix and that are not 
excluded in proposed paragraph (c)(2). We explain that this is not an 
absolute rule, because each State agency will have the option to decide 
whether to permit a disability examiner to make these determinations. 
Our intent is to provide each State agency with the authority to 
determine whether a given disability examiner is sufficiently skilled 
to make disability determinations without working in a team with a 
medical or psychological consultant.
    We also provide in the third sentence of the proposed paragraph a 
reminder that a disability examiner may still request assistance from a 
medical or psychological consultant. In the prototype States, there 
have been many cases in which disability examiners sought opinions from 
medical and psychological consultants on various aspects of claims.
    Proposed paragraph (c)(1)(ii) is the same as current paragraph 
(c)(2).
    In the proposed rule, we would redesignate current paragraph (c)(1) 
as paragraph (c)(2). The current paragraph provides the requirement 
that a disability examiner and a medical or psychological consultant 
must make the determination in almost all cases. In the proposed 
paragraph, we would retain this provision for States that are not yet 
using the new process in proposed Secs. 404.1615(c)(2)(iii) and 
416.1015(c)(2)(iv). The reason the part 404 and part 416 sections have 
different numbers is that there is an additional section (proposed 
paragraph (c)(2)(iii)) containing the requirement of title XVI of the 
Act that in any case of a child claiming SSI disability benefits, we 
must make reasonable efforts to ensure that a qualified pediatrician or 
other individual who specializes in a field of medicine appropriate to 
a child's impairment(s) evaluates the case of the child. We decided to 
make the paragraphs providing the current rule for using teams last so 
that when we need to revise the rules again after all State agencies 
are using the new process, we can delete them without having to 
renumber the paragraphs.
    In proposed paragraph (c)(2)(i), we would provide, as required by 
the Act, that a team must make the determination in any case in which 
the State agency determines that the individual is not disabled and 
there is evidence that indicates the existence of a mental impairment. 
In proposed paragraph (c)(2)(ii) we provide that a State agency may at 
its option require any disability examiner to work in a team with a 
medical or psychological consultant.
    We are also proposing two changes to current paragraph (c) that are 
not related to the Prototype. At the end of Sec. 404.1615(c), are two 
undesignated paragraphs. There is one undesignated paragraph at the end 
of Sec. 416.1015(c) that contains the same text as the two undesignated 
paragraphs at the end of Sec. 404.1615(c). The first sentence of both 
versions provides cross-references to the rules defining ``medical or 
psychological consultant'' and ``disability hearing officer.'' In the 
proposed rules, we have moved those cross-references to the appropriate 
sections of paragraph (c) that address these individuals.
    The second sentence explains that State agency disability examiners 
and disability hearing officers must be qualified to interpret and 
evaluate medical reports and other evidence as necessary to determine 
the capacities of the claimant to perform substantial gainful activity. 
We propose to designate this sentence as paragraph (d) so that it can 
be cited, and to redesignate all the subsequent paragraphs in the 
sections. We are not proposing any changes to this sentence.
    The second undesignated paragraph at the end of current 
Sec. 404.1615(c), which is the third sentence in the single 
undesignated paragraph in current Sec. 416.1015(c), provides a cross-
reference to Sec. 404.1572 (in Sec. 404.1615(c)) and to

[[Page 5500]]

Sec. 416.972 (in Sec. 416.1015(c)) ``for what we mean by substantial 
gainful activity.'' Although these rules do in fact define the term 
``substantial gainful activity'' for purposes of evaluating a person's 
earnings and work activity, the cross-references are misleading in the 
context of the preceding text. Disability examiners and disability 
hearing officers do not determine whether claimants who are working are 
engaging in ``substantial gainful activity'' and do not use the rules 
in Secs. 404.1572 and 416.972. This determination is made in our field 
offices. Disability examiners and disability hearing officers make 
determinations about whether an individual is able to work using other 
rules regarding medical and vocational factors. Therefore, we propose 
to delete these sentences since they could be confusing.

Other Changes

    We are proposing changes to other rules in subparts J, P, and Q of 
part 404, subparts I, J, and N of part 416, and subparts B and C of 
part 422. These changes are intended to make these other rules 
consistent with the proposed changes we have explained above.

Clarity of This Regulation

    Executive Order (E.O.) 12866 and the President's memorandum of June 
1, 1998, require each agency to write all rules in plain language. In 
addition to your substantive comments on these proposed rules, we 
invite your comments on how to make these proposed rules easier to 
understand.
    For example:
    <bullet> Have we organized the material to suit your needs?
    <bullet> Are the requirements in the rules clearly stated?
    <bullet> Do the rules contain technical language or jargon that is 
unclear?
    <bullet> Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
    <bullet> Would more (but shorter) sections be better?
    <bullet> Could we improve clarity by adding tables, lists, or 
diagrams?
    <bullet> What else could we do to make the rules easier to 
understand?

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register on the Internet site for the 
Government Printing Office: http://www.access.gpo.gov/su_docs/aces/aces140.html. It is also available on the Internet site for SSA (i.e., 
Social Security Online): http://www.ssa.gov/.

Regulatory Procedures

Executive Order 12866 and the Congressional Review Act 

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these proposed regulations meet the criteria of an 
economically significant regulatory action under E.O. 12866 because the 
impact in any single year exceeds $100 million. Thus, they were subject 
to OMB review. We have provided below an assessment of the costs and 
benefits of these proposed rules. It should also be noted that this 
proposed rule is a major rule under the criteria of the Congressional 
Review Act (Chapter 8 of 5 U.S.C.).
Program Savings
    We do not expect any program savings to result from these 
regulations.
Program Costs
    1. Title II
    We estimate that these rules will result in increased program 
outlays resulting in the following costs (in millions of dollars) to 
the title II program:

                          [Million of dollars]
------------------------------------------------------------------------
                                                       FY2001-   FY2001-
  FY2001     FY2002     FY2003     FY2004    FY2005     2005      2010
------------------------------------------------------------------------
       70        155        360        751     1,247     2,583    17,105
------------------------------------------------------------------------

Related Medicare Costs

 
                          [Millions of dollars]
------------------------------------------------------------------------
                                                       FY2001-   FY2001-
  FY2001     FY2002     FY2003     FY2004    FY2005     2005      2010
------------------------------------------------------------------------
                   3         26         75       174       277     4,420
------------------------------------------------------------------------

    2. Title XVI
    We estimate that these rules will result in increased program 
outlays resulting in the following costs (in millions of dollars) to 
the title XVI program:

                                              [Millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                               FY2001-   FY2001-
                                             FY2001    FY2002    FY2003    FY2004    FY2005     2005      2010
----------------------------------------------------------------------------------------------------------------
Federal...................................         4        30        81       188       335       638     3,922
State.....................................  ........         3         8        19        34        64       392
----------------------------------------------------------------------------------------------------------------


[[Page 5501]]

Related Medicaid Costs

                                              [Millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                               FY2001-   FY2001-
                                             FY2001    FY2002    FY2003    FY2004    FY2005     2005      2010
----------------------------------------------------------------------------------------------------------------
Federal...................................         3        40       120       310       576     1,049     8,940
State.....................................         2        30        91       234       435       791     6,743
----------------------------------------------------------------------------------------------------------------

Administrative Savings
    We do not expect any administrative savings to result from these 
regulations.
Administrative Costs
    We expect there will be some administrative costs associated with 
the transition to these rules.
Policy Alternatives
    We considered, but did not select, the following policy 
alternative:
Keep the Current Disability Claim Process
    As noted above, the initiative to redesign the disability claim 
process was critical of several aspects of the current process, 
including: the time it takes for a final agency decision; the lack of 
interaction between the claimant and the decisionmaker; and the lack of 
thorough explanations, in many cases, of the basis for the disability 
determination. Based on the Full Process Model test and our experience 
with the prototype so far, we found that the proposed new process 
results in better determinations at the initial level, with more 
allowances of claims that should be allowed. Many claims that would 
have been allowed only after appeal under the old process, were allowed 
at the initial step of the new process. Eliminating the reconsideration 
step enables claimants who appeal to reach the hearing level sooner 
than under the old process, and the resources previously used at the 
reconsideration step can be used to ensure a more complete 
determination process at the initial level. These positive results 
support implementation of the redesigned claim process.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments, and on the private sector. This final rule would not 
impose any Federal mandates on any State, local, or tribal governments, 
or on the private sector, within the meaning of the Unfunded Mandates 
Reform Act of 1995.

Regulatory Flexibility Act

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

Paperwork Reduction Act

    These proposed regulations would impose no new reporting or 
recordkeeping requirements requiring OMB clearance.

(Catalog of Federal Domestic Assistance Programs No. 96.001, Social 
Security--Disability Insurance; 96.002, Social Security--Retirement 
Insurance; 96-004, Social Security--Survivors Insurance; 96.006, 
Supplemental Security Income) 

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Blind, 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, Reporting and recordkeeping 
requirements, Supplemental Security Income (SSI).

20 CFR Part 422

    Administrative practice and procedure, Freedom of information, 
Organization and functions (Government agencies), Social Security.

    Dated: January 11, 2001.
Kenneth S. Apfel,
Commissioner of Social Security.
    For the reasons set out in the preamble, we propose to amend 
subparts J, P, and Q of part 404, subparts I, J, and N of part 416, and 
subparts B and C of part 422 of 20 CFR, chapter III as set forth below:

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

    1. The authority citation for subpart J of part 404 continues to 
read as follows:

    Authority: Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j), 
221, 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 
401(j), 404(f), 405(a), (b), (d)-(h), and (j), 421, 425, and 
902(a)(5)); 31 U.S.C. 3720A; 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 404.900 is amended by revising paragraphs (a)(2) and 
(a)(3) to read as follows:


Sec. 404.900  Introduction.

    (a) * * *
    (2) Reconsideration. If you are dissatisfied with an initial 
determination, except for certain determinations about whether you are 
disabled (see paragraph (a)(3)(ii) of this section), you may ask us to 
reconsider it.
    (3) Hearing before an administrative law judge. You may request a 
hearing before an administrative law judge if you are dissatisfied 
with:
    (i) A reconsideration determination; or
    (ii) Certain initial determinations on your application for 
benefits based on disability, if you are a person entitled to an 
informal disability conference, as explained in Sec. 404.904 and 
appendix 1 to this subpart.
* * * * *
    3. Section 404.901 is amended by adding the following definition to 
the alphabetical list of definitions:


Sec. 404.901  Definitions

* * * * *
    ``Fully favorable,'' with respect to a disability determination, 
means that we determine that: the claimant is disabled; the beginning 
date of disability is no later than the date alleged by the claimant; 
and either disability has not ended or, if the claimant alleges that 
disability has ended, it ended no earlier than the date alleged by the 
claimant.
* * * * *
    4. Section 404.904 is redesignated as Section 404.904a and revised 
to read as follows:


Sec. 404.904a  Notice of the initial determination.

    We will mail a written notice of the initial determination to you 
at your last known address. The notice will state the reasons for the 
initial determination and the effect of the initial determination.

[[Page 5502]]

The notice also will explain your right to appeal the determination and 
whether the appeal should be for a reconsideration or a hearing before 
an administrative law judge. (See Secs. 404.900(a), 404.904(g), 
404.907, and 404.930, and appendix 1 to this subpart.) We will not mail 
a notice if the beneficiary's entitlement to benefits has ended because 
of his or her death.
    5. A new section 404.904 is added to read as follows:


Sec. 404.904  Informal disability conference.

    (a) What is an informal disability conference? When you file an 
application for disability benefits, the disability examiner may offer 
you an opportunity to have an informal disability conference. If your 
claim is decided by a component of our office other than a State 
agency, the disability examiner in that component may offer you an 
opportunity to have an informal disability conference. The purpose of 
the informal disability conference is to explain how your medical 
condition relates to our disability requirements, and to make sure that 
we have all of the information we need to make a determination about 
whether you are disabled. We will offer you an informal disability 
conference if all of the following apply in your case:
    (1) Based on the evidence in your case record, it appears that we 
will not be able to make a fully favorable disability determination. 
However, we will not offer you an informal disability conference if the 
determination is less than fully favorable because:
    (i) You are, or were, engaging in substantial gainful activity; or
    (ii) You fail to cooperate in the processing of your claim; or
    (iii) You fail to meet one or more eligibility requirement that is 
not related to your medical condition (e.g., insured status).
    (2) Your claim meets the requirements in paragraphs (c) and (d) of 
Appendix 1 of this subpart (claims for disability being determined by 
certain State agencies).
    (b) Notification. We will notify you in writing to offer you the 
conference. You may choose to have a conference or not have a 
conference. If you have an attorney or other representative, we will 
also notify that person about the conference. The attorney or 
representative may participate in the conference.
    (c) How will my informal disability conference be held? In most 
cases, we will hold your informal disability conference by telephone. 
In some cases, we may ask you to come to the State agency for a 
conference in person. We may also ask you to go to a location near you 
for a videoconference. We will decide how your conference will be held.
    (d) What happens during the informal disability conference? The 
disability examiner will have an informal conversation with you. If he 
or she has not already done so in earlier conversations, the disability 
examiner will explain our disability standard. He or she also will tell 
you why the evidence in your case does not appear to support a fully 
favorable determination. You will have a chance to give us any 
information that we may not have. If you want to give us information 
that we need to make a determination, we will give you a chance to get 
the information or we will try to get it for you, following our rules 
in Sec. 404.1512.
    (e) What happens if I decide not to have an informal disability 
conference? If you decide not to have a conference, we will make an 
initial determination based on the information that we have.
    6. Section 404.905 is revised to read as follows:


Sec. 404.905  Effect of an initial determination.

    Our initial determination is final unless you request appeal (see 
Sec. 404.907) within the stated time period, or we revise the 
determination.
    7. Section 404.907 is revised to read as follows:


Sec. 404.907  Reconsideration--general.

    (a) If you are dissatisfied with the initial determination, 
reconsideration is the first step in the administrative review process 
that we provide, except for the following determinations. In these 
cases, the next step in the administrative review process is to the 
administrative law judge hearing level.
    (1) Determinations described in Sec. Sec. 404.930(a)(6) and (a)(7), 
where you appeal an initial determination denying your request for 
waiver or adjustment or recovery of an overpayment (see Sec. 404.506).
    (2) If you meet the requirements in paragraphs (c) and (d) of 
Appendix 1 of this subpart, an initial determination about whether you 
are disabled that is not fully favorable to you, except for a 
determination based on a finding that you are, or were, engaging in 
substantial gainful activity. (See appendix 1 to this subpart.)
    (b) If you are dissatisfied with our reconsidered determination, 
you may request a hearing before an administrative law judge.
    8. Section 404.908 is amended by revising paragraph (a) to read as 
follows:


Sec. 404.908  Parties to a reconsideration.

    (a) Who may request a reconsideration. If you are dissatisfied with 
our initial determination, you may request that we reconsider it, 
unless you are entitled to request a hearing before an administrative 
law judge, as we explain in Sec. 404.930 and Appendix 1 of this 
subpart. In addition, a person who shows in writing that his or her 
rights may be adversely affected by the initial determination may 
request a reconsideration.
* * * * *
    9. Section 404.930 is amended by redesignating existing paragraphs 
(a)(2) through (a)(7) as paragraphs (a)(3) through (a)(8), and adding a 
new paragraph (a)(2) to read as follows:


Sec. 404.930  Availability of a hearing before an administrative law 
judge.

    (a) * * *
    (2) an initial determination about whether you are disabled that is 
not fully favorable to you, unless that determination was about whether 
you are engaging or were engaging in substantial gainful activity, if 
your claim meets the requirements in paragraphs (c) and (d) of Appendix 
1 of this subpart;
* * * * *
    10. Section 404.948 is amended by revising the heading of paragraph 
(a) to read as follows:


Sec. 404.948  Deciding a case without an oral hearing before an 
administrative law judge.

    (a) Decision fully favorable. * * *
* * * * *
    11. A new appendix 1 to subpart J is added to read as follows:

Appendix 1--Claims That Will Be Handled Under the New Disability 
Claims Process

    (a) What is this appendix for? This appendix lists the types of 
claims that will be handled under the new disability claims process, 
and which State agencies will participate in the process. 
Individuals who meet the criteria in paragraphs (c) and (d) of this 
appendix, except for individuals whose determinations of disability 
are based on a finding that they are, or were, engaging in 
substantial gainful activity, may appeal to an administrative law 
judge hearing if they are dissatisfied with their initial 
determinations. In the States listed in paragraph (d), a disability 
examiner is responsible for making the disability determination in 
certain cases. The disability examiner will have the flexibility to 
decide whether input from a medical or psychological consultant is 
needed in making the disability determination. See Secs. 404.1615 
and 416.1015. Individuals who also meet the criteria in 
Sec. 404.904(a) of this section or Sec. 416.1404 of part 416 and 
whose State agencies are using the new claims process

[[Page 5503]]

will be offered an informal disability conference.
    (b) Why aren't all State agencies using the new disability 
claims process? We are phasing in the new process gradually, because 
each State will need substantial lead time for training and 
preparation, and we must retain our capacity to process new claims 
as timely as possible during implementation. This means that we will 
add more State agencies to this list from time-to-time until all 
State agencies are using the new process. When all State agencies 
are using the new process, we will delete this appendix and the new 
process will apply to everyone.
    (c) Which claims will be handled under the new disability claims 
process? Your claim will be handled under the new process if you 
filed an application for benefits (disability insurance benefits or 
Supplemental Security Income) based on disability or blindness and 
if your case is processed in one of the State agencies listed in 
paragraph (d) of this appendix.
    (d) Which State agencies are using the new disability claims 
process? The following State agencies are using the new process:
    Alabama; Alaska; California (North Los Angeles and West Los 
Angeles branches); Colorado; Louisiana; Michigan; Missouri; New 
Hampshire; New York (Brooklyn and Albany branches); Pennsylvania.

    12. The authority citation for subpart P of part 404 continues to 
read as follows:

    Authority:  Secs. 202, 205(a), (b), and (d)-(h), 216(I), 221(a) 
and (i), 222(c), 223, 225, and 702(a)(5) of the Social Security Act 
(42 U.S.C. 402, 405(a), (b), and (d)-(h), 416(i), 421(a) and (i), 
422(c), 423, 425, and 902(a)(5)); sec. 211(b), 104-193, 110 Stat. 
2105, 2189.

    13. Section 404.1512 is amended by revising paragraph (b)(6) to 
read as follows:


Sec. 404.1512  Evidence of your impairment.

* * * * *
    (b) * * *
    (6) Findings, other than the ultimate determination about whether 
you are disabled, made by State agency medical or psychological 
consultants and other program physicians or psychologists, and opinions 
expressed by medical experts we consult based on their review of the 
evidence in your case record. See Sec. Sec. 404.1527(f)(2) and (f)(3).
* * * * *
    14. Section 404.1526 is amended by revising the last sentence of 
paragraph (b) and by adding a new paragraph (d) to read as follows:


Sec. 404.1526  Medical equivalence.

* * * * *
    (b) * * * We may request, and will consider if requested, any 
medical opinion from one or more medical or psychological consultants 
designated by the Commissioner when we decide medical equivalence. (See 
Sec. 404.1616.)
* * * * *
    (d) Responsibility for determining medical equivalence. In cases 
where the State agency or other designee of the Commissioner makes the 
initial disability determination, a disability examiner is responsible 
for determining medical equivalence in cases in which a medical or 
psychological consultant does not make the determination together with 
the disability examiner (see Sec. 404.1615 and Appendix 1 of subpart 
J). In cases in which a medical or psychological consultant makes the 
determination together with the disability examiner, the medical or 
psychological consultant is responsible for assessing medical severity, 
and the disability examiner and medical or psychological consultant are 
jointly responsible for determining medical equivalence. For cases in 
the disability hearing process or otherwise decided by a disability 
hearing officer, the responsibility for determining medical equivalence 
rests with either the disability hearing officer or, if the disability 
hearing officer's reconsideration determination is changed under 
Sec. 404.918, with the Associate Commissioner for Disability or his or 
her delegate. For cases at the Administrative Law Judge or Appeals 
Council level, the responsibility for deciding medical equivalence 
rests with the administrative law judge or Appeals Council.
    15. Section 404.1527 is amended by revising paragraph (f)(1), by 
redesignating existing paragraphs (f)(2) and (f)(3) as paragraphs 
(f)(3) and (f)(4) and by adding a new paragraph (f)(2) to read as 
follows:


Sec. 404.1527  Evaluating opinion evidence.

* * * * *
    (f) * * *
    (1) In some cases, State agency medical and psychological 
consultants are members of teams that make initial determinations of 
disability (see Sec. 404.1615(c)(2)). In these cases, a State agency 
medical or psychological consultant will consider the evidence in your 
case record and make findings of fact about the medical issues, 
including, but not limited to, the existence and severity of your 
impairment(s), the existence and severity of your symptoms, whether 
your impairment(s) meets or equals the requirements for any impairment 
listed in appendix 1 to this subpart, and your residual functional 
capacity. These administrative findings of fact are based on the 
evidence in your case record but they are not themselves evidence at 
this step.
    (2) In other cases, a State agency disability examiner is 
responsible for making the initial determination (see 
Sec. 404.1615(c)(1)). In these cases, the disability examiner may 
obtain the opinion of a State agency medical or psychological 
consultant with respect to issues, including, but not limited to, the 
existence and severity of your impairment(s), the existence and 
severity of your symptoms, whether your impairment(s) meets or equals 
the requirements for any impairment listed in appendix 1 to this 
subpart, and your residual functional capacity. In these cases, State 
agency disability examiners weigh any opinions provided by State agency 
medical or psychological consultants in accordance with these rules. 
State agency medical and psychological consultants are highly qualified 
and are also experts in Social Security disability evaluation. See 
Sec. 404.1512(b)(6). When a State agency disability examiner considers 
findings of a State agency medical or psychological consultant, the 
State agency disability examiner will evaluate the findings using 
relevant factors in paragraphs (a) through (e) of this section, such as 
the medical or psychological consultant's medical specialty and 
expertise in our rules, the supporting explanations provided by the 
medical or psychological consultant, and any other factors relevant to 
the weighing of the opinions.
* * * * *
    16. Section 404.1529 is amended by revising the third sentence of 
paragraph (b) and by adding a new fourth sentence to paragraph (b) to 
read as follows:


Sec. 404.1529  How we evaluate symptoms, including pain.

* * * * *
    (b) Need for medically determinable impairment that could 
reasonably be expected to produce your symptoms, such as pain. * * * In 
some cases at the initial step in the administrative review process, 
and all cases at the reconsideration step, a State agency medical or 
psychological consultant (or other medical or psychological consultant 
designated by the Commissioner) directly participates in determining 
whether your medically determinable impairment(s) could reasonably be 
expected to produce your alleged symptoms (see Sec. 404.1615(c)(2)). In 
other cases at the initial step of the administrative review process, a 
State agency disability examiner may ask for and consider the opinion 
of a State agency medical or psychological consultant in determining 
whether your medically determinable impairment(s) could reasonably be 
expected to

[[Page 5504]]

produce your alleged symptoms (see Sec. 404.1615). * * *
* * * * *
    17. Section 404.1546 is revised to read as follows:


Sec. 404.1546  Responsibility for assessing and determining residual 
functional capacity.

    (a) Initial determinations. (1) In cases in which a State agency 
disability determination is made by a team consisting of a State agency 
disability examiner and a medical or psychological consultant, the 
medical or psychological consultant is responsible for assessing your 
residual functional capacity (see Sec. 404.1615(c)(2)).
    (2) In cases in which a State agency disability examiner makes the 
disability determination, the State agency disability examiner is 
responsible for assessing your residual functional capacity (see 
Sec. 404.1615(c)(1)).
    (b) Disability hearing cases. For cases in the disability hearing 
process, the responsibility for deciding your residual functional 
capacity rests with either the disability hearing officer or, if the 
disability hearing officer's reconsidered determination is changed 
under Sec. 404.918, with the Associate Commissioner for Disability or 
his or her delegate.
    (c) Administrative law judge or Appeals Council cases. For cases at 
the Administrative Law Judge or Appeals Council level, the 
administrative law judge or Appeals Council is responsible for 
assessing your residual functional capacity.
    18. The authority citation for subpart Q of part 404 continues to 
read as follows:

    Authority:  Secs. 205(a), 221, and 702(a)(5) of the Social 
Security Act (42 U.S.C. 405(a), 421, and 902(a)(5)).

    19. Section 404.1615 is amended by revising paragraph (c), by 
redesignating the first undesignated paragraph following paragraph 
(c)(3) as paragraph (d), by removing the second undesignated paragraph 
following paragraph (c)(3), by revising new paragraph (d), and by 
redesignating existing paragraphs (d), (e), (f), and (g), as paragraphs 
(e), (f), (g), and (h), to read as follows:


Sec. 404.1615  Making disability determinations.

* * * * *
    (c) The following individuals in the State agency will make 
disability determinations:
    (1)(i) If your claim meets the requirements in paragraphs (c) and 
(d) of Appendix 1 of subpart J, a State agency disability examiner is 
responsible for making the disability determination in your claim, 
unless it is a claim described in (c)(2) of this section. The State 
agency disability examiner may request advice from a State agency 
medical or psychological consultant on the medical aspects of your 
impairment.
    (ii) In any State agency, a State agency disability examiner may 
make the disability determination when there is no medical evidence to 
be evaluated (i.e., no medical evidence exists or we are unable, 
despite making every reasonable effort, to obtain any medical evidence 
that may exist) and the individual fails or refuses, without a good 
reason, to attend a consultative examination (see Sec. 404.1518).
    (2) A State agency medical or psychological consultant (see 
Sec. 404.1616) and a State agency disability examiner together will 
make the disability determination in the following situations:
    (i) Any case in which the State agency determines that you are not 
disabled and there is evidence that indicates the existence of a mental 
impairment, as described in paragraph (e) of this section;
    (ii) Any case in which the State agency decides to require a State 
agency medical or psychological consultant and a State agency 
disability examiner to make the disability determination together; and
    (iii) Any case, if your claim does not meet the requirements in 
paragraphs (c) and (d) of Appendix 1 of subpart J.
    (3) A State agency disability hearing officer (see Sec. 404.915).
    (d) The State agency disability examiner and disability hearing 
officer must be qualified to interpret and evaluate medical reports and 
other evidence relating to the claimant's physical or mental 
impairments and as necessary to determine the capacities of the 
claimant to perform substantial gainful activity.
* * * * *
    20. Section 404.1616 is amended by revising paragraph (a) to read 
as follows:


Sec. 404.1616  Medical or psychological consultants.

    (a) What is a medical consultant? A medical consultant is a person 
who is a member of a team that makes disability determinations in a 
State agency, as explained in Sec. 404.1615(c)(2), or who provides 
advice to a State agency disability examiner, as explained in 
Sec. 404.1615(c)(1). A medical consultant may also be a person who 
serves the same functions for us when a federal component makes the 
disability determination.
* * * * *

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

    21. The authority citation for subpart I of part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5), 1611, 1614, 1619, 1631(a), (c), and 
(d)(1), and 1633 of the Social Security Act (42 U.S.C. 902(a)(5), 
1382, 1382c, 1382h, 1383(a), (c), and (d)(1), and 1383b); secs. 4(c) 
and 5, 6(c)-(e), 14(a), and 15, Pub. L. 98-460, 98 Stat.1794, 1801, 
1802, and 1808 (42 U.S.C. 421 note, 423 note, 1382h note).

    22. Section 416.912 is amended by revising paragraph (b)(6) to read 
as follows:


Sec. 416.912  Evidence of your impairment.

* * * * *
    (b) * * *
    (6) Findings, other than the ultimate determination about whether 
you are disabled, made by State agency medical or psychological 
consultants and other program physicians or psychologists, and opinions 
expressed by medical experts we consult based on their review of the 
evidence in your case record. See Secs. 416.1527(f)(2) and (f)(3).
* * * * *
    23. Section 416.926 is amended by revising the last sentence of 
paragraph (b) and by adding a new paragraph (d) to read as follows:


Sec. 416.926  Medical equivalence for adults and children.

* * * * *
    (b) * * * We may request, and will consider if requested, any 
medical opinion from one or more medical or psychological consultants 
designated by the Commissioner when we decide medical equivalence. (See 
Sec. 416.1016.)
* * * * *
    (d) Responsibility for determining medical equivalence. In cases 
where the State agency or other designee of the Commissioner makes the 
initial disability determination, a disability examiner is responsible 
for determining medical equivalence in cases in which a medical or 
psychological consultant does not make the determination together with 
the disability examiner (see Sec. 416.1015 and Appendix 1 of subpart 
J). In cases in which a medical or psychological consultant makes the 
determination together with the disability examiner, the medical or 
psychological consultant is responsible for assessing medical severity, 
and the disability examiner and medical or

[[Page 5505]]

psychological consultant are jointly responsible for determining 
medical equivalence. For cases in the disability hearing process or 
otherwise decided by a disability hearing officer, the responsibility 
for determining medical equivalence rests with either the disability 
hearing officer or, if the disability hearing officer's reconsideration 
determination is changed under Sec. 416.1418, with the Associate 
Commissioner for Disability or his or her delegate. For cases at the 
Administrative Law Judge or Appeals Council level, the responsibility 
for deciding medical equivalence rests with the administrative law 
judge or Appeals Council.
    24. Section 416.927 is amended by revising paragraph (f)(1), by 
redesignating existing paragraphs (f)(2) and (f)(3) as paragraphs 
(f)(3) and (f)(4) and by adding a new paragraph (f)(2) to read as 
follows:


Sec. 416.927  Evaluating opinion evidence.

* * * * *
    (f) * * *
    (1) In some cases, State agency medical and psychological 
consultants are members of teams that make initial determinations of 
disability (see Sec. 416.1015(c)(2)). In these cases, a State agency 
medical or psychological consultant will consider the evidence in your 
case record and make findings of fact about the medical issues, 
including, but not limited to, the existence and severity of your 
impairment(s), the existence and severity of your symptoms, whether 
your impairment(s) meets or equals the requirements for any impairment 
listed in appendix 1 to subpart P of part 404 of this chapter, and your 
residual functional capacity. These administrative findings of fact are 
based on the evidence in your case record but they are not themselves 
evidence at this step.
    (2) In other cases, a State agency disability examiner is 
responsible for making the initial determination (see 
Sec. 416.1015(c)(1)). In these cases, the disability examiner may 
obtain the opinion of a State agency medical or psychological 
consultant with respect to issues, including, but not limited to, the 
existence and severity of your impairment(s), the existence and 
severity of your symptoms, whether your impairment(s) meets or equals 
the requirements for any impairment listed in appendix 1 to subpart P 
of part 404 of this chapter, and your residual functional capacity. In 
these cases, State agency disability examiners weigh any opinions 
provided by State agency medical or psychological consultants in 
accordance with these rules. State agency medical and psychological 
consultants are trained and are also experts in Social Security 
disability evaluation. See Sec. 416.912(b)(6). When a State agency 
disability examiner considers findings of a State agency medical or 
psychological consultant, the State agency disability examiner will 
evaluate the findings using relevant factors in paragraphs (a) through 
(e) of this section, such as the medical or psychological consultant's 
medical specialty and expertise in our rules, the supporting 
explanations provided by the medical or psychological consultant, and 
any other factors relevant to the weighing of the opinions.
* * * * *
    25. Section 416.929 is amended by revising the third sentence of 
paragraph (b) and by adding a new fourth sentence to paragraph (b) to 
read as follows:


Sec. 416.929  How we evaluate symptoms, including pain.

* * * * *
    (b) Need for medically determinable impairment that could 
reasonably be expected to produce your symptoms, such as pain. * * * In 
some cases at the initial step in the administrative review process, 
and all cases at the reconsideration step, a State agency medical or 
psychological consultant (or other medical or psychological consultant 
designated by the Commissioner) directly participates in determining 
whether your medically determinable impairment(s) could reasonably be 
expected to produce your alleged symptoms (see Sec. 416.1015(c)(2)). In 
other cases at the initial step of the administrative review process, a 
State agency disability examiner may ask for and consider the opinion 
of a State agency medical or psychological consultant in determining 
whether your medically determinable impairment(s) could reasonably be 
expected to produce your alleged symptoms (see Sec. 416.1015). * * *
* * * * *
    26. Section 416.946 is revised to read as follows:


Sec. 416.946  Responsibility for assessing and determining residual 
functional capacity.

    (a) Initial determinations. (1) In cases in which a State agency 
disability determination is made by a team consisting of a State agency 
disability examiner and a medical or psychological consultant, the 
medical or psychological consultant is responsible for assessing your 
residual functional capacity (see Sec. 416.1015(c)(2)).
    (2) In cases in which a State agency disability examiner makes the 
disability determination, the State agency disability examiner is 
responsible for assessing your residual functional capacity (see 
Sec. 416.1015(c)(1)).
    (b) Disability hearing cases. For cases in the disability hearing 
process, the responsibility for deciding your residual functional 
capacity rests with either the disability hearing officer or, if the 
disability hearing officer's reconsidered determination is changed 
under Sec. 416.1418, with the Associate Commissioner for Disability or 
his or her delegate.
    (c) Administrative law judge or Appeals Council cases. For cases at 
the Administrative Law Judge or Appeals Council level, the 
administrative law judge or Appeals Council is responsible for 
assessing your residual functional capacity.
    27. The authority citation for subpart J of part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5), 1614, 1631, and 1633 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1382c, 1383, and 1383b).

    28. Section 416.1015 is amended by redesignating paragraphs (d) 
through (h) as paragraphs (e) through (i), by redesignating the 
undesignated paragraph following paragraph (c)(3) as paragraph (d) and 
revising it, and by revising paragraph (c) to read as follows:


Sec. 416.1015  Making disability determinations.

* * * * *
    (c) The following individuals in the State agency will make 
disability determinations:
    (1) (i) If your claim meets the requirements of paragraphs (c) and 
(d) of Appendix 1 of subpart J, part 404 of this chapter, a State 
agency disability examiner is responsible for making the disability 
determination in your claim, unless it is a claim described in (c)(2) 
of this section. The State agency disability examiner may request 
advice from a State agency medical or psychological consultant on the 
medical aspects for your impairment.
    (ii) In any State agency, a State agency disability examiner may 
make the disability determination when there is no medical evidence to 
be evaluated (i.e., no medical evidence exists or we are unable, 
despite making every reasonable effort, to obtain any medical evidence 
that may exist) and the individual fails or refuses, without a good 
reason, to attend a consultative examination (see Sec. 416.918).
    (2) A State agency medical or psychological consultant (see 
Sec. 416.1016) and a State agency disability examiner together will 
make the disability determination in the following situations:

[[Page 5506]]

    (i) Any case in which the State agency determines that you are not 
disabled and there is evidence that indicates the existence of a mental 
impairment, as described in paragraph (e) of this section;
    (ii) Any case in which the State agency decides to require a State 
agency medical or psychological consultant and a State agency 
disability examiner to make the disability determination together; and
    (iii) Any case of a child claiming disability benefits, as 
described in paragraph (f) of this section;
    (iv) Any case, if your claim does not meet the requirements in 
paragraphs (c) and (d) of Appendix 1 of subpart J, part 404 of this 
chapter.
    (3) A State agency disability hearing officer (see Sec. 416.1015).
    (d) The State agency disability examiner and disability hearing 
officer must be qualified to interpret and evaluate medical reports and 
other evidence relating to the claimant's physical or mental 
impairments and as necessary to determine the capacities of the 
claimant to perform substantial gainful activity.
* * * * *
    29. Section 416.1016 is amended by revising paragraph (a) to read 
as follows:


Sec. 416.1016  Medical or psychological consultants.

    (a) What is a medical consultant? A medical consultant is a person 
who is a member of a team that makes disability determinations in a 
State agency, as explained in Sec. 416.1015(c)(2), or who provides 
advice to a State agency disability examiner, as explained in 
Sec. 416.1015(c)(1). A medical consultant may also be a person who 
serves the same functions for us when a federal component makes the 
disability determination.
* * * * *
    30. The authority citation for subpart N of part 416 continues to 
read as follows:

    Authority:  Secs. 702(a)(5), 1631, and 1633 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b); 31 U.S.C. 
3720A.

    31. Section 416.1400 is amended by revising paragraphs (a)(2) and 
(a)(3) to read as follows:


Sec. 416.1400  Introduction.

    (a) * * *
    (2) Reconsideration. If you are dissatisfied with an initial 
determination, except for certain determinations about whether you are 
disabled (see (a)(3)(ii) of this section), you may ask us to reconsider 
it.
    (3) Hearing before an administrative law judge. You may request a 
hearing before an administrative law judge if you are dissatisfied 
with:
    (i) A reconsideration determination; or
    (ii) Certain initial determinations on your application for 
benefits based on disability, if you are a person entitled to an 
informal disability conference, as explained in Sec. 416.1404 and 
appendix 1 to subpart J of part 404 of this chapter.
* * * * *
    32. Section 416.1401 is amended by adding the following definition 
to the alphabetical listing of definitions in this section, to read as 
follows:


Sec. 416.1401  Definitions.

* * * * *
    ``Fully favorable'' with respect to a disability determination, 
means that we determine that: the claimant is disabled; the beginning 
date of disability is no later than the date alleged by the claimant; 
and either disability has not ended or, if the claimant alleges that 
disability has ended, it ended no earlier than the date alleged by the 
claimant.
* * * * *
    33. Section 416.1404 is redesignated as Section 416.1404a and 
revised to read as follows:


Sec. 416.1404a  Notice of the initial determination.

    (a) We will mail a written notice of the initial determination to 
you at your last known address. Generally, we will not send a notice if 
your benefits are stopped because of your death, or if the initial 
determination is a redetermination that your eligibility for benefits 
and the amount of your benefits have not changed.
    (b) The written notice that we send will tell you:
    (1) What our initial determination is;
    (2) The reasons for our determination; and
    (3) What rights you have to a reconsideration of the determination 
or a hearing before an administrative law judge. (See 
Sec. Sec. 416.1400(a), 416.1404(g), 416.1407, and 416.1430, and 
appendix 1 to subpart J of part 404 of this chapter.)
    (c) If our initial determination is that we must suspend, reduce or 
terminate your benefits, the notice will also tell you that you have a 
right to a reconsideration before the determination takes effect (see 
Sec. 416.1336).
    34. A new section 416.1404 is added to read as follows:


Sec. 416.1404  Informal disability conference.

    (a) What is an informal disability conference? When you file an 
application for disability benefits, the disability examiner may offer 
you an opportunity to have an informal disability conference. If your 
claim is decided by a component of our office other than a State 
agency, the disability examiner in that component may offer you an 
opportunity to have an informal disability conference. The purpose of 
the informal disability conference is to explain how your medical 
condition relates to our disability requirements, and to make sure that 
we have all of the information we need to make a determination about 
whether you are disabled. We will offer you an informal disability 
conference if all of the following apply in your case:
    (1) Based on the evidence in your case record, it appears that we 
will not be able to make a fully favorable disability determination. 
However, we will not offer you an informal disability conference if the 
determination is less than fully favorable because:
    (i) You are, or were, engaging in substantial gainful activity; or
    (ii) You fail to cooperate in the processing of your claim; or
    (iii) You fail to meet one or more eligibility requirement that is 
not related to your medical condition (e.g., limitations on income and 
resources).
    (2) Your claim meets the requirements of paragraphs (c) and (d) of 
appendix 1, subpart J of part 404.
    (b) Notification We will notify you in writing to offer you the 
conference. You may choose to have a conference or not have a 
conference. If you have an attorney or other representative, we will 
also notify that person. The attorney or representative may participate 
in the conference.
    (c) How will my informal disability conference be held? In most 
cases, we will hold your informal disability conference by telephone. 
In some cases, we may ask you to come to the State agency for a 
conference in person. We may also ask you to go to a location near you 
for a videoconference. We will decide how your conference will be held.
    (d) What happens during the informal disability conference? The 
disability examiner will have an informal conversation with you. If he 
or she has not already done so in earlier conversations, he or she will 
explain our disability standard. He or she also will tell you why the 
evidence in your case does not appear to support a fully favorable 
determination. You will have a chance to provide information that we 
may not have. If you want to give us information that we need to make a 
determination, we will give you a chance to get the information or we 
will try to get it for you, following our rules in Sec. 416.912.

[[Page 5507]]

    (e) What happens if I decide not to have an informal disability 
conference? If you decide not to have a conference, we will make an 
initial determination based on the information that we have.
    35. Section 416.1405 is revised to read as follows:


Sec. 416.1405  Effect of an initial determination.

    Our initial determination is final unless you request a 
reconsideration or an administrative law judge hearing within the 
stated time period, or we revise the determination.
    36. Section 416.1407 is revised to read as follows:


Sec. 416.1407  Reconsideration--general.

    If you are dissatisfied with the initial determination, 
reconsideration is the first step in the administrative review process 
that we provide, with one exception. If your claim meets the 
requirements of paragraphs (c) and (d) of Appendix 1, subpart J, part 
404 of this chapter, and we make an initial determination about whether 
you are disabled that is not fully favorable to you, except for a 
determination based on a finding that you are, or were, engaging in 
substantial gainful activity, the next step in the administrative 
review process is to the administrative law judge hearing level. If you 
are dissatisfied with our reconsidered determination, you may request a 
hearing before an administrative law judge.
    37. Section 416.1408 is amended by revising paragraph (a) to read 
as follows:


Sec. 416.1408  Parties to a reconsideration.

    (a) Who may request a reconsideration. If you are dissatisfied with 
our initial determination, you may request that we reconsider it, 
unless you are entitled to request a hearing before an administrative 
law judge, as we explain in Sec. 416.1430 and appendix 1 of subpart J, 
part 404 of this chapter. In addition, a person who shows in writing 
that his or her rights may be adversely affected by the initial 
determination may request a reconsideration.
* * * * *
    38. Section 416.1430 is amended by redesignating existing 
paragraphs (a)(2), (a)(3), and (a)(4) as paragraphs (a)(3), (a)(4), and 
(a)(5), and by adding a new paragraph (a)(2) to read as follows:


Sec. 416.1430  Availability of a hearing before an administrative law 
judge.

    (a) * * *
    (2) An initial determination about whether you are disabled that is 
not fully favorable to you, unless that determination was about whether 
you are engaging or were engaging in substantial gainful activity, if 
your claim meets the requirements of paragraphs (c) and (d) of appendix 
1 of subpart J, part 404 of this chapter;
* * * * *
    39. Section 416.1448 is amended by revising the heading of 
paragraph (a) to read as follows:


Sec. 416.1448  Deciding a case without an oral hearing before an 
administrative law judge.

    (a) Decision fully favorable. * * *
* * * * *

PART 422--ORGANIZATION AND PROCEDURES

    40. The authority citation for subpart B of part 422 continues to 
read as follows:

    Authority: Secs. 205, 232, and 702(a)(5), 1131, and 1143 of the 
Social Security Act (42 U.S.C. 405, 432, 902(a)(5), 1320b-l, and 
1320b-13).

    41. Section 422.140 is amended by revising the first sentence to 
read as follows:


Sec. 422.140  Reconsideration of initial determination.

    Except in the case of certain determinations regarding disability 
(see Sec. 404.930 and appendix 1 of subpart J, part 404 of this 
chapter), any party who is dissatisfied with an initial determination 
with respect to entitlement to monthly benefits, a lump-sum death 
payment, a period of disability, a revision of an earnings record, with 
respect to any other right under title II of the Social Security Act, 
or with respect to entitlement to hospital insurance benefits or 
supplementary medical insurance benefits, or the amount of hospital 
insurance benefits, may request that the Social Security Administration 
reconsider such determination. * * *
    42. The authority citation for subpart C of part 422 continues to 
read as follows:

    Authority: Secs. 205, 221, and 702(a)(5) of the Social Security 
Act (42 U.S.C. 405, 421, and 902(a)(5)); 30 U.S.C. 923(b).

    43. Section 422.203 is amended by revising the first sentence of 
paragraph (a)(1), by redesignating paragraph (c) as paragraph (c)(1), 
and by adding paragraph (c)(2) to read as follows:


Sec. 422.203  Hearings.

    (a) * * * (1) After certain determinations regarding disability 
(see Sec. 404.930 and appendix 1 of subpart J, part 404 of this 
chapter), and after a reconsidered or a revised determination (i) of a 
claim for benefits or any other right under title II of the Social 
Security Act; or (ii) of eligibility or amount of benefits or any other 
matter under title XVI of the Act, except where an initial or 
reconsidered determination involving an adverse action is revised, 
after such revised determination has been reconsidered; or (iii) as to 
entitlement under part A or part B of title XVIII of the Act, or as to 
the amount of benefits under part A of such title XVIII (where the 
amount in controversy is $100 or more); or of health services to be 
provided by a health maintenance organization without additional costs 
(where the amount in controversy is $100 or more); or as to the amount 
of benefits under part B of title XVIII (where the amount in 
controversy is $500 or more); or as to a determination by a peer review 
organization (PRO) under title XI (where the amount in controversy is 
$200 or more); or as to certain determinations made under section 1154, 
1842(1), 1866(f)(2), or 1879 of the Act; any party to such a 
determination may, pursuant to the applicable section of the Act, file 
a written request for a hearing on the determination. * * *
* * * * *
    (c) * * *
    (2) Unless for good cause shown on extension of time has been 
granted, a request for hearing must be filed within 60 days after the 
receipt of the notice of the reconsidered or revised determination, or 
after an initial determination described in Sec. 404.900(a)(3)(ii), 42 
CFR 498.3(b) and (c) (see Secs. 404.933, 410.631, and 416.1433 of this 
chapter and 42 CFR 405,722, 498.40, and 417.260.)
* * * * *
[FR Doc. 01-1442 Filed 1-18-01; 8:45 am]
BILLING CODE 4191-02-P


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