* Effective March 31, 1995, the functions of the Secr etary of Health and

Human Services in social security cases were transf erred to the Commissioner of Social Security. P.L. No. 103-296. Pursuant to Fe d. R. Civ. P. 25(d), the district court substituted Shirley S. Chater, Commissioner o f Social Security, for Donna E. Shalala, Secretary of Health and Human Services, as the defendant in this action. Although we have substituted the Commissio ner for the Secretary in the caption, in the text we continue to refer to the Se cretary because she was the appropriate party at the time of the underlying dec ision.

** This order and judgment is not binding precedent, e xcept under the doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3.

*** Honorable G. Thomas Van Bebber, Chief Judge, UnitedStates District Court for the District of Kansas, sitting by design ation.

UNITED STATES COURT OF APPEALS Filed 10/30/96 FOR THE TENTH CIRCUIT

RICHARD P. HILL,

Plaintiff-Appellant,

v. SHIRLEY S. CHATER, Commissioner of Social Security, *

Defendant-Appellee. No. 96-2035 (D.C. No. CIV-94-84-JP) (D. N.M.)

ORDER AND JUDGMENT **

Before BRISCOE and MURPHY, Circuit Judges, and VAN BEBBER, *** District Judge.-2-

After examining the briefs and appellate record, th is panel has determined unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f) and 10th Cir. R. 34.1.9. Th e case is therefore ordered submitted without oral argument. Richard P. Hill appeals from an order of the distri ct court affirming the Secretary’s decision denying his application for so cial security disability benefits and Supplemental Security Income (SSI). Mr. Hill f iled for disability benefits and SSI on May 11, 1992. He alleged disability due to problems with his left ankle, his right shoulder, and two vertebrae in his back; a heart attack; and a nervous breakdown. His requests were denied initia lly and on reconsideration. Following a de novo hearing on March 3, 1993, an ad ministrative law judge (ALJ) determined that he was not disabled within th e meaning of the Social Security Act. Mr. Hill presented additional eviden ce before the Appeals Council, which denied review. He then filed suit in distric t court. The district court affirmed the Secretary’s decision, and he appealed to this court. We review the Secretary’s decision to determine whe ther the factual findings are supported by substantial evidence in the record viewed as a whole and whether the correct legal standards were applie d. Andrade v. Secretary of-3-

Health & Human Servs. , 985 F.2d 1045, 1047 (10th Cir. 1993). Substantia l evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Fowler v. Bowen , 876 F.2d 1451, 1453 (10th Cir. 1989)(quotation omitted). The Secretary has established a five-step evaluatio n process for determining whether a claimant is disabled within t he meaning of the Social Security Act. See Williams v. Bowen , 844 F.2d 748, 750-52 (10th Cir. 1988)(discussing five-step disability test). Mr. H ill argues here that the Secretary erred in finding, at step two, that he had no sever e mental impairment. The Secretary analyzes this case at step five, arguing that the ALJ properly found that Mr. Hill’s mental impairments did not preclude him from performing sedentary work. We are thus faced with the threshold questio n of which step the Secretary reached in evaluating Mr. Hill’s mental impairments

. The ALJ discussed Mr. Hill’s mental impairments in that section of his decision devoted to residual functional capacity (RFC). There, he stated the following: Despite his testimony at the hearing that he feels anxious and depressed, there is no evidence of any of the types of nonexertional limitations on employment as set out in Section 12. 00 etseq. , Subpart P, Appendix 1.

. . . .1 The appeals council stated that new evidence prese nted to it “appears

consistent . . . with the [ALJ’s] conclusion that y ou retain the capacity to perform work in the national economy.” Appellant’s App. at50-51. We do not read this as an acknowledgment that the alleged mental impair ment is severe. See 20 C.F.R. § 1520a(c). The appeals council did not complete a new PRT form. See id. § 1520a(d)(2). Only the ALJ’s form, rating Mr. Hi ll’s mental impairment as nonsevere, appears in the record. See Hill v. Sullivan , 924 F.2d 972, 974 (10th Cir. 1991)(discussing necessity for completing PRT form in analyzing claims of mental impairment). Moreover, the appeals council stated that the new evidence “indicates, in part, that your intellectual functio ning is normal .” Appellant’s App. at 50 (emphasis added). The only credible reading of the appeals council’s (continued...) -4- I find nothing in the documentary record to indicat e a significantly limiting psychiatric disorder from a functional standpoint.

. . . . [T]here is no finding, sign, or medical diagnosis o f the existence of any psychiatric problem which is significantly tang ible to warrant further development. Appellant’s App. at 79-81. The ALJ stated that he found no “significantly limi ting” mental disorder “from a functional standpoint.” Id. at 80. This is step two language. See 20 C.F.R. §§ 404.1520(c); 404.1520a(b)(3) and (c)(1 ); 416.920(c). Moreover, the ALJ completed a psychiatric review technique (PRT) form, in which he concluded the alleged mental impairment was “not severe.” Ap pellant’s App. at 84. Although the ALJ reached step five in his evaluatio n of Mr. Hill’s physical impairments, we conclude that he rejected his claim of mental impairment at step
two. 11 (...continued)

decision is that Mr. Hill’s mental impairment, if a ny, is not sufficiently severe to significantly limit his ability to work. This dete rmination is properly reviewed at step two.

-5- At step two, a claimant need only make a “de minimu s” showing of medical severity. See Williams , 844 F.2d at 751. An impairment is not severe onl y if it “would have no more than a minimal effect on an ind ividual’s ability to work, even if the individual’s age, education, or work experience were specifically considered.” SSR 85-28, 1985 WL 56856, at *3. The ALJ had before him a relatively recent mental s tatus examination prepared by Dr. Balcazar, a consulting physician. Dr. Balcazar concluded that Mr. Hill was “not showing any well-defined psychiatric problem at the present.” Appellant’s App. at 205. Dr. Balcazar further stat ed that if Mr. Hill had a handicap, it was of a physical nature. Id. at 206. The record before the ALJ, including Dr. Balcazar’s report, thus supports his finding at step two of no severe mental impairment. However, this is not the end of our inquiry. In making our substantial evidence determination we must also review the addi tional evidence presented to the appeals council. See O’Dell v. Shalala , 44 F.3d 855, 859 (10th Cir. 1994). Mr. Hill presented the appeals council with a report by Dr. Bradshaw, dated August 28, 1993, in which he diagnosed Mr. Hill with dysthymia, possible-6-

bi-polar disorder, “occupational problem,” and bord erline personality disorder. Id. at 62. Dr. Bradshaw stated that people with this type of personality pattern are usually very u nstable with regards to their moods. They do have interpersonal relatio nship problems, and they have self-image problems. They are typica lly extremely impulsive and show a lack of emotional control, esp ecially when it comes to displaying anger. Certainly these types o f problems make it difficult for an individual to get along with other s in a job setting. Id. Dr. Bradshaw also completed a “Medical Assessmentof Ability to do Work-Related Activities (Mental)” form, in which he rated Mr. Hill’s ability to relate to coworkers, deal with public, interact wi th supervisors, deal with work stresses, understand, remember and carry out comple x job instructions, maintain personal appearance, behave in an emotionally stabl e manner, relate predictably in social situations, and demonstrate reliability, as either “fair” or “poor.” Id. at 64- 65. Use of term “fair” (or “poor”) on this form i s evidence of disability. See Cruse v. United States Dep’t of Health & Human Serv s. , 49 F.3d 614, 618 (10th Cir. 1995). Dr. Bradshaw’s evidence, which was neither rejectednor refuted by the appeals council, meets Mr. Hill’s burden at step tw o. We must therefore remand-7-

for further proceedings in sequential analysis in light of Dr. Bradshaw’s findings. The judgment of the United States District Court fo r the District of New Mexico is REVERSED, and this case is REMANDED to th e district court with instructions to remand it to the Secretary for furt her proceedings.

Entered for the Court

G. Thomas Van Bebber District Judge