67370 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 411

RIN 0960–AF11

The Ticket to Work and SelfSufficiency Program

AGENCY: Social Security Administration

(SSA).

ACTION: Final rules.

SUMMARY: We are publishing final

regulations implementing the Ticket to

Work and Self-Sufficiency Program

(Ticket to Work program) authorized by

the Ticket to Work and Work Incentives

Improvement Act of 1999. The Ticket to

Work program provides beneficiaries

with disabilities with expanded options

for access to employment services,

vocational rehabilitation services, or

other support services. We will pay the

providers of those services after the

beneficiaries achieve certain levels of

work.

DATES: These regulations are effective

January 28, 2002.

FOR FURTHER INFORMATION CONTACT:

Georgia E. Myers, Regulations Officer,

Social Security Administration, 6401

Security Boulevard, Baltimore, MD

21235, E-mail to regulations@ssa.gov, or

telephone (410) 965–3632 or TTY (410)

966–5609 for information about these

regulations. For information on

eligibility or filing for benefits, call our

national toll-free number, 1–800–772–

1213 or TTY 1–800–325–0778, or visit

our Internet Web site, SSA Online, at

www.ssa.gov.

SUPPLEMENTARY INFORMATION:

Background

The National Organization on

Disability/Harris Survey of 1998 found

that only 29 percent of individuals with

disabilities were working full- or parttime. From calendar year 1986 to

calendar year 1999, the number of

individuals receiving disability benefits

rose 80 percent, with about half

receiving Social Security disability

benefits and half Supplemental Security

Income (SSI) benefits. Among the

factors contributing to this increase

were outreach efforts of the Social

Security Administration (SSA) and the

aging of the work force. The Federal

government spent $51.3 billion on

Social Security disability benefits in

calendar year 1999, and $22.9 billion on

SSI. Many States use State funds to

supplement the benefits of SSI

beneficiaries.

According to the U.S. General

Accounting Office, less than one percent

of Social Security disability and SSI

beneficiaries leave the Social Security

and SSI rolls each year as a result of

paid employment. Of those who leave,

about one-third return within three

years. If just one-half of one percent of

the current Social Security disability

and SSI beneficiaries were to cease

receiving benefits as a result of engaging

in self-supporting employment, savings

in cash benefits would total $3.5 billion

over the work-life of those individuals.

These final regulations are intended

to expand the options available for

Social Security disability beneficiaries

and disabled or blind SSI beneficiaries

to access vocational rehabilitation (VR)

services, employment services, and

other support services that are necessary

for such beneficiaries to obtain, regain

or maintain employment that reduces

their dependency on cash benefits. We

expect that the expansion of these

options and the creation of new work

incentives in the Ticket to Work and

Work Incentives Improvement Act of

1999 (Public Law 106–170) will remove

some of the disincentives that many

beneficiaries with disabilities face when

they attempt to work or, if already

working, continue working or increase

their work effort. If more beneficiaries

with disabilities engage in selfsupporting employment, the net result

will be a reduction in the Social

Security and SSI disability rolls and

savings to the Social Security Trust

Fund and general revenues.

Ticket to Work and Work Incentives

Improvement Act of 1999

On December 17, 1999, the Ticket to

Work and Work Incentives Improvement

Act of 1999 (Public Law 106–170)

became law.

In section 2(b) of Public Law 106–170,

the Congress states that this legislation

has the following four basic purposes:

—To provide health care and

employment preparation and

placement services to individuals

with disabilities that will enable those

individuals to reduce their

dependence on cash benefit programs.

—To encourage States to adopt the

option of allowing individuals with

disabilities to purchase Medicaid

coverage that is necessary to enable

such individuals to maintain

employment.

—To provide individuals with

disabilities the option of maintaining

Medicare coverage while working.

—To establish a ‘‘Ticket to Work and

Self-Sufficiency Program’’ that allows

Social Security disability and

disabled or blind SSI beneficiaries to

seek the employment services,

vocational rehabilitation services, and

other support services needed to

obtain, regain, or maintain

employment and reduce their

dependence on cash benefit programs.

Section 101(a) of Public Law 106–170

amended Part A of title XI of the Social

Security Act (the Act) by adding a new

section 1148, The Ticket to Work and

Self-Sufficiency Program (Ticket to

Work program). The purpose of the

Ticket to Work program is to expand the

universe of service providers available

to beneficiaries with disabilities who are

seeking employment services,

vocational rehabilitation services, and

other support services to assist them in

obtaining, regaining and maintaining

self-supporting employment.

The Social Security Administration is

required to develop the regulations

necessary to implement section 1148 of

the Act, as well as certain other

amendments to the Act made by Public

Law 106–170, and to provide details

regarding the Ticket to Work program.

Section 101(e) of Public Law 106–170

requires the Commissioner of Social

Security (the Commissioner) to

prescribe such regulations as are

necessary to implement the

amendments made by section 101. We

are prescribing these regulations to

address a number of areas where

specific policy decisions were left to the

discretion of the Commissioner.

Under the Ticket to Work program,

the Commissioner may issue tickets to

Social Security disability beneficiaries

and disabled and blind SSI

beneficiaries. Each beneficiary will have

the option of using his or her ticket to

obtain services from a provider known

as an employment network (EN). The

beneficiary will choose the EN, and the

EN will provide employment services,

vocational rehabilitation services, and

other support services to assist the

beneficiary in obtaining, regaining and

maintaining self-supporting

employment. ENs will also be able to

choose whom they serve. Beneficiaries

issued a ticket also will have the option

of taking the ticket to their State

vocational rehabilitation agency for

services.

The Commissioner’s intent in

publishing these final regulations for the

Ticket to Work program is to allow

service providers that have traditionally

provided employment services,

vocational rehabilitation services and

other support services, as well as other

types of entities, to qualify as ENs and

serve beneficiaries with disabilities

under the program. The expansion of

options available to obtain these

services will provide beneficiaries with

real choices in getting the services they

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67371

need to obtain, regain, or maintain

employment.

Public Education Forums and

Conferences

Immediately following passage of

Public Law 106–170, we began working

with the U.S. Departments of Health and

Human Services, Education, and Labor,

as well as the Presidential Task Force on

the Employment of Adults with

Disabilities, the President’s Committee

on Employment of People with

Disabilities, and the National Council

on Disability. These Federal partners

joined together to plan and conduct a

series of public education forums. The

purpose of the forums was to increase

the awareness of public disability

programs and programs designed to

help individuals with disabilities start

or return to work among individuals

with disabilities, their families and

representatives, service providers,

advocates and State agencies. The

forums focused on Federal and State

employment-related policies and

programs for people with disabilities.

Forums were held in eleven major

cities across the country. Those cities

were Baltimore, Maryland (December

12, 1999); Kansas City, Missouri

(February 2, 2000); Durham, North

Carolina (March 9, 2000); Phoenix,

Arizona (March 30, 2000); New York,

New York (April 6, 2000); Austin, Texas

(May 17, 2000); Seattle, Washington

(June 13, 2000); Worcester,

Massachusetts (June 26, 2000); Chicago,

Illinois (August 1, 2000); Harrisburg,

Pennsylvania (August 15, 2000); and

Denver, Colorado (September 13–14,

2000).

Representatives from many national

and community-based organizations

participated in these forums, including

the SSI Coalition, Virginia

Commonwealth University, Disability

Rights Education and Defense Fund, the

National Brain Injury Association,

Consortium for Citizens with

Disabilities, Robert Wood Johnson

Foundation, National Council on

Independent Living, Capstone Group, as

well as State representatives from the

Developmental Disabilities Councils,

the State Independent Living Councils,

and the Governors’ Committees on

Employment of People with Disabilities.

The forums provided participants

with both information and an

opportunity for discussion. Topics

included: SSA customer services and

work incentives; State health care

systems and models; and employment

initiatives of the Departments of

Education, Labor, and Health and

Human Services.

The forums were also used as an

opportunity to share information about

Public Law 106–170 and conduct

exploratory discussions about policy

issues relating to the implementation of

the provisions in the legislation that

were left to the Commissioner to

interpret. New models where State and

local systems are working together to

serve their common customers with

disabilities were highlighted.

SSA representatives were also

involved in meetings and conferences

on the national, regional, State, and

local levels. These included SSAsponsored forums in Chicago, San

Francisco, Dallas, Denver, and

Philadelphia conducted in January and

February 2000, which focused on the

Ticket to Work program. At these

meetings and conferences, SSA

representatives made presentations on

Public Law 106–170, facilitating

discussion and obtaining

recommendations that were considered

in developing the provisions of the

Ticket to Work program that were

addressed in our proposed rules.

SSA’s Programs for Rehabilitation

Services Prior to Implementation of the

Ticket to Work Program

In titles II and XVI of the Social

Security Act, Congress provided that we

promptly refer individuals applying for

or determined eligible for Social

Security disability benefits or SSI

benefits based on disability or blindness

to State vocational rehabilitation (VR)

agencies for necessary rehabilitation

services. Under the statute and by

regulations, if a State VR agency does

not serve a beneficiary whom we

referred, we may use other public or

private agencies, organizations,

institutions or individuals to provide

services. Under our regulations, these

other providers of services are known as

alternate participants. We are

authorized under the Act to pay State

VR agencies and alternate participants

for the reasonable and necessary costs of

services provided to Social Security

disability beneficiaries and disabled and

blind SSI beneficiaries under specific

circumstances. The most frequent

circumstance permitting payment under

the Act is when the services provided

result in the beneficiary performing

substantial gainful activity (SGA) for a

period of at least nine continuous

months. These programs for referral and

reimbursement for VR services are

provided for in sections 222(a) and (d)

and sections 1615(a), (d), and (e) of the

Act.

Section 101(b) of Public Law 106–170

makes a number of conforming

amendments to the Act, which require

amendments to existing regulations that

implement these statutory provisions.

As we gradually implement the Ticket

to Work program in States selected by

the Commissioner, the provisions of the

Act for referring beneficiaries to State

VR agencies will cease to be in effect in

those States as provided in sections

101(b), (c) and (d) of Public Law 106–

170. Additionally, the use of alternate

participants under the title II and title

XVI vocational rehabilitation

reimbursement programs will be phased

out in the States as the Ticket to Work

program is implemented, as authorized

under section 101(d)(5) of Public Law

106–170.

Section 101(b) of Public Law 106–170

also repealed sections 222(b) and

1615(c) of the Act, under which the

Commissioner was authorized to impose

sanctions (i.e. make deductions from

Social Security disability benefits or

suspend SSI benefits) with respect to

any beneficiary who refused, without

good cause, to accept rehabilitation

services made available by a State VR

agency or an alternate participant.

The proposed rules to implement

these statutory changes will be

published in the Federal Register at a

later date.

Section 101(b) of Public Law 106–170

also amends sections 225(b) and

1631(a)(6) of the Act under which SSA

is authorized to continue disability or

blindness benefit payments to

individuals who recover medically

while participating in a program of

vocational rehabilitation services

approved by the Commissioner if the

Commissioner determines that

continuation in or completion of the

program will increase the likelihood

that the individual will be permanently

removed from the disability or

blindness benefit rolls. Section 101(b) of

Public Law 106–170 amends these

sections of the Act by striking ‘‘a

program of vocational rehabilitation

services’’ and inserting ‘‘a program

consisting of the Ticket to Work and

Self-Sufficiency Program under section

1148 or another program of vocational

rehabilitation services, employment

services, or other support services’’. The

proposed rules to implement this

expanded definition will be published

in the Federal Register at a later date.

We will also publish at a later date in

the Federal Register the rules for

implementing section 112 of Public Law

106–170, Expedited Reinstatement of

Disability Benefits.

General Goals of the Ticket to Work

Program

The Ticket to Work program will

enhance the range of choices available

67372 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

to Social Security disability and

disabled and blind SSI beneficiaries

when they are seeking employment

services, VR services and other support

services to obtain, regain or maintain

self-supporting employment. The

coordinated and interrelated public

policy embodied in various provisions

of Public Law 106–170 will remove

several disincentives to employment

faced by beneficiaries with disabilities.

The Ticket to Work program will

increase beneficiaries’ access to public

and private providers to obtain

employment services, VR services, and

other support services. As a result, the

Ticket to Work program, together with

other provisions of Public Law 106–170,

should increase the number of

beneficiaries who increase their work

effort and leave the Social Security or

SSI disability rolls due to income from

employment.

In addition to providing the increased

opportunity for these beneficiaries to

obtain services when they seek

employment, Public Law 106–170 may

result in substantial savings for the

Federal government and State

governments. Not only should there be

an increase in the number of

beneficiaries leaving the Social Security

and SSI disability rolls due to work or

earnings, some individuals will secure

work with employers who offer group

health coverage, thereby reducing

Medicaid and Medicare expenses.

Earned income should also yield tax

receipts while reducing expenses in

Social Security disability and disabled

and blind SSI benefits, food stamps,

HUD housing rent subsidies, and certain

veterans benefits. Improved

employment rates of individuals with

disabilities should increase the

independence of such individuals and

strengthen our communities and

workforce.

Ticket to Work Program

Section 1148 of the Act, which was

added by section 101(a) of Public Law

106–170, directs the Commissioner of

Social Security to establish a Ticket to

Work and Self-Sufficiency Program.

Section 1148(b) of the Act authorizes

the Commissioner to issue a ticket to

disabled beneficiaries. Beneficiaries

may choose among public or private

service providers that have been

approved by SSA to function as ENs

under the program to obtain

employment services, vocational

rehabilitation services, or other support

services to assist them in obtaining,

regaining or maintaining employment

that will reduce their dependence on

cash benefits. Beneficiaries will also

have the option of choosing to obtain

services from their State VR agency. The

overall purpose of the Ticket to Work

program is to expand the universe of

options available to beneficiaries with

disabilities for obtaining such services.

Section 101(d) of Public Law 106–170

requires the Commissioner to

implement the Ticket to Work program

in graduated phases at phase-in sites

selected by the Commissioner. This is to

permit a thorough evaluation of the

program and ensure that the most

effective methods are in place for full

implementation of the program. This

section also provides that the Ticket to

Work program should be available in

every State not later than 2004.

SSA has decided that the Ticket to

Work program will be implemented in

the following manner:

During Phase I of the Ticket to Work

program, we will distribute tickets to

eligible beneficiaries in the following

States: Arizona, Colorado, Delaware,

Florida, Illinois, Iowa, Massachusetts,

New York, Oklahoma, Oregon, South

Carolina, Vermont and Wisconsin. We

intend to implement this phase upon

the effective date of these regulations.

During Phase II of the Ticket to Work

program, we will distribute tickets to

eligible beneficiaries in the following

States: Alaska, Arkansas, Connecticut,

Georgia, Indiana, Kansas, Kentucky,

Louisiana, Michigan, Mississippi,

Missouri, Montana, Nevada, New

Hampshire, New Jersey, New Mexico,

North Dakota, South Dakota, Tennessee,

Virginia and in the District of Columbia.

We intend to implement this phase in

calendar year 2002.

During Phase III of the Ticket to Work

program, we will distribute tickets to

eligible beneficiaries in the following

States: Alabama, California, Hawaii,

Idaho, Maine, Maryland, Minnesota,

Nebraska, North Carolina, Ohio,

Pennsylvania, Rhode Island, Texas,

Utah, Washington, West Virginia,

Wyoming, as well as in American

Samoa, Guam, the Northern Mariana

Islands, Puerto Rico and the Virgin

Islands. We intend to implement this

phase in calendar year 2003.

Section 1148(d)(1) of the Act

authorizes the Commissioner to conduct

a competitive bidding process and enter

into an agreement with one or more

organizations to serve as a Program

Manager (PM) to assist SSA in

administering the Ticket to Work

program.

The PM will recruit and recommend

for selection by the Commissioner ENs

for service under the program; monitor

all ENs serving in the geographic areas

covered under the PM’s agreement to

ensure that adequate choices of services

are made available to beneficiaries;

assure that payment by the

Commissioner to ENs is warranted;

facilitate access by beneficiaries to ENs;

ensure the availability of adequate

services; and ensure that sufficient ENs

are available and that each beneficiary

under the program has reasonable

access to employment services,

vocational rehabilitation services, and

other support services.

Section 1148(d)(4) of the Act directs

the Commissioner to select and enter

into agreements with service providers

that are willing to function as ENs and

assume responsibility for the

coordination and delivery of

employment services, vocational

rehabilitation services, and other

support services to beneficiaries with

disabilities under the Ticket to Work

program. A beneficiary with a ticket

may assign his or her ticket to any

provider that is serving as an EN under

the Ticket to Work program and is

willing to accept the assignment.

Beneficiaries who are issued a ticket

also will have the option of taking the

ticket to their State VR agency for

services.

Section 101(e) of Public Law 106–170

requires the Commissioner to prescribe

such regulations as are necessary to

implement the amendments made by

section 101 of this legislation. These

final regulations address those areas

which must be regulated in order to

implement the Ticket to Work program.

Additional regulations necessary for the

ongoing implementation of the program

will be published as proposed rules in

the Federal Register at a later date. For

example, proposed performance

measures to be used in conducting

periodic reviews as necessary to provide

for effective quality assurance in the

provision of services by ENs will need

to be developed and published in the

Federal Register for comment.

Notice of Proposed Rulemaking

We published a Notice of Proposed

Rulemaking (NPRM) in the Federal

Register on December 28, 2000 (65 FR

82844) proposing rules to implement

the Ticket to Work program. We

provided the public 60 days to submit

comments. The comment period closed

February 26, 2001. We received

comments from over 400 commenters.

We discuss the comments we received

on the NPRM and provide our responses

to the comments later in this preamble

under ‘‘Public Comments on the Notice

of Proposed Rulemaking.’’ A summary

of the public comments is available on

the Internet at the SSA Office of

Employment Support Programs’ Work

Site at http://www.ssa.gov/work.

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67373

As we explain below, in these final

regulations, we are making a number of

changes from the proposed rules in

response to public comments. As

suggested in a number of these

comments, we are also making other

changes in the interest of improved

clarity, consistency, and improved

organization.

Final Regulations

We are adding a new part 411 to

chapter III of title 20 of the Code of

Federal Regulations to provide the

regulations for the Ticket to Work

program. The new part 411 is divided

into the following subparts.

Subpart A—Introduction

Subpart A of these regulations

provides an introduction to the

regulations in the new part 411. Section

411.100 provides an overview of the

regulations in part 411. Section 411.105

describes the purpose of the Ticket to

Work program. Section 411.110 explains

that the Ticket to Work program will be

implemented in graduated phases in

sites around the country as required by

section 101(d) of Public Law 106–170.

Section 411.115 provides definitions of

terms used in part 411. In the final

rules, we have reorganized the

definitions of terms in § 411.115 to

place the terms in alphabetical order. In

final § 411.115(m) (proposed

§ 411.115(i)), we have clarified the

definition of State vocational

rehabilitation agency to indicate that in

those States that have one agency that

provides VR services to non-blind

individuals and another agency that

provides services to blind individuals,

the term ‘‘state vocational rehabilitation

agency’’ or ‘‘state VR agency’’ refers to

either State agency. In addition, we have

expanded § 411.115 in the final rules to

provide definitions of the terms

‘‘employment network’’ or ‘‘EN,’’

‘‘individual work plan’’ or ‘‘IWP,’’

‘‘individualized plan for employment’’

or ‘‘IPE,’’ ‘‘program manager’’ or ‘‘PM,’’

and ‘‘ticket.’’

Subpart B—Tickets Under the Ticket to

Work Program

Subpart B of these regulations

describes what a ticket is and explains

who is eligible to receive a ticket.

Section 411.120 explains that a ticket

is a document that provides evidence of

the Commissioner’s agreement to pay an

EN or State VR agency to which a

beneficiary’s ticket is assigned for

providing services to the beneficiary

under the Ticket to Work program if

certain conditions are met. As required

by section 101(e)(2)(B) of Public Law

No. 106–170, we have added a complete

description of the format and the

wording of the ticket to this section.

Section 411.125 states the following

requirements, among others, for

eligibility to receive a ticket: a title II

beneficiary must be age 18 to 64, and a

title XVI beneficiary must be age 18 to

64 and be eligible for disability

payments under the disability standard

for adults; a beneficiary must be in

current pay status for monthly cash

benefits based on disability under title

II of the Act or monthly Federal cash

benefits based on disability or blindness

under title XVI of the Act; and a

beneficiary’s case must either (1) have a

permanent impairment or a

nonpermanent impairment (i.e. an

impairment for which medical

improvement is possible but cannot be

predicted), or (2) have an impairment

that is expected to improve and have

undergone at least one continuing

disability review (CDR).

In developing requirements for ticket

eligibility under these regulations, we

considered, but decided not to extend

eligibility for a ticket to three additional

groups of individuals.

The first group consists of

beneficiaries who have impairments

that are expected to improve and for

whom we have not yet conducted at

least one continuing disability review.

Because these beneficiaries have

conditions that are expected to

medically improve in a relatively short

period of time, they could be expected

to return to work without the need for

services under the Ticket to Work

program. Continuing disability reviews

for this category of beneficiaries are

scheduled for 6–18 months after the

initial disability determination. Under

these rules, if we determine in the first

continuing disability review that the

beneficiary remains disabled, we would

then issue a ticket, provided that the

beneficiary met the other ticket

eligibility criteria. This approach would

ensure that beneficiaries whose

conditions do not improve as

anticipated have the opportunity to

benefit from services under the Ticket to

Work program within a relatively short

period of time after the initial

determination.

The second group consists of

individuals who have not attained age

18. Beneficiaries in this group generally

are in school, still pursuing completion

of their formal elementary and

secondary education. For this group,

participation in an employment plan

under the Ticket to Work program could

interfere with their pursuit of an

education, completion of which many

believe should be the primary focus and

goal for school-age youth.

The third group consists of those who

received title XVI payments prior to

attaining age 18 (i.e. under the disability

standard for children) and have since

attained age 18, but for whom we have

not yet conducted a redetermination of

their eligibility under the disability

standard for adults. Because ongoing

eligibility has not yet been determined

for these beneficiaries, we believe that it

is premature to issue a ticket to them

immediately. Under the final rules, if

we establish in the redetermination that

a beneficiary in this group is eligible for

disability payments under the disability

standard for adults, we would then

issue a ticket, provided that the

beneficiary met the other ticket

eligibility criteria.

We plan to review periodically our

policy regarding ticket eligibility,

including whether it would be prudent

to extend eligibility to the groups

discussed above. In addition, we are

interested in exploring various

approaches to assist youth under age 18

to transition to independence, further

education, and careers in the workforce.

Therefore, we are publishing a Notice

elsewhere in today’s Federal Register in

which we are seeking suggestions from

the public to assist us in designing for

beneficiaries in the second and third

groups an approach that could

complement the Ticket to Work

program.

In response to public comments, in

these final rules we have added

§ 411.125(c) to explicitly state that

individuals whose entitlement to title II

benefits based on disability is reinstated

under section 223(i) of the Act, or

whose eligibility for title XVI benefits

based on disability or blindness is

reinstated under section 1631(p) of the

Act, will be eligible to receive another

ticket in the first month he or she is

entitled to reinstated benefits, as long as

the beneficiary meets certain other

requirements for eligibility for a ticket.

Sections 223(i) and 1631(p) of the Act

were added by section 112 of Public

Law 106–170.

Section 411.130 explains that SSA

will distribute tickets in graduated

phases.

Section 411.135 explains that

participation in the Ticket to Work

program is voluntary. This section

explains that if beneficiaries want to

participate in the program, they may

take their tickets to any entity serving

under the program.

Section 411.140 explains that a

beneficiary may assign his or her ticket

to any EN or State VR agency that is

willing to provide services, and that the

67374 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

beneficiary may discuss his or her

rehabilitation and employment plans

with as many entities as he or she

wishes. This section explains that the

beneficiary can obtain a list of the

approved ENs in his or her area. This

section also explains certain

requirements that must be met in order

for a beneficiary to assign a ticket.

Section 411.140 provides that an

individual will be eligible to assign a

ticket to an EN or State VR agency only

during a month in which the individual

meets the requirements of

§ 411.125(a)(1) and (a)(2). In general,

this means the individual must be age

18–64 and must be either a title II

disability beneficiary in current pay

status who is not receiving benefit

payments under 20 CFR 404.316(c),

404.337(c), 404.352(d) or 404.1597a, or

a title XVI disability beneficiary whose

Federal SSI cash benefits are not

suspended and who is not receiving

disability or blindness benefit payments

under 20 CFR 416.996 or 416.1338.

Section 411.140 also provides that

beneficiaries and ENs must agree to and

sign an individual work plan (IWP) (or,

in the case of a State VR agency, an

individualized plan for employment

(IPE)) before a ticket can be assigned. In

response to public comments, in these

final rules we are revising § 411.140(a)

to indicate that individuals may assign

their ticket to a State VR agency if they

are eligible to receive VR services

according to 34 CFR 361.42. We are

making a similar change to § 411.150

regarding reassignment of a ticket to a

State VR agency. Also in response to

comments, we are revising §§ 411.140

and 411.150 to indicate that a

representative of the State VR agency

must agree to and sign the IPE. We also

have modified §§ 411.140 and 411.150

of the final rules to provide that in order

for a ticket to be assigned or reassigned

to a State VR agency, the beneficiary

and a representative of the State VR

agency must agree to and sign both an

IPE and a form that provides the

information described in § 411.385(a)(1),

(2) and (3) of these final regulations.

We are also making changes to

§ 411.140(d) and (e) and § 411.150(b)

and (c) in these final rules to clarify that

a copy of the signed IWP developed by

the beneficiary and the EN, or the

completed and signed form required for

assignment or reassignment of a ticket to

a State VR agency under § 411.385(a)

and (b), must be submitted to and

received by the PM in order for a ticket

to be assigned or reassigned to the EN

or State VR agency. If the IWP or

required form has been submitted to and

received by the PM, and if the other

requirements for assignment or

reassignment of a ticket are met, we will

consider the ticket assigned or

reassigned to the EN or State VR agency,

effective as of the first day on which

such other requirements are satisfied.

Section 411.145 describes the

conditions under which a beneficiary

may take a ticket back after it has been

assigned to an EN or State VR agency.

It also describes other conditions under

which a ticket that is assigned can be

taken out of assignment. In response to

public comments, we are revising

§ 411.145(b) to state that a State VR

agency may ask the PM to take a ticket

out of assignment if the State VR agency

stops providing services because the

individual has been determined to be

ineligible for VR services under 34 CFR

361.42, and to provide a cross-reference

to the reassignment rules in § 411.150.

Section 411.150 explains the

beneficiary’s right to reassign a ticket, if

the beneficiary chooses. In response to

public comments, we have revised

§ 411.150(b) to state that the beneficiary

and a representative of the State VR

agency must agree to and sign an

Individualized Plan for Employment if

the beneficiary wishes to reassign his or

her ticket to a State VR agency. Also, as

discussed above, we have modified this

provision in the final rules to provide

that in order for a ticket to be reassigned

to a State VR agency, the beneficiary

and a representative of the State VR

agency must agree to and sign both an

IPE and a form that provides the

information described in § 411.385(a)(1),

(2) and (3). We also are modifying

§ 411.150(b) to clarify that one of the

conditions for reassigning a ticket is that

the ticket must be unassigned. We

explain that if the ticket currently is

assigned to an EN or State VR agency,

the beneficiary must first tell the PM in

writing that he or she wants to take the

ticket out of assignment as provided

under § 411.145. In addition, as written,

proposed § 411.150(b)(2) potentially

could have prevented certain

individuals who were working with ENs

or State VR agencies from reassigning

their ticket, thus unnecessarily limiting

their ability to take full advantage of the

provisions of the Ticket to Work

program.

Accordingly, we have modified the

requirements in § 411.150(b) to provide

exceptions to the general rule that in

order to reassign a ticket, an individual

must be age 18–64 and either a title II

disability beneficiary in current pay

status or a title XVI disability

beneficiary whose Federal SSI cash

benefits are not suspended. Final

§ 411.150(b)(3) provides that an

individual does not have to satisfy these

requirements if the individual and a

representative of the new EN sign an

IWP, or if the individual and a

representative of the State VR agency

sign both an IPE and the required form,

within certain time periods. The time

periods begin from the effective date on

which the ticket was no longer assigned

to the previous EN or State VR agency.

The applicable time period depends on

whether the individual’s ticket is or is

not in use under the rules in § 411.170

et seq. For an individual whose ticket is

not in use, the specified time period is

30 days from the effective date the ticket

no longer was assigned to the previous

EN or State VR agency. For an

individual whose ticket is in use, the

specified time period is the three-month

period that begins with the first month

the ticket no longer was assigned to the

previous EN or State VR agency. This

three-month period is the extension

period described in § 411.220.

The requirements that an individual

be age 18–64 and be either a title II

disability beneficiary in current pay

status or a title XVI disability

beneficiary whose Federal SSI cash

benefits are not suspended are two of

the basic requirements specified in

§ 411.125(a)(1) and (2) which an

individual must meet in order to be

eligible to receive a ticket under that

section. In these final rules, an

individual must meet these same

requirements in order to be eligible to

reassign a ticket under § 411.150, unless

one of the conditions specified in

§ 411.150(b)(3) is met.

In addition, final § 411.150(a)

provides that an individual will not be

eligible to reassign a ticket if he or she

is receiving title II disability benefits

under 20 CFR 404.316(c), 404.337(c),

404.352(d) or 404.1597a, or is receiving

title XVI disability or blindness benefit

payments under 20 CFR 416.996 or

416.1338. This rule was reflected in

proposed § 411.150(b)(2). We are

retaining this rule in final § 411.150(a).

This rule applies regardless of whether

one of the conditions specified in

§ 411.150(b)(3) is met.

Other changes which we are making

in final § 411.150(b) and (c) are

explained above in our discussion of the

revisions to § 411.140. Because of these

changes, proposed § 411.150(d) is

deleted in these final rules.

Section 411.155 explains when a

beneficiary’s ticket terminates and

eligibility for participation in the Ticket

to Work program ends. Once a ticket

terminates, a beneficiary may not assign

or reassign it to an EN or State VR

agency. Under these regulations, a ticket

will terminate when: (1) entitlement to

Social Security disability benefits ends

for reasons other than the individual’s

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67375

work activity or earnings, or when

eligibility for SSI benefits based on

disability or blindness terminates for

reasons other than the individual’s work

activity or earnings, whichever is later;

(2) a Social Security disabled widow(er)

beneficiary attains age 65; or (3) a

disabled or blind SSI beneficiary

reaches age 65 and may qualify for SSI

benefits based on age.

In order to provide clarity regarding

all of the circumstances under which a

ticket will terminate and an individual’s

eligibility for participation in the Ticket

to Work program ends, we also are

expanding § 411.155 to add a

description of the events that terminate

the ticket after the beneficiary’s

entitlement to title II benefits based on

disability or eligibility for title XVI

benefits based on disability or blindness

terminated because of work or earnings.

After such termination of entitlement or

eligibility (and, in the case of a

concurrent title II/title XVI disability

beneficiary, the termination of

entitlement/eligibility under the other

program), a ticket will terminate in any

of the following months: (1) the month

we make a final determination or

decision that an individual is not

entitled to have title II benefits based on

disability reinstated under section 223(i)

of the Act or not eligible to have title

XVI benefits based on disability or

blindness reinstated under section

1631(p) of the Act; (2) the month in

which we make a final determination or

decision that an individual is not

entitled to title II benefits based on

disability or eligible for title XVI

benefits based on disability or blindness

based on the filing of an application for

benefits; (3) the month in which a

beneficiary reaches retirement age (as

defined in section 216(l) of the Act); (4)

the month in which the beneficiary dies;

(5) the month in which a beneficiary

becomes entitled to a title II benefit that

is not based on disability or eligible for

a title XVI benefit that is not based on

disability or blindness; and (6) the

month in which the beneficiary again

becomes entitled to title II benefits

based on disability, or eligible for title

XVI benefits based on disability or

blindness, based on filing a new

application.

In addition, consistent with the

modification to § 411.125, we are

modifying § 411.155 to indicate that

when a beneficiary is eligible to receive

another ticket as a result of benefit

reinstatement under section 223(i) or

1631(p) of the Act, the ticket that the

beneficiary received in connection with

the previous period of entitlement or

eligibility will terminate in the month

the beneficiary is eligible for the new

ticket.

We have deleted reference to payment

of 60 outcome payments to an EN that

was described in proposed § 411.155(d),

since this event properly refers to the

period of using a ticket (see § 411.171(d)

and (e)).

Subpart C—Suspension of Continuing

Disability Reviews for Beneficiaries

Who Are Using a Ticket

Under section 221(i) of the Act and

under the authority granted by sections

1631 and 1633 of the Act, we conduct

periodic reviews to ensure that

beneficiaries continue to meet the

definition of disability under sections

223(d) and 1614(a) of the Act. These

reviews are called continuing disability

reviews (CDRs). Public Law 106–170

amends the Act to add section 1148(i),

which states that SSA may not initiate

a CDR during any period in which a

beneficiary is using a ticket. The statute

states:

‘‘During any period for which an

individual is using, as defined by the

Commissioner, a ticket to work and selfsufficiency issued under this section,

the Commissioner (and any applicable

State agency) may not initiate a

continuing disability review or other

review under section 221 of whether the

individual is or is not under a disability

or a review under title XVI similar to

any such review under section 221.’’

The definition of using a ticket is to

be determined by the Commissioner of

Social Security. Subpart C outlines our

definition of using a ticket.

In developing our definition of using

a ticket, we considered two key factors.

First, the intent of the Ticket to Work

program is to allow beneficiaries with

disabilities to seek the services they

need to work and to reduce or eliminate

dependence on Social Security

disability and SSI benefits. However,

anecdotal evidence suggests that some

beneficiaries are afraid that working, or

even receiving vocational rehabilitation

services, may increase the likelihood

that their benefits will be terminated by

a CDR. Therefore, using a ticket should

be defined in a way that minimizes this

employment disincentive for

beneficiaries participating in the Ticket

to Work program. In order to maintain

the integrity of the disability programs,

it is also important that beneficiaries

who have medically improved and who

no longer meet the definition of

disability under sections 223(d) and

1614(a)(3) of the Act do not continue to

receive disability benefits for an undue

length of time.

Our definition seeks to balance these

concerns by ensuring that CDRs are

suspended only during the period in

which beneficiaries are making timely

progress toward reducing or eliminating

dependence on Social Security

disability or SSI benefits, while at the

same time recognizing that progress

toward that goal may not always be

rapid or continuous.

Under our definition of using a ticket,

a beneficiary will be considered to be

using a ticket during the period in

which he or she was making progress

toward the goal of reducing or

eliminating dependence on disability

benefits within reasonable time frames.

Under this approach, beneficiaries will

be allowed a limited period to prepare

for work. At the end of this period, they

will need to show that they were

progressing toward self-sufficiency by

demonstrating increasing levels of

employment.

An important advantage of this

definition of using a ticket is that it

increases employment incentives by

‘‘rewarding’’ beneficiaries who work

and progress toward self-sufficiency

with continued suspension of CDRs.

However, requiring beneficiaries to

demonstrate increasing levels of

employment within a defined time

frame results in a fairly complex

regulation. The complexity arises from

our attempt to balance the concerns

discussed above and, to the extent

possible, to accommodate the diverse

employment needs of a wide range of

beneficiaries. While some level of

complexity is unavoidable, we have

attempted wherever possible to simplify

the regulation and to make it

straightforward to implement.

Based on the comments that we

received regarding the complexity and

difficulty of this subpart, we are revising

and reorganizing the content to increase

clarity wherever possible.

Sections 411.160 and 411.165

introduce this subpart. In response to a

comment on proposed § 411.160 noting

a confusion in the use of the term

‘‘continuing disability review’’ for both

medical and work reviews, we are

clarifying the language in paragraph (b)

to reference our rules on when we may

conduct a CDR to determine whether an

individual remains eligible for

disability-based benefits. In response to

recommendations that we clarify

proposed § 411.165 to explain when the

period of using a ticket begins and ends,

we are expanding § 411.165 to include

cross-references to §§ 411.170 and

411.171.

We are adding § 411.166 in response

to comments on our proposed rules

regarding the use of new terms. This

67376 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

section provides a glossary of the

following terms: ‘‘active participation in

your employment plan,’’ ‘‘extension

period,’’ ‘‘inactive status,’’ ‘‘initial 24-

month period,’’ ‘‘progress review,’’

‘‘timely progress guidelines,’’ ‘‘12-

month progress review period,’’ and

‘‘using a ticket.’’

In our proposed rules, we used the

terms ‘‘work review’’ or ‘‘work review

period’’ when referring to the

requirements for making timely progress

toward self-supporting employment. In

response to comments that these terms

caused confusion with existing terms

used to describe ‘‘work CDR,’’ we are

now referring to ‘‘progress review’’ or

‘‘progress review period,’’ which are

included in the glossary of terms in

§ 411.166.

Sections 411.170 and 411.171

describe when the period of using a

ticket begins and ends. The period of

using a ticket begins when the ticket is

first assigned to an EN or State VR

agency. The primary purpose of the

suspension of CDRs is to ensure that

Ticket to Work program participants are

not inhibited in their attempts to work

or pursue an employment plan by the

fear that such activities will increase the

likelihood that their benefits will be

terminated in a medical review. Prior to

the assignment of the ticket, a

beneficiary is not participating in these

activities under the Ticket to Work

program.

We are revising § 411.171 to clarify

that the period of using a ticket ends

with the earliest of the following (1) the

occurrence of one of the events listed in

§ 411.155, which describes the events

that will result in termination of the

ticket; (2) when the beneficiary is

determined to be no longer making

timely progress toward self-supporting

employment according to our guidelines

(see §§ 411.180 through 411.200); (3)

when the extension period expires if the

beneficiary has not reassigned the ticket

within the period; or (4) when we have

made 60 outcome payments to an EN,

including a State VR agency functioning

as an EN, under subpart H. In instances

where the beneficiary assigned a ticket

to a State VR agency which selected the

cost reimbursement payment system,

the period of using a ticket also will end

with the 60th month for which an

outcome payment would have been

made had the State VR agency chosen

to function as an EN with respect to the

beneficiary.

Section 411.175 describes our rules

when a beneficiary assigns a ticket after

a CDR has begun. A beneficiary may

assign the ticket and receive services

under the Ticket to Work program. We

will, however, complete the CDR.

Sections 411.180, 411.185, 411.190

and 411.191 describe our guidelines for

timely progress toward self-supporting

employment.

After assigning a ticket, beneficiaries

will be allowed up to two years to

prepare for employment. This two-year

period is referred to in the final rules as

the initial 24-month period. After two

years, we will consider that

beneficiaries are continuing to use a

ticket, and are therefore eligible to

receive the protection in Section 1148(i)

of the Act regarding non-initiation of

CDRs, if they work at progressively

higher levels of employment. Such a

progression would allow beneficiaries

time to improve their employment

capacities.

We are reordering certain paragraphs

in § 411.180 to provide a more

appropriate placement for the

definitions of terms we use to describe

the guidelines we use to determine if an

individual is making timely progress

toward self-supporting employment. We

are also clarifying that, for purposes of

counting the 24 months comprising the

initial 24-month period, we will not

count any month in which the ticket is

not assigned or not in use.

Under our timely progress guidelines,

in the 24-month progress review

conducted by the PM, beneficiaries

must demonstrate that their

employment plan has a goal of at least

three months of work, as defined in

§ 411.185, by the time of the first 12-

month progress review. The PM also

must find that beneficiaries can

reasonably be expected to reach this

goal. In response to public comments,

we are revising § 411.180(c)(1) to allow

beneficiaries to use months worked

during the initial 24-month period to

meet these requirements of the 24-

month progress review, as long as the

work was at the level applicable to the

work requirements for the first 12-

month progress review period under

§ 411.185. In the third year of

participation in the Ticket to Work

program (referred to in the final rules as

the first 12-month progress review

period), beneficiaries would be required

to work at least three months at a

specified level. In response to public

comment, we are revising

§ 411.180(c)(2) to allow beneficiaries to

use months worked during the initial

24-month period to meet this

requirement as well, as long as the work

was at the required level as described in

§ 411.185. We are revising

§ 411.185(a)(1), (b)(1) and (c)(1) to

reference the rules in § 411.180(c)(1)

and (c)(2) on when months of work

performed during the initial 24-month

period may be used to meet certain

requirements of the 24-month progress

review and the work requirements of the

first 12-month progress review period.

In the fourth year of participation in

the program, beneficiaries will be

required to work at least six months at

the SGA level. In the fifth and

succeeding years, in order to be

considered to be using a ticket, they will

be required to work at least six months

in each year and have earnings in each

such month that are sufficient to

eliminate the payment of Social

Security disability benefits and Federal

SSI benefits.

In developing these guidelines, we

recognized that progress toward selfsufficiency is not always continuous,

and some beneficiaries may not attain

full self-sufficiency. Many beneficiaries

have disabilities with cycles of relapse

and remission. In addition, some

beneficiaries may need to try more than

one job before finding a situation that

suits their abilities and needs. The

requirement that beneficiaries need only

work three months out of 12 in the third

year and six months out of 12 in

succeeding years recognizes that some

beneficiaries may not be able to work on

a continuous basis.

Section 411.185 provides levels of

earnings that an individual must have in

order to be considered to be using a

ticket. It defines when an individual

will be considered to be working for

purposes of meeting the timely progress

guidelines. Under this definition, the

required earnings level will increase

over time. In the third and fourth years

of participation in the Ticket to Work

program (i.e. the first and second 12-

month progress review periods), both

Social Security disability beneficiaries

and concurrent Social Security and SSI

beneficiaries will be required to work at

the SGA level applicable to non-blind

beneficiaries for the specified number of

months. This means that the beneficiary

must have monthly earnings from

employment or self-employment, after

any applicable deductions under 20

CFR 404.1572 through 404.1576, that

are more than the SGA threshold

amount for non-blind beneficiaries.

The SGA threshold amount is set by

regulation under 20 CFR 404.1574(b)(2),

and is currently $740 a month for nonblind beneficiaries. Social Security

disability beneficiaries, including

concurrent Social Security and SSI

beneficiaries, who are in a trial work

period or who are statutorily blind will

be deemed to have met the requirement

to work at the SGA level applicable to

non-blind beneficiaries if their gross

earnings from employment, before any

exclusions, are more than the SGA

threshold amount for non-blind

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67377

beneficiaries, or if their net earnings

from self-employment, before any

exclusions, are more than the SGA

threshold amount for non-blind

beneficiaries.

Under the definition of work for

purposes of the first and second 12-

month progress review periods, SSI

disability and blindness beneficiaries

will be considered to be working in a

month in which the beneficiary has

gross earnings from employment, before

any exclusions, that are more than the

SGA threshold amount for non-blind

beneficiaries, or has net earnings from

self-employment, before any exclusions,

that are more than the SGA threshold

amount for non-blind beneficiaries.

Earnings at the levels established in

§ 411.185 for the third and fourth years

of participation in the program may not

be sufficient to eliminate the payment of

all disability benefits. The amount of

earnings needed to eliminate the

payment of disability benefits depends

on a variety of factors, including

whether the beneficiary receives Social

Security or SSI benefits, or both,

whether the beneficiary is blind, and

whether the beneficiary has

impairment-related work expenses or is

eligible for other income exclusions.

The earnings requirement for the third

and fourth years are set at levels that

allow beneficiaries time to work toward

the higher levels of earnings that may be

required to eliminate the payment of

disability benefits for the required

months in subsequent years of program

participation.

In the fifth and subsequent years of

participation in the program, both

Social Security and SSI beneficiaries

will be required to work for at least six

months with earnings in each such

month that are sufficient to eliminate

payment of Social Security disability

and Federal SSI cash benefits in a

month. The requirement that

individuals using a ticket eventually

attain this level of earnings is consistent

with the payment structure of the Ticket

to Work program, in which ENs receive

outcome payments only when Federal

disability benefit payments are

eliminated. It also reflects that one of

the purposes of the Ticket to Work

program is to produce savings in benefit

payments. Since the suspension of CDRs

for individuals using a ticket means that

it is possible that some beneficiaries

who no longer meet the definition of

disability will continue to be eligible for

benefits, it is important that the

suspension of CDRs not continue for an

undue length of time without a

significant reduction in benefit

payments due to earnings.

In § 411.190, we discuss how it will

be determined if a beneficiary is

meeting the timely progress guidelines.

To place the rules in a more logical

order according to the sequence of

events and actions they discuss, we are

expanding § 411.190 to incorporate the

rules for placing a ticket in inactive

status, as well as other rules relating to

the initial 24-month period, that were

previously set out in proposed

§§ 411.192 and 411.220. (In the final

rules, § 411.192 has been deleted, and

proposed § 411.225 has been

redesignated § 411.220.) During the

initial 24-month period following

assignment of a ticket, the PM will give

beneficiaries the option of placing the

ticket in inactive status if they are

unable to participate in their

employment plan for a significant

period of time for any reason.

Beneficiaries may decide to exercise this

option because any months during

which the ticket is in inactive status

will not count toward the time

limitations (i.e. the initial 24-month

period) under the timely progress

guidelines. The PM will explain,

however, that since the ticket will not

be in use during the period in which it

is in inactive status, the beneficiary will

be subject to a CDR, should one become

due.

A beneficiary will be subject to

initiation of a CDR during any period for

which the beneficiary’s ticket is

considered to be not in use. A ticket is

considered to be not in use during any

month during which the ticket is in

inactive status as described in § 411.190

or during which the ticket is unassigned

following the close of the three-month

extension period described in § 411.220.

A ticket also is considered to be not in

use after the period of using a ticket

ends as described in § 411.171.

We are modifying the summary table

in § 411.191 to reflect the rule we are

adding to § 411.180(c)(2) which will

allow beneficiaries to use months

worked during the initial 24-month

period to meet the work requirements of

the first 12-month progress review if the

work was at the requisite level. We also

are making changes to the table in these

final rules to clarify certain entries in

the table, to reflect changes we are

making to other sections of the final

rules in subpart C, and to provide a

more accurate description of the level of

earnings required for SSI-only

beneficiaries during the first and second

12-month progress review periods.

In §§ 411.195, 411.200 and 411.205,

we discuss how the PM will conduct

periodic progress reviews to ensure that

beneficiaries are meeting the timely

progress guidelines. The first review

will be a 24-month progress review

occurring at the end of the initial 24-

month period. This will be followed by

12-month progress reviews. After

successfully completing a progress

review, the beneficiary will be

considered to be meeting the timely

progress guidelines until the next

review is completed. If a beneficiary

disagrees with the PM’s decision in any

review, the beneficiary will have the

right to ask SSA to review the PM’s

decision. The Commissioner or the

Commissioner’s designee will review

the decision. The criteria for the 24-

month progress review and the 12-

month progress reviews are designed to

be as clear-cut as possible. This feature,

combined with the PM’s responsibility

for conducting the reviews should allow

for rapid processing of reviews and

decrease the administrative burden on

both the beneficiary and SSA.

In response to public comments, we

are adding a sentence to § 411.195(a)(1)

to indicate that the activities outlined in

the employment plan during the initial

24-month period may include

employment.

In § 411.210, we explain that a

determination that a beneficiary is not

making timely progress toward selfsupporting employment will result in

our finding that the beneficiary no

longer is using a ticket. The beneficiary

would be allowed to continue in the

Ticket to Work program, and the

beneficiary’s EN or State VR agency

would be eligible for any payments that

became due. In response to public

comments, we are modifying

§ 411.210(a) to indicate that these

payments would include not just

outcome payments, but also milestone

payments (or, for a State VR agency

electing payment under the cost

reimbursement payment system,

payments under the cost reimbursement

payment system) for which the ENs or

State VR agencies are eligible. These

beneficiaries, however, would once

again be subject to CDRs.

This section also provides that a

beneficiary who fails to meet the timely

progress guidelines will have the

opportunity to be considered to be using

a ticket later if the beneficiary actively

participates in the employment plan or

works for a specified number of months.

The requirements which a beneficiary

must meet in order to re-enter in-use

status (including the number of months,

type of participation, and earnings level

required) vary depending on how far the

beneficiary had progressed when he or

she failed to meet the timely progress

guidelines.

We are providing this method of

allowing a beneficiary to be considered

67378 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

again to be using a ticket because, as

previously stated, we recognize that due

to the nature of disability, progress

toward increased self-sufficiency is not

always direct. Beneficiaries may make

unsuccessful attempts before reaching

their employment goals, and these

unsuccessful attempts should not

deprive them of the supports that they

need to make renewed efforts.

In response to a public comment, we

are adding a new § 411.210(b)(1) to

provide that a beneficiary who fails to

meet the timely progress guidelines

during the initial 24-month period may

re-enter in-use status by demonstrating

three consecutive months of active

participation in the employment plan.

This new provision is more consistent

with the requirements of active

participation during this period under

the timely progress guidelines under

§ 411.190(a). In new § 411.210(b)(1)(iii)

we explain that for a beneficiary who is

reinstated to in-use status after having

failed to meet the timely progress

guidelines during the initial 24-month

period, the next review will be the 24-

month progress review. We also have

added a new § 411.210(b)(2) to provide

a separate provision on re-entering inuse status for a beneficiary who failed

to meet the timely progress guidelines

in the 24-month progress review. In new

§ 411.210(b)(2)(i), we explain that,

consistent with the proposed rules, a

beneficiary who fails to meet the timely

progress guidelines in the 24-month

progress review may re-enter in-use

status by completing three months of

work (as defined in § 411.185(a)(1),

(b)(1) or (c)(1)) within a rolling 12-

month period. We have modified this

provision (which was formerly a part of

proposed § 411.210(b)(1)) to provide

that the beneficiary also must satisfy the

test of § 411.200(a)(2) regarding the

anticipated level of the beneficiary’s

work during the ensuing 12-month

progress review period that would begin

if the beneficiary were reinstated to inuse status. We also clarify in new

§ 411.210(b)(2)(i) and (iii) that the work

requirements for this 12-month progress

review period will be the work

requirements that are applicable during

the second 12-month progress review

period.

To accommodate new § 411.210(b)(1)

and (b)(2), we have renumbered the

remaining numbered paragraphs that

were included under proposed

§ 411.210(b). In § 411.210(b)(3), (b)(4)

and (b)(5) of the final rules, we have

added provisions to the rules on reentering in-use status to provide that, in

addition to completing the work

requirements, the beneficiary also must

satisfy the test of § 411.200(a)(2)

regarding the anticipated level of the

beneficiary’s work during the ensuing

12-month progress review period that

would begin if the beneficiary were

reinstated to in-use status. This change

is consistent with the two-step process

for the 12-month progress reviews under

§ 411.200(a).

For further clarification of the process

of re-entering in-use status, we are

adding § 411.210(c), and revising

§ 411.210(b), to describe the process for

requesting reinstatement to in-use

status, to explain that the PM will

decide whether the beneficiary has

satisfied the requirements for reentering in-use status, and to provide

that a beneficiary may ask us to review

the PM’s decision that the beneficiary

has not satisfied the requirements for reentering in-use status. These sections

explain that a beneficiary must submit

a written request to the PM asking that

he or she be reinstated to in-use status.

If the PM decides that the beneficiary

has not satisfied the requirements for reentering in-use status, the beneficiary

may request that we review the

decision.

Final § 411.220 was § 411.225 in the

proposed rules. Final § 411.220 explains

that beneficiaries who are using a ticket

are eligible for an extension period of up

to three months to reassign a ticket that

previously was assigned to an EN or

State VR agency and no longer is

assigned. We have revised this section

to indicate that the ticket must be in use

for the beneficiary to be eligible for the

extension period. During this period, we

will consider that the ticket still is in

use, and the beneficiary will not be

subject to CDRs. In response to public

comments, we are modifying this

section to show the beneficiary’s

moving to an area not served by the

previous EN or State VR agency as a

reason the ticket may no longer be

assigned. We also have explained in

§ 411.220(e) of the final rules that a

beneficiary whose extension period

began during the initial 24-month

period will have a new initial 24-month

period when the beneficiary reassigns a

ticket during the extension period to an

EN or State VR agency, other than the

one to which the ticket previously was

assigned.

We are adding a new § 411.225 to

describe the circumstance of a

beneficiary reassigning a ticket after the

end of the extension period. This

section concerns a situation that was not

discussed in the proposed rules. This

section explains that a beneficiary may

reassign a ticket after the end of the

extension period under the conditions

described in § 411.150. Section

411.225(c) explains that if the extension

period began during the initial 24-

month period, a beneficiary will have a

new initial 24-month period when the

beneficiary reassigns a ticket to an EN

or State VR agency, other than the one

to which the ticket previously was

assigned. The reason for providing a

new initial 24-month period at this time

is because the beneficiary may have to

reassign his or her ticket due to no fault

of his or her own. For example, the EN

may have gone out of business or be no

longer approved to participate in the

Ticket to Work program, or the

beneficiary may have to relocate or may

have a relapse in his or her medical

condition. Section 411.225(d) explains

that if the extension period began

during any 12-month progress review

period, the period comprising the

remaining months in that review period

will begin with the first month

beginning after the day on which

reassignment of the ticket is effective.

Subpart D—Use of One or More

Program Managers To Assist in

Administration of the Ticket To Work

Program

Section 1148(d)(1) of the Act requires

the Commissioner to enter into an

agreement with one or more

organizations to serve as a PM to assist

the Commissioner in administering the

Ticket to Work program. Section

101(e)(2)(E) of Public Law 106–170

identified specific regulations that SSA

must promulgate regarding the terms of

the agreements to be entered into with

a PM. Three items are specifically

required:

(1) the terms by which a PM would be

precluded from direct participation in

the delivery of services;

(2) standards which must be met by

quality assurance measures and

methods of recruitment of ENs; and

(3) the format under which dispute

resolution will operate under section

1148(d)(7) of the Act.

Among other things, section

1148(d)(7) requires the Commissioner to

provide a mechanism for resolving

disputes between PMs and ENs, and

between PMs and providers of services.

Subpart D of these regulations

explains that SSA will contract with one

or more organizations to serve as a PM

and assist SSA in administering the

Ticket to Work program.

Section 411.230 explains that SSA

will conduct a competitive bidding

process to select one or more private

organizations to perform the PM’s

functions.

Section 411.235 describes the

minimum qualifications required of a

PM.

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Section 411.240 describes certain

limitations that are placed on a PM

regarding the direct provision of

services under the Ticket to Work

program.

Section 411.245 identifies key

responsibilities that a PM must assume

to assist SSA in administering the

program, including ensuring that

information provided to beneficiaries is

in alternate formats, meaning media

appropriate to beneficiaries’

impairments. We are revising paragraph

(b)(2) of § 411.245 to remove the word

‘‘medical’’ from the term ‘‘medical

impairment’’ used in defining

‘‘accessible format,’’ as recommended

by one commenter, because not all

impairments are medical. We are also

revising paragraph (c)(2) of § 411.245, as

recommended by a number of

commenters, to make it clear that the

PM will be responsible for making

determinations regarding the allocation

of outcome or milestone payments when

the beneficiary has been served by more

than one EN.

Section 411.250 explains how SSA

will evaluate a PM.

Subpart E—Employment Networks

Section 1148(d)(4)(A) of the Act

requires the Commissioner to select and

enter into agreements with ENs to

provide services under the Ticket to

Work program. Section 1148(f)(1)(A)

states that each EN serving under the

Ticket to Work program shall consist of

an agency or instrumentality of a State

(or a political subdivision thereof) or a

private entity that assumes

responsibility for the coordination and

delivery of services under the program

to beneficiaries assigning tickets to it.

These ENs are in addition to State

agencies administering or supervising

the administration of the State plan

approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), known as State

VR agencies, that will also be serving

beneficiaries with disabilities under the

Ticket to Work program. State VR

agencies will have the option of serving

beneficiaries with tickets either as an

EN (that is, to be paid under one of the

EN payment systems described in

subpart H of these regulations) or under

the existing cost reimbursement

payment system authorized in sections

222(d) and 1615(d) of the Act. The

Commissioner is also directed to enter

into an agreement with any alternate

participant operating under the

authority of section 222(d)(2) of the Act

in any State where the Ticket to Work

program is being implemented if the

alternate participant chooses to serve as

an EN. An EN may consist of a one-stop

delivery system established under

subtitle B of title I of the Workforce

Investment Act of 1998 (29 U.S.C. 2811

et seq.).

Section 1148(f) of the Act requires

that entities seeking to participate in the

Ticket to Work program as ENs meet

certain qualifications. The

Commissioner has discretion in

determining the qualifications that an

entity must meet to be approved to serve

as an EN. We are providing

requirements for ENs that are not

unduly burdensome and that are

intended to permit both traditional as

well as other types of entities to qualify.

The Commissioner’s intent is to ensure

that non-traditional service providers

are not prohibited from being approved

as ENs, while still requiring evidence

that all ENs meet certain minimum

qualifications such as licensure,

accreditation, academic qualifications,

or experience. This inclusive approach

is critically important to ensure that

beneficiaries with disabilities have a

real choice in services necessary to

obtain, regain and maintain

employment.

Section 1148(f) of the Act also

addresses requirements for ENs under

the Ticket to Work program. It requires

each EN to serve a prescribed service

area and ensure that employment

services, VR services, and other support

services are provided under appropriate

IWPs.

Sections 411.300 and 411.305 of these

regulations explain what an EN is and

what entities are eligible to apply to

serve as ENs.

Section 411.310 explains how public

or private entities will apply to us to be

approved as ENs and how we will

determine whether an entity qualifies to

be an EN. We are changing the heading

of § 411.310 to make it clear that this

section is not applicable to State VR

agencies and that State VR agencies do

not apply to be ENs.

We are revising the first sentence of

§ 411.310(a) to make it clear that a State

VR agency does not have to respond to

our request for proposals (RFP) to

function as an EN.

We are adding paragraph (c) to this

section to § 411.310 to provide a crossreference to § 411.360 on how a State

VR agency begins to participate as an

EN in the Ticket to Work program.

Section 411.315 describes the

minimum qualifications for an EN

under the Ticket to Work program. In

response to public comments, we are

adding language to paragraph (a)(2) of

§ 411.315 to provide examples of what

we mean by programmatically

accessible.

We are revising section 411.315(b)(2)

to make it clear that ENs are not

required to provide medical or related

health services or be licensed to provide

such services, but that the EN should

take reasonable steps to assure that if

any medical and related health services

are provided, such medical and health

related services are provided under the

formal supervision of persons licensed

to prescribe or supervise the provision

of these services.

Section 411.315 provides that an EN

must have applicable certificates,

licenses, or other credentials if State law

in the entity’s State requires such

documentation to provide VR services,

employment services or other support

services in the State.

Section 411.320 describes the major

responsibilities of an entity serving as

an EN.

Section 411.321 explains the

conditions under which we will

terminate an agreement with an EN for

inadequate performance. We have

clarified that we will terminate an

agreement with an EN for noncompliance in any of the three areas

cited in this section.

Section 411.325 lists the reporting

requirements placed on an entity

serving as an EN. We are adding a new

paragraph (e) to require that ENs submit

information to assist the PM conducting

the reviews necessary to determine

whether a beneficiary is making timely

progress towards self-supporting

employment. This requirement is

necessary to obtain information for

determining whether a beneficiary will

continue to receive CDR protection. It

will make the EN reporting requirement

consistent with the reporting

requirement of State VR agencies

regarding timely progress reviews. As a

result of adding a new paragraph (e), we

are redesignating the proposed

paragraphs (e) through (i) as paragraphs

(f) through (j) in the final rules. We are

deleting the requirement from paragraph

(g) in the proposed rules (redesignated

as paragraph (h) in the final rules) to

submit a financial report that shows the

percentage of the EN’s budget that was

spent on serving beneficiaries with

tickets, including the amount spent on

beneficiaries who return to work and

those who do not return to work. We are

making this change because of many

public comments indicating that this

would be a burdensome reporting

requirement.

Section 411.330 explains how we will

evaluate an EN’s performance.

67380 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

Subpart F—State Vocational

Rehabilitation Agencies’ Participation

Section 1148(c) of the Act addresses

participation by State VR agencies in the

Ticket to Work program. In general, this

section gives each State VR agency the

opportunity to determine, on a case-bycase basis, whether it will participate in

the Ticket to Work program as an EN or

under the cost reimbursement payment

system authorized under sections 222(d)

and 1615(d) of the Act (see 20 CFR

§§ 404.2101 et seq. and 416.2201 et

seq.). The State VR agency must elect

either the outcome payment system or

the outcome-milestone payment system

to be used when it functions as an EN

when serving a beneficiary with a ticket.

The Commissioner is directed to

provide for periodic opportunities to

exercise this election.

Generally, under the Ticket to Work

program, State VR agencies will

continue to operate as they do today.

For example, when a State VR agency

functions as an EN, it will provide

services in accordance with the

requirements of the State plan approved

under title I of the Rehabilitation Act of

1973, as amended (29 U.S.C. 720 et

seq.), and a client will complete an

individualized plan for employment

with the State VR agency. If a State VR

agency has a dispute over a payment

under the cost reimbursement payment

system, the State VR agency will use the

dispute resolution procedures already in

place under 20 CFR 404.2127 and

416.2227. The new functions and

responsibilities for State VR agencies

under the Ticket to Work program

include checking with the PM if the

State VR agency wants to see if a

disabled beneficiary who is seeking

services from the State VR agency has a

ticket that is available for assignment or

reassignment, submitting information to

the PM required to assign or reassign a

beneficiary’s ticket to the State VR

agency, routing EN payment dispute

questions through the PM, submitting

preliminary and post-employment data

to the PM, and providing reports

regarding the outcomes achieved by

beneficiaries assigning tickets to the

State VR agency in those cases where

the State VR agency functioned as an

EN.

Subpart F of these regulations

establishes that the cost reimbursement

payment system is a payment option

under the Ticket to Work program for

State VR agencies, subject to certain

limitations described in § 411.585(a)

and (b) of subpart H of these final rules.

Section 411.350 explains that a State

VR agency must participate in the

Ticket to Work program if it wishes to

receive payment from SSA for serving

disabled beneficiaries who are issued a

ticket. We have clarified this section by

adding the words ‘‘who are issued a

ticket’’.

Section 411.355 describes the

different payment options available to

the State VR agencies. Section 411.355

explains that, subject to the limitations

in § 411.585 of subpart H, State VR

agencies, on a case-by-case basis, may

participate in the Ticket to Work

program either as an EN or under the

cost reimbursement payment system.

This section also explains that the State

VR agency must use the EN payment

system it elected when serving a

beneficiary as an EN. We have modified

the language and structure of this

section for added clarity.

Section 411.360 explains what a State

VR agency must do to function as an EN

under the Ticket to Work program with

respect to a beneficiary and explains

that a State VR agency may choose, on

a case-by-case basis, to seek payment

from SSA under the cost reimbursement

payment system or its elected EN

payment system. Paragraph (a) of

§ 411.360 describes the method SSA

will use to communicate with State VR

agencies about implementation of the

Ticket to Work program in States.

Paragraph (b) includes a reference to the

limitations on payment in § 411.585. We

have made these changes to this section

to add clarity.

Section 411.365 describes how a State

VR agency will select an EN payment

system for use when functioning as an

EN. In these final rules, we are

modifying § 411.365 to eliminate the

requirement that the Governor or

Governor’s designated representative

must sign the letter advising SSA of

which EN payment system the State VR

agency will use when it functions as an

EN with respect to a beneficiary who

has a ticket. We are revising this section

to provide that the director of the State

agency administering or supervising the

administration of the State plan

approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), or the director’s

designee must sign the letter advising

SSA of the State VR agency’s election of

an EN payment system. We are making

this change to the final rules to respond

to comments that the director or his or

her designee is in a better position to

make the payment election decision.

Section 411.370 explains that a State

VR agency generally may choose to be

paid under the cost reimbursement

payment system when serving

beneficiaries with tickets, subject to the

limitation in § 411.585(b) of subpart H

of these final rules.

Section 411.375 explains that State

VR agencies must continue to provide

services to beneficiaries with tickets

under the requirements of the State plan

approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.).

Section 411.380 describes how a State

VR agency can determine if a disabled

beneficiary seeking services has been

issued a ticket and, if so, the status of

the ticket. We have made changes to this

section in the final rules to provide a

more accurate description of the

information the State VR agency can

obtain from the PM regarding a

beneficiary’s ticket status.

Section 411.385 explains that once

the State VR agency determines that a

beneficiary is eligible for vocational

rehabilitation services, the beneficiary

and a representative of the State VR

agency must agree to and sign an IPE.

In these final rules, we are revising the

provisions of § 411.385(a) to conform to

the changes we are making to §§ 411.140

and 411.150 regarding the requirements

that must be met in order for a

beneficiary to assign or reassign a ticket.

We explain that the parties must agree

to and sign an IPE in order for the

beneficiary to assign or reassign his or

her ticket to the State VR agency. We

explain that §§ 411.140(d) and

411.150(a) and (b) describe the other

requirements which must be met for a

ticket to be assigned or reassigned,

respectively. Final § 411.385(a) explains

that in order for a beneficiary’s ticket to

be assigned or reassigned to the State

VR agency, the State VR agency must

submit the information described in

§ 411.385(a)(1)–(a)(3) to the PM. This

information includes the method of

payment which the State VR agency is

selecting for a particular beneficiary.

We are revising § 411.385(b) to change

the designation of the person in the

State VR agency who is required to sign

the completed form which the State VR

agency must submit to the PM in order

for a ticket to be assigned or reassigned

to the State VR agency. We are revising

this section to permit ‘‘a representative

of the State VR agency’’ to sign the form

as this provides greater flexibility to the

State VR agency than our proposed

requirement that the form be signed by

‘‘the State VR agency representative

working with the beneficiary.’’

Section 411.390 describes what a

State VR agency should do when a

beneficiary already receiving services

under an approved IPE becomes eligible

for a ticket that is available for

assignment and decides to assign the

ticket to the State VR agency. We are

modifying this section in the final rules

to provide a more accurate description

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67381

of the circumstances in which an

individual who is already receiving

services from the State VR agency under

an IPE may become eligible for a ticket.

We also are adding a provision to clarify

that the State VR agency must submit

the completed and signed form

described in § 411.385(a) and (b) to the

PM in order for the beneficiary’s ticket

to be assigned to the State VR agency.

In addition, we explain that § 411.140(d)

describes the other requirements which

must be met in order for the beneficiary

to assign a ticket.

Section 411.395 explains that each

State VR agency will be required to

provide periodic reports to the PM on

the specific outcomes achieved with

respect to the services provided to

beneficiaries under the Ticket to Work

program in cases where the State VR

agency functioned as an EN.

Section 1148(c)(3) of the Act requires

State VR agencies and ENs to enter into

agreements regarding the conditions

under which services will be provided

when an EN that has been assigned the

beneficiary’s ticket refers the beneficiary

to a State VR agency for services.

Sections 411.400 and 411.405 explain

that an EN may refer a beneficiary that

it is serving under the Ticket to Work

program to a State VR agency for

services only if such an agreement is in

place prior to the EN making the

referral.

Section 411.410 explains that these

agreements should be broad-based and

apply to all beneficiaries who may be

referred by an EN to a particular State

VR agency. In the final rules, we are

modifying § 411.410 to indicate that the

general guideline that the agreements

should be broad-based and apply to all

beneficiaries who may be referred by an

EN to a State VR agency is not intended

to preclude an EN and a State VR

agency from entering into an

individualized agreement to meet the

needs of a single beneficiary if both the

EN and State VR agency wish to do so.

Section 411.415 explains that the PM

will verify the establishment of such

agreements based on the EN’s

submission of a copy of the agreement

to the PM.

Section 411.420 provides guidance

and examples of what could be included

in these agreements.

Section 411.425 explains what a State

VR agency should do if an EN attempts

to refer a beneficiary being served under

the Ticket to Work program to the State

VR agency without having established

such an agreement.

Section 411.430 explains what the PM

should do when notified that a referral

has been attempted in the absence of an

agreement.

Section 411.435 establishes

procedures for resolving disputes

arising under these agreements between

ENs and State VR agencies. We are

revising this section by replacing the

word ‘‘should’’ in § 411.435(a) and (b)

with ‘‘must,’’ to establish the regulatory

policy as a requirement to be followed

in the dispute resolution process.

Subpart G—Requirements for

Individual Work Plans

Section 1148(g) of the Act requires

each EN to ensure that employment

services, vocational rehabilitation

services, and other support services

provided under the Ticket to Work

program are provided under IWPs. The

minimum requirements for an IWP are

spelled out in this section.

Subpart G of these regulations

establishes the requirements for the IWP

that must be developed when an EN and

a beneficiary with a ticket agree to work

together under the Ticket to Work

program. Beneficiaries who are clients

of the State VR agencies will continue

to use the IPE rather than an IWP.

Section 411.450 explains what an IWP

is. In response to comments on the

proposed rule, we are revising this

section to spell out ‘‘individual work

plan’’ for clarity, and to add the words

‘‘(other than a State VR agency)’’ to

clarify that IWPs would not be a

requirement for State VR agencies.

Section 411.455 explains the purpose

of the IWP and explains that the EN

must develop and implement the plan

in a manner that gives the beneficiary

the opportunity to exercise informed

choice in selecting an employment goal.

Section 411.460 explains that the

beneficiary and the EN share the

responsibility for determining the

content of the IWP.

Section 411.465 describes the specific

information that must be included in

each IWP.

Section 411.470 describes when an

IWP becomes effective. In the final

rules, we are revising § 411.470 to

conform to the changes we are making

to §§ 411.140 and 411.150 concerning

the requirements which must be met in

order for a beneficiary to assign or

reassign his or her ticket. We are also

revising § 411.470(b) to make the

effective date of an IWP consistent with

the effective date of the assignment or

reassignment of the beneficiary’s ticket.

Subpart H—Employment Network

Payment Systems

Section 1148(h) of the Act provides

that the Ticket to Work program shall

provide for payment authorized by the

Commissioner to ENs under either an

outcome payment system or an

outcome-milestone payment system.

Each EN must elect which payment

system it will use.

The outcome payment system and the

outcome-milestone payment system are

defined in § 411.500. This section also

defines certain other terms we use in

this subpart relating to the EN payment

systems.

The first term we define in § 411.500

is the ‘‘payment calculation base.’’ This

term relates to the amount we will pay

an EN (including a State VR agency

choosing to be paid as an EN) under

either EN payment system. We will pay

an EN for specific milestones or

outcomes that a beneficiary who assigns

the ticket to the EN achieves, not for the

costs of specific services that the EN

provides. We base milestone and

outcome payments upon the prior

calendar year’s national average

disability benefit payable under title II

or title XVI, not upon the specific

benefit payment payable to a beneficiary

with a ticket. We call the national

average benefit payment the payment

calculation base. In § 411.500(a)(1), we

define the payment calculation base

applicable in connection with a title II

or concurrent title II/title XVI disability

beneficiary. In § 411.500(a)(2), we define

the payment calculation base applicable

in connection with a title XVI disability

beneficiary, who is not concurrently a

title II disability beneficiary.

In § 411.500(b), we define the term

‘‘outcome payment period.’’ Both EN

payment systems provide for a payment

to an EN for each month, during an

individual’s outcome payment period,

for which Social Security disability

benefits and Federal SSI cash benefits

are not payable to the individual

because of the performance of

substantial gainful activity (SGA) or by

reason of earnings from work activity.

Each beneficiary who is issued a ticket

has one outcome payment period in

connection with that ticket. In

§ 411.500(b), we explain that an

individual’s outcome payment period

begins with the first month, ending after

the date on which the ticket was first

assigned, for which Social Security

disability benefits and Federal SSI cash

benefits are not payable to the

individual due to SGA or earnings. We

also explain that the outcome payment

period ends with the 60th month,

consecutive or otherwise, ending after

such date, for which such benefits are

not payable due to SGA or earnings.

In these final rules, we are modifying

the definition of the ‘‘outcome payment

system’’ in § 411.500(c) to clarify that

this payment system provides for a

schedule of payments to an EN for each

67382 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

month, during an individual’s outcome

payment period, for which Social

Security disability benefits and Federal

SSI cash benefits are not payable to the

individual because of work or earnings.

We are also expanding § 411.500 in

these final rules to include definitions

of ‘‘outcome payment’’ and ‘‘outcome

payment month.’’ In final § 411.500(d),

we explain that ‘‘outcome payment’’

means a payment for an outcome

payment month. In final § 411.500(e),

we explain that ‘‘outcome payment

month’’ means a month, during an

individual’s outcome payment period,

for which Social Security disability

benefits and Federal SSI cash benefits

are not payable to the individual

because of work or earnings. Final

§ 411.500(e) also explains that the

maximum number of outcome payment

months for each ticket is 60. This

provision appeared in § 411.500(c) of

the proposed rules. We are moving the

provision to § 411.500(e) of the final

rules where we explain what we mean

by an outcome payment month.

Final § 411.500(f), which we proposed

as § 411.500(d), provides a general

description of the term ‘‘outcomemilestone payment system.’’ This

payment system provides a schedule of

payments to an EN that includes, in

addition to payments during the

outcome payment period, payment for

completion by a beneficiary of up to

four milestones directed toward the goal

of permanent employment. In these

final rules, we are increasing the

number of milestones for which

payment may be made under the

outcome-milestone payment system

from the two milestones we proposed in

the NPRM to four milestones. This is

one of four major changes we are

making to the outcome-milestone

payment system in response to public

comments, all of which we discuss more

fully below.

In addition, in these final rules we are

modifying final § 411.500(f) to clarify

that the milestones for which payment

may be made must occur prior to the

beginning of an individual’s outcome

payment period. We are also clarifying

that the payments which may be made

to an EN under the outcome-milestone

payment system consist of milestone

payments which may be made for any

milestones occurring prior to the

individual’s outcome payment period,

as well as any outcome payments which

may be made for months during the

individual’s outcome payment period.

We deleted the last sentence in

proposed section 411.500(d) that

compared the total payments under the

outcome-milestone payment system,

because this is stated in section

411.525(a).

Section 1148(c) of the Act permits

each State VR agency to participate in

the program as an EN with respect to a

disabled beneficiary. When the State VR

agency elects to participate in the Ticket

to Work program as an EN with respect

to a disabled beneficiary, we will pay

the State VR agency in accordance with

its elected EN payment system. If the

State VR agency chooses not to

participate as an EN with respect to a

disabled beneficiary, we will pay the

State VR agency for services provided to

that beneficiary in accordance with the

cost reimbursement payment system

under sections 222(d) and 1615(d) and

(e) of the Act. Our regulations

concerning this cost reimbursement

payment system are at 20 CFR 404.2101

through 404.2127 and 416.2201 through

416.2227. Payments to State VR

agencies under the Ticket to Work

program are discussed in §§ 411.510 and

411.585.

Each provider will elect, in writing,

the EN payment system which it will be

paid under when it agrees to become an

EN. Similarly, each State VR agency will

notify us in writing regarding which EN

payment system it will use when it

chooses to function as an EN for a

beneficiary with a ticket. We will

periodically offer each EN (including

each State VR agency) the opportunity

to change its elected payment system. If

the EN (or State VR agency) does change

its elected payment system, the change

will apply only to tickets assigned to the

EN (or State VR agency) after SSA is

notified about the change in the elected

payment system. These provisions,

including the frequency of opportunity

for an EN to change its payment system,

are discussed in §§ 411.505 through

411.520.

In the final rule, we are making a

number of changes to §§ 411.505

through 411.520. These changes correct

grammatical errors and clarify our

intentions, but do not change the intent

of the proposed sections.

• In final § 411.505 we are combining

the first two sentences concerning an

EN’s choice of payment systems into

one sentence.

• In final § 411.510(b) we are placing

a new parenthetical sentence between

the two sentences we proposed. The

first sentence of this paragraph explains

that a State VR agency must

communicate its decision to serve a

beneficiary to the PM. The new second

sentence provides a reference to that

portion of the final rule where we

discuss the PM and its role in the Ticket

to Work program.

• In final § 411.515(a) we are making

some editorial changes to the second

sentence and clarifying the third

sentence to note what day in the month

an EN’s payment system election

becomes effective. Also, we are adding

a new sentence to the end of this

paragraph which clarifies that a State

VR agency may also change its elected

EN payment system.

• In final § 411.515(b) we are making

some editorial changes and expanding

the explanation of when the 12-month

period for making a change in an EN

payment system for any reason ends.

We had proposed that the period would

end with the 12th month following the

month in which the EN first elects an

EN payment system. The final rule adds

an alternative month, the 12th month

after the month we implement the

Ticket to Work program in the State in

which the EN (or State VR agency)

operates, if it is later.

• In final § 411.515(c) we are

correcting grammatical errors and

deleting the date in the last sentence

because it is unnecessary. This sentence

notes that we will offer ENs the

opportunity to make a change in their

elected payment systems at least every

18 months.

• In final § 411.520 we are correcting

grammatical errors in the title and text

and clarifying that the rule applies to

State VR agencies as well as to ENs.

Sections 411.525 through 411.565

provide our rules for computing

payments to ENs under the two EN

payment systems. They also describe

what payments may be made and when,

and discuss allocating payments to

multiple ENs to whom the ticket was

assigned at different times.

Sections 1148(h)(2) and (h)(3) of the

Act provide that the outcome payment

system and the outcome-milestone

payment system shall provide for a

schedule of payments to an EN, in

connection with a beneficiary who

assigns a ticket to the EN, for each

month, during the individual’s outcome

payment period, for which Social

Security disability benefits and Federal

SSI cash benefits based on disability or

blindness are not payable to the

individual because of work or earnings.

There can be a maximum of 60 outcome

payment months and, therefore, a

maximum of 60 monthly outcome

payments. In § 411.525(a), we explain

that we will calculate payments for

outcome payment months under both

EN payment systems using the payment

calculation base as defined in

§ 411.500(a)(1) or (a)(2). We deleted the

second sentence in proposed

§ 411.525(a). The proposed sentence

referred to the fact that the payment

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67383

calculation base we use to compute the

value of payments for outcome months

attained in one calendar year is based

on the preceding calendar year’s

national average disability benefit

payment information. This is simply a

restatement of the definition of the

payment calculation base that is found

in the references cited in the first

sentence of § 411.525(a), which we did

not change.

Section 411.525(a)(1)(i) discusses

payments under the outcome payment

system, explaining that an EN is eligible

for a monthly outcome payment for each

month for which Social Security

disability benefits and Federal SSI cash

benefits are not payable to the

individual because of work or earnings.

This section also provides that monthly

payments under the outcome payment

system will be 40 percent of the

payment calculation base. This

percentage is the maximum the law

allows at the beginning of the program.

Under the outcome payment system,

each monthly outcome payment is the

same during a calendar year. At the end

of each calendar year, we will refigure

the payment calculation base for the

next year. For clarity, we combined the

last two sentences of proposed

§ 411.525(a)(1)(i) and added a reference

to § 411.550. We also noted that we will

round our computation of the outcome

payment to the nearest whole dollar.

Section 411.525(a)(1)(ii) provides

criteria for determining whether a

month occurring after the month in

which a beneficiary’s entitlement to

Social Security disability benefits ends

or eligibility for SSI benefits based on

disability or blindness terminates due to

work activity or earnings will be

considered to be an outcome payment

month. We are making two changes to

the rules we proposed. First, in final

§ 411.525(a)(1)(ii), we are substituting

the word ‘‘with’’ for the word ‘‘in’’ to

clarify that the months we are talking

about are those after the month ‘‘with’’

which such entitlement ends or

eligibility terminates. Second, in

§ 411.525(a)(1)(ii)(A), we are clarifying

that the level of earnings required must

be more than the SGA threshold amount

specified in 20 CFR 404.1574(b)(2) (or

20 CFR 404.1584(d) for individuals who

are statutorily blind). We had proposed

that earnings could be at or above the

SGA dollar amount, but this is

ambiguous in that earnings at the dollar

amount specified in 20 CFR

404.1574(b)(2) and 404.1584(d) are not

indicative of SGA, while earnings above

the SGA threshold amounts in the

referenced rules are. It was our intent in

this section, as well as in proposed

§ 411.535, to require that earnings

exceed the monthly SGA threshold

amount.

As a result of these changes, final

§ 411.525(a)(1)(ii) provides two criteria

for us to use when determining whether

we will consider any month after the

month with which disability

entitlement ends or eligibility

terminates because of work or earnings

to be an outcome payment month. First,

the individual must have gross earnings

from employment (or net earnings from

self-employment) in that month that are

more than the SGA threshold dollar

amount in 20 CFR 404.1574(b)(2) (for an

individual who is not statutorily blind)

or in 20 CFR 404.1584(d) (for an

individual who is statutorily blind).

Second, the individual cannot be

entitled to any monthly benefits under

title II or eligible for any benefits under

title XVI for that month.

Section 411.525(a)(2) explains what

payments we can make to an EN under

the outcome-milestone payment system.

This system provides payments to an

EN when the beneficiary achieves

milestones directed toward the goal of

permanent employment. Payments for

the milestones achieved come before,

and are in addition to, outcome

payments made during the outcome

payment period. For clarity, we inserted

a new sentence after the first one we

proposed. It notes that milestones must

occur prior to the beginning of the

beneficiary’s outcome payment period

and meet the requirements of § 411.535.

Also, consistent with changes we are

making elsewhere in these final rules,

we are amending the first sentence of

§ 411.525(a)(2) to state that we may pay

an EN for up to four milestones

achieved by a beneficiary who assigned

his or her ticket to the EN.

Section 411.525(b) explains the

provision in section 1148(h)(3)(C) of the

Act concerning the limitation on total

payments to an EN under the outcomemilestone payment system. The Act

requires us to design the outcomemilestone payment system so that an

EN’s total payments with respect to each

beneficiary is less than, on a net present

value basis, the total amount the EN

would receive if paid under the

outcome payment system. In the second

sentence of § 411.525(b) we explain that

an EN’s total potential payments under

the outcome-milestone payment system

will be about 85 percent of the total that

would be payable under the outcome

payment system for the same

beneficiary.

Section 411.525(c) explains that we

will pay an EN to whom a ticket has

been assigned only for milestones or

outcomes that are achieved prior to the

month in which an individual’s ticket

terminates, as described in § 411.155.

We will not pay milestone or outcome

payments based on an individual’s work

activity or earnings in or after the month

a ticket terminates.

Sections 411.530 through 411.545

provide our rules for computing

payments to ENs under the outcomemilestone payment system. In response

to the public comments, we are making

four major changes to this EN payment

system.

• First, we are adding two milestones.

We describe them in § 411.535.

• Second, we are doubling the total

value of the potential milestone

payments. We provide these payment

amounts in § 411.540.

• Third, we are spreading, over 60

months as opposed to 12, the outcome

payment reductions made on account of

milestone payments received. We

discuss this reduction in § 411.530.

• Fourth, we are substituting a flat

outcome payment rate of 34 percent for

the graduated monthly outcome

payments we proposed. We discuss how

we calculate the payment amounts for

outcome payment months under the

outcome-milestone payment system in

§ 411.545.

Section 411.530 describes how we

will reduce outcome payments under

the outcome-milestone payment system

when an EN receives milestone

payments. In the NPRM, we proposed to

reduce the first 12 outcome payments by

the amount paid out as milestone

payments. However, in response to

public comments, we are extending the

reduction period over the full 60

months of the outcome payment period.

In addition, we are clarifying two points

in final § 411.530. First, we explain that

an EN’s outcome payments will be

reduced due to the milestone payments

received by that EN, not due to

milestone payments paid to another EN.

Second, we are broadening the language

in the final rule by deleting the word

‘‘already’’ from the language we

proposed. This change allows for

adjustments should we make a

retroactive payment for a milestone that

a beneficiary achieved before the

outcome payment period began.

Section 411.535 provides the

milestone requirements. We are making

three changes to this section. First, we

are clarifying that the milestones occur

after the date on which the ticket was

first assigned and the beneficiary starts

to work. Just as the outcome payment

period cannot begin until after the date

the beneficiary first assigns a ticket, a

beneficiary cannot begin to attain a

milestone until after he or she first

assigns the ticket. Second, as we

explained in the changes we are making

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to § 411.525(a)(1)(ii)(A), we are

clarifying that the level of a

beneficiary’s monthly earnings required

for a milestone must be more than the

SGA threshold amount. Third, we are

including two additional milestones.

The first milestone we are adding is met

when a beneficiary works for one

calendar month and has gross earnings

from employment (or net earnings from

self-employment) for that month that are

more than the SGA threshold amount.

The other milestone we are adding,

which is the fourth milestone, is met

when a beneficiary works for 12

calendar months within a 15-month

period and has gross earnings from

employment (or net earnings from selfemployment) for each of the 12 months

that are more than the SGA threshold

amount. As a result of these additions,

we are renumbering proposed

milestones one and two as final

milestones two and three. These

milestones also require work at more

than the SGA threshold amount for

three and seven months, respectively,

within a 12-month period. Additionally,

in § 411.535 we are providing that any

of the work months used to meet the

first, second, or third milestone may be

used to meet a subsequent milestone.

Section 411.540 provides how we will

calculate the payment for each

milestone. In the proposed rules we

provided for the payment of two

milestones and based their calculation

on a percentage of the payment

calculation base that together

represented approximately 10 percent of

the total payments possible under the

outcome-milestone payment system. In

final § 411.540 we are not changing our

method of computing milestone

payments or revising the payment

percentages for the two milestones we

proposed, but we are adding two more

milestones and the net effect is a

doubling of the total value of the

milestone payments. The value of the

first additional milestone payment is

equal to 34 percent of the payment

calculation base, and the value of the

other additional milestone payment is

equal to 170 percent of the payment

calculation base. The total value of the

additional milestone payments is equal

to approximately 10 percent of the

potential payments possible under the

outcome-milestone payment system.

When combined with the total value of

the milestone payments we originally

proposed and which we are retaining in

these final rules, the total value of the

four potential milestone payments

under the outcome-milestone payment

system is equal to approximately 20

percent of the total possible payments

available under the outcome-milestone

payment system.

We are also making four other

changes to final § 411.540. First, we are

stating that after we multiply the

applicable milestone percentage by the

payment calculation base, we will

round the resulting milestone payment

computation to the nearest whole dollar.

Second, we are adding two paragraphs

that identify the attainment month for

each of the two additional milestones.

This month is important because we use

the payment calculation base for the

calendar year in which the attainment

month occurs when computing the

milestone payment. Third, we are

redesignating proposed paragraphs (a)

and (b) as paragraphs (b) and (c) and

proposed paragraphs (c) and (d) as

paragraphs (f) and (g). These paragraphs

discuss the payment calculations and

attainment months for the two

milestones we proposed. Fourth, we are

deleting the second sentence we

proposed in paragraphs (a) and (b), now

final paragraphs (b) and (c). The

sentence referred to the two proposed

milestone payments as being equal to

two and four outcome payments,

respectively. Technically, this is an

incorrect statement because outcome

payments under the outcome-milestone

payment system will vary depending on

how much has been paid in milestone

payments.

Section 411.545 states how, under the

outcome-milestone payment system, we

will calculate the amount of the

outcome payment. We had proposed

graduated monthly outcome payments.

However, in response to public

comments, we are substituting a flat

outcome payment rate for the one we

proposed. This rate is 34 percent of the

payment calculation base for the

calendar year in which the outcome

payment month occurs, rounded to the

nearest whole dollar, and then reduced,

if necessary, as described in § 411.530.

This flat rate makes the total potential

payments under the outcome-milestone

payment system about 85 percent of the

total potential payments that could be

made under the outcome payment

system. We did not change the rate

differential between the two EN

payment systems as many commenters

suggested and explain our reasons for

this in the responses to the public

comments below.

Section 411.550 provides the payment

amounts for outcome payment months

under the outcome payment system. An

outcome payment under the outcome

payment system is equal to 40 percent

of the applicable payment calculation

base. Consistent with clarifications we

are making in §§ 411.540 and 411.545,

we are modifying § 411.550 to state that

we will round our computation of the

outcome payment to the nearest whole

dollar.

Section 411.555 provides that an EN

may generally keep the milestone and

outcome payments it receives under its

elected EN payment system, even if the

beneficiary does not sustain work for all

60 outcome payment months. The

proposed rules for this section, by

reference to § 411.560, indicated that

retroactive adjustments to payments

already received by ENs may occur

when we allocate a prior payment with

another EN. In the final rules, we

expand § 411.555. We placed the

general rule allowing ENs to keep the

milestone and outcome payments for

which they are eligible in paragraph (a)

and added paragraphs (b) and (c).

Paragraph (b) discusses the adjustments

we may have to make should we

determine that we paid an EN an

incorrect amount. Paragraph (c) refers to

the EN notification and dispute

resolution process we have for

overpayments and underpayments.

Sections 411.560 and 411.565 explain

that it is possible to pay more than one

EN for the same milestone or outcome

payment month. In this situation, the

payment will be allocated among the

ENs that qualify for payment. Section

1148(e)(3) of the Act provides that the

PM will determine the allocation based

on the services provided by each EN. It

also is possible to pay more than one EN

for different milestones or outcome

payment months on the same ticket.

When more than one EN is eligible for

payment with respect to a ticket, we

will pay each EN in accordance with its

elected payment system at the time the

ticket was assigned to each EN.

In response to public comments, we

are expanding the discussion in the last

sentence of proposed § 411.560 to

clarify how the PM will make a payment

allocation determination when more

than one EN qualifies for a payment.

The PM will base its determination on

the contribution of services provided by

each EN toward the achievement of the

outcomes or milestones. Also, outcome

and milestone payments will not be

increased because the payments are

shared between two ENs. In addition to

these changes, we are correcting

grammatical errors in the title of

§ 411.565.

Section 411.570 provides that the Act

prohibits an EN from requesting or

accepting compensation from a

beneficiary for the EN’s services.

Section 411.575 describes how an EN

will request payment for either a

milestone payment or an outcome

payment month. The EN will make a

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67385

written request to the PM for payment

for each milestone. The request will be

accompanied by evidence showing that

the milestone was achieved. We do not

have to stop a beneficiary’s monthly

cash payment in order to pay a

milestone payment to an EN.

For outcome payments under either

EN payment system, an EN must also

submit a written request for payment to

the PM. Since outcome payments

cannot be made unless the beneficiary

has sufficient work or earnings to

reduce the Federal cash benefits to zero,

we are retaining the general requirement

we proposed for an EN’s payment

request to be accompanied by evidence

of the beneficiary’s work or earnings.

However, in response to public

comments, we are making three changes

to § 411.575(b). First, we are providing

an exception to the general requirement

for evidence of a beneficiary’s work or

earnings in order to cover those

situations in which the EN requesting

the payment does not currently hold the

ticket because it is unassigned or

reassigned to another EN. Second, we

are allowing the EN to submit its request

for payment and evidence of work or

earnings on a quarterly basis, rather

than on a monthly or bimonthly basis as

we proposed. Third, we are

incorporating the rules we proposed in

§§ 411.575(b)(3) through (5) in

§ 411.575(b)(3), and deleting

§§ 411.575(b)(3) through (5).

In addition to these changes, we are

making other clarifying changes to

§ 411.575. We are adding three new

paragraphs at § 411.575(a)(1)(ii), (iii)

and (iv) to discuss the requirements for

an EN to receive a milestone payment.

These requirements are: (1) The

milestone must occur prior to the

outcome payment period as defined in

§ 411.500(b), (2) the provisions in

§ 411.535 must be satisfied, and (3) the

milestone cannot occur in or after the

month in which the ticket terminates as

defined in § 411.155. We also are

modifying the language in final

§ 411.575(a)(1)(i), which was proposed

as § 411.575(a)(1). The revised language

clarifies that we will pay an EN for

milestones only if the EN’s elected

payment system in effect at the time the

beneficiary assigned the ticket to the EN

was the outcome-milestone payment

system. The wording we proposed had

suggested that the payment system

election and ticket assignment had to

occur simultaneously and this was

incorrect. Finally, we added paragraph

(b)(1)(iii) to final § 411.575 to clarify

that in addition to the other

requirements listed, we will pay an EN

for an outcome payment month only if

the ticket has not terminated for any of

the reasons listed in § 411.155.

Section 411.580 explains that an EN

must first have had the ticket assigned

to it before it can be eligible to receive

milestone or outcome payments.

As a beneficiary is free to choose

where to assign a ticket, the opening

paragraph of § 411.585 explains that a

State VR agency and an EN can both be

eligible for payment on a ticket if the

State VR agency elects to be paid as an

EN. Each entity can be paid as an EN

under its respective EN payment

system. If the State VR agency chooses

to serve a beneficiary with a ticket and

to be paid under the cost reimbursement

payment system, then we will pay the

State VR agency under the cost

reimbursement payment system if it

meets the criteria for reimbursement

and if we have not first paid an EN

under its elected payment system with

respect to the same beneficiary and

ticket. For each ticket, a payment either

under the cost reimbursement payment

system or under an elected EN payment

system will exclude any payment under

the other payment system. Absent this

restriction, it would be possible to pay

separately under both the cost

reimbursement payment system and

under the EN payment systems such

amounts as, when combined, would

exceed the statutory limitation of one or

both of these payment systems for

serving the same beneficiary under the

same ticket.

In response to a public comment, we

are cross-referring § 411.560 in the

opening paragraph of § 411.585. Section

411.560 explains how the PM will make

a determination of payment allocation

should more than one entity qualify for

payment as an EN.

Section 411.587 is a new section that

we are adding in response to a

comment. It explains which provider we

will pay if, with respect to the same

ticket, we receive two requests for

payment and one request is from a

provider that elected an EN payment

system and the other request is from a

State VR agency that elected payment

under the cost reimbursement payment

system.

Section 411.590 describes what an EN

or State VR agency serving as an EN can

do if either disagrees with our decision

on a payment request it submits. This

section also explains that an EN cannot

appeal our determination about a

beneficiary’s right to benefits even when

that determination affects the payment

to an EN. In the final rules, we are

broadening paragraph (d) of § 411.590 to

clarify that any determination we make

about a beneficiary’s right to disability

cash benefits, not just a determination

that a beneficiary appeals, could affect

an EN’s payment or result in an

adjustment to payments already made to

an EN. In addition, we made some

editorial changes throughout this

section.

Section 411.595 identifies various

methods we will use to monitor the EN

payment systems for financial integrity.

Section 411.597 states that we will

periodically review the conditions

affecting payment under the two EN

payment systems to determine if these

payment systems are providing

adequate incentives and appropriate

economies for ENs to assist beneficiaries

to enter the workforce.

Subpart I—Ticket to Work Program

Dispute Resolution

Section 1148(d)(7) of the Act requires

us to provide for a mechanism for

resolving disputes between beneficiaries

and ENs, between ENs and PMs, and

between PMs and service providers. As

part of this process, we are required to

provide a party to a dispute a reasonable

opportunity for a full and fair review of

the matter in dispute. Finally,

beneficiaries and State VR agencies may

have disputes. The various dispute

resolution mechanisms are discussed

below.

PM and EN Disputes With SSA

Since PMs and ENs, other than State

VR agencies functioning as ENs, will

operate under contracts with SSA,

disputes between SSA and PMs and

between SSA and ENs that are not State

VR agencies will be subject to the

dispute resolution procedures contained

in the contracts with SSA.

Disputes between Beneficiaries and ENs

That Are Not State VR Agencies

There is a three-step process for

resolving disputes between beneficiaries

and ENs that are not State VR agencies.

This three-step process will ensure that

both beneficiaries and ENs have the

opportunity to resolve disputes using

informal means.

As a first step in the dispute

resolution process, each EN is required

to have an internal grievance procedure

whereby beneficiaries have the

opportunity to work with

representatives of the EN to try to

resolve any disputes arising during the

implementation or amending of an IWP.

If the dispute is not resolved using the

EN’s internal grievance procedures, both

the beneficiary and the EN will have the

option of contacting the PM for

assistance in resolving the dispute.

Upon request, the PM will conduct a

full review of the matter in dispute and

67386 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

make a recommendation to the

beneficiary and the EN as to how the

dispute might be resolved (see

§ 411.615). This second step is intended

to provide the parties to the dispute the

opportunity to present their case before

an impartial third party, the PM. The

third step involves bringing the dispute

to SSA.

Section 411.605 explains the

responsibilities of an EN that is not a

State VR agency regarding this dispute

resolution process, including informing

beneficiaries of the availability of

assistance from the State Protection and

Advocacy (P&A) system at every step in

the dispute resolution process. Section

411.610 identifies specific points in the

rehabilitation process when an EN that

is not a State VR agency must inform

beneficiaries about the procedures for

resolving disputes.

Section 411.615 describes how a

disputed issue will be referred to the

PM, including what information should

be submitted. Section 411.620 tells how

long the PM has to provide a written

recommendation on how to resolve the

dispute. Section 411.625 explains that if

the parties to the dispute do not agree

with the PM’s recommendation and the

dispute continues to be unresolved,

either the beneficiary or the EN that is

not a State VR agency has the option of

bringing the dispute to the attention of

SSA for resolution.

Section 411.625 also describes the

information that must be submitted to

SSA to facilitate our review of the

dispute. Section 411.630 explains that

SSA’s decision is final.

Section 411.635 explains that a

beneficiary has the right to be

represented in the dispute resolution

process under the Ticket to Work

program and that the State P&A system

is available to provide assistance and

advocacy services to beneficiaries

seeking or receiving services from ENs

operating under the Ticket to Work

program.

Disputes Between ENs and PMs

Section 411.650 explains that a

dispute between an EN that is not a

State VR agency and the PM, that does

not involve an EN’s payment request,

will be resolved using the procedures

for resolving disputes developed by the

PM. If the matter cannot be resolved

using these procedures, it will be

forwarded to SSA for resolution. Section

411.655 explains how a PM will refer

disputes to us. Section 411.660 explains

that SSA’s decision on a dispute

between an EN that is not a State VR

agency and a PM is final.

A dispute over a payment request

submitted by an EN, including a State

VR agency serving as an EN, will be

resolved using the dispute resolution

procedures contained in § 411.590.

Disputes Between Service Providers

and PMs

We are required to provide a

mechanism for resolving disputes

between service providers and PMs.

Most service providers approved to

serve beneficiaries under the Ticket to

Work program will be serving as ENs.

Disputes between ENs and PMs over

payments are discussed in subpart H.

Other disputes between ENs and PMs

are discussed above, and in §§ 411.650,

411.655, and 411.660. State VR agencies

that choose not to serve beneficiaries

with tickets as ENs will be the only

other service providers having a

relationship with a PM under the Ticket

to Work program. Disputes between a

State VR agency that is not functioning

as an EN and a PM, that involve issues

related to ticket assignment and do not

involve a request for payment or other

reimbursement issue, will be handled in

accordance with the PM’s dispute

resolution procedures. A dispute over a

payment request submitted by a State

VR agency which is serving a

beneficiary with a ticket under the

vocational rehabilitation cost

reimbursement system (see sections

222(d) and 1615(d) of the Social

Security Act) will be resolved under

existing regulations governing the

resolution of disputes regarding a

payment request (see 20 CFR

§§ 404.2127(a) and 416.2227(a)).

Disputes Between Beneficiaries and

State VR Agencies

Section 411.640 explains that the

dispute resolution procedures in the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), apply to any

dispute arising between a disabled

beneficiary and a State VR agency,

regardless of whether the services are

being provided under one of the EN

payment systems or under the cost

reimbursement payment system

authorized under sections 222(d) and

1615(d) of the Social Security Act.

In response to comments on the

proposed rules, we are revising rules in

subpart I (§§ 411.600, 411.605, 411.610,

411.615, 411.625, 411.630, 411.635,

411.640, and 411.650) to clarify whether

they refer to ENs that are not State VR

agencies, or those that are State VR

agencies.

Subpart J—The Ticket to Work

Program and Alternate Participants

Under the Programs for Payments for

Vocational Rehabilitation Services

Section 101(d) of Public Law 106–170

provides for a graduated

implementation of the Ticket to Work

Program. By January 1, 2004, the

program will be operating in all States

and U.S. territories.

Section 1148(d)(4)(B) of the Act

requires the Commissioner, in any State

where the Ticket to Work program is

implemented, to enter into agreements

with any alternate participant that is

operating under the authority of section

222(d)(2) of the Act in the State as of the

date of enactment of Public Law 106–

170 if the alternate participant chooses

to serve as an EN under the program.

Subpart J of these regulations

describes how implementation of the

Ticket to Work program affects the

current alternate participant payment

programs under 20 CFR 404.2101 et seq.

and 416.2201 et seq. Section 411.700

explains what an alternate participant

is. Sections 411.705 and 411.710

explain that an approved alternate

participant has the option of becoming

an EN when the Ticket to Work program

is implemented in a State and tells an

alternate participant what it must do to

become an EN. Sections 411.715

through 411.730 describe how the

transition process will occur for

alternate participants who choose to

become ENs. These sections explain

how SSA will handle payments related

to beneficiaries who were being served

by alternate participants under existing

employment plans prior to the Ticket to

Work program being implemented in

the State and the alternate participant

becoming an EN. These sections also

provide that SSA will not provide

reimbursement for any services

provided to a beneficiary under the

alternate participant payment system

after December 31, 2003.

Public Comments on the Notice of

Proposed Rulemaking

When we published the NPRM in the

Federal Register on December 28, 2000

(65 FR 82844), we provided interested

parties 60 days to submit comments. We

received comments from over 400

commenters, including national, State

and community-based agencies and

private organizations serving people

with disabilities, beneficiaries, and

other individuals. We considered

carefully the comments we received on

the proposed rules in publishing these

final regulations. The comments we

received and our responses to the

comments are set forth below. Although

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67387

we condensed, summarized, or

paraphrased the comments, we believe

that we have expressed the views

accurately and have responded to all of

the relevant issues raised.

Comments and Responses

Subpart B—Tickets Under the Ticket to

Work Program

Comment: Several commenters

indicated that we should delay the

issuance of tickets until these final

regulations were published.

Response: After consideration of the

public comments on our proposed rules

as well as other views on the best time

to begin the release of the tickets, we

have decided to delay releasing tickets

until after these final regulations are

effective. These regulations are effective

30 days after the date of their

publication in the Federal Register. We

believe that this will allow for the

development of an infrastructure of

public and private sector employment

networks to serve beneficiaries who

receive a ticket. We also believe that it

is critical to issue tickets as soon as

possible after these regulations are

effective.

Section 411.120 What Is a Ticket

Under the Ticket to Work Program

Comment: One commenter suggested

that, in the interest of making these

regulations user-friendly, we add a

cross-reference from § 411.120,

regarding what is a ticket under the

Ticket to Work Program, to § 411.140,

which describes when an individual can

assign the ticket.

Response: We are not adopting this

comment. However, we agree that this

section requires clarification to include

a more complete description of the

format and wording of the ticket, as

provided by section 101(e)(2) of Public

Law 106–170. Accordingly, we have

expanded § 411.120 in the final rules to

include a fuller description of the

format and wording of the ticket.

Section 411.125 Who is Eligible To

Receive a Ticket Under the Ticket to

Work Program?

Comment: We received many

comments in response to proposed

§ 411.125(a)(1) which provided that an

individual will be eligible to receive a

ticket in a month in which he or she is

age 18 or older and has not attained age

65. Some commenters agreed that it

would not be appropriate to provide

transitional youth with tickets, as it

might interfere with their pursuit of an

education. The majority of commenters,

though, indicated that we should allow

individuals under age 18 access to a

Ticket, to try to ensure that they do not

begin a life-long dependency on public

benefits.

Response: As we indicated in the

Preamble to the proposed rules, as we

gain experience with the Ticket to Work

program, we plan, at a later time, to

explore the possibility of expanding the

age criteria for receiving a ticket to

include those SSI beneficiaries age 16

and older who are eligible for disability

benefit payments based on the

childhood disability standard. While we

are not adopting the recommendation to

provide these individuals with tickets in

these final rules, we are publishing a

separate notice in this issue of the

Federal Register to request public input

for our consideration in developing

possible approaches to serve the needs

of transition-age youth with disabilities

who are receiving payments under

programs we administer under the Act.

Comment: Proposed § 411.125(a)(3)(i)

and (ii) provide that an individual will

only be eligible for a ticket in a month

in which our records show that the

individual’s case has not been

designated as a medical improvement

expected (MIE) diary review case, or

that we have conducted at least one

continuing disability review (CDR) on

such an individual and have made a

final determination or decision that

disability continues. Many commenters

stated that we should provide tickets to

beneficiaries regardless of whether they

have been designated as a medical

improvement expected diary review

case. They stated that the MIE

categorization is an administrative

convenience to determine the frequency

of CDRs, and is not a sufficiently precise

tool to deny beneficiaries immediate

access to a ticket. Others indicated that

SSA should examine, on a disability-bydisability basis, which people whose

cases have been designated as a MIE

diary case are likely to remain on the

rolls after initial CDR, and issue those

people a ticket. Other commenters

indicated that the majority of

individuals designated as MIE remain

on the rolls after the first CDR, and that

we would, therefore, needlessly be

delaying the opportunity to participate

in the Ticket to Work program for these

individuals.

Response: We are not adopting this

comment. As we indicated in the

Preamble of the proposed rules,

‘‘Because these beneficiaries have

conditions that are expected to

medically improve in a relatively short

period of time, they could be expected

to return to work without the need for

services under the Ticket to Work

program.’’ Moreover, we do not believe,

as some commenters stated, that the

MIE classification is merely an

‘‘administrative convenience’’ and that

it, therefore, has no relevance for

determining who gets a ticket.

We also believe that using a medical

improvement diary system to help

identify beneficiaries who should

receive tickets is the most

administratively feasible approach

currently available to us. We believe

that the approach outlined in the

proposed rules, and provided in these

final rules, strikes the proper balance

between equitable treatment of

disability beneficiaries and ensuring, to

the extent possible, that the resources

that will be available in the Ticket to

Work program are distributed in the

most effective and efficient manner.

We believe that the use of the medical

improvement diary system is the most

practical and efficient means available

to identify those beneficiaries with

impairments that are expected to

improve within a relatively short period

of time so as to permit the individual to

engage in SGA. However, we believe

that it may be possible to find ways to

improve that system for its use in

connection with the Ticket to Work

program. Therefore, we plan to conduct

an evaluation of the methodology for the

existing MIE category within the CDR

classification system to assess possible

ways to improve the system for use in

identifying those beneficiaries for whom

near-term medical improvement should

preclude the immediate receipt of a

Ticket.

Comment: Many commenters

indicated that there should not be a

limit on the number of tickets a person

can receive in a lifetime, as long as a

person is not using more than one ticket

at a time. Other commenters added that

a person should be eligible for another

ticket when the cash value of the first

one has been exhausted. They cited

potential inequities involving

beneficiaries (1) Whose benefits are

reinstated under the provisions of

section 223(i) or 1631(p) of the Act (as

added by section 112 of Public Law

106–170); (2) who retain eligibility

under section 1619(b) of the Act; and (3)

who receive services from the State VR

agency that elects payment under the

cost reimbursement payment system.

Response: As in the proposed rules,

§ 411.125(b) of the final rules does not

limit the total number of tickets that an

individual may be eligible to receive

during his or her lifetime under the

Ticket to Work program. Rather,

consistent with section 1148 of the Act,

the regulation limits the number of

tickets an individual may receive during

any period during which the individual

is either a title II disability beneficiary

67388 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

or a title XVI disability beneficiary and

his or her title XVI eligibility has not

terminated. If an individual’s

entitlement to title II benefits based on

disability or eligibility for title XVI

benefits based on disability or blindness

terminates, and the individual again

becomes entitled to or eligible for

benefits, the individual may be eligible

to receive a new ticket.

Section 411.125(b) of the final

regulations provides that an individual

will not be eligible to receive more than

one ticket during any period during

which the individual is either: (1)

Entitled to title II benefits based on

disability; or (2) eligible for title XVI

benefits based on disability or blindness

and the eligibility has not terminated.

This rule is based on section 1148 of the

Act, which authorizes the

Commissioner to issue ‘‘a ticket’’ to

disabled beneficiaries for participation

in the Ticket to Work program. The Act

defines ‘‘disabled beneficiary’’ for

purposes of this section to mean ‘‘a title

II disability beneficiary or a title XVI

disability beneficiary.’’ Section 1148 of

the Act also provides that an individual

is a title II disability beneficiary for each

month for which the individual is

entitled to title II benefits based on

disability as described in that section.

This section also indicates that an

individual is a title XVI disability

beneficiary for each month for which

the individual is eligible for a Federal

cash benefit under section 1611 or

1619(a) of the Act based on disability or

blindness.

In addition, section 1148 of the Act

indicates that an individual may be

issued only one ticket while he or she

is a disabled beneficiary. That section

provides that the limitation on the total

number of outcome payments that may

be paid to an EN applies with respect to

each beneficiary. Section 1148 also

authorizes the Commissioner to pay an

outcome payment to an EN, ‘‘in

connection with each individual who is

a beneficiary, for each month, during

the individual’s outcome payment

period, for which benefits . . . are not

payable. * * *’’ This section indicates

that each individual who is a

beneficiary has one outcome payment

period, consisting of 60 months. Thus,

under section 1148 of the Act, the

Commissioner is authorized to pay a

maximum of 60 outcome payments to

an EN with respect to each individual

who is a beneficiary. Accordingly, the

final regulations provide that an

individual may not receive more than

one ticket during any period during

which the individual is either a title II

disability beneficiary or a title XVI

disability beneficiary and his or her title

XVI eligibility has not terminated.

We are adding a provision to

§ 411.125 in these final rules to clarify

that individuals whose entitlement to

title II benefits based on disability is

reinstated under section 223(i) of the

Act, or whose eligibility for title XVI

benefits based on disability or blindness

is reinstated under section 1631(p) of

the Act, will be eligible to receive

another ticket in the first month he or

she is entitled to or is eligible for

reinstated benefits, as long as the

beneficiary meets certain other

requirements for eligibility for a ticket.

Comment: Many commenters stated

that SSA must address issues

specifically related to individuals who

are entitled to child’s insurance benefits

as disabled adult children (DACs). They

indicated that our title II program

regulations should allow these

beneficiaries to move on and off the title

II program (in other words, to have their

benefits reinstated) to the same extent

that other beneficiaries with disabilities

are allowed to do so. Otherwise, they

argue, the purpose of the Ticket program

will be thwarted.

Response: Section 202(d)(1)(B) of the

Act provides that an individual who is

an adult child (18 years old or older) of

an insured person who is entitled to

old-age or disability benefits, or who has

died, is eligible for benefits if the

individual is unmarried and has a

disability that began before the

individual is 22 years old. Under the

provisions of section 202(d)(6) of the

Act, an individual whose entitlement to

child’s insurance benefits based on

disability has terminated may again

become entitled to such benefits if he or

she has not married and he or she is

under a disability which began before

the end of the 84th month following the

month in which his or her most recent

entitlement to child’s insurance benefits

terminated because he or she ceased to

be under a disability. Therefore, these

individuals would be eligible to receive

another ticket in the first month they

again become entitled to benefits, as

long as they meet all other requirements

for eligibility for a ticket.

Further, such individuals whose

benefits are reinstated under section

223(i) of the Act also will be eligible to

receive another ticket in the first month

they are entitled to reinstated benefits,

as long as they meet certain other

requirements for eligibility for a ticket.

Comment: Several commenters stated

that we should eliminate the

requirement in proposed § 411.125(a)(2)

that a beneficiary be in current pay

status in order to be eligible to receive

a ticket. They stated that this provision

would disadvantage individuals who

are in overpayment, extended period of

eligibility or 1619(b) status.

Response: The rule which provides

that a disabled or blind title XVI

beneficiary may be eligible to receive a

ticket only in a month in which his or

her Federal SSI cash benefits are not

suspended is based on section 1148 of

the Act. Under section 1148, the

Commissioner is authorized to issue a

ticket to a title XVI disability beneficiary

for participation in the Ticket to Work

program. This section also provides that

an individual is a title XVI disability

beneficiary for each month for which

the individual is eligible for a Federal

cash benefit under section 1611 or

1619(a) of the Act based on disability or

blindness. If payment of an individual’s

monthly Federal SSI cash benefits is

suspended under 20 CFR 416.1321–

416.1330 due to ineligibility, such

individual is not a title XVI disability

beneficiary for that month for purposes

of section 1148 of the Act since he or

she is not eligible for Federal SSI cash

benefits.

We are providing a similar

requirement regarding current pay

status for title II disability beneficiaries

to make the criteria for issuing a ticket

the same for title II beneficiaries as for

title XVI beneficiaries. This will provide

consistent and equitable treatment of

beneficiaries under the two programs

with respect to the issuance of tickets.

We also believe that limiting the

issuance of tickets to title II disability

beneficiaries who are receiving cash

benefits is consistent with the purpose

of the Ticket to Work program, which is

to enable beneficiaries to seek the

services they need to return to work and

reduce their dependency on cash

benefits. In addition, we believe that

providing tickets only to title II

disability beneficiaries who are

receiving title II cash benefits is

consistent with Congress’ expectation

regarding who would be eligible to

participate in the Ticket to Work

program. In its report on the legislation

to establish the Ticket to Work program,

the House of Representatives Committee

on Ways and Means explained that the

legislation would ‘‘define ‘disabled

beneficiary’ for purposes of Program

participation to include SSI disability

benefits recipients and Social Security

beneficiaries receiving disability

insurance, disabled widow’s, and

childhood disability benefits.’’ (H.R.

Rep. No. 393, 106th Cong., 1st Sess. 41

(1999).)

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67389

Section 411.140 When Can I Assign

My Ticket and How?

Comment: One commenter indicated

that we should revise proposed

§ 411.140(b) to clarify that individuals

may assign the ticket to a State VR

agency if they are eligible to receive VR

services according to 34 CFR 361.42.

The commenter also indicated that we

should revise § 411.145(b) to clarify that

a State VR agency does not have

discretion on when it will or will not

serve an individual. Rather, they

indicated, Title I of the Rehabilitation

Act provides that a VR agency must

cease providing services to individuals

who are no longer eligible for VR

services. They further suggested that we

revise both § 411.140(c) and 411.150(b)

to reflect that the VR counselor must

agree to and sign an Individualized Plan

for Employment.

Response: We agree, and we have

made the appropriate changes to

§§ 411.140, 411.145 and 411.150.

Section 411.150 Can I Reassign My

Ticket to a Different EN or to the State

VR Agency?

Comment: Some commenters

indicated that we should limit, in

§ 411.150, the reasons a beneficiary can

reassign a ticket. They also suggested

that we impose limits as to how many

times a beneficiary will be allowed to

reassign a ticket.

Response: Section 1148(e)(3) of the

Act provides that the PM will ensure

that beneficiaries are allowed changes in

ENs without being deemed to have

rejected services under the program.

Therefore, we are not adopting this

comment.

Comment: We received a comment

which we decided to group with the

comments on this section because it

most closely related to reassigning a

ticket to a different EN or State VR

agency. The commenter asked if, from a

State VR agency’s perspective, a legal

guardian’s decisions with regard to the

Ticket to Work program would be

controlling. For example, would we

require a legal guardian’s permission

before the ticket could be taken back

from one EN and reassigned to another?

Response: We assume that the

commenter is referring to a courtappointed legal guardian of an

individual who has been declared

legally incompetent. In such a case, the

legal guardian is responsible for making

decisions on behalf of the individual

and for exercising any rights of such

individual. In the Ticket to Work

program, the court-appointed legal

guardian of a beneficiary who is legally

incompetent would be responsible for

exercising the beneficiary’s rights under

the program, including deciding

whether the beneficiary’s ticket should

be assigned or reassigned to an EN. In

such circumstances, in order for the

beneficiary’s ticket to be assigned or

reassigned, the IWP under which

services are provided to the beneficiary

by an EN must be agreed to and signed

by the beneficiary’s court-appointed

legal guardian. According to the

Rehabilitation Services Administration,

the same would be true for approval of

an IPE under which services are

provided by a State VR agency. In the

case of a beneficiary who is a legally

competent adult, it is up to the

beneficiary to decide whether to assign

or reassign his or her ticket.

Section 411.155 When Does My Ticket

Terminate?

Comment: One commenter stated that

we should revise § 411.155 to indicate

that we will pay a State VR agency after

the month in which a ticket terminates

if the VR agency has elected and is

eligible to claim payment under the cost

reimbursement payment system

authorized under sections 222(d) and

1615(d) and (e) of the Social Security

Act. This modification would clarify,

according to the commenter, that if a

state VR agency chooses current law

reimbursement, which is possible on a

case-by-case basis, the use of a ticket is

not relevant, and the VR agency can be

paid for services.

Response: We do not agree with this

recommendation to revise the final rules

because it is unnecessary. The final

rules provide that we will make

payment to a State VR agency under the

cost reimbursement payment system if

all of the following conditions exist: (1)

the beneficiary’s ticket is assigned to the

State VR agency under the rules in

subpart F; (2) the cost reimbursement

payment system is the State VR agency’s

payment system with respect to that

beneficiary; (3) we have not made

payment to an EN or a State VR agency

functioning as an EN under one of the

EN payment systems with respect to the

ticket, as discussed in § 411.585; and (4)

the requirements of sections 222(d) and

1615(d) of the Act and applicable

regulations relating to cost

reimbursement are met.

Subpart C—Suspension of Continuing

Disability Reviews for Beneficiaries

Who Are Using a Ticket

Section 411.160 What Does This

Subpart Do?

Comment: One commenter noted that

the Ticket to Work program exempts

beneficiaries who are using a ticket from

medical reviews, but not work reviews.

The commenter indicated that the

language in § 411.160(b) would confuse

beneficiaries and would not allay

beneficiary fears about continuing

disability reviews (CDRs) because SSA

uses the term continuing disability

reviews in the context of the disability

programs when referring to the process

of conducting both medical and work

reviews. The commenter suggested that

we establish a different process for work

reviews.

Response: We did not establish a

different process for work reviews

because programmatically they are a

type of CDR. However, in response to

this comment, we clarified the language

in final § 411.160(b). The revised

language references our rules on when

we may conduct a CDR (i.e. 20 CFR

404.1589, 416.989, and 416.989a) to

determine whether an individual

remains eligible for disability-based

benefits. It then explains that, for

purposes of subpart C, the term

continuing disability review includes

the medical reviews we conduct when

determining if a beneficiary’s medical

condition has improved, as described in

20 CFR 404.1594 and 416.994, but does

not include the CDRs we do under 20

CFR 404.1594(d)(5) to determine

whether a title II beneficiary’s work

activity demonstrates the ability to

engage in SGA. In light of this

clarification, we removed the

parenthetical reference to §§ 404.1594

and 416.994 that we included in

proposed § 411.165.

Section 411.165 How Does Being in the

Ticket to Work Program Affect My

Continuing Disability Reviews?

Comment: Two commenters

recommended that we clarify proposed

§ 411.165 by referencing the specific

sections that explain when the period of

using a ticket begins (§ 411.170) and

ends (§ 411.171).

Response: We concur with the

recommendation and are adding these

cross-references to final § 411.165.

Comment: Another commenter,

referencing proposed § 411.165,

expressed concern that if a beneficiary

places his or her ticket into inactive

status (e.g. due to health reasons) we

would be able to consider the activities

he or she engaged in while actively

participating in the Ticket to Work

program when we conduct a subsequent

medical CDR. The commenter said that

our consideration of such activities

would create a significant disincentive

for beneficiaries to participate in the

Ticket to Work program and

recommended that we amend final

§ 411.165 to assure beneficiaries that we

67390 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

would not consider these activities

when we conduct subsequent medical

CDRs.

Response: Section 1148 of the Act

does not specifically address the factors

we consider when we conduct medical

CDRs and thus we are not amending

§ 411.165 in the final rules in the

manner suggested. However, we will

address this issue when we implement

section 111 of Public Law 106–170,

Work Activity Standard as a Basis for

Review of an Individual’s Disabled

Status, which becomes effective on

January 1, 2002. In general, this section

amends section 221 of the Act to

provide that, with regard to individuals

who are entitled to title II benefits based

on disability, and have received these

benefits for at least 24 months, we will

not schedule a CDR solely as a result of

work activity, and we will not use work

activity engaged in by the individual as

evidence that the individual is no longer

disabled.

Comment: A commenter asked what

happens to those beneficiaries who are

eligible to use a ticket, but are already

working with a provider who is not an

EN. The commenter notes that these

beneficiaries, unlike those who are

using a Ticket, have to undergo CDRs

even though they may already be

making progress towards fuller

employment.

Response: In order for CDRs to be

suspended for an individual under

section 1148(i) of the Act, the

beneficiary must be using a ticket as

defined by the Commissioner of Social

Security. In the situation described by

the commenter, the beneficiary may

wish to encourage his or her current

provider to become an EN.

Section 411.166 Glossary of Terms

Used in This Subpart

Comment: Several comments

suggested that we define the terms we

use in subpart C in a central location in

order to assist with the clarity and flow

of the subpart.

Response: We agree and have added

new § 411.166 to provide a glossary of

key terms which we use in Subpart C.

In new § 411.166 we explain the

following eight terms:

• active participation in your

employment plan

• extension period

• inactive status

• initial 24-month period

• progress review

• timely progress guidelines

• 12-month progress review period,

• using a ticket

In the proposed rules we called the

‘‘12-month progress review period’’ the

‘‘12-month work review period’’ and a

‘‘progress review’’ a ‘‘work review.’’ We

renamed these concepts in these final

rules to distinguish these progress

reviews from the ‘‘work reviews’’ we

conduct for title II beneficiaries,

following the completion of their trial

work periods, to determine whether

their work and earnings demonstrate the

ability to engage in SGA. When we do

a work review under the title II

disability program, we make a

determination about whether an

individual is no longer disabled because

of work and earnings. When we do a

progress review under the rules in

subpart C, we are simply deciding

whether a Ticket is ‘‘in use’’ so that we

can determine whether an individual is

exempt from periodic medical reviews.

Section 411.171 When Does the Period

of Using a Ticket End?

Comment: One commenter stated we

should ensure that the events cited in

proposed § 411.171(b) and (c), that

would signify that the period of using a

ticket has ended, are not beyond the

control of the individual. Proposed

§ 411.171(b), which is redesignated in

the final rules as § 411.171(e), provides

that, if a beneficiary has assigned a

ticket to a State VR agency which selects

the cost reimbursement payment

system, the period of using a ticket will

end with the 60th month for which an

outcome payment would have been

made had the State VR agency chosen

to serve the beneficiary as an EN.

Proposed § 411.171(c), which is

redesignated in the final rules as

§ 411.171(b), provides that the period of

using a ticket will end the day before

the effective date of a decision under

§ 411.192 (which has been incorporated

in final § 411.190), § 411.195, § 411.200

or § 411.205 that an individual no

longer is making timely progress toward

self-supporting employment.

Response: Section 1148(h)(4)(B) of the

Act provides that we will make up to 60

outcome payments to an EN based on a

ticket. Final § 411.171 (d) and (e),

therefore, provide that the period of

using a ticket will terminate at the same

point, with reference to potential

outcome payment months, regardless of

whether a State VR agency elects to

serve a beneficiary as an EN or elects to

be paid under the cost reimbursement

payment system. In order for the period

of using a ticket to terminate in this

situation, a beneficiary will have had to

work 60 months with monthly earnings

sufficient to preclude the payment of

Social Security disability benefits and

Federal SSI cash benefits.

The rules described in §§ 411.190,

411.195, 411.200 and 411.205

contemplate that the beneficiary will

have the opportunity to participate in

the decision-making process before the

PM or SSA makes a decision that the

beneficiary is no longer making timely

progress toward self-supporting

employment.

Comment: One commenter

recommended that we add a provision

to the section of the rules regarding

when the period of using a ticket ends

to assure that the State VR agency will

receive payment for services furnished

to a beneficiary when a beneficiary

applies and seeks services from the

State VR agency after his or her period

of using a ticket has ended.

Response: The determination

regarding ticket use affects whether a

CDR may be initiated with respect to a

beneficiary. The conduct of a CDR could

affect payment to providers if the

beneficiary’s entitlement to or eligibility

for benefits is determined to have ended

for reasons other than work or earnings.

The specific determination as to

whether the period of using a ticket has

ended for a particular beneficiary is not

relevant to the determination of whether

or not a State VR agency can be paid

under either the cost reimbursement

payment system or its elected EN

payment option. Unless the restrictions

on payment described in § 411.585

apply, we will pay the State VR agency

if all requirements for payment are met,

even if the beneficiary’s ticket is not in

use.

Section 411.175 What if I Assign My

Ticket After a Continuing Disability

Review Has Begun?

Comment: We received two comments

suggesting that we add a statement to

this section to indicate that, if a

beneficiary chooses to have benefits

continued pending an appeal of a

medical cessation determination and

does not prevail in the appeal, he or she

may be required to repay the benefits

received during this period.

Response: While we understand the

concern of the commenters, we did not

adopt the recommendation to add this

statement to § 411.175 in these final

regulations, since this section provides

appropriate cross-references to

§§ 404.1597a and 416.996, which

provide this statement.

Comment: Two commenters indicated

that, since no other individuals have

CDRs conducted while they are

receiving services with a ticket, we

should suspend CDRs when a

beneficiary assigns the ticket after a CDR

has begun. The commenters suggested

that allowing the individual to continue

to receive services and supports through

an established EN should be consistent

with the legislative intent to help ensure

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67391

access and entry into improved work

opportunities. They concluded that SSA

has more to gain in terms of positive

outcomes by allowing suspension of

such reviews and having the person

continue with their individual work

plan.

Response: Section 1148(i) of the Act

precludes the initiation of a CDR for a

beneficiary who is using a ticket as

defined by the Commissioner. Section

411.175 deals with the situation where

a CDR is initiated before the beneficiary

assigns and begins using the ticket.

Mere receipt of a ticket does not

preclude the conduct of a CDR. Further,

§ 411.175 does not preclude the

beneficiary from receiving services if he

or she assigns a ticket after a CDR has

begun.

Section 411.180 What Is Timely

Progress Toward Self-Supporting

Employment?

General: By far, the overwhelming

number of comments received relating

to subpart C of the NPRM related to this

section on timely progress toward selfsupporting employment and other

sections which specify the guidelines

for timely progress. We have divided

these comments into five topic areas.

These topic areas are:

(1) Allowing the individual and the

EN or State VR agency to define what

timely progress is in the IWP/IPE;

(2) ‘‘Banking’’ of work performed in

the initial 24-month period;

(3) Allowing enough time in the time

frames for the completion of college

degrees and/or other post-secondary

education;

(4) Allowing for consideration of

relapses, setbacks, and episodes of

illness in setting time frames; and

(5) Miscellaneous, such as the

complexity of the timely progress

guidelines and the contention that the

timely progress guidelines are more

lenient than the EN payment rules.

1. Allowing the Individual and the EN

or State VR Agency To Define What

Timely Progress Is in the IWP/IPE

Comment: We received a large

number of specific comments from

various individuals and organizations

recommending that we allow the

individual and the EN or State VR

agency to define what timely progress is

in the beneficiary’s IWP or IPE. In

general, these commenters stated that

people with disabilities have unique

needs and, consequently, that the

measurement of timely progress should

be flexible and individualized.

Response: There appears to have been

some misunderstanding that

beneficiaries must meet the timely

progress guidelines in order to

participate in the Ticket to Work

program. Therefore, we believe that it is

appropriate to restate here that the

timely progress guidelines are only used

to determine whether a beneficiary is

using a ticket for purposes of protection

against initiation of a CDR as provided

under section 1148(i) of the Act.

Beneficiaries who do not meet the

timely progress guidelines may still

participate in the Ticket to Work

program, receive services and generate

outcome and milestone payments to

ENs. However, these beneficiaries may

be subject to CDRs.

With reference to the specific

recommendation, we appreciate that

individuals with disabilities have

unique needs, and we believe that there

is sufficient flexibility in our timely

progress rules to accommodate these

needs. Further, if we allowed the

individual and the EN or State VR

agency to define timely progress, it

would not be possible to develop a

consistent and standardized method to

determine timely progress for program

administration and integrity purposes.

Absent these consistent standards, our

ability to measure the effectiveness of

the Ticket to Work program would be

significantly hampered.

2. ‘‘Banking’’ of Work in the Initial 24-

Month Period

Comment: There were a large number

of commenters who recommended

improving the timely progress

guidelines by providing for ‘‘banking’’

months of work completed in the initial

24-month period. These commenters

noted that many beneficiaries have

disabilities that are episodic and

intermittent. While some people may

not be able to work right away, others

might be able to work sooner but may

experience difficulties later. The

commenters considered that it would be

more equitable if we allowed those who

can work earlier than the time frames

described in the proposed rules to

receive credit for their work effort.

These commenters recommended that

a beneficiary should be allowed to

‘‘bank’’ work months in the first two

years of a beneficiary’s participation in

the program to count towards the work

requirements in later years. They further

recommended that, in year 5 and

beyond, work in excess of the six-month

requirement should count toward the

next year’s work requirements. Finally,

these commenters recommended that

increasing amounts of work or earnings,

even if below SGA, should be evaluated

as meeting the requirements for progress

reviews.

Response: As a result of these

recommendations, we are modifying

§ 411.180 and other appropriate sections

to allow a beneficiary who has worked

in months during the initial 24-month

period to use those months of work to

meet the work requirements of the first

12-month progress review period if the

work was at the requisite level.

However, we did not adopt the

recommendations to allow for

‘‘banking’’ of work to satisfy the

requirements of progress review periods

beyond the first 12-month progress

review period, or to consider increasing

amounts of work or earnings that are

below the SGA level for non-blind

beneficiaries as meeting the

requirements for progress reviews.

These recommendations would be

inconsistent with the intent of the

timely progress guidelines, which is to

require that beneficiaries demonstrate

an increasing ability to work at levels

which will reduce their dependence on

cash benefits.

3. Allowing Enough Time in the Time

Frames for the Completion of College

Degrees and/or Other Post-Secondary

Education

Comment: We received a large

number of comments that indicated that

the timely progress guidelines we

proposed do not allow enough time for

an individual to prepare for

employment by pursuing a college

degree and/or post-secondary education.

Response: We understand the

concerns of the commenters and agree

that a college degree and/or postsecondary education may enhance

employment outcomes for individuals

with disabilities. We anticipate that the

provision we are adding in response to

recommendations to allow for

‘‘banking’’ months of work will provide

many beneficiaries with additional time

for the pursuit of college and/or postsecondary education, while suspending

CDRs for them. Further, as we have

stated, the timely progress guidelines

are only intended to determine whether

a beneficiary will be considered to be

using a ticket for purposes of

suspending initiation of CDRs.

Therefore, a beneficiary pursuing postsecondary education can continue to

participate in the Ticket to Work

program, receive services and remain in

the education program. However, if the

beneficiary does not meet the timely

progress guidelines, he or she would be

subject to CDRs.

67392 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

4. Allowing for Consideration of

Relapses, Setbacks and Episodes of

Illness in Setting Time Frames

Comment: We received a substantial

number of comments stating that the

proposed timely progress guidelines

would not allow for relapses, setbacks

and episodes of illness.

Response: We have built into the

timely progress guidelines several

mechanisms that will allow for the

episodic nature of many impairments.

These mechanisms include the

provision allowing a beneficiary to

place a ticket in inactive status during

the initial 24-month period; the

progressive nature of the work

requirements; the fact that we do not

require that work activity has to be

continuous to satisfy the timely progress

guidelines, even in the fifth and

subsequent years; and the modification

that we are making in the final

regulation to allow a beneficiary who

has worked in months during the initial

24-month period to use those months to

meet the requirements of the first 12-

month progress review if the work was

at the requisite level. Further, as we

have stated, these guidelines are only

used to determine whether a beneficiary

will be considered to be using a ticket

for purposes of suspension of initiation

of CDRs, not to determine whether the

beneficiary can participate in the Ticket

to Work program.

5. Miscellaneous Comments

Comment: We received several

comments from Federal and State VR

agencies indicating that the active

participation requirement during the

initial 24-month period should be

eliminated because it is not consistent

with principles set forth in title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), which governs

the Federal/State VR program. The

commenters noted that, in contrast with

our proposed requirements, the

Rehabilitation Act does not set a time

period for achieving an employment

outcome as long as the terms of the IPE

are being met.

Response: The Ticket to Work

program under section 1148 of the Act

is not intended to mirror the Federal/

State program for rehabilitation services

under title I of the Rehabilitation Act.

Rather, the purpose of the Ticket to

Work Program is to provide Social

Security or SSI beneficiaries who are

disabled or blind the opportunity to

choose from a variety of providers to

obtain the services and supports that

they need to become self-supporting. As

we have stated, the timely progress

guidelines are only used to determine

whether a beneficiary will be

considered to be using a ticket for

purposes of suspending initiation of

CDRs. They are not designed to measure

overall success of the program or a

beneficiary’s ability to participate in the

program. In this context, we must

establish consistent standards that

would apply to both beneficiaries

receiving services from ENs and to

beneficiaries receiving services from

State VR agencies.

Comment: One commenter remarked

that the timely progress guidelines that

we proposed in § 411.180 and in

succeeding sections were more generous

than the payment requirements that we

proposed in subpart H of these rules.

The commenter noted that a beneficiary

could keep the CDR protection afforded

by the ticket by working for as little as

nine months at the SGA level over a

four-year period, while an EN working

with such a beneficiary may receive

only nine payments. The commenter

said such a funding scheme was

unrealistic for those providers who do

not have additional funding sources.

Response: The timely progress

guidelines and the rules governing

milestone and outcome payments are

not designed for the same purpose. As

we have stated, the timely progress

guidelines only are used to determine

whether a beneficiary will be

considered to be using a ticket for

purposes of the protection against

initiation of a CDR as provided in

section 1148(i) of the Act. The rules for

determining if an EN or State VR agency

will be eligible to receive a payment

under the EN payment systems under

the Ticket to Work program measure the

ability of the service provider to assist

beneficiaries in their efforts to become

self-supporting. See subpart H for a

further discussion of the EN payment

systems.

Comment: Several commenters

remarked that there appears to be no

incentive for either an EN or a State VR

agency to maintain a case open in the

initial 24-month period because the

regulations do not provide any financial

payment for providing services to an

individual in this status. These

commenters predicted that if we do not

change our regulations that ENs and

State VR agencies will not serve

beneficiaries with significant disabilities

or will be quick to terminate individuals

who do not make progress towards

achieving SGA.

Response: The Ticket to Work

program is an outcome-based program,

and provides for milestone payments

when a beneficiary starts to work, and/

or outcome payments when Federal

disability benefits are not payable to a

beneficiary due to work or earnings.

While there is no requirement that a

beneficiary work during the initial 24-

month period in order to be making

timely progress, there is no penalty for

or prohibition against work. In fact, we

have modified the timely progress rules

to specifically respond to comments that

some beneficiaries can and do work

early in their period of rehabilitation. In

addition, enhancements to the outcomemilestone payment system described in

subpart H of these rules make it possible

for an EN to receive a milestone

payment if a beneficiary works for only

one month and has gross earnings from

employment (or net earnings from selfemployment) for that month that are

more than the SGA threshold amount.

Therefore, payment to ENs is possible

during the initial 24-month period if

they serve beneficiaries who work

during this period.

Comment: We received three related

questions about proposed §§ 411.185

and 411.190. They were: (a) What will

happen to beneficiaries whose

disabilities incapacitate them to the

point that they remain on the disability

benefit rolls after fully utilizing the

ticket? (b) How much time does a

consumer have to keep the ticket in

inactive status? and (c) Will the

beneficiary have a penalty?

Response: We will make outcome

payments to ENs to which beneficiaries

have assigned a ticket only if monthly

cash benefits are not payable because of

the performance of SGA or by reason of

earnings from work. Generally, by the

time 60 outcome payment months have

occurred, entitlement to title II benefits

based on disability or eligibility for title

XVI benefits based on disability or

blindness will have terminated because

of work or earnings for most

beneficiaries. However, these

beneficiaries may be entitled to have

their benefits reinstated under section

223(i) or section 1631(p) of the Act. As

we explain in § 411.125 of the final

rules, beneficiaries whose entitlement to

or eligibility for benefits is reinstated

under these sections of the Act would

be eligible to receive another ticket if

they meet certain other requirements for

eligibility for a ticket.

The option of placing a ticket in

inactive status is available to

beneficiaries only during the initial 24-

month period following the assignment

of the ticket. During this period there is

no penalty or time limit for keeping the

ticket in inactive status, per se. What

happens is that the clock stops and the

ensuing months during which the ticket

is in inactive status do not count

towards the initial 24-month period.

However, the ticket is considered to be

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67393

not in use and the beneficiary is subject

to continuing disability reviews during

this time.

Section 411.185 How Much Do I Need

To Earn To Be Considered To Be

Working?

Comment: One commenter questioned

whether the earnings guidelines we

proposed in § 411.185(a)(1) and (b)(1)

for meeting the timely progress

requirements during the first and

second 12-month work reviews would

lessen the effect of existing work

incentive provisions.

Response: The earnings guidelines we

proposed only deal with determining

whether a beneficiary meets timely

progress requirements for purposes of

suspending medical CDRs. The

guidelines do not affect any of the

existing work incentive provisions.

Section 411.190 How is it Determined

if I am Meeting the Timely Progress

Guidelines?

Comment: One commenter was

concerned that proposed § 411.190 may

conflict with other Federal regulations

governing a State VR agency’s use and

release of confidential information (see

34 CFR 361.38). This commenter

suggested that we modify our final rule

by adding a new paragraph that would

require a State VR agency or an EN to

satisfy all applicable Federal and State

confidentiality requirements before

sharing any personal information about

the beneficiary with the PM.

Response: We do not believe that such

a modification is necessary. Nothing in

this rule overrides Federal and State

confidentiality rules. We provide in 20

CFR Part 401 a description of SSA’s

policies and procedures related to the

Privacy Act of 1974, and section 1106 of

the Social Security Act concerning

disclosure of information about

individuals. ENs, as SSA’s contractors,

are subject to these rules. Similarly,

§ 411.375 states that State VR agencies

are required to provide VR services

under a plan approved under title I of

the Rehabilitation Act of 1973, as

amended, (29 U.S.C. 720 et seq.), even

when functioning as an EN. This

includes the confidentiality requirement

that a State VR agency must follow.

Section 411.191 Table Summarizing

the Guidelines for Timely Progress

Toward Self-Supporting Employment

Comment: One commenter,

referencing the table in proposed

§ 411.191, suggested that we have one

SGA level for all beneficiaries and that

it be the one that currently applies to

those who are blind. The commenter

said the higher level would support the

Ticket program’s goal of transitioning

beneficiaries from benefits to selfsufficiency and would encourage more

beneficiaries to participate in the Ticket

to Work program.

Response: We did not adopt this

suggestion because the SGA level for

individuals who are not blind is not the

subject of these rules. The rules relating

to the SGA levels for those who are not

blind can be found in 20 CFR 404.1574

and 416.974, and the rules relating to

the SGA levels for those who are blind

can be found in 20 CFR 404.1584.

Section 411.192 What if My EN, the

State VR Agency, or I Report That I Am

Not Actively Participating in My

Employment Plan?

Comment: One commenter suggested

that we add a third choice to the two we

proposed in § 411.192(a) (§ 411.190(a)(1)

in the final regulations) for beneficiaries

who are not actively participating in

their employment plans during the

initial 24-month period. It would allow

them to reassign their tickets to a

different EN.

Response: We did not adopt this

suggestion because we state in another

section of these final rules that

beneficiaries will have the right to

reassign their tickets to other ENs or to

a State VR agency (see § 411.150(a)).

Such reassignments can occur

regardless of whether the beneficiaries

are making timely progress toward selfsupporting employment.

Section 411.195 How Will the PM

Conduct My 24-Month ProgressReview?

Comment: One commenter stated that

the timely progress reviews we

proposed in § 411.195 did not take into

consideration the fact that beneficiaries

may not be able to obtain or retain

employment due to circumstances

beyond their control. Reasons cited

included a downward turn in the

economy that increases competition for

available jobs, an employment goal that

requires more than two years to obtain,

and a lack of transportation to look for

jobs. This commenter indicated that it

was unfair to subject beneficiaries to

medical CDRs if they fail to obtain

employment through no fault of their

own.

Response: The timely progress review

to which this commenter referred is the

24-month progress review, which does

not contain a specific requirement for

work within the first 24 months after the

beneficiary assigns a ticket. However,

the 12-month progress reviews, which

come after the 24-month progress

review, contain a work requirement. We

did not modify those requirements

because we believe that they are

sufficiently generous and flexible

enough to accommodate individual

needs. They do not require work in

every month. They require work in three

months for the first 12-month progress

review period and in six months for

subsequent 12-month progress review

periods.

We believe these rules are consistent

with the intent of the Ticket to Work

program, which is to allow beneficiaries

to choose from a variety of providers to

obtain the services and supports that

they need to become self-supporting.

While beneficiaries may be subject to a

CDR if they do not successfully

complete the 12-month progress

reviews, the Ticket does not terminate

and beneficiaries may later qualify for

CDR protection.

Comment: One commenter

recommended rewording § 411.195(a)(1)

so that it does not sound like work is

not an expectation within the initial 24-

month period.

Response: We agree with the

comment and have reworded § 411.195

consistent with this recommendation.

Comment: We received one comment

about § 411.195(a)(3). The commenter

stated that the EN or State VR agencies,

rather than the PM, should determine if

the beneficiary can reasonably be

expected to reach the goal of at least

three months of work during the next

12-month work review period. The

commenter continued that if we do not

make this change, then this section

should be deleted.

Response: We have not adopted this

comment. Under the law, we had to

define what it means to be using a ticket

for purposes of receiving protection

against initiation of a CDR. We have

chosen to use clear standards (active

participation in the employment plan

during the first 24 months, then months

of work activity at a certain level during

succeeding 12-month periods). We

believe it is better to have the PM, who

is charged with helping us to administer

the program, use the criteria we have

established to help us determine

whether a beneficiary will be

considered to be using a ticket for

purposes of CDR protection. We believe

having a single entity perform these

reviews will lead to more fair and

efficient administration of the program.

Section 411.200 How Will the PM

Conduct My Annual Work Review?

Comment: We received six comments

that questioned the ability of the PM to

accurately anticipate and assess timely

progress for individuals whose tickets

are assigned to ENs or State VR

agencies.

67394 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

Response: We believe that we have

developed clear standards for

determining whether a beneficiary is

making timely progress toward selfsupporting employment for purposes of

being considered to be using a ticket.

We further believe that it is better to

have the PM, who is charged with

helping us to administer the program,

use these criteria to help us to

determine whether a beneficiary is

using a ticket for purposes of CDR

protection. We believe that having a

single entity perform these reviews,

with significant input from ENs and

State VR agencies, will lead to more fair

and efficient administration of the

program.

Section 411.210 What Happens if I Do

Not Make Timely Progress Toward SelfSupporting Employment?

Comment: Four commenters asked us

to clarify the proposed rules in

§ 411.210(a) to indicate whether a State

VR agency would be able to receive

payment under the cost-reimbursement

payment system if a beneficiary, who is

found to be no longer using a ticket for

CDR protection purposes, continues to

participate in the Ticket to Work

program. Also, another commenter

asked us whether a State VR agency or

an EN would still be eligible for the

payment option it selected should the

beneficiary work but not meet the

requirements for re-entering in-use

status.

Response: In these final rules, we

made changes to § 411.210(a) to indicate

that a State VR agency which selects the

cost reimbursement payment system

may be eligible for payment under that

system even though the beneficiary is

determined to be no longer using a

ticket. We also made changes to indicate

that an EN or State VR agency serving

a beneficiary as an EN may receive

milestone or outcome payments for

which it is eligible even though the

beneficiary is considered to be no longer

using a ticket. The proposed rules had

referred only to outcome payments.

Under the final rules, beneficiaries who

do not meet the timely progress

guidelines may continue to receive

services from their service providers.

Comment: One commenter was

concerned that an EN that first serves a

beneficiary might not receive its

appropriate share of any future EN

payments if a beneficiary puts a ticket

in inactive status or switches ENs when

seeking to re-enter in-use status. This

commenter recommended that we

amend proposed § 411.210(b)(1)(ii) to

provide that when a beneficiary

completes the required three months of

work at the requisite level for

reinstatement, he/she may re-enter inuse status, provided the ticket is

reassigned to the previous EN or State

VR agency.

Response: We did not adopt this

commenter’s suggestion. We initially

note that under the situation described

in this section, the ticket does not have

to be ‘‘reassigned’’ if it has never been

taken out of assignment. This section

merely provides that for a beneficiary to

re-enter in-use status, his or her ticket

must be assigned to an EN or State VR

agency. We further believe that we do

not have authority under section 1148 of

the Act to restrict the beneficiary’s

choices regarding assigning a ticket in

the manner suggested. With regard to

this commenter’s concerns about a

former EN sharing in any future EN

payments, our rules in § 411.560 allow

us to allocate a payment to more than

one EN when the ENs request payment

for the same milestone or outcome and

the beneficiary has assigned the ticket to

them at different times.

Comment: A comment referenced

§ 411.210 and suggested adding a new

provision to the regulations to indicate

that if SSA determined that individuals

were not using a ticket, and, after a CDR,

determined that they no longer were

disabled, they still could continue to

receive benefits if they meet the

requirements in section 225(b) of the

Social Security Act.

Response: We are not adopting this

recommendation to add a section to the

Ticket to Work program regulations

concerning the provisions for

continuation of benefits. The rules for

continuation of benefit payments to

persons who recover medically while

participating in a rehabilitation program

are in 20 CFR 404.316(c), 404.337(c),

404.352(d), and 416.1338. As previously

stated, we plan to publish proposed

rules to amend those sections of the

regulations to take account of the

amendments made by section 101(b) of

Public Law 106–170 to sections 225(b)

and 1631(a)(6) of the Act.

Comment: This commenter also

indicated that § 411.210(b)(1)(i) should

be revised to make the requirement for

re-entering in-use status during the

initial 24-month period or in the 24-

month progress review consistent with

the actual requirements for this phase,

in other words, actively participating in

the activities outlined in the IWP/IPE,

rather than completing three months of

work at the prescribed level. The

commenter indicated that this provision

is not consistent with the purpose, as

explained in the preamble and the

proposed rules themselves, for the first

24-month period. The commenter

further recommended that the

requirements for reinstatement after

subsequent work reviews also should be

consistent with the requirements of that

phase of timely progress.

Response: We have revised the

requirements for re-entering in-use

status during the initial 24-month

period in § 411.210(b)(1). We have not

changed the requirements for reentering in-use status after failing to

meet the timely progress guidelines in

the 24-month progress review or in the

12-month progress reviews because

these requirements are consistent with

the requirements of the reviews.

Section 411.220 What if I Am

Temporarily Unable To Participate in

My Employment Plan?

Comment: We received five comments

about proposed § 411.220(a). All of

these comments indicated that we

should allow use of the ‘‘inactive

status’’ (as defined in proposed

§§ 411.192(b) and § 411.220(a)) not only

in the initial 24-month period, but

throughout the life of the ticket as long

as the ticket is in use.

Response: To improve the

organization of the rules in subpart C,

the rules that were set out in proposed

§§ 411.192 and 411.220 have been

incorporated in § 411.190 in the final

regulations. We did not adopt the

suggestion to expand the scope of the

rules to allow the placement of a ticket

in inactive status after, as well as

during, the initial 24-month period.

While the placement of a ticket in

inactive status is only permitted during

the initial 24-month period in these

final rules, the work requirements in

subsequent progress review periods are

designed to allow for intermittent

employment (that is, three months of

work out of 12, or six months of work

out of 12) and to take into account

relapses in health.

Comment: We received a comment

regarding proposed § 411.220(b)(1) that

indicated a belief that an individual

would not be eligible to receive services

from an EN or State VR agency if the

individual chooses to place the ticket in

inactive status. This commenter

indicated that State VR agencies must

continue to provide services to their

clients under the terms of the IPE.

Response: Section 411.190 of these

regulations indicates that the option of

placing a ticket in inactive status is

designed to accommodate individuals

who temporarily are unable to

participate or are not actively

participating in their employment plan.

This presumes that these individuals

will not be receiving services under an

IPE during this period of inactivity.

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67395

Comment: We received a comment

suggesting that we modify proposed

§ 411.220(d) to include reassignment of

the ticket as one of the options that the

PM will offer a beneficiary who is not

actively participating in his or her

employment plan. This option would be

in addition to the options of resuming

active participation or placing the ticket

in inactive status.

Response: We are not making this

change because the rules in proposed

§ 411.220(d), which have been moved to

§ 411.190(a)(1) in the final regulations,

concern the timely progress guidelines.

In §§ 411.145 and 411.150 of the final

rules, we explain that a beneficiary has

the option of taking a ticket out of

assignment and then reassigning the

ticket. We will ensure that beneficiaries

are advised of their options regarding

ticket reassignment by providing public

information materials, notices, operating

instructions and procedures to the PM.

Section 411.225 What if My Ticket Is

No Longer Assigned to an EN or State

VR Agency?

Comment: We received two comments

about this section (which is § 411.220 in

the final regulations) which allows the

individual an extension period of up to

three months, during which the

individual will be considered to be

using a ticket even though the ticket is

no longer assigned, to give the

individual time to find another EN

willing and able to serve the individual.

One commenter expressed support for

the provision and did not recommend

any changes. The other commenter

suggested adding a numbered paragraph

to § 411.225(a) as follows: ‘‘You have

relocated to an area not served by your

previous EN or State VR agency.’’

Response: We agree with the

suggested change to this section, with a

modification. We are adding language to

§ 411.220(a)(1) of the final rules

(formerly proposed § 411.225(a)(1)),

instead of adding another numbered

paragraph, to indicate that a beneficiary

may have retrieved the ticket because

the beneficiary relocated to an area not

served by the beneficiary’s previous EN

or State VR agency.

Subpart D—Use of One or More

Program Managers To Assist in

Administration of the Ticket to Work

Program

Section 411.230 What Is a PM?

Comments: The comments on

proposed § 411.230 generally

questioned the ability of a PM to

administer a program as large and

complex as the Ticket to Work program.

One of the commenters expressed

concern about the selection of a private

organization as PM and recommended

that the program be administered only

by a designated State agency. The

commenter indicated that there is a

proven history of State administration of

Federal programs to support their

recommendation. Other issues included

the PM’s ability to provide sufficient

access for beneficiaries with disabilities,

to deal with the diversity issues of

persons with disabilities, and to

coordinate the program equitably

nationwide.

Response: Section 1148(d)(1) of

Public Law 106–170 specifically

provides that PM(s) can be either private

or public sector organizations.

Therefore, the selection of the PM

cannot be restricted to only State

agencies as recommended in the

comments. All organizations, both

public and private, must be considered

under the competitive bidding process

as stated in § 411.230. The

Commissioner may terminate a PM for

inadequate performance. Public and

private entities that serve as a PM for us

will be held to the same level of

accountability.

While the regulation provides general

information about the PM’s

administration of the Ticket to Work

program, specific details regarding

program administration are provided in

the PM contract. The contract contains

a comprehensive business plan, a listing

of specific tasks required of the PM, and

a delivery schedule for completion of

the required tasks. We believe that the

questions raised about access and

diversity are sufficiently addressed in

the contract. For example, the Business

Plan in the contract requires the PM to

operate a toll-free Text Telephone

Communication Service and provide

Spanish language services. Further, the

Business Plan designates the hours of

service to be provided across the

country and requires that inquiries be

monitored on a State-by-State basis to

ensure that the program is successfully

implemented nationwide.

In September 2000, we contracted

with MAXIMUS, Inc., to serve as the PM

for the Ticket to Work program. Specific

information about their duties and

responsibilities as the PM can be

obtained through their toll-free number

at 1–866–968–7842, or TTY 1–866–833–

2967.

Section 411.245 What Are the PM’s

Responsibilities Under the Ticket to

Work Program?

Comment: The majority of comments

on proposed subpart D of the regulation

addressed the provisions of § 411.245.

Several of the comments on proposed

§ 411.245(a) questioned the PM’s ability

to recruit sufficient numbers of ENs.

Specifically, the commenters expressed

concern about whether enough ENs

would be recruited in all States and all

areas to provide beneficiaries with EN

choices. To address this issue, one

commenter recommended that a formal

referral process be created for the

beneficiaries to refer service providers

to the PM as potential ENs. Another

commenter wanted the evaluation of the

PM as described in proposed § 411.250

to specifically identify ‘‘the recruitment

of sufficient ENs’’ as one of the

assessment criteria.

Another comment addressed the issue

of beneficiary options from a different

perspective. The commenter

recommended that the PM provide each

EN with a list of ticket holders in their

area that had not yet assigned their

ticket. Each EN could then contact the

beneficiaries and discuss with them

services the EN could offer. Through

this process, beneficiaries would be

provided a variety of options from

which to choose when assigning their

ticket.

Response: As we indicated

previously, the regulation provides

general information regarding the

responsibilities of the PM. The PM

contract gives much greater detail about

the PM’s responsibilities, including the

marketing activities that the PM will

undertake.

While the contract does not

specifically identify a referral program

for beneficiaries as part of their

recruitment efforts, it does require the

PM to use a variety of resources in their

recruitment efforts. Since neither the

regulation nor the PM contract

precludes the beneficiary as a source for

potential EN referrals, we do not believe

a formal referral process specifically for

beneficiaries is needed in order for the

PM to use this source when appropriate.

We do not believe that it is necessary to

identify ‘‘recruitment of sufficient ENs’’

as a separate assessment criterion in the

regulation. The regulation provides

assessment criteria such as quality of

services and customer satisfaction. We

believe that these criteria can be used in

determining whether or not the PM

recruited sufficient ENs to provide

beneficiaries with choices in the

assignment of their tickets. In addition

to the assessment criteria listed in the

regulations, the PM’s contract identifies

the enrollment of sufficient ENs as a

performance standard required under

the Government Performance and

Results Act.

The process for the PM to provide

ENs with information about

beneficiaries eligible to receive tickets is

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addressed in the Business Plan of the

PM’s contract. We will provide the PM

with a list of all ticket-eligible

beneficiaries by geographic area and

disability impairment. The PM will

provide, within the limitations of the

Privacy Act, the ENs with information

from this list for beneficiaries eligible to

receive tickets in their area. The PM will

encourage the ENs to use the lists to

market their services with the

beneficiaries.

Comment: Several comments on

proposed § 411.245(b) addressed the

issue of providing information in

accessible formats. The language in the

proposed regulation defined accessible

format as ‘‘media that is appropriate to

a particular beneficiary’s medical

impairment(s)’’. Other commenters were

concerned that all information about the

Ticket to Work program should be

provided in an accessible format and

that the beneficiary’s preference should

be taken into consideration. One

commenter requested that ‘‘medical’’ be

removed from the term ‘‘medical

impairment,’’ in defining ‘‘accessible

format’’ in paragraph (b)(2).

Response: The Business Plan of the

PM contract identifies certain

requirements that address accessibility

issues. The PM is required to operate a

toll-free Text Telephone

Communication Service for people with

hearing and speech impairments+ to

provide service through their toll-free

telephone number. In addition, the

website operated by the PM will be fully

accessible to visitors with disabilities

via software-based assistive

technologies such as screen readers,

screen magnifiers, speech synthesizers,

and voice input software that operate in

conjunction with graphical desktop

browsers. Informational materials will

be made available to beneficiaries in

Braille format upon request. We agree

with the comment regarding the word

‘‘medical,’’ as not all impairments are

‘‘medical’’ in nature. We have changed

the language in the final regulations to

omit the word ‘‘medical’’.

Comment: Comments on proposed

§ 411.245(b) and (d) recommended

adding time frames to the regulation.

One was a fifteen-day time frame for the

PM to respond to the beneficiaries about

the reassignment of their tickets. The

second was a ten-day time frame for the

PM to respond to the EN about the

assignment of a beneficiary’s ticket. In

both instances, the commenters were

concerned about the delays that

beneficiaries and ENs might experience

if the PM did not respond timely.

Response: In both of the situations

addressed in the comments, there is an

assumption that services to the

beneficiary cannot begin until a formal

notice is received from the PM about the

assignment or reassignment of a Ticket.

This is not the case. The Business Plan

of the PM contract outlines the process

the PM will use for assigning or

reassigning a ticket. When a beneficiary

brings the Ticket to an EN, the EN will

verify that the beneficiary has a ticket

eligible for assignment. If the

beneficiary and EN agree to work

together, they develop an individual

work plan. At this time, the beneficiary

and the EN may begin working together.

Therefore, there is no delay in service as

anticipated by the comments. When the

PM receives the plan signed by both the

beneficiary and EN, the PM will verify

that the ticket is eligible for assignment,

update the database to show the ticket

has been assigned, and notify the

appropriate parties.

Comment: Comments on proposed

§ 411.245(c)(2) and § 411.245(d)

requested that additional language be

included to clarify the PM’s

involvement in certain dispute

resolution situations. Commenters

wanted both sections to identify the

PM’s responsibility to resolve payment

disputes between two or more ENs

when a ticket is re-assigned and

multiple ENs have provided services to

the same beneficiary.

Response: We agree and we are

revising § 411.245(c)(2) to clarify that

the PM will be responsible for making

determinations regarding the allocation

of outcome or milestone payments when

the beneficiary has been served by more

than one EN. We believe that the

changes to § 411.245(c)(2) address the

commenter’s concerns and additional

changes in § 411.245(d) are not needed.

Comment: We received several

comments on proposed § 411.245(d)

from State VR agencies regarding the

PM’s review of individual work plans

and individualized plans for

employment. The commenters wanted

the regulation to clarify that the PM

could review only individual work

plans and not individualized plans for

employment. They stressed that the PM

had no authority to review an

individualized plan for employment

submitted by a State VR agency serving

as an EN. The comments cited 34 CFR

361.45 and 361.46 as the only authority

for the content and the development of

individualized plans for employment.

Response: Section 411.245(d) of the

regulation does not require the PM to

review individualized plans for

employment or amendments to those

plans. We have revised this section, as

recommended, to state that the PM will

not review individualized plans for

employment developed by beneficiaries

and State VR agencies. Section 411.385

of the regulation describes how an

individualized plan for employment is

used in the Ticket to Work program.

Section 411.385 does not require these

plans to be submitted to the PM in

connection with the assignment of a

ticket to a State VR agency, and we did

not intend for the PM to review

individualized plans for employment.

Comment: Several comments on

proposed § 411.245(d) discussed the

PM’s oversight of referrals between the

ENs and the State VR agencies.

Commenters requested additional

language that would clarify the PM’s

responsibility when an EN that chooses

not to take a beneficiary’s ticket makes

a referral to a State VR agency. The

commenters wanted the regulation to

reflect the PM’s lack of jurisdiction

regarding such referrals.

Response: While a referral to the State

VR agency in this situation is possible,

the referral would be outside the

parameters of the Ticket to Work

program and the PM’s authority. So, we

do not believe that we need to clarify

the PM’s lack of authority to oversee

such referrals.

Section 411.250 How Will SSA

Evaluate a PM?

Comment: We received many

comments about the evaluation process

for the PM. The commenters wanted to

ensure that evaluation included input

from a variety of stakeholders. Several

commenters recommended that we

solicit input from ENs and beneficiaries

as part of the evaluation process for the

PM. In addition, one commenter urged

that we submit the evaluation to the

Ticket to Work and Work Incentives

Advisory Panel for comment and

recommendations.

Response: The evaluation will gather

input from parties served by the PM

including beneficiaries and ENs. We

agree that such input is a valuable

resource. We also agree that it is

appropriate for the Ticket to Work and

Work Incentives Advisory Panel to

receive and review a copy of the

evaluation. However, we do not believe

that these regulations need to address

this issue as the evaluation process is

outlined in detail in the PM’s contract.

Comment: Other comments on

proposed § 411.250 were directed at

specific elements of the evaluation

process. One commenter requested that

the regulation specify that an evaluation

would be performed at least annually.

Another commenter wanted to know

about the qualifications of the Project

Officer and the Contracting Officer to

review a contract for disability-related

programs.

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67397

Response: We believe that these

elements of the evaluation process

should not be addressed in this

regulation as they are already described

in other Federal regulations including

the Federal Acquisition Regulations

(FAR) at 48 CFR Chapter 1. The

procedures regarding the review of the

PM’s performance are spelled out in the

FAR at 48 CFR subpart 42.15.

Qualifications for project officers and

contracting officers are established in

the FAR at 48 CFR 1.102–4 and 1.602–

1. In addition, the Project Officer is on

staff at SSA’s Office of Employment

Support Program and is knowledgeable

about programs serving persons with

disabilities.

Subpart E—Employment Networks

Section 411.300 What is an EN?

Comment: Some commenters

suggested that the definition of an EN

should be included in its entirety in the

‘‘Definitions’’ section of the final rule.

They indicated this definition should

include a complete list of the services

that the ENs are responsible for

providing or arranging and noted that

we should include the scope of services

that may be needed to enable an

individual with a disability to prepare

for work. Some other commenters

indicated that ENs should be required to

provide a minimum range of services

and that we should specify what is

meant by ‘‘substantial expertise and

experience’’ as contained in section

1148(f)(1)(C) of the Act.

Response: We have defined

employment network, or EN, at

§ 411.115(e). We are not providing a

more complete listing of services

because such a listing would not

encompass all the services or other

assistance a beneficiary might need.

Instead we are specifying only

employment services, vocational

rehabilitation services or other support

services to provide flexibility to ENs

and thus not specifically include or

exclude some services. Section

411.245(b)(3) contains examples of the

services an EN may provide. The types

of services an EN will provide in a

specific case will be detailed in the

work plan an EN will sign with a

beneficiary. SSA does not want to limit

or describe what specific services

should be included in this plan. The

phrase ‘‘substantial expertise and

experience’’ is found in section

1148(f)(1)(C) of the Act, which states

that no EN ‘‘may serve under the

Program unless it meets and maintains

compliance with both general selection

criteria (such as professional and

educational qualifications, where

applicable) and specific selection

criteria (such as substantial expertise

and experience in providing relevant

employment services and supports).’’

We have not further defined that phrase

in the regulations. The general and

specific selection criteria for ENs are

contained in § 411.315 of the final rules.

Section 411.305 Who Is Eligible To Be

an EN?

Comment: Many commenters

recommended that family or friends

who wish to serve an individual be

considered eligible to be an EN. Some

commenters also suggested that we

permit a beneficiary to be his or her own

EN.

Response: The law provides that any

entity willing to assume responsibility

for the coordination and delivery of

services under the Ticket to Work

program may qualify as an EN. Our

regulation states that any qualified

entity willing to assume responsibility

for the coordination and delivery of

employment services, VR services, or

other support services to beneficiaries

who have assigned their tickets to an EN

are eligible to be ENs. This does not rule

out family or friends who meet the

qualifications to be an EN and are

willing to assume this responsibility.

We therefore do not see any need to

specifically cite family or friends.

However, the statute does not allow a

beneficiary to serve as his or her own

EN. As § 1148(b)(3) of the Social

Security Act and § 411.120 explain, a

ticket under the Ticket to Work program

is a document which provides evidence

of the Commissioner’s agreement to pay

an EN or State VR agency for providing

services to a beneficiary.

Comment: Some commenters

questioned why State VR and one-stop

delivery systems should be automatic

ENs. Another commenter requested

inclusion of the Department of Veterans

Affairs as an EN. Another commenter

wanted to know whether an employer

could become an EN.

Response: Section 1148(f)(1) of the

Act states that an EN may be an agency

or instrumentality of a State (or political

subdivision thereof) or a private entity.

It does not allow Federal agencies to

serve as ENs. Section 1148(c) of the Act

allows each State VR agency to elect to

participate in the Ticket to Work

program as an EN with respect to a

disabled individual. While the law

specifically cites one-stop delivery

systems as eligible to become ENs, it

does not make them ENs automatically.

Section 411.305(g) lists employers as

eligible to be ENs.

Comment: One commenter wanted to

know whether American Indian Projects

may become ENs and whether such

projects can become ENs if their State

has not been chosen as a site.

Response: Section 411.305(e) lists

organizations administering VR Services

Projects for American Indians with

Disabilities authorized under section

121 of part C of the Rehabilitation Act

of 1973, as amended (29 U.S.C. 720 et

seq.), as one of the entities eligible to be

ENs. American Indian Projects under

section 121 can apply to be ENs only

within the States where the Ticket to

Work program has been implemented,

or if they are qualified to provide

services within such a State.

Section 411.310 How Does an Entity

Apply To Be an EN and Who Will

Determine Whether an Entity Qualifies

as an EN?

Comment: Some commenters wanted

to know how an entity applies to be an

EN, who will determine whether an

entity qualifies, and requested that our

final rule reflect the differences in

application between State VR agencies

and other entities.

Response: Section 411.310 explains

that an entity applies to be an EN by

responding to our Request for Proposal

(RFP), that the PM will conduct a

preliminary review of responses to the

RFP, and that the Commissioner will

decide which applicants will be

approved to serve as ENs. Sections

411.360 and 411.365 explain that we

will notify the State VR agency in

writing about the payment systems

available under the Ticket to Work

program, and that the State agency must

respond in writing. We have revised

§ 411.310 to clarify that this section

applies to entities other than State VR

agencies which are applying to be ENs.

Comment: One commenter suggested

that since the PM is charged with the

responsibility to ensure that there are a

sufficient number of ENs nationally, the

PM should be charged with the

responsibility to evaluate the

qualifications because they are more

qualified. The commenter also stated

that the PM, not the Commissioner,

should decide which applicants to

select as ENs.

Response: The PM will play a strong

role in evaluating applicants’

qualifications and in recommending

applicants for selection as ENs. SSA

will consider the PM’s evaluations and

recommendations. However, since SSA

will be entering into agreements with

ENs, will be making payments to ENs,

and ultimately will be responsible for

the success of the Ticket to Work

program, SSA must remain the final

authority for evaluating EN

67398 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

qualifications and determining which

applicants will become ENs.

Comment: Several commenters

suggested that we change § 411.310 to

indicate that it applies to entities other

than State VR agencies and that State

VR agencies must comply with

§ 411.360 which discusses how a State

VR agency becomes an EN.

Response: We have modified

§ 411.310 to indicate that it applies to

entities other than State VR agencies

and added a part (c) to explain that

§ 411.360 describes how State VR

agencies participate as ENs in the Ticket

to Work program.

Section 411.315 What Are the

Minimum Qualifications Necessary To

Be an EN?

Comment: One commenter suggested

switching the order of some of the

qualifications listed in § 411.315(a) and

deleting the example in § 411.315 of

using staff with a college degree in a

related field.

Response: The order of qualifications

listed in § 411.315(a) does not imply

that the first one listed is of more

importance than subsequent

qualifications. Items (1) through (6) in

this listing are of equal weight and there

is no rationale for rearranging the

listing. The use of staff with degrees in

a related field as a qualification for ENs

ensures that we do not unduly restrict

qualified entities from becoming ENs

and thus limit the options of our

beneficiaries seeking services, because it

provides another way for an entity to

demonstrate that it meets one of the

qualifications to serve as an EN.

Comment: Several commenters

believed that our requirements for ENs

should require all ENs to be licensed,

certified, accredited or registered to

provide services or to be able to arrange

for other qualified entities to provide

these services. Other commenters felt

that our requirements were too stringent

and that we should delete entirely

§ 411.315(c), which requires that

potential ENs have applicable licenses,

or certificates if required by State law.

Response: We have tried to strike a

balance between ensuring that ENs are

qualified by licensing or certification,

while also providing an opportunity for

non-traditional providers to qualify as

ENs by demonstrating that they have

obtained education or experience in

providing the relevant services. Section

1148(f) of the Act provides that ENs

must meet general selection criteria

such as professional and educational

qualifications where applicable and

specific selection criteria such as

substantial expertise and experience in

providing relevant employment services

and supports. Section 1148(f) did not

limit us to requiring that all ENs be

licensed, certified, or accredited, or

registered to provide services or to

arrange for other qualified entities to

provide these services. However, where

State law requires such documentation,

the requirements of State law will

apply.

Comment: Many commenters noted

that the proposed rules appeared to

require that ENs have relevant

certification, accreditation, or license,

even when the EN is not directly

involved in the provision of services.

They specifically expressed concern

that we were requiring ENs to be

qualified to provide medical and healthrelated services. Commenters suggested

that our final rule clarify that an EN

would not need certification,

accreditation, or licensing unless it was

directly providing the relevant services,

but that the EN must be able to arrange

for an entity with the applicable

certification, accreditation, or license to

provide the services.

Response: Section 411.315 of the

proposed rules did not require

certification, licensing or registration

per se. Section 411.315(b) of the rules

requires ENs to have qualified staff. One

way to meet this requirement is by using

staff that are properly credentialed.

Section 411.315(c) of the rules requires

ENs to comply with whatever State laws

may apply to them; ENs are not relieved

of their obligation to comply with State

law simply by virtue of participating in

the Ticket to Work program. Based on

the comments, we revised

§ 411.315(b)(2) to clarify that if any

medical and related health services are

provided, the EN should take reasonable

steps to assure that such services are

provided under the formal supervision

of persons licensed to prescribe or

supervise the provision of such services.

We did not intend to give the

impression in the proposed rules that all

ENs must be licensed to provide

medical services.

Comment: A few commenters noted

that required certificates and licenses

would vary on a State-to-State basis and

asked what measures would be taken to

address the quality assurance of State

requirements.

Response: SSA has no authority or

interest in determining the validity of

State licensing requirements or to

encroach on State laws regarding these

requirements. Section 411.315(c) states

that potential ENs must comply with

other laws that they may be subject to

in order to provide employment

services, vocational rehabilitation

services, and other support services.

Their potential participation in the

Ticket to Work program does not

eliminate their duty to comply with

other State laws that may govern their

activities.

Comment: One commenter suggested

that our qualifications for ENs should

include alternative demonstrations of

competency and allow for special

circumstances under which an

individual can choose as their provider

an entity with no demonstrated

qualifications or experience subject to

individual approval and periodic review

of progress by the PM. Some

commenters indicated that to meet the

goal of expanding the universe of

service providers, we should include

those family members, friends, or other

persons who have the greatest personal

investment in the individual’s selfsufficiency including formally

established circles of support or

incorporated trust/guardianship boards

and to allow for our experience

requirement to include experience in

life planning and community support.

Response: Section 1148(f)(1) of the

Act requires that ENs meet and maintain

compliance with both general selection

criteria (such as professional and

educational qualifications) and specific

selection criteria (such as substantial

expertise and experience in providing

relevant employment services and

supports). The Act thus requires some

level of education, experience, or

expertise in providing employment

related services and does not permit us

to use, as an EN, providers with no

demonstrated qualifications or

experience in providing or arranging for

these types of services. Friends, family

members, or other persons must meet

these requirements to qualify as ENs.

Comment: Several commenters

questioned whether our requirement of

applicable licenses, if such licenses are

required by State law, would prevent

entities specializing in certain

impairments, such as deafness or

blindness, from qualifying as ENs. Other

commenters suggested our licensing

requirement is too restrictive and will

prevent organizations with national

licenses or certifications from qualifying

as ENs. Still other commenters

indicated that § 411.315(a)(3) should be

modified to include nondiscrimination

on the basis of disability as a

requirement to be an EN.

Response: We do not believe the

requirement in § 411.315(c) that ENs

follow State law will prevent ENs from

specializing in certain impairments.

Section 411.315(c) merely provides that

ENs must follow the State laws that are

applicable to them. SSA has no

authority to encroach on State laws in

instances where licenses, certification,

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67399

or accreditation are required to provide

specific services, including licenses to

serve deaf or hard of hearing

individuals. We do not believe the

requirement in § 411.315(c) will prevent

organizations with national licenses or

certificates from qualifying as ENs.

Presumably, these organizations are

already complying with State laws

applicable to them. We are not adopting

the comment to modify § 411.315(a)(3)

to require nondiscrimination on the

basis of disability. The RFP for ENs

requires applicants to indicate the

impairment categories they serve and

demonstrate that they have experience

and expertise in serving people within

those impairment categories. We

envision that ENs will serve individuals

in different impairment categories and

have expertise and experience in

serving specific groups.

Comment: Some commenters believed

the proposed rule placed a higher value

on education than on experience. Other

commenters questioned what

constitutes ‘‘substantial expertise and

experience.’’

Response: The rules do not place a

higher value on education than on

experience. Our requirements to qualify

as an EN are found at § 411.315. They

include general criteria such as systems

requirements, being accessible, and

having adequate resources to perform

the required activities, among other

items. They also include specific

criteria. The phrase ‘‘substantial

expertise and experience’’ is used in

section 1148(f)(1)(C) of the Act as an

example of what may be used as specific

selection criteria to be an EN. With

respect to the specific selection criteria

we use in § 411.315(b), we require ENs

to have qualified staff. Potential ENs

may show they have qualified staff by

demonstrating that their staff are

certified, licensed or meet certain

standards. Potential ENs may also show

they have qualified staff by

demonstrating that their staff have

education or experience to provide the

services that the EN wants to provide to

beneficiaries.

Comment: One commenter suggested

that we require all ENs to develop an

expertise in small business development

and self-employment assistance

services. The commenter stated that

access to competent and available selfemployment and small business

development services are critical to

successful employment outcomes.

Response: Expertise in small business

development and self-employment

assistance could be a valuable tool for

ENs in providing services to

beneficiaries. However, we do not

believe we should require all ENs to

have this expertise. We intend these

rules to encourage a variety of entities

with different skills and expertise to

become ENs, and do not want to limit

a beneficiary’s range of choices by

requiring that all ENs possess a specific

expertise.

Comment: One commenter suggested

that SSA implement a vigorous review

process for any entity that wishes to

become an EN to assure that each

approved EN is adequately staffed by

educated and certified professionals

who are experienced in the areas of

rehabilitation and disability. Other

commenters indicated that we failed in

the proposed rules to require specific

qualifications for EN staff that would

ensure a high level of knowledge in

serving many disabilities.

Response: The RFP for ENs requires

that entities submit documentation of

their qualifications to serve as ENs. SSA

will not enter into agreements with

entities that do not meet this

requirement. Further, § 411.315

provides criteria that an entity must

meet to qualify as an EN. The staffing

requirements outlined in this section

should ensure that ENs have staff with

a high level of knowledge to serve our

beneficiaries. An EN is not required to

serve all disability categories but can

specialize. The RFP asks applicants to

indicate the impairment categories they

serve and demonstrate their

qualifications to serve people within

those impairment categories.

Comment: Some commenters stated

that we should specify the range of

services ENs must provide.

Response: We want to encourage as

many qualified entities as possible to

serve as ENs. We do not believe we

should require all ENs to provide the

same set of particular services, as

beneficiaries may find a wide variety of

services helpful in their return to work

efforts. In addition, some ENs may not

necessarily provide certain services, but

only coordinate the delivery of services.

Comment: One commenter requested

we permit providers who qualified as

alternate participants under our

reimbursement program to be

automatically eligible as ENs. The

commenter also suggested that other

entities which already contract with

State VR agencies should readily qualify

as ENs.

Response: With respect to alternate

participants, in any State where the

Ticket to Work program is implemented,

each alternate participant whose service

area is in that State will be asked if it

wants to participate in the program as

an EN. See section 1148(d)(4)(B) of the

Social Security Act and § 411.705 of

these final rules. With respect to entities

that have contracts with State VR

agencies, section 1148(f)(1) of the Act

requires that all entities must meet and

maintain compliance with both general

and specific selection criteria. Entities

which have already contracted with

State VR agencies are required to submit

proposals in response to our RFP and

indicate that they will comply with all

requirements of the Ticket to Work

program.

Comment: One commenter

recommended that we presumptively

deem one-stop delivery systems

established under title I of the

Workforce Investment Act of 1998 as

meeting the qualifications to be an EN.

Another commenter asked whether an

independent living center might qualify

as an EN. Another asked what policies

would be put in place for people such

as artists whose work does not fall into

a category represented by an EN. This

commenter expressed a concern that

SSA did not see the arts as a valid career

choice.

Response: Section 1148(f) of the Act

does not permit us to presumptively

deem any entity as qualified as an EN,

although State VR agencies and

alternate participants are the only

entities that do not have to follow the

standard application process to become

an EN. All other potential ENs must

respond to the RFP for ENs and indicate

that they understand and meet the

requirements to serve as ENs. An

independent living center may qualify

as an EN if it meets the requirements

spelled out in these regulations and in

the RFP for ENs. Our regulation does

not state what is appropriate work or

prohibit potential ENs from specializing

in certain career fieldsComment:

Section 411.315(a)(2) of the proposed

rules states that the general criteria for

EN qualification include ‘‘being

accessible, both physically and

programmatically, to beneficiaries

seeking or receiving services.’’ Some

commenters suggested that we need to

define ‘‘programmatic accessibility.’’

Response: We agree and have revised

§ 411.315(a)(2) in the final rules to

include some examples of what it means

to be programmatically accessible.

Section 411.320 What Are an EN’s

Responsibilities as a Participant in the

Ticket to Work Program?

Comment: One commenter

recommended that we establish clear

standards for ENs to use in providing

information to ticket holders regarding

the services provided and expected

outcomes.

Response: ENs are required to provide

information sufficient for beneficiaries

to make an informed choice regarding

67400 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

services and vocational goals and to

then agree to and sign an IWP regarding

these services and the vocational goal.

Section 1148(f)(4) of the Act requires

that ENs prepare periodic reports on at

least an annual basis itemizing

outcomes achieved with respect to

services provided by the EN. Each EN

must provide a copy of its latest report

to each beneficiary that it agrees to work

with under the Ticket to Work program.

The PM is required to ensure that these

reports are available to the public.

Comment: One commenter indicated

that this section should specify who

prescribes an EN’s service area.

Response: When responding to the

RFP for ENs, an applicant indicates the

geographic area(s) in which it proposes

to provide services to beneficiaries.

Comment: Several commenters

indicated that we should reflect the

State VR agency’s obligation to follow

the law as outlined in the Rehabilitation

Act of 1973, as amended (29 U.S.C. 720

et seq.),

Response: Section 411.375 in subpart

F states that ‘‘The State VR agency must

continue to provide services under the

requirements of the State plan approved

under title I of the Rehabilitation Act of

1973, as amended (29 U.S.C. 720 et

seq.), even when functioning as an EN.’’

Section 411.385 indicates that the State

VR agencies are required to follow the

law as outlined in the Rehabilitation Act

which requires the use of an

individualized plan for employment

(IPE).

Comment: Several commenters stated

that we should use the term

‘‘individualized plan for employment’’

as well as IWP.

Response: Sections 411.115(f), (i), and

(j) explain that employment plan means

an individual work plan under which

an EN (other than a State VR agency)

provides services to a disabled

beneficiary under the Ticket to Work

program or an individualized plan for

employment under which a State VR

agency provides services. We use IWP to

identify the employment plan

developed and implemented by an EN

and beneficiary, and IPE to describe the

employment plan agreed to and signed

by a State VR agency and beneficiary.

Comment: Several commenters stated

that we should require ENs to serve any

client living in the geographic area they

indicate they serve. The commenters

indicated that allowing ENs to choose

would prevent those with the most

severe disabilities from getting any

services and ENs would take only the

easiest clients.

Response: The Ticket to Work

program provides for a voluntary

relationship between the beneficiary

and the EN. While an EN may not

discriminate in the provision of services

based on a beneficiary’s age, gender,

race, color, creed, or national origin, an

EN may select the beneficiaries to whom

it will offer services based on factors

such as its assessment of the needs of

the beneficiary and of its ability to help

the individual. Requiring the EN to

serve all clients in their geographic area

would eliminate the voluntary nature of

this relationship and reduce the number

of entities who would choose to serve

beneficiaries as ENs.

Whether there are under-served

populations will be assessed as part of

the ongoing evaluations of the Ticket to

Work program. Section 101(d)(4) of

Public Law 106–170 requires the

Commissioner of Social Security to

provide for independent evaluations to

assess the effectiveness of the Ticket to

Work program, including evaluation of

‘‘the characteristics of individuals in

possession of tickets under the Program

who are not accepted for services and,

to the extent reasonably determinable,

the reasons for which such beneficiaries

were not accepted for services.’’ The

Commissioner is required to provide

periodic reports to the Congress on

these evaluations, setting forth the

Commissioner’s evaluation ‘‘of the

extent to which the Program has been

successful and the Commissioner’s

conclusions on whether or how the

Program should be modified.’’ Section

1148(h)(5)(C) of the Social Security Act

also requires the Commissioner to report

to Congress no later than 36 months

after the date of the enactment of Public

Law 106–170 with recommendations for

a method or methods to adjust EN

payment rates that would ensure

adequate incentives for the provision of

services by ENs of:

• Individuals with a need for ongoing

support and services;

• Individuals with a need for highcost accommodations;

• Individuals who earn a

subminimum wage; and

• Individuals who work and receive

partial cash benefits.

Based on these evaluations, the

Commissioner may recommend

modifications of the program to the

Congress, or make other necessary

changes within the Commissioner’s

authority under the Social Security Act.

Comment: One commenter expressed

concern about what would happen to a

beneficiary who refused to work with an

EN and faced the possibility of

sanctions.

Response: Section 101(b) of Public

Law 106–170 repealed sections 222(b)

and 1615(c) of the Act, which provided

for the sanctions for VR refusal.

Comment: Some commenters stated

that the requirements in the NPRM will

restrict many private businesses from

becoming ENs and do not offer any

incentives to an employer to participate

or even become an EN.

Response: The requirements in the

NPRM are intended to strike a balance

between assuring the participation of

qualified ENs including non-traditional

providers while protecting beneficiaries

by requiring a certain level of

competence by the entities that will

serve them. The incentives provided in

section 1148 of the Act for the ENs are

the milestone and outcome payments

for achieving results. While no special

incentives are provided in this

legislation for employers, we are

confident that employers are qualified

to serve as ENs, and that they will be

able to assist beneficiaries to obtain and

maintain employment.

Section 411.321 Under What

Conditions Will SSA Terminate an

Agreement With an EN Due to

Inadequate Performance?

Comment: One commenter

recommended that we delete the phrase

‘‘self-supporting employment and

leaving the benefit rolls’’ as the goals of

our performance standards for ENs.

Response: Enabling beneficiaries to

achieve self-supporting employment

and leave the benefit rolls is the goal of

the Ticket to Work program. It is a

critical performance standard for ENs

and essential to our evaluation of ENs.

Comment: One commenter expressed

concern about the standards SSA will

use to evaluate ENs and whether we

will have different standards for

rehabilitation agencies and for ENs.

Response: We will develop

appropriate standards to ensure the

capability of ENs to provide the needed

services and to achieve outcomes. For

State VR agency performance, SSA will

defer to the standards required by the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.). As indicated in

section 411.375, the State VR agency

must continue to provide services under

the requirements of the State plan

approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), even while

functioning as an EN.

Section 411.325 What Reporting

Requirements Are Placed on an EN as

a Participant in the Ticket to Work

Program?

Comment: Several commenters

objected to having to provide a financial

report showing the percentage of the

EN’s budget that was spent on serving

beneficiaries with tickets including the

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67401

amount of time that was spent on

beneficiaries who return to work and

those who do not return to work. They

indicated that this percentage reporting

would be an extensive process and

would require reporting on time spent

working with an individual for which

they would not be compensated. Other

commenters felt that the reporting of

ticket acceptance and of the IWP is

unnecessary and represents too much

reporting on process as opposed to

reporting on beneficiary outcomes.

Another commenter asked for a

definition of outcomes to be reported.

One commenter suggested that we

include a requirement that the State VR

agency submit an IPE to the PM in

§ 411.325(b) and (c).

Response: We agree with the

commenters that the reporting

requirement regarding percentage of

time working with beneficiaries would

place an undue burden on ENs and are

eliminating this specific requirement in

our final rule. However, we are required

to obtain information regarding ticket

acceptance and the IWP to ensure that

beneficiaries are using their tickets and

thus are eligible for continuing

disability review protection, and to

determine EN eligibility for payments

under the EN payment systems. We will

develop a national report model, which

will define outcomes. We will use the

information we receive from EN reports

to identify changes we must make to the

Ticket to Work program in the future.

We did not require, in § 411.325 or

elsewhere, the State VR agency to send

a copy of the IPE to the PM, because of

concerns expressed by the

Rehabilitation Services Administration

and other commenters about the privacy

and confidentiality of client information

required by the Rehabilitation Act of

1973, as amended (29 U.S.C. 720 et

seq.).

Comment: One commenter

recommended that we add language to

§ 411.325(h) indicating that the EN will

collect and record such data as we shall

require by written contractual

agreement.

Response: The requirement to collect

and record such data as we shall require

will be in our written agreements with

ENs. There is no need to specify ‘‘by

contractual agreement’’ in § 411.325.

Section 411.330 How Will SSA

Evaluate an EN’s Performance?

Comment: Some commenters

requested information regarding the

specific performance standards SSA

will develop to evaluate ENs and from

whom SSA will obtain input for such

evaluations. Another commenter asked

whether this evaluation should be the

responsibility of the PM.

Response: SSA will develop

appropriate performance standards and

will consider input from providers,

beneficiaries, and other interested

parties in developing these standards.

The PM will assist SSA in evaluating

EN performance. However, SSA is

responsible for the final evaluation

because SSA has entered into

contractual agreements with ENs and

bears the ultimate responsibility for EN

performance and the Ticket to Work

program’s success.

Subpart F—State Vocational

Rehabilitation Agencies’ Participation

General Comments and Responses

Comment: Several commenters stated

that the State VR agency and the EN are

the same entity in instances in which

the VR agency participates as an EN.

These commenters requested that,

throughout the final regulations,

whenever reference is made to an EN,

such reference indicate that an EN

includes a State VR agency functioning

as an EN.

Response: We did not adopt the

commenters’ recommendation. Some

rules in these final regulations, such as

most of the rules in subparts E and G,

apply to entities, other than State VR

agencies, which have entered into

agreement with SSA (or wish to do so)

to serve as ENs under the Ticket to

Work program. Where necessary,

various sections of the final rules

include references to both an EN and a

State VR agency to specify the scope of

a particular rule or rules. For the rules

in subpart H which describe the two EN

payment systems, references to an EN

generally are intended to encompass a

State VR agency functioning as an EN,

unless the context requires otherwise or

there is a specific mention of the State

VR agency.

Section 411.350 Must a State VR

Agency Participate in the Ticket to Work

Program?

Comment: Several commenters

requested that we modify § 411.350,

‘‘Must a State VR agency participate in

the Ticket to Work program?’’ They

indicated that as written this section

indicates that a VR agency must

participate as an EN in order to receive

payment for services. They indicated

that sections 222(d) and 1615(d) and (e)

of the Social Security Act do not require

VR agencies to become ENs.

Response: Section 411.350 has been

clarified as follows: ‘‘Each State agency

administering or supervising the

administration of the State plan

approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), must participate

in the Ticket to Work program if it

wishes to receive payments from SSA

for serving disabled beneficiaries who

are issued a ticket.’’ Section 411.370,

Does a State VR agency ever have to

function as an EN?, states that: ‘‘A State

VR agency does not have to function as

an EN when serving a beneficiary with

a ticket if the ticket has not previously

been assigned to an EN or State VR

agency or if it has been previously

assigned, we have not made payment

under an EN payment system with

respect to that ticket.’’ (See

§ 411.355(a).) Conversely, a State VR

agency does have to function as an EN

when it elects one of the EN payment

systems for a beneficiary, on a case-bycase basis. (See § 411.355(b).) However,

as described in § 411.585(b), a State VR

agency is precluded from being paid

under the cost reimbursement payment

system if an EN or a State VR agency

serving a beneficiary as an EN has been

paid by SSA under one of the EN

payment systems with respect to the

same ticket. However, even if the State

VR agency is not serving as an EN, it

still must tell the PM whenever a

beneficiary with a ticket is accepted for

services.

Section 411.355 What Payment

Options Does a State VR Agency Have

Under the Ticket to Work Program?

Comment: One commenter stated that

it does not make sense to allow the State

VR agencies to determine on a case-bycase basis how they will be paid for

serving a beneficiary, because that could

encourage VR agencies to seek out the

easiest beneficiaries to serve and get

them to employment. The commenter

noted that this is the opposite of the

State VR agencies’ traditional mandate,

which is to give priority to serving the

most severely disabled.

Response: We are not adopting this

comment. The Ticket to Work program

does not in any way affect the State VR

agency’s traditional mandate to serve

the most severely disabled. It merely

provides the State VR agency with an

additional payment option in serving

beneficiaries with disabilities who are

issued a ticket and who seek services

from the State VR agency rather than

from an EN serving under the program.

Comment: One commenter asked if

there would be any changes to the

present process for State VR agencies

seeking cost reimbursement payments.

Response: Under § 411.585(a) of the

final rule, if a State VR agency is paid

by SSA under the cost reimbursement

payment system with respect to a ticket,

67402 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

such payment precludes any subsequent

payment by SSA under one of the EN

payment systems based on the same

ticket. Under § 411.585(b) of the final

rules, if an EN or a State VR agency

serving a beneficiary as an EN is paid by

SSA under one of the EN payment

systems with respect to a ticket, such

payment precludes subsequent payment

to a State VR agency under the cost

reimbursement payment system based

on the same ticket. Public Law 106–170

repealed sections 222(b) and 1615(c) of

the Act, effective January 1, 2001.

Therefore, sanctions for refusing VR

services without good cause are

eliminated. Because the sanctions are

eliminated, cases in which such

sanctions are imposed are eliminated

and no longer one of the categories of

cases for which State VR agencies can

seek reimbursement. As noted in the

preamble, SSA intends to publish

proposed rules in the Federal Register

at a later date to amend the affected

regulations to reflect the change in the

law.

Comment: One commenter stated that

these regulations should state that the

VR reimbursement system continues to

operate as a program available to all

beneficiaries with disabilities who are

eligible for VR services. In the

commenter’s view, as these regulations

read now, reimbursement seems to

apply only to ticket holders. State VR

agencies have and will continue to serve

many beneficiaries who will not receive

tickets.

Response: We are not adopting this

comment. Section 411.355(c) states that:

‘‘When serving a beneficiary who was

not issued a ticket, the State VR agency

may seek payment only under the cost

reimbursement payment system.’’

Section 411.365 How Does a State VR

Agency Notify SSA About Its Choice of

a Payment System for Use When

Functioning as an EN?

Comment: Several commenters stated

that § 411.365(a) should be revised to

reflect that the State Agency must

respond in writing only if it intends to

function as an EN to make it clear that

a State VR agency does not have to

function as an EN.

Response: We are not adopting this

recommendation. Under § 411.585(b) of

the final rules, if an EN or a State VR

agency serving a beneficiary as an EN is

paid by us under one of the EN payment

systems with respect to a ticket, such

payment precludes subsequent payment

to a State VR agency under the cost

reimbursement payment system based

on the same ticket. The only payment

system available to a State VR agency

under this rule would be the EN

payment system elected in response to

the letter identified in § 411.365(a).

Comment: Some commenters stated

that § 411.365(b) should be revised to

allow for the appropriate administrative

authority other than the Governor to

sign the letter reflecting the State VR

agency’s preferred payment method

when functioning as a EN.

Response: We agree, and have revised

§ 411.365(b) in the final rules to indicate

that ‘‘[t]he director of the State agency

administering or supervising the

administration of the State plan

approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720, et seq.) or the director’s

designee must sign the State VR

agency’s letter.’’

Section 411.370 Does a State VR

Agency Ever Have To Function as an

EN?

Comment: Several commenters noted

that proposed § 411.370 provides that

‘‘even if the State VR agency is not

serving as an EN, it still must tell the

program manager whenever a

beneficiary with a ticket is accepted for

services to ensure that the beneficiary’s

ticket is assigned to that agency.’’ The

commenters stated that this provision

would appear to indicate that all a VR

agency needs to do to have a ticket

assigned to it is to tell the PM that they

are working with the individual. They

noted that § 411.370 seems to be

contradicted by § 411.385, which states

that the State VR agencies must have

beneficiaries sign a form when they

wish to assign their Ticket to Work to

a VR agency.

Response: Proposed sections 411.370

and 411.385 are not in conflict. In the

final rules, however, we have made

changes to clarify § 411.370. Section

411.370 explains that State VR agencies

may choose on a case-by-case basis to

function as an EN when serving a

beneficiary with a ticket, or they may

serve beneficiaries under the cost

reimbursement system, subject to the

limitations described in § 411.585. In

either situation, State VR agencies must

tell the PM that a beneficiary has been

accepted for services in order for the

ticket to be assigned to that agency. If

a beneficiary with a ticket decides to

seek services from the State VR agency,

then the beneficiary will in effect be

using the ticket for those services, even

if the State VR agency chooses to be

reimbursed rather than being paid under

one of the EN payment systems. The

process that the State VR agency will

use to inform the PM is provided in

§ 411.385(a) and (b).

Section 411.385 What Does a State VR

Agency Do if a Beneficiary Who Is

Eligible for VR Services Has a Ticket

That Is Available for Assignment?

Comment: Several commenters noted

that, under proposed § 411.385, when a

beneficiary signs an Individualized Plan

for Employment (IPE) as defined under

the Rehabilitation Act, the beneficiary

automatically has assigned the ticket to

the State VR agency, regardless of

whether the VR agency elects to

participate as an EN with respect to the

beneficiary. These commenters believe

that § 411.385 negates beneficiary

choice, which, as they state, is the

hallmark of the Ticket to Work program.

They noted that disability beneficiaries

are presumptively eligible for State VR

services without the ticket. They further

indicated that if the State VR agency

receives payment under the cost

reimbursement payment system,

§ 411.585 provides that we cannot make

payment to an EN. They argued that this

would deny beneficiaries the use of

their tickets at a later time.

Response: The Ticket to Work

program increases beneficiary choice by

expanding the options available for

disability beneficiaries to access

employment services, vocational

rehabilitation services, and other

support services that are necessary for

them to find and retain employment and

reduce dependency on cash benefit

programs. Beneficiaries can choose to

receive services from either the State VR

agency or other service providers

approved to participate as ENs.

Beneficiaries with a ticket that can be

assigned who decide to work with an

EN other than a State VR agency will

agree to and sign an individual work

plan. Similarly, beneficiaries with a

ticket that can be assigned who decide

to work with the State VR agency will

agree to and sign an IPE required under

the Rehabilitation Act of 1973, as

amended (29 U.S.C. 720 et seq.). In both

circumstances, the beneficiaries have

decided to participate in the Ticket to

Work program by working with a

provider to receive services necessary to

help them go to work. Further,

beneficiaries who are not satisfied with

the services they receive from their

chosen providers are able to reassign

their ticket if they meet the

requirements of § 411.150. See the

comment and response section of

subpart H for a discussion of the

conditions that must be met to allow a

State VR agency and EN to both receive

payment for serving a beneficiary based

on the same ticket.

Comment: Two commenters requested

that § 411.385(a) be rewritten to clarify

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67403

that the individual must be determined

eligible prior to developing an IPE and

that both the individual and the VR

counselor must sign the IPE.

Response: Section 411.385(a) has been

revised to indicate that once the State

VR agency determines that a beneficiary

is eligible for VR services, the

beneficiary and a representative of the

State VR agency must agree to and sign

the IPE, and that the requirements of

§ 411.140(d) or § 411.150(a) and (b) also

must be met.

Comment: Several commenters

recommended that we delete the phrase

‘‘working with the beneficiary’’ from

§ 411.385(b) because it is overly specific

and limits who can sign the information

being provided to the PM by the State

VR agency.

Response: We agree and are revising

§ 411.385(b) to delete ‘‘working with the

beneficiary.’’

Section 411.390 What Does a State VR

Agency Do if a Beneficiary to Whom it

Is Already Providing Services Has a

Ticket That Is Available for

Assignment?

Comment: Several commenters

identified a conflict between proposed

§§ 411.390 and 411.510(c) regarding a

State VR agency’s payment election

options with respect to a beneficiary

already receiving VR services under an

IPE before the beneficiary receives a

ticket and assigns it to the State VR

agency.

Response: We are revising § 411.390

to remove the provision that conflicted

with § 411.510(c). Section 411.510(c) of

the final rules provides that for each

beneficiary who already is a client of the

State VR agency prior to receiving a

ticket, the State VR agency will notify

the PM of its payment system election

at the time the beneficiary decides to

assign the ticket to it.

Comment: Some commenters stated

that proposed § 411.390 should be

revised to provide that the State VR

agency should automatically be

considered as the holder of the ticket for

current clients unless and until the

beneficiary opts to change providers.

Response: We are not adopting this

comment. Beneficiaries who are

receiving services from the State VR

agency under an existing IPE when they

receive their ticket should have the

opportunity to make an informed choice

regarding their participation in the

Ticket to Work program. Beneficiaries

will be able to decide whether or not

they wish to assign their ticket to the

State VR agency. This includes

beneficiaries who are determined

eligible for a ticket upon

implementation of the Ticket to Work

program in a State and beneficiaries

who are determined ineligible for a

ticket when the Ticket to Work program

is implemented in a State but later

become eligible for a ticket.

Section 411.395 Is a State VR Agency

Required To Provide Periodic Reports?

Comments: One commenter stated

that § 411.395 should prescribe how

periodic reports on outcomes should be

transmitted, and that an electronic

infrastructure should be in place and

operational prior to implementation of

the Ticket to Work program.

Response: We are not adopting this

recommendation to regulate the process

for transmitting reports between a State

VR agency and the PM. The PM will

contact each State VR agency in States

where the Ticket to Work program has

been implemented to address the

process for collecting information.

Comment: Several commenters stated

that SSA should accept reports

submitted by State VR agencies to the

Rehabilitation Services Administration

rather than creating additional reporting

requirements for these agencies. Their

concern is that reporting will be

excessive and may duplicate or conflict

with existing requirements under the

Rehabilitation Act of 1973, as amended

and the Workforce Investment Act of

1998, as amended.

Response: Reports that State VR

agencies provide to the Department of

Education’s Rehabilitation Services

Administration (RSA) may be used to

meet the reporting requirements in

section 411.395. However, at this time,

we cannot say whether these existing

reports will provide us with all of the

information we need to fulfill our

reporting requirements. The periodic

outcomes reports discussed in section

411.395(a) are required by section

1148(f)(4) of the Social Security Act.

They are a new reporting requirement

for State VR agencies functioning as

ENs. The reports discussed in section

411.395(b) are required so beneficiaries

may take advantage of the new

protection in section 1148(i) of the

Social Security Act which prevents us

from initiating a continuing disability

review when the beneficiaries are using

a ticket. We will work with RSA to

share information whenever possible

and avoid duplication of State VR

agencies’ existing reporting burden.

Comment: One commenter indicated

that § 411.395 should be written to

reflect confidentiality issues as outlined

in the Rehabilitation Act of 1973, as

amended.

Response: We have not adopted this

suggestion. The contract that the PM

and ENs sign with SSA includes the

requirement that access to confidential

information must be restricted and that

such information must be protected.

Section 411.375 states that State VR

agencies are required to provide VR

services under a State plan approved

under title I of the Rehabilitation Act of

1973, as amended (29 U.S.C. 720 et

seq.), even when functioning as an EN.

This includes the confidentiality

requirement that a State VR agency must

follow.

Comment: One commenter noted that

§ 411.395 involves the State VR agencies

in conducting reviews necessary to

ensure that the beneficiary is making

timely progress towards self-supporting

employment while the same is not true

for ENs. The commenter questioned

why the EN wouldn’t be able to validate

that beneficiaries are making timely

progress.

Response: Section 411.190 states that

the PM will be using information

provided by the EN or State VR agency

in making the determination that a

beneficiary is actively participating in

his or her employment plan. Section

411.395(b) requires the State VR agency

to submit this information. We are

revising § 411.325 to require the same

information from an EN.

Comment: This commenter also stated

that the wording in § 411.395(b) should

be changed from: ‘‘The State VR agency

must also submit information to assist

the PM conducting the reviews

necessary to assess a beneficiary’s

timely progress towards self-supporting

employment to determine if a

beneficiary is using a ticket for purposes

of suspending continuing disability

reviews’’ to: ‘‘The State VR agency must

also submit information to assist the PM

conducting the reviews necessary to

assess a beneficiary’s timely progress

towards self-supporting employment to

ensure a beneficiary is not using a ticket

to avoid continuing disability reviews.’’

Response: We are not adopting this

comment. The purpose of the PM’s

review is to determine whether a

beneficiary’s active participation

qualifies for CDR suspension under

section 1148(i) of the Act. As long as a

beneficiary is meeting the guidelines for

timely progress toward self-supporting

employment, the CDR suspension

applies.

Section 411.405 When Does an

Agreement Between an EN and the State

VR Agency Have To Be in Place?

Comment: Commenters stated that

§ 411.400 (Can an EN to which a

beneficiary’s ticket is assigned refer the

beneficiary to a State VR agency for

services?) and § 411.405 should state

that the agreements between ENs and

67404 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

State VR agencies need to conform to

the requirements of the Rehabilitation

Act of 1973, as amended (29 U.S.C 720

et seq.)

Response: We have not adopted this

suggestion. Section 1148(c)(3) of the

Act, Agreements between State

Agencies and Employment Networks,

does not require that the State VR

agency and EN agreement must conform

to the Rehabilitation Act of 1973, as

amended (29 U.S.C. 720 et seq.).

Comment: Several commenters stated

that there is no mention of ENs being

able to enter into agreements with onestop delivery systems established under

the Workforce Investment Act of 1998.

Response: Section 1148(c)(3) of the

Act provides that State agencies and

ENs shall enter into agreements

regarding the conditions under which

services will be provided when an

individual is referred by an EN to a

State agency for services. Section

411.320 regulates the responsibilities of

an EN in the Ticket to Work program.

Section 411.320(c) provides that an EN

may enter into agreements with other

entities to provide employment services,

vocational rehabilitation services, or

other support services to a beneficiary.

On a related point, section

1148(f)(1)(B) of the Act states that an EN

serving under the Ticket to Work

program may consist of a one-stop

delivery system established under

subtitle B of title I of the Workforce

Investment Act of 1998, as amended.

This provision is reflected in

§ 411.305(c) of these final regulations.

As indicated in § 411.320(c), discussed

above, a one-stop delivery system that is

serving as an EN can enter into

agreements as necessary to provide

services to a beneficiary. As required of

all non-State VR agency ENs, a one-stop

delivery system that is an EN must have

an agreement in place with a State VR

agency before it can refer a beneficiary

to the State VR agency for services.

Comment: One commenter stated that

the regulations or preamble should

clarify that the regulations do not

require a separate agreement and may be

satisfied by a local Memorandum of

Understanding (MOU) established

under title I of the Workforce

Investment Act of 1998, or a

modification to such MOU that contains

the specified information.

Response: Section 1148(c)(3) of the

Act does not specify the format of the

agreements required between the State

VR agencies and ENs. Any agreement

must adhere to the requirements of

§ 411.400, which specifies that the

agreement must be in writing and

signed by the State VR agency and the

EN prior to the EN referring any

beneficiary to the State VR agency for

services. If a MOU satisfies these

requirements, it would constitute a

valid agreement.

Section 411.410 Does Each Referral

From an EN to a State VR Agency

Require Its Own Agreement?

Comment: Another commenter noted

that § 411.410 indicates that agreements

between ENs and State VR agencies

should be broad-based and apply to all

beneficiaries who may be referred to the

State VR agency for services. The

commenter stated that broad-based

agreements ignore the uniqueness of

each case and may prohibit an

individual from receiving specialized

services that are necessary in order to

return to competitive employment. The

commenter also noted that there is no

mention of whether the agreement

between the EN and State VR agency

can be terminated. The commenter

recommended that, in addition to broadbased agreements, ENs and State VR

agencies might also create distinct

agreements based on the specific needs

of the individual being served, and that

both the EN and the State VR agencies

should have the ability to terminate

their agreement if the needs of the

individual are not being served.

Response: We agree with the

commenter’s first recommendation. We

are adding language to § 411.410 to

indicate that the general guideline that

the agreement should be broad-based

and apply to all beneficiaries who may

be referred by an EN to a State VR

agency is not intended to preclude an

EN and a State VR agency from entering

into an individualized agreement to

meet the needs of a single beneficiary if

both the EN and the State VR agency

wish to do so. What is agreed to in the

agreement concerning the conditions for

providing VR services to beneficiaries

referred by an EN and the process for

terminating the agreement must be

negotiated between the State VR agency

and the EN.

Section 411.420 What Information

Should Be Included in an Agreement

Between an EN and a State VR Agency?

Comment: Several commenters stated

that SSA should not be establishing the

terms of the agreement between the

State VR agency and the EN in the

regulations. Other commenters

indicated that we should modify

§ 411.420 to provide minimum

requirements for these agreements. One

commenter stated that we should

specify when the State VR agency will

pay the ENs for services. Another

commenter stated that the State VR

agency would be in a position to

negotiate terms of the agreement wholly

favorable to its own interests. The

commenter recommended that the rules

should stipulate that each party to the

agreement share reimbursement

equitably, and that the rules to be

applied by the PM in cases where

disputes arise should be clearly defined

prior to implementation.

Response: We are not establishing the

terms of any agreement entered into

between a State VR agency and an EN.

Section 1148(c)(3) of the Act states that:

‘‘State agencies and employment

networks shall enter into agreements

regarding the conditions under which

services will be provided when an

individual is referred by an employment

network to a State agency for services.

The Commissioner shall establish by

regulations the time frame within which

such agreements must be entered into

and the mechanisms for dispute

resolution between State agencies and

employment networks with respect to

such agreements.’’ The Act does not

provide SSA with the authority to set

minimum standards or to regulate

payment or fee schedules for these

agreements. The introductory text of

§ 411.420 paraphrases the language in

the Act regarding the basic nature of the

agreements and paragraphs (a) through

(d) of that section provide examples

only of the types of information that

could be included in any agreement.

These regulations place no requirements

on what should be included in an

agreement.

Comment: Several commenters stated

that, regardless of whether there is an

agreement in place when a beneficiary

is referred to a State VR agency, recently

published Department of Education

regulations, 34 CFR part 361, require

State VR agencies to process all

applications for services. The

commenters noted that the State VR

agencies will not be expected to expend

program funds on services that are

comparable to the services the

individual is already receiving from the

EN to which the individual’s ticket is

assigned. The commenters noted that

further clarification is needed

concerning a State VR agency’s

responsibility to provide additional

needed services without a signed

agreement with the EN.

Response: The Department of

Education’s, Rehabilitation Services

Administration is the entity responsible

for administering the State VR program.

State VR agencies should contact the

Rehabilitation Services Administration

for guidance on expending State VR

program funds on beneficiaries where

no agreement exist with an EN.

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67405

Comment: Several commenters stated

that §§ 411.405 to 411.430 do not

address instances where individuals

might have assigned their ticket to an

EN, yet decide on their own to come to

the State VR agency for additional

services. In these instances, the EN is

not making the referral, and an

agreement may not be in place between

the EN and the State VR agency. This

may create a situation where a

beneficiary is being served by both an

EN and the State VR agency outside of

the governance of an agreement. The

commenters suggested expanding the

rules in these sections to require that

agreements will be in place between all

ENs and State VR agencies, to ensure

that all ticket holders are covered by an

agreement.

Response: We are not adopting the

commenters’ suggestion. Section

1148(c)(3) of the Act requires

agreements between State VR agencies

and ENs regarding the conditions under

which services will be provided when

an individual is referred by an EN to a

State VR agency for services. SSA does

not have the authority to require an EN

to enter into an agreement with a State

VR agency unless the EN is going to

make a referral of beneficiaries to a State

VR agency for services.

Section 411.435 How Will Disputes

Arising Under the Agreements Between

ENs and State VR Agencies Be

Resolved?

Comment: One commenter

recommended a change to

§ 411.435(c)(2), to provide a time frame

within which SSA must decide the

matter in dispute between an EN and a

State VR agency in a case where either

party makes a timely request for SSA

review following receipt of the PM’s

recommended resolution to the dispute.

The commenter recommended adding a

provision to provide that SSA will have

20 days to determine a resolution to the

dispute.

Response: We do not agree that these

regulations should establish a time

frame for us to resolve disputes. We

agree that we must resolve disputes as

quickly as possible. However, a rigid

time frame would be inadvisable due to

the potential complexity of disputes

involved.

Comment: One commenter noted that

the rules do not mention the State VR

agency’s legal obligation to serve

eligible individuals whether an

agreement with an EN is in place. The

commenter said it is essential that State

VR agencies retain the ability to be paid

under the cost reimbursement system.

Response: Under the Ticket to Work

program, we will pay a State VR agency

for providing services to a beneficiary

who is issued a ticket and assigns or

reassigns the ticket to the State VR

agency if certain conditions are met.

Section 411.355(a) of the final

regulation states that State VR agencies

may choose to participate either as an

EN or under the cost reimbursement

payment system, subject to the

limitations in § 411.585. The section

further states that the State VR agency

makes this choice on a case-by-case

basis. Section 411.370 states that a State

VR agency generally is not restricted in

making its choice of participating either

as an EN or under the cost

reimbursement payment system, with

the exception of the rule under

§ 411.585.

Comment: One commenter questioned

how a beneficiary who chooses an EN

other than a State VR agency would

access the State VR agency for

assistance with assistive technology for

employment purposes. The commenter

observed that a person with a disability

who needs assistive technology in order

to work can request assistance from the

State VR Agency. The commenter asks

if this can be done under the Ticket to

Work program without the beneficiary

reassigning his or her ticket to the State

VR Agency.

Response: If the EN to whom the

beneficiary has assigned his or her ticket

has a signed agreement with the State

VR agency, the EN could refer the

beneficiary to the State VR agency to

secure the services needed. If the

beneficiary’s EN has not entered into an

agreement with the State VR agency, the

beneficiary’s EN would be required to

enter into an agreement with the State

VR agency before the EN could refer the

beneficiary to the State VR agency for

services.

Comment: One commenter stated that

the regulations suggest that there is only

one State VR agency per State. The

commenter noted that this is not true for

all States. In some States, there is a

separate blind services unit. The

commenter asked whether two separate

agreements have to be in place between

the EN and the two VR entities in the

State in such an instance.

Response: The configuration of the

State VR agencies within the State

government’s organizational structure

would determine if an EN would need

to enter into an agreement with one or

two State VR agencies in a particular

State. We are clarifying the definition of

State vocational rehabilitation agency in

final § 411.115(m) to reflect that some

States have more than one agency that

provides VR services.

Subpart G—Requirements for

Individual Work Plans

Section 411.450 What Is an IWP?

Comment: One commenter was of the

opinion that State VR agencies would

have to complete an IWP and an IPE

based on this regulation.

Response: In accordance with

1148(c)(2) of the Act, the State VR

agency will continue to provide services

under the requirements of the State plan

approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.) when providing

services as an EN. The State VR agencies

continue to prepare an Individualized

Plan for Employment (IPE) for all clients

served. We are clarifying § 411.450 so

that it does not give the impression that

a State VR agency is required to

complete an IWP. In the first sentence

of § 411.450 we added in parenthesis

‘‘(other than a State VR agency)’’ to

clarify that State VR agencies are not

required to complete an IWP.

Comment: A few commenters

suggested that we add the definition of

IWP in its entirety in the definition

section of the rules.

Response: This suggestion was

adopted. The IWP and many other new

terms now are included in final

§ 411.115.

Comment: A few commenters wrote

that whenever possible the regulations

should encourage that the IWP and

similar life/work planning instruments

such as the IPE or individualized

service delivery plan be used

interchangeably.

Response: Other employment plans

that are developed based on specific

guidelines and laws may not be used as

a substitute for the IWP unless they

satisfy the requirements of the IWP in

§ 411.465.

Section 411.455 What Is the Purpose

of an IWP?

Comment: One commenter suggested

alternate language to describe the

purpose of an IWP. The commenter

suggested that the wording be changed

to read ‘‘Both parties should develop

and implement the IWP in partnership

in a manner that gives the beneficiary

the opportunity to exercise informed

choice in selecting an employment

goal.’’ The commenter also suggested

using the term ‘‘define’’ in place of the

term ‘‘outline’’ when naming services

that will be provided under an IWP.

Response: The wording that was used

in describing the purpose of the IWP

was taken from the law. Section

1148(g)(1)(B) of the Act requires that

‘‘[e]ach employment network shall

* * * develop and implement each

67406 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

such individual work plan, in

partnership with each beneficiary.’’ The

intent of the IWP is to outline, not

define, the services that have been

mutually agreed to by the EN and the

beneficiary.

Section 411.460 Who Is Responsible

for Determining What Information Is

Contained in the IWP?

Comment: One commenter stated that

a beneficiary could not exercise

informed choice if the EN was not

required to provide the beneficiary with

a comprehensive list of the services

available to support and facilitate an

IWP.

Response: Section 1148(g)(1)(B) of the

Act requires the IWP to be developed in

partnership with the beneficiary and the

EN. ENs will offer services themselves,

or coordinate the delivery of services by

others, or both. The services that any

individual beneficiary may require will

present different opportunities for an

EN to meet. Given the varied nature of

the beneficiaries that an EN may serve

and the services that an EN may provide

or coordinate, we do not believe that a

requirement to provide a comprehensive

list of such services would be

meaningful.

Comment: We received several

comments noting that our proposed

§ 411.465 stated that an EN may not

request or receive compensation from

the beneficiary for the services they

provide, even though the Rehabilitation

Act and other programs allow and

sometimes require beneficiaries to

financially participate in the cost of

their plan.

Response: Section 1148(b)(4) of the

Act states that ‘‘An employment

network may not request or receive

compensation for such services from the

beneficiary.’’ However, the Act does not

prohibit an EN from requesting a

beneficiary who has assigned his or her

ticket to it to participate in the cost of

achieving the employment outcomes

agreed to in the IWP. Section 1148(c)(2)

of the Act states that State VR agencies

are to provide services under title I of

the Rehabilitation Act of 1973, as

amended (29 U.S.C. 720 et seq.) when

providing services as an EN. Therefore,

section 1148 of the Act does not relieve

a beneficiary from financially

participating in the cost of an

individualized plan for employment, if

this is required by the Rehabilitation

Act.

Comment: We received one comment

noting that our proposed § 411.465

provided that an EN shall provide a

statement of remedies available to the

individual, including information about

the availability of the advocacy services

through the State P&A system. The

commenter went on to discuss other

regulations outside of the Ticket to

Work program such as the Client

Assistance Program (CAP) for resolving

disputes. The commenter recommended

that § 411.465 be revised to reflect

services available to individuals who

use the public VR system, such as the

CAP.

Response: State VR agencies continue

to provide services based on the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.). Therefore, the

CAP would continue to be used by State

VR agencies in resolving disputes

between the State VR agency and the

beneficiary. Section § 411.465 covers a

beneficiary who signs an IWP with an

EN other than a State VR agency.

Comment: One commenter suggested

that the minimum requirements of the

IWP specifically state that an EN use

comparable benefits whenever available.

Response: We are not adopting this

comment. The definition of

‘‘comparable’’ benefits is found in 34

CFR 361.53 and applies to State VR

agencies. Section 1148 of the Act does

not require ENs to determine whether

comparable benefits are available when

providing services to a beneficiary.

Comment: One individual expressed

concerns that a beneficiary who assigns

his or her ticket would lose the ticket if

the beneficiary did not do what the EN

requested.

Response: Participation in the Ticket

to Work program is voluntary. An EN

cannot take the beneficiary’s ticket away

for failure to comply with an EN’s

request. The beneficiary remains free to

reassign his or her ticket to another EN.

Comment: A commenter suggested

that the minimum requirement for an

IWP include a statement about the

beneficiary’s responsibility to not

reassign his or her ticket without good

cause.

Response: We are not adopting this

comment. Section 1148 of the Act does

not require that the beneficiary have

good cause for reassigning his or her

ticket to another EN.

Comment: Several commenters

suggested that time frames be identified

for providing specific services.

Response: We are not adopting this

comment. The IWP developed for an

individual with a disability will vary

based on the needs of the individual,

their ability to progress based on the

disability, and the employment goal that

is established. Regulating time frames

for providing services at such an early

stage may be intimidating for some

individuals or ENs. If the beneficiary

and the EN feel comfortable with

establishing time frames, they have the

flexibility to do so under these

regulations.

Comment: One commenter stated that

within the requirements of an IWP there

is a provision that the individual has a

right of privacy without any further

definition or clarification of the term

privacy. The commenter expressed

concern that an individual’s decision

not to share relevant information with

an EN could be critical to the success of

the individual’s rehabilitation. The

commenter recommended that the term

‘‘privacy’’ be removed or adequately

defined. Another commenter asked

what the requirements were for an EN

to obtain medical information for the

IWP and what the requirements were

before the EN could share that

information.

Response: Section 411.465(a)(8)

requires that an IWP must include ‘‘A

statement of the beneficiary’s rights to

privacy and confidentiality regarding

personal information, including

information about the beneficiary’s

disability.’’ The EN’s contract with SSA

will include the requirement that the EN

protect an individual’s privacy and

confidentiality. Personal and medical

information must be obtained through

the beneficiary. Once the information is

obtained from the beneficiary, the EN’s

contract requires the EN to preserve the

privacy and confidentiality of these

records.

Section 411.470 When Does an IWP

Become Effective?

Comment: One commenter said that

our description in the proposed rule of

when an IWP becomes effective was

unclear.

Response: We have revised § 411.470

to clarify when an IWP becomes

effective.

Subpart H—Employment Network

Payment Systems

General

Comment: Many commenters

recommended that we redesign the

proposed outcome-milestone payment

system so that it would be more

supportive of small-to-mid-sized

providers. They said that smaller

providers, unlike State VR agencies and

other large service providers, do not

have the reserves to absorb the risk of

providing services over an extended

period of time or when they are

expensive. The commenters said that, if

the outcome-milestone payment system

fails to provide enough up-front

financial incentives and it takes a

substantial amount of time before ENs

can claim reimbursement, the Ticket to

Work program would restrict the pool of

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67407

providers and undermine consumer

choice. Some said that the proposed

rules offered little improvement over the

alternative participant program for

payment for VR services that was

intended to expand beneficiary access

under the traditional VR cost

reimbursement program. The

commenters were concerned that the

rules, as proposed, would not enhance

beneficiary access to services and would

not be flexible enough to help ENs serve

the diverse needs of the disabled

beneficiary population. Also, they

predicted that the proposed payment

system would encourage providers to

‘‘cream’’ the easier-to-serve clients,

place many in ‘‘any’’ job, as opposed to

developing the sort of career

opportunities that are likely to result in

permanent gains for both consumers

and SSA, and that providers would not

serve those with more severe

disabilities.

Response: In response to these

comments, we made four changes to the

outcome-milestone payment system we

proposed. First, we added two

milestones. Second, we doubled the

total value of the potential milestone

payments. Third, we spread, over 60

months as opposed to 12, the outcome

payment reductions made on account of

milestone payments received. Fourth,

we substituted a flat outcome payment

rate of 34 percent for the graduated

monthly outcome payments we

proposed. We did not narrow the gap

between the two payment systems, as

recommended by many commenters.

These changes are discussed further

below, in response to specific

comments.

Section 411.500 Definitions of Terms

Used in This Subpart

Comment: A few commenters said

that the sample payment calculation

bases we provided in the preamble to

the proposed rule (65 FR 82853) seemed

low. They suggested that, when we

compute the actual payment calculation

bases, we include only the average cash

benefits of beneficiaries eligible for

tickets. These commenters and another

commenter also suggested that we

consider increasing the payment

calculation bases, and therefore the

potential payments to ENs, by taking

into account the additional program

revenues (e.g., FICA taxes) and other

savings (e.g., reduced Medicare/

Medicaid costs resulting from employerprovided health insurance plans) that

are generated by having a beneficiary go

to work.

Two other commenters said that using

the average Federal payment amount for

title XVI only beneficiaries as a payment

calculation base was inflexible because

it did not include State supplementation

payments. The commenters said that the

proposed calculations would not

adequately compensate ENs that

provide services in States where there

are higher service costs or serve those

who are the most disabled.

Response: We did not and can not

modify these final rules with regard to

the calculation of the payment

calculation bases as the commenters

suggested because section 1148(h)(4) of

the Act provides specific requirements

on how to calculate them. When we

calculate the payment calculation bases,

the law does not allow us to exclude the

average benefit payable to non-ticket

holders or to account for any FICA taxes

or other benefit savings. In addition,

section 1148(h)(4)(A)(ii) of the Act

specifically directs us to exclude the

State supplementation payment from

the title XVI payment calculation base

computation.

Comment: One commenter suggested

that we expand proposed § 411.500(b)

and (c) to explain that outcome

payments can be affected by a

beneficiary’s impairment related work

expenses (IRWEs) or the application of

the provisions in section 1619(a) of the

Act. Another commenter asked that we

explain the effect of a beneficiary’s trial

work period (TWP) on the 60-month

outcome payment period.

Response: We did not expand the

final rules as the commenters suggested.

The effect that employment support

provisions can have on the disability

benefits of those who work can vary

depending on the individual case facts.

To the extent that employment support

provisions allow a beneficiary to receive

a Federal cash benefit, they will prohibit

us from making outcome payments with

respect to the beneficiary. For example,

the trial work period allows

beneficiaries who receive title II

disability benefits to test their ability to

work for at least nine months. During

this period they can receive full benefits

regardless of how high their earnings

might be so long as they have a

disabling impairment. As long as the

beneficiaries are in their TWP and

receiving Federal cash disability

benefits, their ENs would not qualify for

outcome payments. We have a

publication, A Summary Guide to

Employment Support Available to

People with Disabilities under the

Social Security Disability Insurance and

Supplemental Security Income

Programs, SSA Pub. No. 64–030, that

provides a general description of the

employment supports available to

beneficiaries with disabilities. This

publication is available on our website

at http://www.ssa.gov/work/

ResourcesToolkit/redbook_page.html.

Section 411.515 Can the EN Change Its

Elected Payment System?

Comment: Two commenters

expressed concern that the 18-month

time frame in proposed § 411.515(c) for

offering ENs the opportunity to change

their elected payment system was too

long. According to one commenter, this

long a period would hinder recruitment

of potential ENs because providers will

be looking for flexibility to help ease

their apprehension over the risks

associated with their participation. The

other commenter suggested that we

allow ENs to change their elections at

least quarterly.

Response: We did not adopt these

comments because we believe that the

language in final § 411.515(b) and (c) is

flexible enough to address these

commenters concerns. Section

411.515(b) offers ENs the opportunity to

change their elected payment system at

any time during the 12 months

following the later of the month they

first elect an EN payment system or the

month we implement the Ticket to

Work program in their State. In

addition, § 411.515(c) states that we will

offer an open election period to ENs ‘‘at

least every 18 months.’’ This language

allows us to offer an open election

period more frequently, if we believe it

is warranted.

Section 411.525 How Are the EN

Payments Calculated Under Each of the

Two EN Payment Systems?

Comment: A few commenters urged

us to relate the EN payment systems

more to the cost of services, especially

for those with more extensive service

needs. Along these lines, one

commenter suggested that we consider

making the VR cost reimbursement

payment system available to ENs. This

commenter also suggested that we make

payments whenever ENs establish that

they provided significant efforts and

services to assist beneficiaries because

this commenter believes that improving

the vocational skills of beneficiaries will

ultimately lead to the reduction or

elimination of benefits. We also

received a recommendation for paying a

stipend to vocational trainers and

beneficiaries in lieu of 60 months of

outcome payments.

Response: We did not adopt these

suggestions because the Ticket to Work

program is an outcome-based program

and the law does not provide authority

for the types of payments identified by

the commenters. We therefore cannot

design a payment system around the

cost of services, even for those with

67408 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

more extensive service needs, or to

make stipend payments in lieu of

outcome payments. We do not have the

authority to extend the VR cost

reimbursement program to ENs that are

not State VR agencies.

Comment: One commenter believed

that the outcome payments we proposed

were too low. Based on experiences in

welfare reform, this commenter did not

believe that the proposed payment

system would attract a wide variety of

service providers. The commenter

expressed the belief that the Ticket to

Work program would be viewed as risky

for providers because they lack the

experiential data with which to estimate

beneficiary work efforts. The commenter

also believed that the proposed payment

system would not attract smaller service

providers because of the cash-flow

concerns that such providers would

have. Agreeing that an outcome based

payment system was fiscally

responsible, this commenter suggested

we ‘‘front-load’’ the outcome payments

in the first year, paying as much as

100% of the saved benefits. Then, in

subsequent years, we could reduce

payments some, but leave enough to

encourage the ENs to provide for followup support services.

Response: We did not adopt this

comment. Section 1148(h)(2)(C) of the

Act limits payments under the outcome

payment system to 40 percent of the

payment calculation base.

Comment: We received several

comments about the two substantial

gainful activity (SGA) dollar thresholds

in proposed §§ 411.525(a)(1)(ii)(A) and

411.535(a). The commenters were

concerned that ENs might be

discouraged from serving beneficiaries

who are statutorily blind because the

SGA threshold amount for them

(currently $1,240) is higher than it is for

those who are not statutorily blind

(currently $740). Thus, the commenters

recommended that we use the lower

SGA threshold amount when we

determine whether to pay an EN,

regardless of the beneficiary’s disability.

Response: We did not adopt this

suggestion because we do not believe it

appropriate to have a threshold amount

for outcome or milestone purposes for

beneficiaries who are blind that is not

equal to the blind SGA threshold

amount for benefit determination

purposes. Individuals who are blind

have several protections, including a

higher earnings threshold. Thus, we

believe that payments due an EN should

reflect this higher limit.

Comment: Many commenters had two

concerns about the proposed differences

in the payments for title II and title XVI

beneficiaries. The first is that the

proposed payment levels for title XVI

only beneficiaries would be

substantially lower than for title II

(including concurrent) beneficiaries.

The second is that since section 1619(a)

of the Act allows for a gradual reduction

of title XVI benefits, it may take longer

for title XVI recipients to achieve

outcome payments than it would for

title II beneficiaries. For example, a title

XVI recipient who receives the

maximum SSI benefit would need to

earn $1,145 in order to reduce benefits

to zero and generate an outcome

payment, while a title II beneficiary who

is not blind would need to earn just over

$740 in a month to reduce benefits to

zero and generate an outcome payment.

The commenters contended that SSI

recipients are likely to have more severe

disabilities, less education and work

history, and require more intensive and

extensive supports. The commenters

said that the lack of a uniform income

level to trigger outcome payments made

the Ticket to Work program confusing.

They predicted that the differences will

discourage ENs from serving title XVI

recipients. Also, they said that our

proposed formula overlooked the

additional cost savings from reduced

reliance on title XVI benefits and

increased employment taxes paid by

working beneficiaries. The commenters

recommended that we increase the

payment levels to ENs for serving title

XVI only beneficiaries, with some

suggesting we pay ENs the same amount

regardless of whether they serve a title

XVI only or a title II beneficiary. The

commenters also recommended that we

establish a uniform income level as a

trigger for outcome payments and allow

for outcome payments based on a partial

reduction of title XVI Federal cash

benefits.

Response: We cannot adopt the

commenters’ recommendations to make

outcome payments for title XVI only

beneficiaries richer or to let an

alternative event, such as the partial

reduction in benefits, trigger outcome

payments. The law is very specific

about how we are to calculate payment

levels and what events trigger outcome

payments. However, the law also

provides for us to study and report to

Congress on the extent to which the

Ticket to Work program has been

successful and what further

modifications should be made.

Specifically, section 1148(h)(5)(C) of the

Act requires us to evaluate and report

on the adequacy of the incentives for

ENs to serve four specific groups of

individuals. They are individuals with a

need for ongoing support and services,

individuals with a need for high-cost

accommodations, individuals who earn

a sub-minimum wage and individuals

who work and receive partial cash

benefits. Also, section 101(d)(4) of

Public Law 106–170 requires a broader

evaluation and report on the success of

the Ticket to Work program. Therefore,

we will be studying how effective the

program is in serving title XVI

beneficiaries.

We based our proposal for the

payment levels on section 1148(h)(2)(C)

and 1148(h)(4)(A) of the Act. Under

section 1148(h)(2)(C) of the Act, we

have to base outcome payments on a

fixed percentage of the payment

calculation base for the calendar year in

which the month occurs. With respect

to the payment calculation base, section

1148(h)(4)(A) of the Act provides for

two payment calculation bases. The first

is based on the average monthly title II

disability insurance benefit payable for

months during the preceding calendar

year. We must use it in connection with

a title II beneficiary. The second

payment calculation base is based on

the average monthly payment of title

XVI benefits based on disability

(excluding State supplementation)

payable for months during the

preceding calendar year to beneficiaries

aged 18 through 64. We must use this

second payment calculation base in

connection with a title XVI beneficiary

who is not concurrently a title II

beneficiary.

We based our proposal to limit

outcome payments to situations in

which monthly Federal SSI cash

benefits to a title XVI disability

beneficiary stop due to work or earnings

on sections 1148(h)(2)(B), (k)(4), and

(k)(5) of the Act. Under section

1148(h)(2)(B) of the Act, an outcome

payment month is a month, during an

individual’s outcome payment period,

‘‘for which benefits (described in

paragraphs (3) and (4) of subsection (k))

are not payable to such individual

because of work or earnings.’’ With

respect to a title XVI disability

beneficiary, the benefits described in

section 1148(k)(4) of the Act are

‘‘supplemental security income benefits

under title XVI’’ based on blindness or

disability. The term ‘‘supplemental

security income benefit under title XVI’’

is defined in section 1148(k)(5) of the

Act to mean ‘‘a cash benefit under

section 1611 or 1619(a),’’ excluding any

State supplementary payment. Thus, in

formulating the proposed rules on

outcome payments for a title XVI

beneficiary, we considered an outcome

payment month to be one ‘‘for which [a

cash benefit under section 1611 and a

cash benefit under section 1619(a)]

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67409

* * * are not payable to the individual

because of work or earnings.’’

Comment: Many commenters were

concerned that proposed § 411.525(b)

set the payment rate for the outcomemilestone payment system at about 85

percent of what would be payable under

the outcome payment system for the

same beneficiary. They said that this

difference was too great to attract small

or specialized providers that do not

have the financial resources to pay for

all of the up-front cost of services. The

commenters predicted that the

difference would discourage the use of

the outcome-milestone payment system,

impede the delivery of services to those

with more severe disabilities, and

undermine the Ticket to Work

program’s goal of increasing consumer

choice.

The commenters recommended that

we close the gap between the two

payment systems to create an incentive

for as many providers as possible to

participate in the Ticket to Work

program. Many suggested that we

narrow the gap to the bare minimum

possible under the law; with two

commenters saying that a one dollar

difference would meet the letter of the

law. Others suggested specific rate

differentials ranging from 95 to 99

percent.

Response: We did not adopt these

commenters’ suggestions to close the

gap between the two payment systems.

We believe that if we close the gap too

much, there would be no incentive for

ENs to choose the outcome payment

system and, by default, we would have

one rather than two EN payment

systems, and that one system would be

the outcome-milestone payment system.

Under the law, we are to offer providers

two EN payment systems and we are to

make the outcome-milestone payment

system the less financially rewarding of

the two. In return for the opportunity to

receive up-front milestone payments,

providers choosing the outcomemilestone payment system receive a

smaller total potential payment amount

than under the outcome payment

system. If there is not a meaningful

difference to the total payments

available under the two systems, all

providers would choose the outcomemilestone payment system because it

offers payments earlier. Such a result

could jeopardize the success of the

program as a whole because the

outcome-milestone payment system, by

offering payments to providers before

SSA has achieved any program savings,

increases the risk that government

outlays in the form of milestone

payments will not be subsequently

offset with savings from the

nonpayment of benefits. As we begin to

implement the Ticket to Work program,

we will collect data and use it to

determine if we should continue to

apply the same rate differential between

the two systems.

Comment: One commenter asked if an

EN would be entitled to the remainder

of the 60 months of outcome payments

if an individual dies or turns age 65

first.

Response: No. In final §§ 411.155(a)

and 411.525(c) we state that we will not

pay an EN for milestone or outcomes

achieved in or after the month in which

a beneficiary’s ticket terminates. The

events that cause a ticket to terminate

are listed in § 411.155.

In all cases, death is an event that

would cause a ticket to terminate. It is

a terminating event for benefit

entitlement/eligibility purposes, and

thus is covered by the provisions in

§ 411.155(a)(1). Also, we refer to death

in § 411.155(c)(4) of the final rules as a

ticket-terminating event for those whose

entitlement/eligibility to disability

benefits have ended/terminated because

of work or earnings.

In most cases, a beneficiary’s ticket

will also terminate when the individual

attains age 65 or, where appropriate, full

retirement age. Attaining full retirement

age is a terminating event for workers

who are entitled to Social Security

disability benefits, and thus is covered

by the provisions in § 411.155(a)(1). We

also refer to full retirement age, or to age

65, in § 411.155(a)(2), (a)(3), and (c)(3) of

the final rules as a ticket-terminating

event.

The only instance in which

attainment of age 65 or retirement age,

would not cause disability benefits, and

hence the ticket, to terminate is if the

individual is still entitled to childhood

disability benefits. However, we will not

pay an EN for any of the remainder of

the 60 months of the outcome payment

period in such a case unless the rules in

§ 411.525(a)(1)(i) are met. They provide

that an EN may receive a monthly

outcome payment only for months in

which no benefits are payable because

of work or earnings.

Section 411.530 How Will the

Outcome Payments Be Reduced When

Paid Under the Outcome-Milestone

Payment System?

Comment: Many commenters were

critical of our proposal in § 411.530 to

reduce the first 12 outcome payments

under the outcome-milestone payment

system by the total amount that we had

already paid for milestone payments.

They said that such a short reduction

period would discourage smaller, less

well-capitalized ENs from participating

in the Ticket to Work program. Referring

to this proposal as ‘‘back loading,’’ they

noted that it would mean that the fifth

year of monthly outcome payments

would be three times higher than the

payments in the first year. They were

concerned that an EN might lose the

bulk of the payments available should a

beneficiary leave them shortly after

beginning to work. The commenters

recommended that we reduce all 60

outcome payments equally, rather than

just the first 12 outcome payments, to

account for milestone payments already

made.

Response: We agree with these

comments and revised § 411.530. In the

outcome-milestone payment system, we

will reduce each outcome payment that

an EN receives by an amount equal to

1⁄60th of the milestone payments already

made to that EN based on a ticket.

With regard to the commenters’

concerns about the loss of payments

when a beneficiary leaves an EN shortly

after beginning to work, an EN may

make a claim for payment for any future

milestones or outcomes the beneficiary

achieves. Final § 411.560 provides that

payments can be split among ENs which

have had a beneficiary’s ticket assigned

to them.

Comment: Many commenters said

that having milestones based on the

SGA threshold amount was an

inappropriate standard for title II

beneficiaries who previously used up

most or all of their trial work period

before getting their tickets. Their

concern was that ENs might not receive

milestone payments if the beneficiaries

reached the outcome payment period

before achieving any milestones.

Response: In response to this

comment we are modifying final

§ 411.530 to make clear that under the

outcome-milestone payment system we

will reduce only outcome payments

based on the amount of milestone

payments an EN receives. If we do not

make milestone payments to an EN with

respect to a particular ticket, we will not

reduce the EN’s outcome payments.

This had been our intent when we

proposed this rule, but we were not

clear on two points. First, we did not

identify whose outcome payments we

would reduce when more than one EN

receives outcome payments based on

the same ticket and one receives

milestone payments and the other does

not. Our intent is to reduce the outcome

payments of the EN that actually

receives the milestone payments.

Second, the proposed rules indicated

that we would reduce outcome

payments by milestone payments

already made. In the final rules we

deleted the word ‘‘already’’ because

67410 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

there may be situations in which we

make a retroactive payment for a

milestone that a beneficiary achieved

before the outcome payment period

began. In such a case, we will have to

make an adjustment for any outcome

reductions we did not take before we

made the retroactive milestone

payment, and we will reduce any future

outcome payments by an amount equal

to 1⁄60th of all milestone payments we

made to that EN.

Section 411.535 What Are the

Milestones for Which an EN Can Be

Paid?

Comment: Many commenters

suggested that we add one or more preemployment milestones to the outcomemilestone payment system we proposed

to ensure that ENs can provide adequate

pre-employment services to disability

beneficiaries. Some suggested

milestones at specific times, for

example, when ENs make vocational

assessments, when beneficiaries and

ENs sign IWPs, when ENs purchase

assistive devices for beneficiaries, or

when ENs place beneficiaries in jobs.

Others suggested that we make the

milestones more flexible, for example,

tie them to a measurable goal in the

IWP, such as the completion of an

educational goal or the acquisition of

specified job skills.

These commenters were concerned

about the two milestones we proposed,

the first of which would not occur until

after beneficiaries work for at least three

months at the SGA threshold amount.

They believed these milestones would

not occur early enough in the service

period and would not allow payment for

the substantial early costs incurred in

providing individuals with significant

disabilities the necessary services that

are directly related to achieving the goal

of permanent employment. While the

commenters acknowledged that paying

for an employment outcome is a worthy

goal, they said that we should have

balanced that goal against the ability to

recruit and retain ENs. Most small-tomid sized ENs, they explained, simply

do not have the capital to wait,

potentially, six months to a year or more

to receive their first payments from

SSA, especially when one considers the

staff time and cost of pre-employment

services required to serve individuals

with significant disabilities. They

believe that the lack of a more flexible

and front-loaded outcome-milestone

payment system may discourage

providers from participating and

thereby significantly limit beneficiary

choice.

The commenters also said that the

milestones were supposed to be a

method of risk sharing between SSA

and providers, but that the two we

proposed would delay and otherwise

limit cash flow and force ENs to assume

all of the risk. One community-based

agency said it was unfair of SSA to ask

currently under-funded, communitybased organizations to accept yet

another burden of providing services

without compensation. In a similar vein,

a State agency expressed concern that

since their State funds many programs

involving providers that could become

ENs, the milestones, as proposed, would

have the effect of shifting up-front

funding costs to the State, unless and

until the providers receive Federal

payments.

Response: We did not adopt any of

the commenters’ suggestions for

establishing pre-employment

milestones. Our major concern with

offering them is that of projected costs.

The events associated with preemployment milestones occur so early

in the process of moving a beneficiary

to independence that we project a

significant number of beneficiaries who

would achieve them would not

eventually leave the disability rolls

because of work or earnings.

Accordingly, there would not be

sufficient savings from the eventual

nonpayment of benefits to offset the

initial cost outlays associated with

having pre-employment milestones. For

this reason, we tied the milestones in

these final rules to beneficiary work

activity, when there is an increased

likelihood of permanent employment

and of achieving outcomes.

Comment: Many commenters urged

us to add to and modify the postemployment milestones we proposed.

Among the suggestions we received

were those to link the milestones to

length of job retention only (e.g., three,

six, and nine months), without regard to

the amount earned. Also, there were

suggestions to have a milestone system

that steps up to the SGA threshold

amount for the final payment because

many beneficiaries ease into their work

and gradually increase their earnings.

Others suggested that we substitute the

recently raised trial work period amount

(i.e. $530) for the higher SGA threshold

amount (i.e. $740 for those who are not

statutorily blind and $1,240 for those

who are statutorily blind). In addition,

we received suggestions to have specific

title XVI milestones based on a

percentage of reduction in cash benefits

and to add a milestone for 12 months of

employment at the SGA dollar amount.

Response: In response to these

comments we amended final § 411.535

to add two milestones to the two that we

originally proposed. The first additional

milestone is met when the beneficiary

works for one calendar month and has

gross earnings from employment (or net

earnings from self-employment) for that

month that are more than the SGA

threshold amount. The other additional

milestone, which is actually the fourth

milestone, is met when the beneficiary

works for 12 calendar months within a

15-month period and has gross earnings

from employment (or net earnings from

self-employment) for each of the 12

months that are more than the SGA

threshold amount. In making these

changes, we renumbered the two

milestones we originally proposed as

the second and third milestones. Also,

we provide that any of the work months

used to meet the first, second, or third

milestones may be used to meet a

subsequent milestone.

We do not anticipate that the changes

we are making to the milestones in these

final rules will be the only ones that we

will make. Section 1148(h)(5)(B) of the

Act directs us to periodically review the

number and amount of the milestone

payments, and authorizes us to make

alterations, if necessary, to ensure that

they allow for adequate incentives for

ENs to serve beneficiaries with

disabilities. Thus, as we begin to

implement the Ticket to Work program

in the 13 initial States, we will continue

to consider the various suggestions that

we received with regard to milestone

payments.

At this time, however, we do not

support the recommendations for a

milestone system based solely on length

of job retention or on lower levels of

earnings so that beneficiaries can ease

into their work. While length of job

retention can be an important factor in

determining whether benefits continue,

so is the level of earnings, and we

believe that that level ought to at least

exceed the SGA threshold amount. This

amount is a gross dollar amount, not the

net earnings that remain after we deduct

the various employment supports an

individual may receive. Also, we do not

favor the recommendations to structure

SSI milestones on a percentage of

reduction in cash benefits. Many factors

(e.g., unearned income and impairmentrelated work expenses, to name a few)

go into making SSI payment decisions.

Thus, it would be difficult to know

whether a given percentage reduction in

cash benefits is due to work or to other

factors, such as unearned income,

without carefully examining each SSI

payment calculation.

Comment: A few commenters urged

us to build incentives into the EN

payment systems to reward ENs for each

additional client they move into the

workforce and for each client they help

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67411

to get better jobs, i.e. jobs that include

benefits and provide a livable wage.

Along these lines, many commenters

urged us to adopt milestones provisions

that would encourage ENs to serve those

who need more costly or more extensive

services to become work ready. Some

suggested that we have individualized

milestone criteria for those who need

ongoing support services or high-cost

accommodations when working, earn

subminimum wages, or work but still

receive partial cash benefits (e.g.,

section 1619(a) recipients). Other

commenters suggested that we adopt a

two-tiered milestone system like the

ones used by some States that

administer supported employment

programs. Under such a system those in

the second tier would get customized

milestones when, due to the nature of

their disabilities, the pre-defined

milestones in tier one are unworkable.

In addition, many suggested that we

consult with providers who have

experience in milestone payment

systems and redesign our system.

Response: We did not adopt these

recommendations because it is

impracticable for us to implement them

at this time, given the size of the ticket

population and its diversity. Like these

commenters, we want the design of our

EN payment systems to increase the

number of ENs serving our beneficiaries.

However, we have a responsibility to

see that our expenditures under the

program do not exceed program savings.

As we gather experiential data, we will

carefully look at who is being served

and what design changes we can

propose to broaden the number of

beneficiaries being served and increase

the number of those finding

employment that will firmly establish

their self-sufficiency. We will consult

with experts in the field, as needed, and

consider the effects of these suggestions

in terms of beneficiary needs, program

operations, and costs. Further, section

1148(h)(5)(C) of the Act requires us to

submit a report to Congress on the

adequacy of the incentives in the Ticket

to Work program for four groups of

individuals. They are those with a need

for ongoing support and services, those

with a need for high-cost

accommodations, those who earn a

subminimum wage, and those who work

and receive partial cash benefits.

Section 411.540 What Are the

Payment Amounts for Each of the

Milestones?

Comment: Many commenters told us

that the payments we proposed to offer

as milestones (i.e. approximately 10

percent of potential payments under the

outcome-milestone payment system) are

inadequate and urged us to increase the

amounts so as to encourage more smallto-mid-sized providers to participate in

the Ticket to Work program. Some of

these commenters suggested that we use

a graduated fee system and pay based on

the level of earnings a beneficiary

receives. Others suggested that we base

the milestone payments on a percentage

of the true cost of services an EN

provides. Still others suggested that we

allow the PM to negotiate a fixed fee

with each EN. We also received many

recommendations for specific fees as

well as many recommendations for a

total package of milestone payments

that ranged from $3,500 to $7,500.

Response: We agree with the

commenters that some increase in the

total milestone package would help to

encourage more providers to serve as

ENs. Therefore, in these final rules, we

doubled the total value of the

milestones that ENs may receive to

approximately 20 percent of the

potential payments possible under the

outcome-milestone payment system. In

terms of the 2001 payment amounts this

equates to milestone payments totaling

$3,096 for title II (including concurrent)

beneficiaries and $1,874 for title XVI

only beneficiaries.

To accomplish this increase in the

milestone payments, we modified final

§ 411.540. We provided that the two

milestones we added—the first and

fourth milestones—would equal 34

percent and 170 percent of the payment

calculation base for the calendar year in

which each occurs. This represents

approximately 10 percent of the

potential payments possible under the

outcome-milestone payment system. In

addition, in final paragraphs (e) and (h)

we explain the term ‘‘month of

attainment’’ for the new milestones.

We do not believe that it is

administratively practicable to adopt a

graduated fee system, to set individual

fees, or to have the PM negotiate fees

with each EN. Also, we believe a $7,500

milestone package is excessive when

there is no guarantee that individuals

who achieve milestones will also

achieve outcomes that result in program

savings.

Section 411.545 What Are the

Payment Amounts for Outcome

Payment Months Under the OutcomeMilestone Payment System?

Comment: Several commenters

suggested that we offer a flat payment

rate for outcome months under the

outcome-milestone payment system.

They found the graduated monthly

outcome payments we proposed in

§ 411.545 to be unnecessarily complex

and predicted they would be more

difficult to manage.

Response: We have adopted this

suggested change and have modified the

rules. Final § 411.545 provides that the

payment for an outcome payment

month under the outcome-milestone

payment system is equal to 34 percent

of the payment calculation base for the

calendar year in which the month

occurs, rounded to the nearest whole

dollar, and reduced for milestone

payments made, as required by the rules

in § 411.530.

Section 411.555 Can the EN Keep the

Milestone and Outcome Payments Even

if the Beneficiary Does Not Achieve All

60 Outcome Months?

Comment: One commenter asked

whether an EN would be responsible for

paying back any payments it receives if

a beneficiary stops working and goes

back on the benefit rolls.

Response: An EN may keep each

milestone or outcome payment for

which the EN is eligible, even if the

beneficiary subsequently stops working

and returns to the benefit rolls. In some

instances, however, we may find it

necessary to adjust a milestone or

outcome payment that the EN receives.

In proposed § 411.555, by reference to

proposed § 411.560, we provided for

such adjustment when another EN, to

which the beneficiary assigned the

ticket, requests payment for the same

milestone or outcome. As we drafted

these final rules, we realized that there

may be other instances in which an

adjustment may be necessary, and thus

we expanded final § 411.555, to explain

these other instances.

Paragraph (a) of final § 411.555

provides a general statement that ENs

may keep those milestone and outcome

payments for which they are eligible.

Paragraph (b) of final § 411.555

discusses the EN payment adjustments

we may make if we determine that we

paid more or less than the correct

amount due. This paragraph also

provides two examples of situations

requiring such an adjustment. One

example refers to the aforementioned

adjustments for payment allocations

required by § 411.560. The other is an

example of an adjustment described in

§ 411.590(d) that results from a

corresponding determination or

decision that we make about a

beneficiary’s right to benefits. Finally,

paragraph (c) of final § 411.555 explains

that we will notify ENs of any revised

payment decisions. It also references

our payment dispute rules in

§ 411.590(a) and (b).

67412 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

Section 411.560 Is It Possible To Pay a

Milestone or Outcome Payment to More

Than One EN?

Comment: We received two comments

about the consequences of a beneficiary

reassigning the ticket to another EN.

One commenter said that the proposed

rules were not clear with regard to

whether we would pay the first EN. The

other commenter was concerned with

the repercussions of expecting ENs to

absorb the cost of the resources

expended on those who reassign their

tickets. This commenter predicted that

concern over beneficiaries reassigning a

ticket would cause some providers to

decline to participate in the Ticket to

Work program, and others who decide

to be ENs would serve only those

beneficiaries with the greatest potential

for success in the timeliest fashion.

Response: We can pay an EN after a

beneficiary reassigns the ticket to

another EN. Final § 411.560 states we

can pay more than one EN and the PM

will determine how much to allocate to

each EN based upon the services

provided. Additionally, final § 411.565

provides that if two or more ENs qualify

for payment on the same ticket, we will

pay each according to its elected EN

payment system.

If we receive a claim from one EN that

we determine is payable, we will make

a reasonable attempt to notify any other

EN that has held the beneficiary’s ticket

and still has an agreement with us to

serve under the program of its

opportunity to claim a share of the

payment. Similarly, if we receive a

claim from the beneficiary’s current EN

that we determine is payable, we also

will make a reasonable attempt to notify

any State VR agency that previously

held the beneficiary’s ticket and had

chosen to be paid as an EN based on

that ticket, of the opportunity to claim

a share of the payment.

Comment: A few commenters

suggested that we provide additional

rules to further define the provisions of

proposed § 411.560 regarding how the

PM will determine payment allocation

to more than one EN. These commenters

were concerned that the Ticket to Work

program is intended to pay ENs based

on employment outcomes and the last

sentence in this proposed section said

that the PM would make payment

allocations based ‘‘upon the services

provided by each EN.’’

Response: We agree that the proposed

wording was unclear. The fourth

sentence of final § 411.560 now says

that the PM will base the payment

allocation determination upon the

contribution of the services provided by

each EN toward the achievement of the

outcomes or milestones. In addition, we

added a fifth sentence to the final rules

to clarify that outcome and milestone

payments will not be increased because

the payments are shared between two or

more ENs.

Section 411.570 Can an EN Request

Payment From the Beneficiary Who

Assigned a Ticket to the EN?

Comment: One commenter questioned

the use of the term ‘‘compensation’’ in

proposed § 411.570. This section

prohibits an EN from requesting or

receiving compensation from the

beneficiary for the services it provides.

The commenter hoped that this section

would not prevent a beneficiary from

purchasing items at any retail

establishment the EN may operate just

because the EN holds the beneficiary’s

ticket.

Response: We believe that in the

context of these regulations it is clear

that the EN may not charge a beneficiary

for the employment, vocational

rehabilitation, or support services it

provides. This regulation does not

prohibit a beneficiary from purchasing

items unrelated to the services the EN

is providing to the beneficiary in any

retail establishment the EN may have.

Comment: One commenter asked

whether an EN could receive funding

from another agency, other than a State

VR agency, while serving a beneficiary

with a ticket.

Response: ENs may receive funding

elsewhere. Other than payments we will

make to ENs, the Ticket to Work

program does not address how ENs are

funded.

Section 411.575 How Does the EN

Request Payment for Milestones or

Outcome Payment Months Achieved by

a Beneficiary Who Assigned a Ticket to

the EN?

Comment: Many commenters objected

to the rules in proposed § 411.575(b)(2)

that would require ENs to submit

evidence of beneficiary earnings when

they request outcome payments because

the commenters believe that the task of

tracking such earnings is the Social

Security Administration’s

responsibility. Some commenters

simply recommended that we not

involve ENs in the process. Others

recommended that we partner with the

Internal Revenue Service (IRS) to

develop a reliable means of receiving

earnings information. Still others

recommended that we assign the PM the

responsibility of acquiring and

validating earnings documentation from

IRS or another source. There were also

suggestions to use the earnings data

posted to our own earnings records and

the earnings information which working

beneficiaries are required to report to us.

Response: We did not adopt these

suggestions. Our goal in proposing that

ENs submit evidence of monthly

beneficiary earnings in order to receive

outcome payments was to facilitate the

EN payment process. Under the Ticket

to Work program, we cannot make

outcome payments for any month for

which a beneficiary receives a Federal

cash disability payment from us.

Accurately and expeditiously tracking

earnings and adjusting monthly benefits

is a difficult task. Beneficiaries are

responsible for telling us when work

occurs. For various reasons, this does

not always happen, or does not happen

on a timely basis. We currently use

earnings reports that we receive from

the IRS and other sources to alert us to

unreported earnings situations.

However, the reports we get can be a

year old, are in annual or quarterly

formats, and are not always primary

sources of earnings. As a result, we must

undertake extensive development to

verify monthly earnings and

employment supports before adjusting

benefits. Thus, we continue to believe

that ENs, which will be working with

and helping beneficiaries get and retain

employment, will be able to supply

documentation of earnings and this will

speed up the benefit adjustment, and

hence, the EN payment process.

Comment: Some commenters

suggested that rather than requiring ENs

to submit evidence of earnings, we

develop a system or mechanism to

notify ENs when a beneficiary’s

disability benefits stop. Then, ENs will

know when to file requests for outcome

payments.

Response: We did not adopt this

suggestion. We do not presently have

the systems interface capability to

automatically notify ENs when a

beneficiary’s benefits stop on account of

work or earnings. Further, based on the

rules in §§ 411.525(a)(1)(ii)(A) and

411.575(b)(1)(i)(B), once an individual’s

entitlement to Social Security disability

benefits ends or eligibility for SSI

benefits based on disability or blindness

terminates because of work or earnings,

we still need evidence that the

individual had gross earnings in a

month that are more than the SGA

threshold amount in order to make an

outcome payment.

Comment: Many commenters,

representing both large and small

service providers, objected to the

provisions in proposed § 411.575(b)(2),

(b)(4), and (b)(5) that would require ENs

to submit evidence of beneficiary

earnings on a monthly or bimonthly

basis. They said that the proposed rules

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67413

were complex, expensive, and

excessively burdensome on both ENs

and employers. Also, many predicted

that the rules would deter providers

from participating in the Ticket to Work

program.

The commenters expressed concern

with the costs and feasibility of

establishing a tracking system that could

monitor the monthly earnings of

multiple beneficiaries over an extended

period of time, especially when

beneficiaries switch employers, are not

continuously employed, or move to

areas the EN does not serve. Some

commenters also said that ENs would

not be able to obtain monthly earnings

information on an ongoing basis from

those who assign their tickets to other

ENs, achieve independent employment,

or leave the disability rolls and no

longer have an incentive to cooperate

with their EN. Even commenters who

said that they presently have access to

State records of employment wages

pointed out that such records would not

be a good source of evidence under our

proposed rules. That is because these

are quarterly, not monthly, wage

reports, and they can be over a year old.

Another commenter said that the

proposed requirement to report earnings

at least every two months would be

difficult for State VR agencies,

especially once they close a

beneficiary’s case.

Many commenters suggested that we

allow ENs to submit evidence of

quarterly, rather than monthly, earnings

and to do so on a quarterly or semiannual basis, as opposed to a monthly

or bimonthly basis. There were also

suggestions to pay ENs in the event that

ticket holders do not provide the needed

earnings information and to assist ENs

in documenting earnings when

beneficiaries reassign their tickets to

other ENs.

Response: In response to these

comments, we consolidated the earnings

documentation requirements for

outcome payments into one paragraph

and made two changes. First, final

§ 411.575(b)(2) now requires ENs to

submit their payment requests, along

with evidence of beneficiary work or

earnings, on at least a quarterly basis.

Second, this paragraph includes an

exception to this general rule to provide

for those situations in which the ticket

is no longer assigned to the EN that files

the request for payment. In such cases,

the EN is not required to submit

evidence of beneficiary work or

earnings, although of course any

evidence submitted in these cases will

help to expedite our processing of the

payment request.

Comment: One commenter said that

we should not place a mandatory

earnings-reporting requirement on ENs.

Instead, this commenter suggested that

we require ENs to request a time-limited

release for earnings information from

each beneficiary. Then, if the

beneficiary signs the release, we should

require the EN to report earnings

information to us, to the extent that the

beneficiary continues to cooperate with

the EN.

Response: We did not adopt this

suggestion. We believe that the method

ENs use to collect earnings information

from beneficiaries does not need to be

regulated by us. Rather, it is something

that both parties should discuss and

reach an agreement on before the ticket

is assigned. For example, they may

decide to reference the agreed-to

collection method in the IWP.

Comment: Commenters were

concerned that the second sentence of

proposed § 411.575(b)(2) was

burdensome. It would require ENs to

submit ‘‘sufficient’’ proof of work or

earnings for us to determine whether we

can stop the beneficiary’s monthly

Federal cash benefits due to work or

earnings. One of these commenters

pointed out that this sentence was

inconsistent with how we actually

evaluate a beneficiary’s work or

earnings because there was no mention

of our work incentive provisions. For

example, payroll records may show

‘‘sufficient’’ earnings to stop benefits,

but we may decide to continue benefits

because a beneficiary is in a trial work

period, has an impairment related work

expense or a plan for achieving selfsupport, or receives a subsidy.

Response: We agree with the

commenters and removed this sentence

from final § 411.575(b)(2).

Comment: Many commenters were

concerned with the last sentence in

proposed § 411.575(b)(2). It stated that

wage evidence for employees is ‘‘best

obtained from the employer or the

employer’s designated payroll

preparer.’’ Some commenters said that

this sentence poses significant

confidentiality issues, especially for

beneficiaries who have not disclosed

their disability to their employers. Two

commenters noted that an EN could just

as easily obtain this same information

from the beneficiary’s pay stubs and one

of these commenters suggested that we

permit ENs to submit photocopied, as

opposed to original, pay stubs. Another

commenter said the information could

be retrieved from State wage records,

and one commenter suggested we allow

for the use of Unemployment Insurance

wage records. In addition to these

comments, many said that having ENs

collect earnings information from any

source might violate the right of

beneficiaries to keep such information

confidential and private from ENs, if

they so choose.

Some of these commenters

recommended that we specify what

other types of earnings documentation

we would consider acceptable and

indicate where ENs could obtain them.

One commenter suggested that we allow

for the use of payroll records retrieved

from State taxation departments.

Response: In response to these

comments, we included two additional

examples of the types of evidence that

ENs may submit with their payment

requests in the second sentence of final

§ 411.575(b)(2). They are an unaltered

copy of the beneficiary’s pay stub and

an unaltered copy of the beneficiary’s

estimated tax return if self-employed.

These are not the only sources of

evidence we will accept, and the PM, in

its EN training material, will discuss

what other types of evidence that ENs

may submit.

We retained the example of a

statement from the employer or the

employer’s designated payroll preparer

because we consider this evidence to be

of high probative value. However, we

would not expect an EN to request this

information or, for that matter, an

employer to provide it without a

beneficiary’s signed consent.

Comment: With respect to proposed

§ 411.575, one commenter asked how an

EN’s ability to collect payments would

be affected by a delay in our stopping

disability benefits to a working

beneficiary.

Response: In most situations, an EN’s

eligibility for a payment will depend on

SSA’s determination about a

beneficiary’s right to payment. Briefly,

there are three different payment

scenarios, two of which are related to

outcome payments, and the other

concerns milestone payments.

• The first scenario relates to when

we are asked to make an outcome

payment under either the outcome

payment system or the outcomemilestone payment system while the

beneficiary is still entitled under title II

or eligible under title XVI. (It is possible

for a beneficiary to be entitled or

eligible, but to not receive cash

benefits.) Before we can make an

outcome payment to the EN, we must

determine whether the payment of

Social Security disability benefits and

Federal SSI cash benefits to an

otherwise entitled or eligible beneficiary

is precluded because of work or

earnings.

• The second payment scenario

relates to when we are asked to make

67414 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

payment to an EN in connection with an

individual whose entitlement or

eligibility for disability benefits has

terminated due to work or earnings. In

such a situation, payment to an EN will

depend on whether the individual has

earnings for a month that meet the

earnings requirements in

§ 411.525(a)(1)(ii)(A), and whether the

requirement in § 411.525(a)(1)(ii)(B) is

satisfied.

• The third payment scenario

involves an EN’s request for a milestone

payment. Our determination regarding a

milestone payment will depend on

whether the requirements concerning

duration of work and level of earnings

for attainment of a particular milestone

are met and whether attainment of the

milestone occurs before the start of the

individual’s outcome payment period.

As noted in § 411.500(b), the outcome

payment period begins with the first

month, ending after the date on which

the ticket was first assigned, for which

Social Security disability benefits and

Federal SSI cash benefits are not

payable to the individual due to work or

earnings. If the start of the outcome

payment period is an issue with regard

to a request for a milestone payment,

then we may have to make a

determination about a beneficiary’s right

to payment.

Comment: We received suggestions

not to recover any overpayments to ENs

or beneficiaries that result from the

earnings reporting system we use and a

suggestion to provide for a specific

payment time frame to ensure ENs of

prompt payment following the

submission of accurately documented

payment claims. Along similar lines,

many commenters suggested that SSA

institute a 90-day payment processing

rule. Under such a rule, the PM would

have 30 days to submit EN reported

earnings to us and then SSA would have

60 days to stop or adjust a beneficiary’s

check. Should we fail to stop or adjust

benefits within this time frame, these

commenters recommended that we pay

the EN’s claim immediately, as though

benefits had stopped, and not hold the

beneficiary liable for any overpayment.

Response: We did not adopt the

suggestions to not recover or not hold

beneficiaries liable for overpayments

because, except in the case of milestone

payments, the statute does not allow us

to pay an EN and the beneficiary for the

same month. Therefore, in order for us

to pay one party, we must recover any

overpayments we may have made to the

other party.

Also, we did not incorporate any

payment time frames into these final

rules. The earnings documentation that

ENs submit will help us to make more

timely decisions. However, we must

still develop all relevant issues and

adhere to strict due process guidelines

before we adjust or stop a beneficiary’s

benefits. Additionally, in SSI cases, we

must offer to continue benefits should a

beneficiary appeal our determination to

stop benefits.

Comment: Two commenters

discussed the outcome payment system

and how a beneficiary’s use of work

incentive provisions such as plan for

achieving self-support (PASS) and

impairment-related work expenses

(IRWE) could prevent some ENs from

getting paid. Their concern was that

those beneficiaries with more intensive

service needs would not be served. One

of these commenters said that ENs

might not fully disclose or explain to

beneficiaries that beneficiaries have

these other work incentives available,

and that ENs may rush beneficiaries to

benefit suspension, in order to generate

outcome payments for the EN.

Response: We hope that all

beneficiaries who want to work will

receive services, and that, when they

begin to work, they will avail

themselves fully of all of the various

work incentive provisions of the Act.

We will monitor any complaints about

ENs discouraging beneficiaries from

using the work incentive provisions. In

addition, to eliminate any possibility of

a conflict of interest, in these final rules

we deleted the provision in proposed

§ 411.575(b)(3) that encouraged ENs to

submit beneficiary-completed Work

Activity Reports (Form SSA–821s) with

their requests for outcome payments.

Usually, Social Security field personnel

request beneficiaries to complete and

return this form when work activity is

reported and assist beneficiaries when

needed. We originally thought it would

speed our determinations about work or

earnings if ENs obtained this form and

submitted it to us with their payment

requests. However, the form contains

questions about special working

conditions and payments and

impairment-related work expenses. In

light of these comments, we believe the

beneficiaries should obtain the form

from Social Security field personnel,

and should complete it with their

assistance, not the EN’s.

Beneficiaries have many sources of

information about our other work

incentives such as PASS and IRWE.

Section 1149 of the Act, as added by

section 121 of Public Law 106–170,

requires that SSA establish a corps of

work incentives specialists within SSA

who will specialize in disability work

incentives and who will disseminate

accurate information on work incentives

to disability beneficiaries and to benefit

applicants. We have created a new

position called the employment support

representative to fulfill this requirement

to create a corps of work incentives

specialists. These specialists will also

assist organizations awarded funds by

SSA to provide information about work

incentives.

Section 1149 of the Act requires us to

establish a program of grants,

cooperative agreements, or contracts for

State or private agencies or

organizations to provide benefits

planning and assistance to beneficiaries

with disabilities. Under this program,

we have awarded funds to organizations

in every State and U.S. territory in order

to disseminate accurate information

about the various work incentives

provisions available to title II and title

XVI disability beneficiaries. The

organizations receiving funds from SSA

will provide information, guidance, and

planning to beneficiaries with

disabilities on the availability and

interrelation of Federal and State work

incentives programs, on health

coverage, and on the availability of

protection and advocacy services and

how to access such services.

Under a program authorized by

section 1150 of the Act, we are awarding

grants to State protection and advocacy

systems in every State, in the District of

Columbia, in five U.S. territories, and to

the protection and advocacy system for

Native Americans. These grants will

allow the protection and advocacy

systems to assist beneficiaries with

disabilities in obtaining information and

advice about receiving vocational

rehabilitation and employment services,

as well as advocacy and other services

that a disabled beneficiary may need to

secure or regain gainful employment.

We believe that these programs and

our efforts will ensure that disability

beneficiaries are more fully informed

about all of the work incentives

provisions available to them.

Comment: One commenter asked

about the consequences for an EN if we

deny an EN’s claim for payment due to

inaccurate wage information or other

reasons.

Response: Generally, the only

consequence is that the claim will be

denied and the EN will not receive

payment. However, if we believe that

the issue of inaccurate wage reporting

involves the possibility of fraud, we will

investigate the issue fully and take

appropriate action.

Of course, if an EN disagrees with our

decision on a payment request, we will

follow the rules in § 411.590(a) to

resolve the dispute. Similarly, if a State

VR agency, serving a beneficiary as an

EN, disagrees with our decision on a

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67415

payment request under an EN payment

system, we will follow the rules in

§ 411.590(b) to resolve the dispute.

Section 411.585 Can a State VR

Agency and an EN Both Receive

Payment for Serving the Same

Beneficiary?

Comment: One commenter, referring

to the introductory text of proposed

§ 411.585, suggested that the final rules

provide guidance on how a shared

payment to an EN and a State VR agency

that decides to serve a beneficiary as an

EN would be calculated.

Response: We amended the

introductory text of final § 411.585 to

provide a cross-reference to final

§ 411.560, which explains how a PM

will make a shared payment EN

determination.

Comment: We received a number of

comments, from both inside and outside

of the State VR system, about the

proposal in § 411.585 (a) and (b) to

preclude payment under one of the EN

payment systems if a State VR agency

first receives payment under the cost

reimbursement payment system, and

vice-versa. Several of these commenters

questioned the legal basis for this

provision. They said that they found

nothing in the legislative history or

statute that would prohibit payments

under both systems. Further, they

argued that our proposal would negate

beneficiary choice and ultimately harm

those with significant disabilities who

could benefit from services under both

the VR cost reimbursement and EN

payment systems.

Some of the commenters also said that

our proposal seems to assume that the

EN payment systems and the cost

reimbursement payment system pay for

identical services. Their interpretation

of the EN payment systems is that they

provide for long-term supports that help

beneficiaries maintain productive

employment over 60 months. These

commenters view the cost

reimbursement payment system as one

that allows State VR agencies to close

cases after 90 days of employment and

collect payment when beneficiaries

achieve a continuous 9-month period of

SGA.

Those who commented on § 411.585

recommended that we revise it. They

believe that the Ticket to Work program

should accommodate both the EN and

the cost reimbursement payments

systems for serving the same

beneficiary.

Response: We did not revise final

§ 411.585 to allow for payment with

respect to a ticket under both the

traditional cost reimbursement system

and an EN payment system because we

believe to do so would be contrary to

how we believe Congress intended for

the two programs to operate together,

and to do so could undermine the

Ticket to Work program’s goal of

realizing program savings while moving

beneficiaries to independence. The first

two sentences of section 1148(c)(1) of

the Act provide State VR agencies with

the option of electing to participate in

the Ticket to Work program as an EN

with respect to a beneficiary. The third

sentence of section 1148(c)(1) of the Act

allows State VR agencies the additional

option of choosing, on a case-by-case

basis, to be paid under the cost

reimbursement payment system when

serving a beneficiary with a ticket. Had

Congress intended to allow for

payments under both the cost

reimbursement payment system and the

EN payment systems with respect to the

same individual with a ticket, there

would have been no need for the third

sentence of 1148(c)(1). The authority to

reimburse State VR agencies under the

cost reimbursement payment system

already existed under sections 222(d)

and 1615(d) and (e) of the Act. We

believe that Congress included the third

sentence in section 1148(c)(1) of the Act

to make the securing of services by a

beneficiary with a ticket from a State VR

agency electing cost reimbursement a

mutually exclusive alternative to a

beneficiary’s obtaining services from an

EN. This view of section 1148(c)(1) of

the Act is shared by the Congressional

Budget Office (CBO) in the cost

estimates it submitted to the Senate

Committee on Finance (Senate Report

No. 106–37, March 26, 1999, page 41)

and the House Committee on Commerce

(House Report No. 106–220, July 1,

1999, page 19). In their reports the CBO

stated that the Ticket to Work program

would ‘‘partially displace the current’’

cost reimbursement program.

Another provision of the enabling

legislation that supports our regulatory

limitation on payments in § 411.585 is

section 1148(e)(3) of the Act. It provides

that a beneficiary may change ENs

without being deemed to have rejected

services under the Ticket to Work

program; that, when such a change

occurs, the PM shall reassign the ticket

based on the choice of the beneficiary;

and that, ‘‘[u]pon the request of the

employment network, the program

manager shall make a determination of

the allocation of the outcome or

milestone-outcome payments based on

the services provided by each

employment network.’’ These

provisions do not contemplate a

beneficiary switching providers or

having SSA or the PM allocate

payments among providers in a case

where one of the providers is a State VR

agency that has chosen to be paid under

the cost reimbursement payment

system.

Section 1148(h) of the Act also

supports the regulatory limitation on

payments in § 411.585. This section

limits the total number of outcome

payments that we can make on a ticket

under either EN payment system to 60

payments. Once this limit is reached,

the ticket ceases to have any further

value for purposes of making payments

under either EN payment system. Since

the third sentence of section 1148(c)(1)

of the Act gives State VR agencies the

option of being paid under the cost

reimbursement payment system instead

of being paid under one of the EN

payment systems (not in addition to

being paid under the EN payment

systems), we believe that once we pay

a State VR agency under this system for

having served a beneficiary, the ticket

ceases to have value for purposes of

making payments thereafter under

either EN payment system.

Comment: One commenter expressed

concern that the rules in § 411.585 did

not address how State VR agencies

would be paid for the cost of the

services they provide to beneficiaries

whose tickets are held by an EN. On one

hand the State VR agencies cannot limit

the services they provide to eligible

individuals. On the other hand, an EN

that holds the ticket of a beneficiary

who requires expensive technological

services to work could not be expected

to reimburse a State VR agency for the

cost of such services from the monies

the EN would receive under the Ticket

to Work program.

Response: The authorizing legislation

of the Ticket to Work program does not

give us the authority to decide how or

whether State VR agencies will be

reimbursed by ENs for the services they

provide to beneficiaries whose tickets

are held by ENs. Section 1148(c)(3) of

the Act provides that State VR agencies

shall enter into agreements regarding

the conditions under which services

will be provided when an individual is

referred by an EN to a State VR agency

for services. Our rules in § 411.400

through 411.435 address the agreements

between State VR agencies and EN and

how disputes will be resolved.

Comment: Some commenters

expressed concern that the provisions in

§ 411.585 could lead to abuses should

ENs actively recruit beneficiaries who

are near the end of their employment

plans after State VR agencies have put

substantial resources into serving them.

Response: We understand these

concerns, however, we believe that State

67416 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

VR agencies and ENs will use the

provisions in the Ticket to Work

program to work together to serve our

beneficiaries in ways that give the

beneficiaries expanded access to

employment, vocational rehabilitation,

and support services. We will make

every effort to ensure that beneficiaries

can make informed choices about the

providers available to them, the nature

of the services they offer, and how a

provider’s payment system election may

affect the beneficiary’s future use of the

ticket.

Comment: One commenter suggested

that we make provision for State VR

agencies to share their cost

reimbursement payments with ENs,

with the PM resolving any disputes.

Response: We do not have the

statutory authority to adopt this

suggestion. Section 1148(e)(3) of the Act

provides for the PM to make

determinations about allocating

outcome and milestone payments.

However, there is no similar provision

for allocating cost reimbursement

payments between a State VR agency

and an EN that serve the same

beneficiary.

Section 411.587 Which Provider Will

SSA Pay if, With Respect to the Same

Ticket, SSA Receives a Request for

Payment From an EN or a State VR

Agency That Elected Payment Under an

EN Payment System and a Request for

Payment From a State VR Agency That

Elected Payment Under the Cost

Reimbursement Payment System?

Comment: One commenter suggested

that, if we did not revise § 411.585 to

allow for payment under both the cost

reimbursement and the EN payment

systems with respect to the same ticket,

we specify the criteria we would use

when deciding which provider to pay.

Response: In response to this

comment, we added § 411.587 to these

final rules. This section clarifies which

provider we will pay if, with respect to

the same ticket, we receive a request for

payment from a provider that elected an

EN payment system and one from a

State VR agency that elected the cost

reimbursement payment system.

Paragraph (a) of § 411.587 explains that

we will pay the claim of the provider

that first meets the requirements for

payment under its elected payment

system applicable to the beneficiary

who assigned the ticket. Paragraph (b) of

this section explains which provider we

will pay should both meet the payment

requirements in the same month. In

such a case, we will pay the claim of the

provider to which the beneficiary’s

ticket is currently assigned. If the ticket

is not currently assigned to either

provider, we will pay the claim of the

provider to which the ticket was most

recently assigned.

Section 411.590 What Can an EN Do if

the EN Disagrees With Our Decision on

a Payment Request?

Comment: Many commenters found

two issues troubling in proposed

§ 411.590(d) concerning what an EN can

do if it disagrees with a revised

determination which we make about a

beneficiary’s right to benefits following

a beneficiary’s appeal of a determination

which is unfavorable to the beneficiary

and which affects the beneficiary’s

entitlement, eligibility, or right to a

benefit payment. First, commenters

believed that the proposed section

highlights the possibility of an EN

having to return payments following a

beneficiary’s successful appeal, which

the commenters said would act as a

disincentive for providers to serve as

ENs. Second, they disliked the

provision which permits an EN to

furnish any evidence it has which may

be relevant to the beneficiary’s appeal.

The commenters said this rule would

create an adversarial situation and harm

the relationship between beneficiaries

and ENs.

Response: We understand the

concerns that these commenters have

about the disability determination and

payment process and resulting effect it

can have on the EN payment process.

That is why we decided to refer to this

process, which we call the

administrative review process, in

proposed § 411.590(d). Also, we do not

want the process to create an adversarial

relationship between beneficiaries and

ENs. That is why we clearly state in

§ 411.590(c) and (d) that an EN cannot

appeal a determination we make about

a beneficiary’s right to benefits, but they

may furnish evidence in support of their

claims for payment.

Sections 404.900 et seq. and 416.1400

et seq. explain the administrative review

process we have under title II and title

XVI of the Act. Determinations we make

about a beneficiary’s right to disability

cash benefits are administrative actions

that are subject to review. Generally, if

beneficiaries are dissatisfied with a

determination we make, they have a 60-

day period in which to request further

administrative review, and ultimately

court review. Additionally, if they do

not request a review within these time

frames, they may request that we reopen

and revise a determination we

previously made about a beneficiary’s

right to cash benefits, or we may decide

to this on our own initiative. Since the

EN payment systems are inherently

linked to the determinations we make

about a beneficiary’s right to cash

benefits, there will be situations in

which we make, amend, or otherwise

revise a determination relating to a

beneficiary’s right to cash benefits, and

that determination will result in an EN

having to return a payment we

previously made to them. However, we

are hopeful that our efforts to educate

beneficiaries and ENs about the various

employment support provisions in the

Act and to remind them of their

reporting responsibilities will increase

understanding of how work may affect

a beneficiary’s right to cash benefits,

which in turn will help us to minimize

the number of instances in which we

must revise EN payment decisions.

As we reviewed the provisions we

proposed to respond to these comments,

we realized that the rules we proposed

in § 411.590(d) did not cover all of the

possible administrative actions that we

might make about a beneficiary’s right

to disability cash benefits. Therefore, we

reorganized and broadened the language

in the final rules so that they refer to all

determinations we may make about a

beneficiary’s right to benefits, not just

those determinations that a beneficiary

may appeal. In addition, we referenced

our rules in § 411.555 concerning the

adjustment of EN payments when we

determine we paid more or less than the

correct amount.

Section 411.597 Will SSA Periodically

Review the Outcome Payment System

and the Outcome-Milestone Payment

System for Possible Modifications?

Comment: Many commenters

suggested that we initiate, as soon as

possible, the research needed for the

Report on the Adequacy of the

Incentives provided in the Ticket to

Work program, as required by section

1148(h)(5)(C) of the Act. They said that

they had identified the report as a key

initiative to assure that those with

severe disabilities are able to participate

fully in the Ticket to Work program.

Thus, they urged us to begin collecting

the information as soon as possible and

suggested that we collect data on

matters such as the reasons ENs decline

to offer services to one or more groups

of the four groups specifically identified

in the law.

Response: We agree with the

commenters that the information

gathered for this report will play a key

role in the development of future

policies and proposals for possible

legislative changes to assist beneficiaries

participate more fully in the Ticket to

Work program. As soon as the Ticket to

Work program is operational, we will

begin collecting data on all four groups

mentioned in the statute, including data

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67417

on the reasons ENs may decline to serve

them.

Comment: Many commenters

suggested that we use our

demonstration authority to test various

payment options and funding schemes

in the initial rollout States. Some

recommended that we test three or four

varying milestone and payment

amounts to determine which would best

attract appropriate ENs for hard to serve

populations. One specific

recommendation was that we test

offering outcome payments for reduced

cash benefits when, due to the nature of

a beneficiary’s condition, the

beneficiary can achieve only lower

levels of employment. Another

recommendation was that we test

making outcome and milestone

payments richer for cases involving SSI

beneficiaries and encourage States to

contribute a portion of the saved SSI

State supplementation payment. In

addition, there was a suggestion to test

up-front capitalization funding via

matching Federal and State dollars.

Response: We will consider all of

these interesting demonstration ideas as

we continue to explore the best ways to

serve beneficiaries with disabilities and

reduce their barriers to work and selfsufficiency.

Subpart I—Ticket to Work Program

Dispute Resolution

Public comments on subpart I of the

proposed rules raised a number of

issues relating to the dispute resolution

processes. An overall theme in the

comments was that review and appeal

mechanisms should be more elaborate

than required by the legislation. The

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), provides a

process for resolution of disputes

between beneficiaries and ENs that are

State VR agencies. The Commissioner

has developed a different 3-step process

for resolving disputes between

beneficiaries and ENs that are not State

VR agencies.

The rules for this 3-step dispute

resolution process provide common

sense guidelines that give both parties to

the dispute several opportunities to be

heard. The rules permit disputants to

resolve quickly, easily, and fairly issues

that arise between them. The 3-step

dispute resolution process for resolving

disputes between beneficiaries and ENs

that are not State VR agencies affords a

full and fair review of issues in dispute.

A discussion of specific issues raised in

the public comments and our responses

follow.

Comment: Some commenters stated

that we should provide beneficiaries

and ENs that are not State VR agencies

an opportunity for a face-to-face

hearing. Several recommended that the

administrative and judicial review

process for appeal of initial

determinations (§§ 404.900 through

404.999 and 416.1400 through

416.1499) be used for the dispute

resolution process. One commenter

suggested that beneficiaries should be

entitled to the rights customary to

evidentiary hearings, including the right

to be provided notice, the right to

request discovery, the right to present

evidence, the right to defend oneself,

the right to cross-examine witnesses, the

right to a written decision, and the

opportunity to appeal. Another

commenter stated that the time frame

for appeal of a decision should be 60

days to be consistent with time frames

in our administrative review process.

Response: Section 1148(d)(7) of the

Act requires, among other things, that

the Commissioner provide a mechanism

for resolving disputes between

beneficiaries and ENs. The

Commissioner is required to afford a

party to such a dispute a reasonable

opportunity for a full and fair review of

the matter in dispute. The

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), provides a

process for resolution of disputes

between beneficiaries and ENs that are

State VR agencies. The Commissioner

has developed a different process for

resolving disputes between beneficiaries

and ENs that are not State VR agencies.

We believe that the dispute resolution

process we have created provides the

parties with a reasonable opportunity to

have a full and fair review of the matter

in dispute. Section 1148(d)(7) does not

require the Commissioner to afford a

face-to-face hearing. The legislation did

not allocate funding to support this type

of process. Disputes between

beneficiaries and ENs relate to aspects

of the rehabilitation process, such as

proposed changes in the vocational goal

and the Individual Work Plan, the

nature and duration of education and

training, and the type and availability of

equipment provided. Multiple disputes

may arise between a beneficiary and the

EN at different points in the

rehabilitation process, and each dispute

will require quick resolution to

maintain ongoing rehabilitation efforts.

Submission of these types of disputes to

the administrative and judicial review

process reserved for critical payment

issues would impose unacceptable

administrative and financial burdens on

the Agency. This would also disrupt the

rehabilitation process while relatively

minor issues could remain unresolved

during a lengthy appeal process.

We are retaining the 3-step process set

forth in the proposed rules, because this

process meets the statutory mandate for

a full and fair review of disputes

between beneficiaries and ENs that are

not State VR agencies. It provides the

parties several opportunities to be

heard, allows both parties to the dispute

to present their case before an impartial

third party, the PM, and expedites

dispute resolution.

Comment: Many commenters

questioned whether the 3-step process

for resolving disputes between

beneficiaries and ENs that are not State

VR agencies provides a full and fair

review. Several commenters proposed

that we establish a single, standard

grievance model at step one for use by

all ENs that are not State VR agencies.

Other commenters said that we should

provide beneficiaries clear information

about the dispute resolution process,

including defined ‘‘next steps,’’ impose

reasonable time frames, and inform

disputants of the right to be represented

and the right to provide evidence at

each step of the dispute resolution

process. In addition, one commenter

said that the PM should be required to

provide all the evidence, not just

relevant evidence, when a dispute is

referred to us at step 3.

Response: The 3-step process in

subpart I provides for expedient

resolution of disputes between

beneficiaries and ENs, and a full and

fair review of the disputed issues.

Requiring ENs that are not State VR

agencies to implement a standard

grievance model of our design at the

first step of the 3-step dispute resolution

process would impose unfair burdens

on them. ENs are voluntary participants

in the Ticket to Work program, and

some ENs might choose to withdraw

from this program if required to

implement a new process distinct from

internal grievance procedures already in

place.

In subpart I, we require that:

At step one, the EN that is not a State

VR agency is required: to have grievance

procedures that a beneficiary can use to

seek a resolution to a dispute under the

Ticket to Work program; to give each

beneficiary seeking services a copy of its

internal grievance procedures; to inform

each beneficiary seeking services of the

right of either party to refer a dispute

first to the PM for a review, and then to

us for a final decision; and to inform

each beneficiary of the availability of

assistance from the State P&A system.

At step two, if the beneficiary or the

EN that is not a State VR agency asks the

PM to review a disputed issue, the PM

is to contact the EN to submit all

relevant information and evidence

67418 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

within 10 days, including a description

of the disputed issue, a summary of the

beneficiary’s and the EN’s positions

related to each disputed issue, and a

description of any solutions proposed

by the EN, including the reasons the

beneficiary rejected each proposed

solution. The PM has 20 days to provide

a written recommendation resolving the

dispute, and explaining the reasoning

for the proposed resolution.

At step three, if the beneficiary or the

EN requests SSA to review the PM’s

recommended resolution of the dispute,

this request must be made within 15

working days of the receipt of the PM’s

recommendation. The PM has 10

working days to refer the request to us

for a review, including with the request

a copy of the beneficiary’s IWP,

information and evidence related to the

disputed issues, and the PM’s

conclusions and recommendations. Our

decision on the resolution of the dispute

will be final.

Comment: Some commenters

suggested that the process for resolving

disputes between beneficiaries and ENs

that are not State VR agencies should

provide for optional mediation or an

external appeals process to ensure the

beneficiary an unbiased resolution of

the dispute. Several commenters said

that the Dispute Resolution Board

mentioned in the preamble to the

proposed rules for this process should

have non-SSA employees. Another

commenter stated that the third step

should be eliminated and the final

decision delegated to the PM at step

two.

Response: In developing these rules,

we considered making outside

mediation part of the dispute resolution

process, but we rejected this option, in

part, because we believe using an

outside mediator would not achieve

expedient dispute resolution. We also

believe that it is not necessary to

establish any external appeals process

for dispute resolution, because we

believe the three-step process provides

for a full and fair review. We have

deleted any reference to a dispute

resolution board, as the proposed rules

did not provide for it, but it was only

mentioned in the preamble to the

proposed rules. At step three, disputes

will be referred to SSA rather than to a

formal board. We do not agree that step

three should be eliminated from the

dispute resolution process and that the

PM should make the final dispute

decision. An appeal to SSA affords the

beneficiary an additional opportunity to

be heard and to receive the

Commissioner’s opinion on the issue.

Comment: Some commenters stated

that the dispute resolution process for

disputes between beneficiaries and ENs

that are not State VR agencies should be

the same as the process that is used for

those disputes between beneficiaries

and ENs that are State VR agencies.

Response: State VR agencies that are

serving as ENs have dispute resolution

procedures in place already. The

dispute resolution process used by State

VR agencies provides an opportunity for

beneficiaries and State agencies to

resolve disputes by formal mediation,

an impartial hearing, or civil action. The

dispute resolution process that the State

VR agencies are required to follow

fulfills and exceeds the requirement of

section 1148(d)(7) of the Social Security

Act for a full and fair review of the

matter in dispute.

We recognize that beneficiaries who

choose to work with State VR agencies

will have a different dispute resolution

process than those who choose to work

with non-State agency ENs. However,

the 3-step process described in the

regulations provides these beneficiaries

with a full and fair review, in an

expeditious and cost-efficient manner.

Comment: Several commenters

pointed out that our proposed rules

were not clear with respect to whether

they addressed both ENs that are not

State VR agencies and those that are.

Several others stated that the regulations

should indicate when the provisions of

the Rehabilitation Act of 1973, as

amended (29 U.S.C. 720 et seq.), relating

to opportunities for mediation, an

impartial hearing, and court action

apply.

Response: We are revising the rules in

subpart I to clarify whether they referred

to ENs that are not State VR agencies,

or those that are State VR agencies.

Comment: One commenter stated that

services and supports provided to a

beneficiary should not be suspended or

reduced while the beneficiary is

involved in the dispute resolution

process. Another asked if the timely

progress guidelines would be suspended

immediately when a dispute is not

solved.

Response: Participation of ENs in the

Ticket to Work program is voluntary.

We believe that requiring ENs to

continue providing supports or services

until disputes are resolved would not be

consistent with these aspects of the

program. The timely progress guidelines

will not be suspended when a dispute

remains unsolved.

Comment: Several commenters stated

that we should provide beneficiaries the

names and addresses of P&A services

and representatives. One commenter

suggested we should notify P&A

services of all disputes and the names

of disputants, unless the beneficiaries

specifically objected. Another

commenter stated that we should ensure

all representatives are expert in all

aspects of benefits. And, several

commenters suggested that legal

services for beneficiaries involved in

disputes be paid for.

Response: Section 411.605(d) requires

ENs that are not State VR agencies to

inform beneficiaries of the availability

of P&A services to assist them in the

dispute resolution process. We will not

release any information to a P&A service

about the beneficiary unless we are

authorized to do so, in accord with our

regulations governing disclosure of

official records and information (20 CFR

401.100 ff.). We will require ENs to

inform beneficiaries of the right to be

represented at each step of the dispute

resolution process. We do not have the

authority to pay such representatives.

We are not establishing standards of

expertise for representatives, because

this would impair the beneficiary’s

ability to choose non-attorneys to help

them with their disputes (e.g., family

members, clergy, members of the

rehabilitation community). The ability

to use non-attorneys to represent

beneficiaries in minor disputes is

especially important because many

beneficiaries may not be able to pay for

representation.

Comment: Several commenters

suggest we require disputants to adhere

to our final recommendations for

resolving issues between them.

Response: Because the Ticket to Work

program is voluntary in nature, the good

will and commitment of both parties to

the rehabilitation effort is critical to its

successful outcome. The three-step

dispute resolution process should

promote positive and productive

communication between these parties.

We do not believe that mandating

participants to adhere to our

recommendations for dispute resolution

would further the rehabilitation

partnership.

Youth in Transition to Adulthood

Section 411.125 of these final

regulations states that an individual will

be eligible to receive a ticket in a month

in which he or she is age 18 or older and

has not attained age 65, provided the

individual has qualified for title II

benefits based on disability or qualified

for title XVI benefits based on disability

under the adult standard or based on

blindness.

When we published the proposed

rules on December 28, 2000, we

included the following: ‘‘As we gain

experience with the Ticket to Work

program, we plan, at a later time, to

explore the possibility of expanding the

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67419

age criteria for receiving a ticket to

include those SSI beneficiaries age 16

and older who are eligible for disability

benefit payments based on the

childhood disability standard.’’

In these final rules, we have decided

not to issue a ticket to those recipients

under age 18 and those who have

attained age 18, but for whom we have

not yet conducted a redetermination of

their eligibility under the disability

standard for adults. However, we are

interested in exploring various

approaches to assist youth beneficiaries

to transition to independence, further

education, and careers in the workforce.

Therefore, we are publishing a Notice

elsewhere in today’s Federal Register in

which we are seeking suggestions from

the public to assist us in designing for

these beneficiaries an approach that

could complement the Ticket to Work

program.

Electronic Version

The electronic version of this

document is available on the Internet at

http://www.access.gpo.gov/su_docs/

aces/aces140.html. It is also available

on the Internet site for SSA at http://

www.ssa.gov.

Regulatory Procedures

Executive Order 12866

We have consulted with the Office of

Management and Budget (OMB) and

determined that these final rules meet

the criteria for a significant regulatory

activity under Executive Order (E.O.)

12866. Thus, OMB has reviewed these

final rules. For the five-year period from

fiscal year 2002 through 2006, the

effects on the Old Age, Survivors and

Disability Insurance benefit payments

range from minimal in fiscal year 2002

to costs of $27 million in fiscal year

2006. For the same period, the effects on

Federal Supplemental Security Income

payments range from savings of $1

million in fiscal year 2002 to savings of

$6 million in fiscal year 2006. We

expect that the effects on expenditures

of the Medicare and Medicaid programs

during that time period would be

negligible. As the costs and savings from

fiscal year 2002 through 2006 are not

expected to exceed $100 million in any

one year, these final rules are neither

economically significant under E.O.

12866, nor ‘‘major’’ under the

provisions of 5 U.S.C. 801 et seq.

However, we believe there may be

additional ‘‘benefits’’ to society that will

result from these rules. While these

benefits are difficult to quantify, we can

present some general elements of these

benefits.

We believe the Ticket to Work

program offers potential benefits to

society on several levels. For example,

the Ticket to Work program may

increase opportunities for individuals

who receive disability benefits to access

training, employment and placement

services, including opportunities to

create their own businesses and widen

their exposure to the employment

market. The program may provide new

funding streams for existing providers of

vocational services and give them access

to new clients, as well as allow them to

forge relationships with employers

interested in job placement of these

clients. It may also encourage the

establishment of new providers of

vocational services. For employers, the

program may provide access to a new

base of potential employees as

individuals who receive disability

benefits attempt to enter the

employment market under the terms of

the Ticket to Work program.

As required by the Ticket to Work and

Work Incentives Improvement Act of

1999, we must evaluate the Ticket to

Work program after it is implemented.

As part of that evaluation, we plan to

use various qualitative measures to

determine the effects on society.

Regulatory Flexibility Act

We certify that these final rules will

not have a significant economic impact

on a substantial number of small entities

because they would primarily affect

only individuals, and those entities that

voluntarily enter into a contractual

agreement with us. Therefore, a

regulatory flexibility analysis as

provided in the Regulatory Flexibility

Act, as amended, is not required.

Although a regulatory flexibility

analysis is not required, we have made

every effort to consider the effects these

rules might have on small entities that

might choose to participate in the Ticket

to Work program. As we mentioned

earlier in this preamble, we sponsored

and participated in many public forums,

presentations, and discussions leading

up to the development of these final

rules. At these forums, we discussed

with service providers their concerns

about participating in the Ticket to

Work program. These final rules reflect

our efforts to make these rules as

inclusive as possible; that is, to allow

for the participation in the program of

many different types of vocational

service providers, including small

entities, that can provide a wide range

of services. For example, we increased

the number and total amount of

milestone payments, from what we had

earlier proposed, to help smaller or

lesser-capitalized entities to participate

in the program. We also considered the

effects on small entities in determining

the level of credentials a service

provider must have to participate in the

program. At the same time, we must

also consider our stewardship

responsibilities in protecting the public

funds and in assuring that individuals

receiving disability benefits who choose

to participate in the Ticket to Work

program also receive quality services

from the providers to whom they assign

their tickets. We believe these final rules

reflect our efforts to achieve a balance

between providing opportunities for

small entities, and protecting public

funds and assuring that individuals

receiving disability benefits receive

quality services.

Federalism

We have reviewed these final rules

under the threshold criteria of E.O.

13132, ‘‘Federalism,’’ and determined

that they do not have substantial direct

effects on the States, on the relationship

between the national government and

the States, or the distribution of power

and responsibilities among the various

levels of government. The Ticket to

Work and Work Incentives

Improvement Act of 1999 established

the Ticket to Work program that will

complement the existing State

vocational rehabilitation program.

Although we have determined that

these final rules do not trigger the

requirements of E.O. 13132, we have

consulted with State vocational

rehabilitation agencies and their

national organization throughout our

development of these rules. As

mentioned earlier in the preamble to

these rules, we sponsored and

participated in numerous educational

forums throughout the country in order

to stimulate discussion about the Ticket

to Work program. We employed our

long-standing relationship with the

State vocational rehabilitation agencies

through a variety of meetings, forums

and other conversations to gain insight

as to how to develop these rules.

Furthermore, we have consulted on a

regular basis with those States selected

for the first round of the Ticket to Work

rollout, and the Department of

Education’s Rehabilitation Services

Administration in preparing these rules.

These final rules reflect, to the extent

practicable, our efforts to respond to the

issues raised by the States during these

consultations.

In addition, we note that the Old-Age,

Survivors and Disability Insurance

program is exempt from the Unfunded

Mandates Reform Act of 1995.

67420 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

Paperwork Reduction Act

This final rule contains new reporting

(Rpt), recordkeeping (Rec) and

disclosure (Dis) requirements in the

sections listed below. These burden

requirements have been cleared under

OMB Number 0960–0644. The clearance

expires on December 31, 2004.

TICKET TO WORK AND SELF-SUFFICIENCY PROGRAM ANNUAL BURDEN CALCULATION CHART

Section No. and requirements Number of respondents

Frequency of

response

Average burden per response (in

minutes)

Estimated annual burden

hrs.

411.140(c) Rpt—X-refer sections 411.145, 411.150, 411.325 (a), (b), (c), (d)

& 411.320 (f).

31,450 One time ..... 270 141,525

411.325(e) Rpt—X-refer section 411.395 (b) .................................................... 10,328 Quarterly ..... 120 20,656

411.325(f) Dis—X-refer section 411.395(a) ....................................................... 45,000 Occasional .. 5 3,750

411.190(a) Rpt—X-refer section 411.195 .......................................................... 1,000 One time ..... 30 500

411.220(b)(1) Rpt— ........................................................................................... 1,000 One time ..... 30 500

411.220(c)(1) Rpt— ........................................................................................... 500 One time ..... 5 42

441.245(b)(1) Rec— ........................................................................................... 12,000 One time ..... 1 200

411.325(d) Rpt— ................................................................................................ 1,800 One time ..... 480 14,400

411.365 Rpt— .................................................................................................... 82 One time ..... 240 328

411.575 Rpt—X-refer section 411.500 .............................................................. 13,000 Daily ............ 30 6,500

411.605(b) Dis—X-refer section 411.610 .......................................................... 45,000 Occasional .. 5 3,750

411.435(c) Rpt— ................................................................................................ 2,582 One time ..... 60 2,582

411.615 Rpt— .................................................................................................... 3,000 One time ..... 60 3,000

411.625 Rpt— .................................................................................................... 1,500 One time ..... 60 1,500

411.210(b) Rpt— ................................................................................................ 3,145 One time ..... 30 1,573

411.590(b) Rpt— ................................................................................................ 813 One time ..... 60 813

411.655 Rpt— .................................................................................................... 1 30-per year .. 120 60

411.200 Rpt— .................................................................................................... 1 ..................... 1 1

Total Annual Respondents .......................................................................... ........................ ..................... ........................ 172,202

Total Annual Burden Hours ........................................................................ ........................ ..................... ........................ 201,680

X-Refer—Burden for these sections has been accounted for under title section cited.

411.200—Reflects a one hour places holder pending implementation and program experience.

The below chart represents burden

associated with forms SSA–1365, State

Agency Ticket Assignment Form; SSA–

1366, State Vocational Rehabilitation

Ticket to Work Information Sheet, and

SSA–1367, Individual Work Plans (IWP)

Information Work Sheet, that have been

cleared under OMB–0641. The

clearance expires on April 30, 2002.

Forms Respondents Frequency of

response

Average burden per response

(minutes)

Estimated annual burden

hours

SSA–1365 ........................................................................................................ 21 4,048 3 4,250

SSA–1366 ........................................................................................................ 21 132 2 92

SSA–1367 ........................................................................................................ 31,450 1 3 1,573

Total burden ............................................................................................. ........................ ........................ ........................ 5,915

(Catalog of Federal Domestic Program Nos.

96.001, Social Security-Disability Insurance;

96.002, Social Security-Retirement Insurance;

96.004, Social Security-Survivors Insurance;

and 96.006, Supplemental Security Income)

List of Subjects in 20 CFR Part 411

Administrative practice and

procedure; Blind, Disability benefits;

Old-Age, Survivors, and Disability

Insurance; Reporting and recordkeeping

requirements; Social Security;

Supplemental Security Income; Public

Assistance programs; Vocational

Rehabilitation.

Dated: December 18, 2001.

Jo Anne B. Barnhart,

Commissioner of Social Security.

For the reasons set forth in the

preamble, we are adding a new part 411

to chapter III of title 20 of the Code of

Federal Regulations to read as follows:

PART 411—The Ticket to Work and

Self-Sufficiency Program

Subpart A—Introduction

Sec.

411.100 Scope.

411.105 What is the purpose of the Ticket

to Work program?

411.110 How is the Ticket to Work program

implemented?

411.115 Definitions of terms used in this

part.

Subpart B—Tickets Under the Ticket to

Work Program

411.120 What is a ticket under the Ticket

to Work program?

411.125 Who is eligible to receive a ticket

under the Ticket to Work program?

411.130 How will SSA distribute tickets

under the Ticket to Work program?

411.135 What do I do when I receive a

ticket?

411.140 When can I assign my ticket and

how?

411.145 Once my ticket has been assigned

to an EN or State VR agency, can it be

taken out of assignment?

411.150 Can I reassign my ticket to a

different EN or the State VR agency?

411.155 When does my ticket terminate?

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67421

Subpart C—Suspension of Continuing

Disability Reviewsfor Beneficiaries Who are

Using a Ticket

Introduction

411.160 What does this subpart do?

411.165 How does being in the Ticket to

Work program affect my continuing

disability reviews?

411.166 Glossary of terms used in this

subpart.

Definition of Using a Ticket

411.170 When does the period of using a

ticket begin?

411.171 When does the period of using a

ticket end?

411.175 What if I assign my ticket after a

continuing disability review has begun?

Guidelines for Timely Progress Toward SelfSupporting Employment

411.180 What is timely progress toward

self-supporting employment?

411.185 How much do I need to earn to be

considered to be working?

411.190 How is it determined if I am

meeting the timely progress guidelines?

411.191 Table summarizing the guidelines

for timely progress toward selfsupporting employment.

411.195 How will the PM conduct my 24-

month progress review?

411.200 How will the PM conduct my 12-

month progress reviews?

411.205 What if I disagree with the PM’s

decision about whether I am making

timely progress toward self-supporting

employment?

Failure To Make Timely Progress

411.210 What happens if I do not make

timely progress toward self-supporting

employment?

The Extension Period

411.220 What if my ticket is no longer

assigned to an EN or State VR agency?

411.225 What if I reassign my ticket after

the end of the extension period?

Subpart D—Use of One or More Program

Managers To Assist in Administration of the

Ticket to Work Program

411.230 What is a PM?

411.235 What qualifications are required of

a PM?

411.240 What limitations are placed on a

PM?

411.245 What are a PM’s responsibilities

under the Ticket to Work program?

Evaluation of Program Manager

Performance

411.250 How will SSA evaluate a PM?

Subpart E—Employment Networks

411.300 What is an EN?

411.305 Who is eligible to be an EN?

411.310 How does an entity other than a

State VR agency apply to be an EN and

who will determine whether an entity

qualifies as an EN?

411.315 What are the minimum

qualifications necessary to be an EN?

411.320 What are an EN’s responsibilities

as a participant in the Ticket to Work

program?

411.321 Under what conditions will SSA

terminate an agreement with an EN due

to inadequate performance?

411.325 What reporting requirements are

placed on an EN as a participant in the

Ticket to Work program?

411.330 How will SSA evaluate an EN’s

performance?

Subpart F—State Vocational Rehabilitation

Agencies’ Participation

Participation in the Ticket to Work Program

411.350 Must a State VR agency participate

in the Ticket to Work program?

411.355 What payment options does a State

VR agency have under the Ticket to

Work program?

411.360 How does a State VR agency

become an EN?

411.365 How does a State VR agency notify

SSA about its choice of a payment

system for use when functioning as an

EN?

411.370 Does a State VR agency ever have

to function as an EN?

411.375 Does a State VR agency continue to

provide services under the requirements

of the State plan approved under title I

of the Rehabilitation Act of 1973, as

amended (29 U.S.C. 720 et seq.), when

functioning as an EN?

Ticket Status

411.380 What does a State VR agency do if

the State VR agency wants to determine

whether a person seeking services has a

ticket?

411.385 What does a State VR agency do if

a beneficiary who is eligible for VR

services has a ticket that is available for

assignment or reassignment?

411.390 What does a State VR agency do if

a beneficiary to whom it is already

providing services has a ticket that is

available for assignment?

411.395 Is a State VR agency required to

provide periodic reports?

Referrals by Employment Networks to State

VR Agencies

411.400 Can an EN to which a beneficiary’s

ticket is assigned refer the beneficiary to

a State VR agency for services?

Agreements Between Employment Networks

and State VR Agencies

411.405 When does an agreement between

an EN and the State VR agency have to

be in place?

411.410 Does each referral from an EN to a

State VR agency require its own

agreement?

411.415 Who will verify the establishment

of agreements between ENs and State VR

agencies?

411.420 What information should be

included in an agreement between an EN

and a State VR agency?

411.425 What should a State VR agency do

if it gets an attempted referral from an

EN and no agreement has been

established between the EN and the State

VR agency?

411.430 What should the PM do when it is

informed that an EN has attempted to

make a referral to a State VR agency

without an agreement being in place?

Resolving Disputes Arising Under

Agreements Between Employment Networks

and State VR Agencies

411.435 How will disputes arising under

the agreements between ENs and State

VR agencies be resolved?

Subpart G—Requirements for Individual

Work Plans

411.450 What is an Individual Work Plan?

411.455 What is the purpose of an IWP?

411.460 Who is responsible for determining

what information is contained in the

IWP?

411.465 What are the minimum

requirements for an IWP?

411.470 When does an IWP become

effective?

Subpart H—Employment Network Payment

Systems

411.500 Definitions of terms used in this

subpart.

411.505 How is an EN paid by SSA?

411.510 How is the State VR agency paid

under the Ticket to Work program?

411.515 Can the EN change its elected

payment system?

411.520 How are beneficiaries whose

tickets are assigned to an EN affected by

a change in that EN’s elected payment

system?

411.525 How are the EN payments

calculated under each of the two EN

payment systems?

411.530 How will the outcome payments be

reduced when paid under the outcomemilestone payment system?

411.535 What are the milestones for which

an EN can be paid?

411.540 What are the payment amounts for

each of the milestones?

411.545 What are the payment amounts for

outcome payment months under the

outcome-milestone payment system?

411.550 What are the payment amounts for

outcome payment months under the

outcome payment system?

411.555 Can the EN keep the milestone and

outcome payments even if the

beneficiary does not achieve all 60

outcome months?

411.560 Is it possible to pay a milestone or

outcome payment to more than one EN?

411.565 What happens if two or more ENs

qualify for payment on the same ticket

but have elected different EN payment

systems?

411.570 Can an EN request payment from

the beneficiary who assigned a ticket to

the EN?

411.575 How does the EN request payment

for milestones or outcome payment

months achieved by a beneficiary who

assigned a ticket to the EN?

411.580 Can an EN receive payments for

milestones or outcome payment months

that occur before the beneficiary assigns

a ticket to the EN?

411.585 Can a State VR agency and an EN

both receive payment for serving the

same beneficiary?

411.587 Which provider will SSA pay if,

with respect to the same ticket, SSA

receives a request for payment from an

EN or a State VR agency that elected

67422 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

payment under an EN payment system

and a request for payment from a State

VR agency that elected payment under

the cost reimbursement payment system?

411.590 What can an EN do if the EN

disagrees with our decision on a

payment request?

411.595 What oversight procedures are

planned for the EN payment systems?

411.597 Will SSA periodically review the

outcome payment system and the

outcome-milestone payment system for

possible modifications?

Subpart I—Ticket to Work Program Dispute

Resolution

Disputes Between Beneficiaries and

Employment Networks

411.600 Is there a process for resolving

disputes between beneficiaries and ENs

that are not State VR agencies?

411.605 What are the responsibilities of the

EN that is not a State VR agency

regarding the dispute resolution process?

411.610 When should a beneficiary receive

information on the procedures for

resolving disputes?

411.615 How will a disputed issue be

referred to the PM?

411.620 How long does the PM have to

recommend a resolution to the dispute?

411.625 Can the beneficiary or the EN that

is not a State VR agency request a review

of the PM’s recommendation?

411.630 Is SSA’s decision final?

411.635 Can a beneficiary be represented in

the dispute resolution process under the

Ticket to Work program?

Disputes Between Beneficiaries and State VR

Agencies

411.640 Do the dispute resolution

procedures of the Rehabilitation Act of

1973, as amended (29 U.S.C. 720 et seq.),

apply to beneficiaries seeking services

from the State VR agency?

Disputes Between Employment Networks

and Program Managers

411.650 Is there a process for resolving

disputes between ENs that are not State

VR agencies and PMs, other than

disputes on a payment request?

411.655 How will the PM refer the dispute

to us?

411.660 Is SSA’s decision final?

Subpart J—The Ticket to Work Program and

Alternate Participants Under the Programs

for Payments for Vocational Rehabilitation

Services

411.700 What is an alternate participant?

411.705 Can an alternate participant

become an EN?

411.710 How will an alternate participant

choose to participate as an EN in the

Ticket to Work program?

411.715 If an alternate participant becomes

an EN, will beneficiaries for whom an

employment plan was signed prior to

implementation be covered under the

Ticket to Work program payment

provisions?

411.720 If an alternate participant chooses

not to become an EN, can it continue to

function under the programs for

payments for VR services?

411.725 If an alternate participant becomes

an EN and it has signed employment

plans, both as an alternate participant

and an EN, how will SSA pay for

services provided under each

employment plan?

411.730 What happens if an alternate

participant signed an employment plan

with a beneficiary before Ticket to Work

program implementation in the State and

the required period of substantial gainful

activity is not completed by January 1,

2004?

Authority: Sec. 1148 of the Social Security

Act (42 U.S.C. 1320b–19); sec. 101(b)–(e),

Pub. L. 106–170, 113 Stat. 1860, 1873 (42

U.S.C. 1320b–19 note).

Subpart A—Introduction

§ 411.100 Scope.

The regulations in this part 411 relate

to the provisions of section 1148 of the

Social Security Act which establishes

the Ticket to Work and Self-Sufficiency

Program (hereafter referred to as the

‘‘Ticket to Work program’’). The

regulations in this part are divided into

ten subparts:

(a) Subpart A explains the scope of

this part, explains the purpose and

manner of implementation of the Ticket

to Work program, and provides

definitions of terms used in this part.

(b) Subpart B contains provisions

relating to the ticket under the Ticket to

Work program.

(c) Subpart C contains provisions

relating to the suspension of continuing

disability reviews for disabled

beneficiaries who are considered to be

using a ticket.

(d) Subpart D contains provisions

relating to the use of one or more

program managers to assist us in the

administration of the Ticket to Work

program.

(e) Subpart E contains provisions

relating to employment networks in the

Ticket to Work program.

(f) Subpart F contains provisions

relating to State vocational

rehabilitation agencies’ participation in

the Ticket to Work program.

(g) Subpart G contains provisions

relating to individual work plans in the

Ticket to Work program.

(h) Subpart H contains provisions

establishing employment network

payment systems.

(i) Subpart I contains provisions that

establish a procedure for resolving

disputes under the Ticket to Work

program.

(j) Subpart J contains provisions

explaining how the implementation of

the Ticket to Work program affects

alternate participants under the

programs for payments for vocational

rehabilitation services under subpart V

of part 404 and subpart V of part 416 of

this chapter.

§ 411.105 What is the purpose of the

Ticket to Work program?

The purpose of the Ticket to Work

program is to expand the universe of

service providers available to

individuals who are entitled to Social

Security benefits based on disability or

eligible for Supplemental Security

Income (SSI) benefits based on

disability or blindness in obtaining the

services necessary to find, enter and

retain employment. Expanded

employment opportunities for these

individuals also will increase the

likelihood that these individuals will

reduce their dependency on Social

Security and SSI cash benefits.

§ 411.110 How is the Ticket to Work

program implemented?

We are implementing the Ticket to

Work program in graduated phases at

phase-in sites around the country. We

are implementing the program at sites

on a wide enough scale to allow for a

thorough evaluation and ensure full

implementation of the program on a

timely basis.

§ 411.115 Definitions of terms used in this

part.

As used in this part:

(a) ‘‘The Act’’ means the Social

Security Act, as amended.

(b) ‘‘Commissioner’’ means the

Commissioner of Social Security.

(c) ‘‘Cost reimbursement payment

system’’ means the provisions for

payment for vocational rehabilitation

services under subpart V of part 404 and

subpart V of part 416 of this chapter.

(d) ‘‘Disabled beneficiary’’ means a

title II disability beneficiary or a title

XVI disability beneficiary.

(e) ‘‘Employment network’’ or ‘‘EN’’

means a qualified public or private

entity that has entered into an

agreement with us to serve under the

Ticket to Work program and that

assumes responsibility for the

coordination and delivery of

employment services, vocational

rehabilitation services, or other support

services to beneficiaries assigning

tickets to it. The rules on employment

networks are described in subpart E of

this part (§§ 411.300–411.330). A State

vocational rehabilitation agency may

choose, on a case-by-case basis, to

function as an employment network

with respect to a beneficiary under the

Ticket to Work program. The rules on

State vocational rehabilitation agencies’

participation in the Ticket to Work

program are described in subpart F of

this part (§§ 411.350–411.435).

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67423

(f) ‘‘Employment plan’’ means an

individual work plan described in

paragraph (i) of this section, or an

individualized plan for employment

described in paragraph (j) of this

section. When used in subpart J of this

part, ‘‘employment plan’’ also means a

‘‘similar document’’ referred to in

§§ 404.2114(a)(2) and 416.2214(a)(2) of

this chapter under which an alternate

participant under the programs for

payments for vocational rehabilitation

services (described in subpart V of part

404 and subpart V of part 416 of this

chapter) provides services to a disabled

beneficiary under those programs.

(g) ‘‘Federal SSI cash benefits’’ means

a ‘‘Supplemental Security Income

benefit under title XVI’’ based on

blindness or disability as described in

paragraphs (n) and (r) of this section.

(h) ‘‘I’’, ‘‘my’’, ‘‘you’’, or ‘‘your’’ means

the disabled beneficiary.

(i) ‘‘Individual work plan’’ or ‘‘IWP’’

means an employment plan under

which an employment network (other

than a State vocational rehabilitation

agency) provides services to a disabled

beneficiary under the Ticket to Work

program. An individual work plan must

be developed under, and meet the

requirements of, the rules in subpart G

of this part (§§ 411.450–411.470).

(j) ‘‘Individualized plan for

employment’’ or ‘‘IPE’’ means an

employment plan under which a State

vocational rehabilitation agency

provides services to individuals with

disabilities (including beneficiaries

assigning tickets to it under the Ticket

to Work program) under a State plan

approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.). An

individualized plan for employment

must be developed under, and meet the

requirements of, 34 CFR 361.45 and

361.46.

(k) ‘‘Program manager’’ or ‘‘PM’’

means an organization in the private or

public sector that has entered into a

contract with us to assist us in

administering the Ticket to Work

program. The rules on the use of one or

more program managers to assist us in

administering the program are described

in subpart D of this part (§§ 411.230–

411.250).

(l) ‘‘Social Security disability

benefits’’ means the benefits described

in paragraph (q) of this section.

(m) ‘‘State vocational rehabilitation

agency’’ or ‘‘State VR agency’’ means a

State agency administering or

supervising the administration of the

State plan approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.). In those States

that have one agency that provides VR

services to non-blind individuals and

another agency that provides services to

blind individuals, this term refers to

either State agency.

(n) ‘‘Supplemental Security Income

benefit under title XVI’’ means a cash

benefit under section 1611 or 1619(a) of

the Act, and does not include a State

supplementary payment, administered

Federally or otherwise.

(o) ‘‘Ticket’’ means a document

described in § 411.120 which the

Commissioner may issue to disabled

beneficiaries for participation in the

Ticket to Work program.

(p) ‘‘Ticket to Work program’’ or

‘‘program’’ means the Ticket to Work

and Self-Sufficiency Program under

section 1148 of the Act.

(q) ‘‘Title II disability beneficiary’’

means an individual entitled to

disability insurance benefits under

section 223 or to monthly insurance

benefits under section 202 of the Act

based on such individual’s disability as

defined in section 223(d) of the Act.

(See § 404.1505 of this chapter.) An

individual is a title II disability

beneficiary for each month for which

such individual is entitled to such

benefits.

(r) ‘‘Title XVI disability beneficiary’’

means an individual eligible for

Supplemental Security Income benefits

under title XVI on the basis of blindness

(within the meaning of section

1614(a)(2) of the Act) (see §§ 416.981

and 416.982 of this chapter) or disability

(within the meaning of section

1614(a)(3) of the Act) (see § 416.905 of

this chapter). An individual is a title

XVI disability beneficiary for each

month for which such individual is

eligible for such benefits.

(s) ‘‘We’’ or ‘‘us’’ means the Social

Security Administration.

Subpart B—Tickets Under the Ticket to

Work Program

§ 411.120 What is a ticket under the Ticket

to Work program?

(a) A ticket under the Ticket to Work

program is a document which provides

evidence of the Commissioner’s

agreement to pay, under the rules in

subpart H of this part, an employment

network (EN) or a State VR agency to

which a disabled beneficiary’s ticket is

assigned, for providing employment

services, vocational rehabilitation

services, and other support services to

the beneficiary.

(b) The ticket is a red, white and blue

document approximately 6′′ by 9′′ in

size. The left side of the document

includes the beneficiary’s name, ticket

number, claim account number and the

date we issued the ticket. The ticket

number is 12 characters and comprises

the beneficiary’s own social security

number, the letters ‘‘TW’’ and a number

1, 2, etc. A number 1 in the last position

would signify that this is the first ticket

the beneficiary has received, consistent

with § 411.125(b).

(c) The right side of the ticket

includes the signature of the

Commissioner of Social Security, and

the following language:

This ticket is issued to you by the Social

Security Administration under the Ticket to

Work and Self-Sufficiency Program. If you

want help in returning to work or going to

work for the first time, you may offer this

ticket to an Employment Network of your

choosing or take it to your State vocational

rehabilitation agency for services. If you

choose an Employment Network and it agrees

to take your ticket, or if you choose your

State agency and you qualify for services,

these providers can offer you the services you

may need to go to work.

An Employment Network provides the

services at no cost to you. The Social

Security Administration will pay the

Employment Network if you assign your

ticket to it, and the Employment Network

helps you to go to work and complies with

other requirements of the Program. An

Employment Network serving under the

Program has agreed to abide by the rules and

regulations of the Program under the terms of

its agreement with the Social Security

Administration for providing services under

the Program. Your State agency can tell you

about its rules for getting services.

§ 411.125 Who is eligible to receive a ticket

under the Ticket to Work program?

(a) You will be eligible to receive a

Ticket to Work in a month in which—

(1) You are age 18 or older and have

not attained age 65;

(2)(i)(A) You are a title II disability

beneficiary (other than a beneficiary

receiving benefit payments under

§ 404.316(c), § 404.337(c), § 404.352(d),

or § 404.1597a of this chapter); and

(B) You are in current pay status for

monthly title II cash benefits based on

disability (see subpart E of part 404 of

this chapter for our rules on

nonpayment of title II benefits); or

(ii)(A) You are a title XVI disability

beneficiary (other than a beneficiary

receiving disability or blindness benefit

payments under § 416.996 or § 416.1338

of this chapter);

(B) If you are an individual described

in § 416.987(a)(1) of this chapter, you

are eligible for benefits under title XVI

based on disability under the standard

for evaluating disability for adults

following a redetermination of your

eligibility under § 416.987 of this

chapter; and

(C) Your monthly Federal cash

benefits based on disability or blindness

under title XVI are not suspended (see

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subpart M of part 416 of this chapter for

our rules on suspension of title XVI

benefit payments); and

(3) Our records show that—

(i) Your case is not designated as a

medical improvement expected diary

review case (see §§ 404.1590 and

416.990 of this chapter for what we

mean by a medical improvement

expected diary review); or

(ii) Your case is designated as a

medical improvement expected diary

review case, and we have conducted at

least one continuing disability review in

your case and made a final

determination or decision that your

disability continues (see subpart J of

part 404 or subpart N of part 416 of this

chapter for when a determination or

decision becomes final).

(b) You will not be eligible to receive

more than one ticket during any period

during which you are either—

(1) Entitled to title II benefits based on

disability (see §§ 404.316(b), 404.337(b)

and 404.352(b) of this chapter for when

entitlement to title II disability benefits

ends); or

(2) Eligible for title XVI benefits based

on disability or blindness and your

eligibility has not terminated (see

subpart M of part 416 of this chapter for

our rules on when eligibility for title

XVI benefits terminates).

(c) If your entitlement to title II

benefits based on disability ends and/or

your eligibility for title XVI benefits

based on disability or blindness

terminates as described in

§ 411.155(b)(1) or (2), you will be

eligible to receive a new ticket in a

month in which—

(1) Your entitlement to title II benefits

based on disability is reinstated under

section 223(i) of the Act, or your

eligibility for title XVI benefits based on

disability or blindness is reinstated

under section 1631(p) of the Act; and

(2) You meet the requirements of

paragraphs (a)(1) and (2) of this section.

§ 411.130 How will SSA distribute tickets

under the Ticket to Work program?

(a) We will distribute tickets in

graduated phases at phase-in sites

selected by the Commissioner, to permit

a thorough evaluation of the Ticket to

Work program and ensure that the most

effective methods are in place for full

implementation of the program. (See

§ 411.110.)

(b) We will distribute a ticket to you

when we distribute tickets in your State,

if you are eligible to receive a ticket

under § 411.125.

§ 411.135 What do I do when I receive a

ticket?

Your participation in the Ticket to

Work program is voluntary. When you

receive your ticket, you are free to

choose when and whether to assign it

(see § 411.140 for information on

assigning your ticket). If you want to

participate in the program, you can take

your ticket to any EN you choose or to

your State VR agency.

§ 411.140 When can I assign my ticket and

how?

(a) You may assign your ticket only

during a month in which you meet the

requirements of § 411.125(a)(1) and

(a)(2). You may assign your ticket to any

EN which is serving under the program

and is willing to provide you with

services, or you may assign your ticket

to a State VR agency if you are eligible

to receive VR services according to 34

CFR 361.42. You may not assign your

ticket to more than one provider of

services (i.e. an EN or a State VR

agency) at a time. Once you have

assigned your ticket to an EN or State

VR agency, you may take your ticket out

of assignment for any reason under the

rules in § 411.145(a). Also, you may

reassign your ticket under the rules in

§ 411.150.

(b)(1) In determining which EN you

want to work with, you may discuss

your rehabilitation and employment

plans with as many ENs in your area as

you wish. You also may discuss your

rehabilitation and employment plans

with the State VR agency.

(2) You can obtain a list of the

approved ENs in your area from the

program manager (PM) we have enlisted

to assist in the administration of the

Ticket to Work program. (See

§ 411.115(k) for a definition of the PM.)

(c) If you choose to work with an EN

serving under the program, both you

and the EN of your choice need to agree

upon an individual work plan (IWP)

(see § 411.115(i) for a definition of an

IWP). If you choose to work with a State

VR agency, you must develop an

individualized plan for employment

(IPE) and your State VR counselor must

agree to the terms of the IPE, according

to the requirements established in 34

CFR 361.45 and 361.46. (See § 411.115(j)

for a definition of an IPE.) The IWP or

IPE outlines the services necessary to

assist you in achieving your chosen

employment goal.

(d) In order for you to assign your

ticket to an EN or State VR agency, all

of the following requirements must be

met:

(1)(i) If you decide to work with an

EN, you and a representative of the EN

must agree to and sign an IWP; or

(ii) If you decide to work with a State

VR agency, you and a representative of

the State VR agency must agree to and

sign both an IPE and a form that

provides the information described in

§ 411.385(a)(1), (2) and (3).

(2) You must be eligible to assign your

ticket under the rules in paragraph (a)

of this section.

(3) A representative of the EN must

submit a copy of the signed IWP to the

PM or a representative of the State VR

agency must submit the completed and

signed form (as described in

§ 411.385(a) and (b)) to the PM.

(4) The PM must receive the copy of

the IWP or receive the required form, as

appropriate.

(e) If all of the requirements in

paragraph (d) of this section are met, we

will consider your ticket assigned to the

EN or State VR agency. The effective

date of the assignment of your ticket

will be the first day on which the

requirements of paragraphs (d)(1) and

(2) of this section are met. See

§§ 411.160 through 411.225 for an

explanation of how assigning your ticket

may affect medical reviews that we

conduct to determine if you are still

disabled under our rules.

§ 411.145 Once my ticket has been

assigned to an EN or State VR agency, can

it be taken out of assignment?

(a) If you assigned your ticket to an

EN or a State VR agency, you may take

your ticket out of assignment for any

reason. You must notify the PM in

writing that you wish to take your ticket

out of assignment. The ticket will be no

longer assigned to that EN or State VR

agency effective with the first day of the

month following the month in which

you notify the PM in writing that you

wish to take your ticket out of

assignment. You may reassign your

ticket under the rules in § 411.150.

(b) If your EN goes out of business or

is no longer approved to participate as

an EN in the Ticket to Work program,

the PM will take your ticket out of

assignment with that EN. The ticket will

be no longer assigned to that EN

effective on the first day of the month

following the month in which the EN

goes out of business or is no longer

approved to participate in the Ticket to

Work program. You will be sent a notice

informing you that your ticket is no

longer assigned to that EN. In addition,

if your EN is no longer willing or able

to provide you with services, or if your

State VR agency stops providing

services to you because you have been

determined to be ineligible for VR

services under 34 CFR 361.42, the EN or

State VR agency may ask the PM to take

your ticket out of assignment with that

EN or State VR agency. The ticket will

be no longer assigned to that EN or State

VR agency effective on the first day of

the month following the month in

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67425

which the EN or State VR agency makes

a request to the PM that the ticket be

taken out of assignment. You will be

sent a notice informing you that your

ticket is no longer assigned to that EN

or State VR agency. You may reassign

your ticket under the rules in § 411.150.

(c) For information about how taking

a ticket out of assignment may affect

medical reviews that we conduct to

determine if you are still disabled under

our rules, see §§ 411.171(c) and 411.220.

§ 411.150 Can I reassign my ticket to a

different EN or the State VR agency?

(a) Yes. If you previously assigned

your ticket and your ticket is no longer

assigned (see § 411.145) or you wish to

change the assignment, you may

reassign your ticket, unless you are

receiving benefit payments under

§ 404.316(c), § 404.337(c), § 404.352(d)

or § 404.1597a of this chapter, or you are

receiving disability or blindness benefit

payments under § 416.996 or § 416.1338

of this chapter (the provisions of

paragraph (b)(3) of this section

notwithstanding). If you previously

assigned your ticket to an EN, you may

reassign your ticket to a different EN

which is serving under the program and

is willing to provide you with services,

or you may reassign your ticket to the

State VR agency if you are eligible to

receive VR services according to 34 CFR

361.42. If you previously assigned your

ticket to the State VR agency, you may

reassign your ticket to an EN which is

serving under the program and is

willing to provide you with services or

to another State VR agency if you are

eligible to receive services according to

34 CFR 361.42.

(b) In order for you to reassign your

ticket to an EN or State VR agency, all

of the following requirements must be

met:

(1) Your ticket must be unassigned. If

your ticket is assigned to an EN or a

State VR agency, you must first tell the

PM in writing that you want to take

your ticket out of assignment (see

§ 411.145).

(2)(i) You and a representative of the

new EN must agree to and sign a new

IWP; or

(ii) If you wish to reassign your ticket

to a State VR agency, you and a

representative of the State VR agency

must agree to and sign both an IPE and

a form that provides the information

described in § 411.385(a)(1), (2) and (3).

(3) You must meet the requirements of

§ 411.125(a)(1) and (2) on or after the

day you and a representative of the new

EN sign your IWP or you and a

representative of the State VR agency

sign your IPE and the required form,

except if—

(i) Your ticket is not in use (see

§ 411.170 et seq.) and the requirements

of paragraph (b)(2) of this section are

met within 30 days of the effective date

your ticket no longer was assigned to

the previous EN or State VR agency (see

§ 411.145); or

(ii) Your ticket is in use (see § 411.170

et seq.) and the requirements of

paragraph (b)(2) of this section are met

before the end of the 3-month extension

period described in § 411.220.

(4) A representative of the EN must

submit a copy of the signed IWP to the

PM or a representative of the State VR

agency must submit the completed and

signed form (as described in

§ 411.385(a) and (b)) to the PM.

(5) The PM must receive the copy of

the IWP or received the required form,

as appropriate.

(c) If all of the requirements in

paragraphs (a) and (b) of this section are

met, we will consider your ticket

reassigned to the new EN or State VR

agency. The effective date of the

reassignment of your ticket will be the

first day on which the requirements of

paragraphs (a) and (b)(1), (2) and (3) of

this section are met. See §§ 411.160

through 411.225 for an explanation of

how reassigning your ticket may affect

medical reviews that we conduct to

determine if you are still disabled under

our rules.

§ 411.155 When does my ticket terminate?

(a) Your ticket will terminate if and

when you are no longer eligible to

participate in the Ticket to Work

program. If your ticket terminates, you

may not assign or reassign it to an EN

or State VR agency. We will not pay an

EN (including a State VR agency) for

milestones or outcomes achieved in or

after the month in which your ticket

terminates (see § 411.525(c)). Your

eligibility to participate in the Ticket to

Work program will end, and your ticket

will terminate, in the earliest of the

following months:

(1) The month in which your

entitlement to title II benefits based on

disability ends for reasons other than

your work activity or earnings, or the

month in which your eligibility for

benefits under title XVI based on

disability or blindness terminates for

reasons other than your work activity or

earnings, whichever is later;

(2) If you are entitled to widow’s or

widower’s insurance benefits based on

disability (see §§ 404.335 and 404.336 of

this chapter), the month in which you

attain age 65; or

(3) If you are eligible for benefits

under title XVI based on disability or

blindness, the month following the

month in which you attain age 65.

(b) The rules in paragraph (c) of this

section apply in determining when your

eligibility to participate in the Ticket to

Work program will end and your ticket

will terminate if—

(1) You were not a concurrent title II/

title XVI disability beneficiary, and your

entitlement to title II benefits based on

disability ends or your eligibility for

title XVI benefits based on disability or

blindness terminates because of your

work activity or earnings; or

(2) You were a concurrent title II/title

XVI disability beneficiary and—

(i) Your entitlement to title II benefits

based on disability ends because of

work activity or earnings and your

eligibility for title XVI benefits based on

disability or blindness terminates for

any reason; or

(ii) Your eligibility for title XVI

benefits based on disability or blindness

terminates because of your work activity

or earnings and your entitlement to title

II benefits based on disability ends for

any reason.

(c) For purposes of paragraph (b) of

this section, the ticket which you

received in connection with the

previous period during which you were

either entitled to title II benefits based

on disability or eligible for title XVI

benefits based on disability or blindness

(as described in § 411.125(b)) will

terminate, and your eligibility to

participate in the Ticket to Work

program based on that ticket will end,

in the earliest of the following months:

(1) If we make a final determination

or decision that you are not entitled to

have title II benefits based on disability

reinstated under section 223(i) of the

Act or eligible to have title XVI benefits

based on disability or blindness

reinstated under section 1631(p) of the

Act, the month in which we make that

determination or decision;

(2) If we make a final determination

or decision that you are not entitled to

title II benefits based on disability or

eligible for title XVI benefits based on

disability or blindness after you file an

application for benefits, the month in

which we make that determination or

decision;

(3) The month you attain retirement

age (as defined in section 216(l) of the

Act);

(4) The month in which you die;

(5) The month in which you become

entitled to a title II benefit that is not

based on disability or eligible for a title

XVI benefit that is not based on

disability or blindness;

(6) The month in which you again

become entitled to title II benefits based

on disability, or eligible for title XVI

benefits based on disability or

67426 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

blindness, based on the filing of an

application for such benefits; or

(7) If your entitlement to title II

benefits based on disability is reinstated

under section 223(i) of the Act, or your

eligibility for title XVI benefits based on

disability or blindness is reinstated

under section 1631(p) of the Act, the

month in which you are eligible to

receive a new ticket under § 411.125(c).

Subpart C—Suspension of Continuing

Disability Reviews for Beneficiaries

Who Are Using a Ticket

Introduction

§ 411.160 What does this subpart do?

(a) This subpart explains our rules

about continuing disability reviews for

disability beneficiaries who are

participating in the Ticket to Work

program.

(b) Continuing disability reviews are

reviews that we conduct to determine if

you are still disabled under our rules

(see §§ 404.1589, 416.989 and 416.989a

of this chapter for the rules on when we

may conduct continuing disability

reviews). For the purposes of this

subpart, continuing disability reviews

include the medical reviews we conduct

to determine if your medical condition

has improved (see §§ 404.1594 and

416.994 of this chapter), but not any

review to determine if your disability

has ended under § 404.1594(d)(5) of this

chapter because you have demonstrated

your ability to engage in substantial

gainful activity (SGA), as defined in

§§ 404.1571–404.1576 of this chapter.

§ 411.165 How does being in the Ticket to

Work program affect my continuing

disability reviews?

We periodically review your case to

determine if you are still disabled under

our rules. However, if you are in the

Ticket to Work program, we will not

begin a continuing disability review

during the period in which you are

using a ticket. Sections 411.170 and

411.171 describe when the period of

using a ticket begins and ends. You

must meet certain requirements for us to

consider you to be using a ticket.

§ 411.166 Glossary of terms used in this

subpart.

(a) Active participation in your

employment plan means you are

engaging in activities outlined in your

employment plan on a regular basis and

in the approximate time frames

specified in the employment plan.

(b) Extension period is a period of up

to three months during which you may

reassign a ticket without being subject to

continuing disability reviews. You may

be eligible for an extension period if the

ticket is in use and no longer assigned

to an Employment Network (EN) or

State VR agency (see § 411.220).

(c) Inactive status is a status in which

you may place your ticket if you are

temporarily unable to participate or not

actively participating in your

employment plan. You may place a

ticket in inactive status only during the

initial 24-month period. Months during

which your ticket is in inactive status

do not count toward the time limitations

for making timely progress toward selfsupporting employment. You may keep

your ticket in inactive status as long as

you choose. However, because the ticket

is not in use during months in which it

is in inactive status, you will be subject

to continuing disability reviews during

these months.

(d) Initial 24-month period means the

24-month period that begins with the

month following the month in which

you first assigned your ticket. We do not

count any month in which the ticket is

not assigned to an EN or State VR

agency, as described in § 411.145, or any

month during which the ticket is not in

use because it is in inactive status (see

§ 411.190(a)(2)) or because you were

determined to be no longer making

timely progress toward self-supporting

employment under § 411.190(a)(3) or

§ 411.205.

(e) Progress review means the reviews

the program manager (PM) conducts to

determine if you are meeting the timely

progress guidelines described in these

regulations. (See § 411.115(k) for a

definition of the PM.) The method for

conducting the 24-month progress

review is explained in § 411.195 and the

method for conducting 12-month

progress reviews is explained in

§ 411.200.

(f) Timely progress guidelines means

the guidelines we use to determine if

you are making timely progress toward

self-supporting employment. In general,

we determine if you are making timely

progress toward self-supporting

employment using two distinct criteria

with defined time frames. These criteria

are active participation in your

employment plan during the initial 24-

month period and increased work and

earnings during subsequent 12-month

progress review periods (see § 411.180

to § 411.190, § 411.195 and § 411.200).

(g) 12-month progress review period

means the 12-month period that begins

either following the end of the initial

24-month period or following the

previous 12-month progress review

period. We do not count any month

during which your ticket is not assigned

to an EN or State VR agency, as

described in § 411.145.

(h) Using a ticket means that you have

assigned a ticket to an EN or State VR

agency and are making timely progress

toward self-supporting employment.

(See § 411.171 for a discussion of when

the period of using a ticket ends.)

Definition of Using a Ticket

§ 411.170 When does the period of using

a ticket begin?

The period of using a ticket begins on

the effective date of the assignment of

your ticket to an EN or State VR agency

under § 411.140.

Note: If your period of using a ticket ends

because you have previously failed to meet

the timely progress guidelines under

§§ 411.180 through 411.190, the period of

using a ticket will resume if you satisfy the

requirements for re-entering in-use status.

(See § 411.210.)

§ 411.171 When does the period of using

a ticket end?

The period of using a ticket ends with

the earliest of the following—

(a) The month before the month in

which the ticket terminates as a result

of one of the events listed in § 411.155;

(b) The day before the effective date

of a decision under § 411.190; § 411.195,

§ 411.200, or § 411.205 that you are no

longer making timely progress toward

self-supporting employment;

(c) The close of the three-month

extension period which begins with the

first month in which your ticket is no

longer assigned to an EN or State VR

agency (see § 411.145), unless you

reassign your ticket within the threemonth extension period (see § 411.220

for an explanation of the three-month

extension period);

(d) The 60th month for which an

outcome payment is made to your EN

(including a State VR agency) under

subpart H of this part; or

(e) If you have assigned your ticket to

a State VR agency which selects the cost

reimbursement payment system, the

60th month for which an outcome

payment would have been made had the

State VR agency chosen to serve you as

an EN.

§ 411.175 What if I assign my ticket after

a continuing disability review has begun?

(a) If we begin a continuing disability

review before the date on which you

assign a ticket, you may still assign the

ticket and receive services under the

Ticket to Work program. However, we

will complete the continuing disability

review. If in this review we determine

that you are no longer disabled, in most

cases you will no longer be eligible to

receive benefit payments. However, if

you assigned your ticket before we

determined that you are no longer

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67427

disabled, in certain circumstances you

may continue to receive benefit

payments (see §§ 404.316(c), 404.337(c),

404.352(d), and 416.1338 of this

chapter). If you appeal the decision that

you are no longer disabled, you may

also choose to have your benefits

continued pending reconsideration and/

or a hearing before an administrative

law judge on the cessation

determination (see §§ 404.1597a and

416.996 of this chapter).

(b) The date on which we begin the

continuing disability review is the date

on the notice we send you that tells you

that we are beginning to review your

disability case.

Guidelines for Timely Progress Toward

Self-Supporting Employment

§ 411.180 What is timely progress toward

self-supporting employment?

(a) General. The purpose of the Ticket

to Work program is to provide you with

the services and supports you need to

work and reduce or eliminate your

dependence on Social Security

disability benefits and/or SSI benefits

based on disability or blindness. We

consider you to be making timely

progress toward self-supporting

employment when you show an

increasing ability to work at levels

which will reduce or eliminate your

dependence on these benefits.

(b) Definitions. As used in this

subpart—

(1) Initial 24-month period means the

24-month period that begins with the

month following the month in which

you first assigned your ticket. (See

§§ 411.220(e) and 411.225(c) for when a

new initial 24-month period may be

established for you.) We do not count

any month during which the ticket is

not assigned to an EN or State VR

agency, as described in § 411.145, or any

month during which the ticket is not in

use because it is in inactive status (see

§ 411.190(a)(2)) or because you were

determined to be no longer making

timely progress toward self-supporting

employment under § 411.190(a)(3) or

§ 411.205.

(2) 12-month progress review period

means the 12-month period that begins

either following the end of the initial

24-month period or following the

previous 12-month progress review

period. We do not count any month

during which your ticket is not assigned

to an EN or State VR agency, as

described in § 411.145.

(c) Guidelines. We will determine

whether you are making timely progress

toward self-supporting employment by

using the following guidelines:

(1) During the initial 24-month period

after you assign your ticket, you must be

actively participating in your

employment plan. ‘‘Actively

participating in your employment plan’’

means that you are engaging in activities

outlined in your employment plan on a

regular basis and in the approximate

time frames specified in the

employment plan. These activities may

include employment, if agreed to in the

employment plan. At the end of the

initial 24-month period, you must

successfully complete the 24-month

progress review, as described in

§ 411.195. If you worked in one or more

months during the initial 24-month

period at the level of work applicable to

the work requirement for the first 12-

month progress review period, each

such month of work may be used to

reduce by one month the number of

months of work referred to in

§ 411.195(a)(2) and § 411.195(a)(3) for

purposes of meeting the requirements of

those sections regarding a goal of three

months of work during the first 12-

month progress review period.

(2) During your first 12-month

progress review period, you must work

(as defined in § 411.185) for at least

three of these 12 months. The three

months do not need to be consecutive.

If you worked one or more months

during the initial 24-month period at the

level of work applicable to the work

requirement for the first 12-month

progress review period, each such

month of work may be used to reduce

by one month the number of months of

work required for the first 12-month

progress review period.

(3) During your second 12-month

progress review period, and in later 12-

month progress review periods, you

must work (as defined in § 411.185) for

at least six of these 12 months. The six

months do not need to be consecutive.

§ 411.185 How much do I need to earn to

be considered to be working?

For the purpose of determining if you

are meeting the timely progress

requirements for continued ticket use,

we will consider you to be working in

each month in which you have earnings

at the following levels:

(a) For title II disability beneficiaries:

(1) During your first and second 12-

month progress review periods, we will

consider you to be working in a month

in which you have earnings from

employment or self-employment at the

SGA level for non-blind beneficiaries, as

defined in §§ 404.1572 through

404.1576 of this chapter. For a month in

which you are in a trial work period (see

§ 404.1592 of this chapter), or if you are

statutorily blind as defined in

§ 404.1581 of this chapter, we will

consider the following as fulfilling this

requirement—

(i) Gross earnings from employment,

before any deductions for impairment

related work expenses under § 404.1576

of this chapter, that are more than the

SGA threshold amount for non-blind

beneficiaries in § 404.1574(b)(2) of this

chapter; or

(ii) Net earnings from selfemployment (as defined in

§ 416.1110(b) of this chapter), before any

deductions for impairment related work

expenses under § 404.1576 of this

chapter, that are more than the SGA

threshold amount for non-blind

beneficiaries in § 404.1574(b)(2) of this

chapter.

Note to paragraph (a)(1): If you worked in

one or more months during the initial 24-

month period at the level of work described

in paragraph (a)(1) of this section, those

months of work may be used to meet certain

requirements of the 24-month progress

review as explained in § 411.180(c)(1) and

the work requirements for the first 12-month

progress review period as explained in

§ 411.180(c)(2).

(2) During your third 12-month

progress review period, and during later

12-month progress review periods, we

will consider you to be working in a

month for which Social Security

disability benefits are not payable to you

because of your work or earnings.

(b) For title XVI beneficiaries:

(1) During your first and second 12-

month progress review periods, we will

consider you to be working in a month

in which you have—

(i) Gross earnings from employment,

before any SSI income exclusions, that

are more than the SGA threshold

amount for non-blind beneficiaries in

§ 404.1574(b)(2) of this chapter; or

(ii) Net earnings from selfemployment (as defined in

§ 416.1110(b) of this chapter), before any

SSI income exclusions, that are more

than the SGA threshold amount for nonblind beneficiaries in § 404.1574(b)(2) of

this chapter.

Example to paragraph (b)(1): If you earn

$750 in January 2001, but exclude $200 of

this income in a Plan for Achieving SelfSupport (see §§ 416.1180–416.1182 of this

chapter), you would still be considered to be

working in that month.

Note to paragraph (b)(1): If you worked in

one or more months during the initial 24-

month period at the level of work described

in paragraph (b)(1) of this section, those

months of work may be used to meet certain

requirements of the 24-month progress

review as explained in § 411.180(c)(1) and

the work requirements for the first 12-month

progress review period as explained in

§ 411.180(c)(2).

67428 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

(2) During your third 12-month

progress review period, and during any

later 12-month progress review periods,

we will consider you to be working in

a month in which you have earnings

from employment or self-employment

that are sufficient to preclude the

payment of Federal SSI cash benefits for

a month.

(c) For concurrent title II and title XVI

beneficiaries:

(1) During your first and second 12-

month progress review periods, we will

consider you to be working in a month

in which you have earnings from

employment or self-employment at the

SGA level for non-blind beneficiaries as

defined in §§ 404.1572 through

404.1576 of this chapter. For a month in

which you are in a trial work period (see

§ 404.1592 of this chapter), or if you are

statutorily blind as defined in

§ 404.1581 of this chapter, we will

consider the following as fulfilling this

requirement—

(i) Gross earnings from employment,

before any SSI income exclusions or

deductions for impairment related work

expenses under § 404.1576 of this

chapter, that are more than the SGA

threshold amount for non-blind

beneficiaries in § 404.1574(b)(2) of this

chapter; or

(ii) Net earnings from selfemployment (as defined in

§ 416.1110(b) of this chapter), before any

SSI income exclusions or deductions for

impairment related work expenses

under § 404.1576 of this chapter, that

are more than the SGA threshold

amount for non-blind beneficiaries in

§ 404.1574(b)(2) of this chapter.

Note to paragraph (c)(1): If you worked in

one or more months during the initial 24-

month period at the level of work described

in paragraph (c)(1) of this section, those

months of work may be used to meet certain

requirements of the 24-month progress

review as explained in § 411.180(c)(1) and

the work requirements for the first 12-month

progress review period as explained in

§ 411.180(c)(2).

(2) During your third 12-month

progress review period, and during later

12-month progress review periods, we

will consider you to be working in a

month in which you have earnings from

employment or self-employment

sufficient to preclude the payment of

Social Security disability benefits and

Federal SSI cash benefits for a month.

§ 411.190 How is it determined if I am

meeting the timely progress guidelines?

(a) During the initial 24-month period.

(1) General. During the initial 24-

month period after you assign your

ticket, you must be actively

participating in your employment plan,

as defined in § 411.180(c)(1). Active

participation in your employment plan

will be presumed unless you or your EN

or State VR agency tell the program

manager (PM) that you are not actively

participating. (See § 411.115(k) for a

definition of the PM.) If you or your EN

or State VR agency report to the PM that

you are temporarily unable to

participate or are not actively

participating in your employment plan

during the initial 24-month period after

you assign your ticket, the PM will give

you the choice of placing your ticket in

inactive status or resuming active

participation in your employment plan.

(2) Inactive status. If you choose to

place the ticket in inactive status, your

ticket will be placed in inactive status

beginning with the first day of the

month following the month in which

you make your request. You are not

considered to be using a ticket during

months in which your ticket is in

inactive status. Therefore, you will be

subject to continuing disability reviews

during those months. The months in

which your ticket is in inactive status

do not count toward the time limitations

for making timely progress toward selfsupporting employment. You may not

place your ticket in inactive status after

the initial 24-month period.

(i) To place a ticket in inactive status,

you must submit a written request to the

PM asking that your ticket be placed in

inactive status. The request must

include a statement from your EN or

State VR agency that you will not be

participating in your plan or receiving

services from them during the period of

inactive status.

(ii) If your ticket is still assigned to an

EN or State VR agency, you may

reactivate your ticket and return to inuse status at any time by submitting a

written request to the PM. Your ticket

will be reactivated beginning with the

first day of the month following the

month in which the PM receives your

request.

(3) Resuming active participation. If

you choose to resume active

participation in your employment plan,

you will be allowed three months to

demonstrate this active participation to

the PM. During this period, you will be

considered to be making timely progress

toward self-supporting employment,

and these months will count toward

your initial 24-month period. The PM

will contact your EN or State VR agency

after the three months to determine

whether you have been actively

participating in your employment plan

during these three months. If the EN or

State VR agency reports that you have

been actively participating in your

employment plan during these three

months, you will continue to be

considered to be making timely progress

toward self-supporting employment. If

the EN or State VR agency reports that

you have not been actively participating

in your employment plan during these

three months, the PM will find that you

are no longer making timely progress

toward self-supporting employment.

The PM will send a written notice of

this decision to you at your last known

address. The notice will explain the

reasons for the decision and inform you

of the right to ask us to review the

decision. The decision will become

effective 30 days after the date on which

the PM sends the notice of the decision

to you, unless you request that we

review the decision under § 411.205.

(b) After the initial 24-month period.

(1) After the initial 24-month period, the

PM will conduct progress reviews to

determine if you are meeting the timely

progress guidelines for continuing to be

considered to be using a ticket.

(2) The PM will conduct a 24-month

progress review at the end of the initial

24-month period. (See § 411.195.)

(3) If you successfully complete your

24-month progress review, the PM will

then conduct 12-month progress

reviews at the end of each 12-month

progress review period. (See § 411.200.)

§ 411.191 Table summarizing the

guidelines for timely progress toward selfsupporting employment.

You may use the following table as a

general guide to determine what you

need to do to meet the guidelines for

timely progress toward self-supporting

employment. For more detail, refer to

§§ 411.180–411.190, and §§ 411.195 and

411.200.

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67429

If you: You are in this period: You must work: With this level of

earnings:

At the end of the

period we will

conduct your:

(a) First assigned your ticket less than 24

months ago (not counting any months during which your ticket was unassigned or

was not in use).

Initial 24-month period No work requirement.

Must be actively

participating in employment plan.

Not applicable ............ 24-month progress review.

(b) First assigned your ticket 25 to 36

months ago, not counting certain months 1.

First 12-month

progress review period.

3 months out of 12 2 .. Earnings at the SGA

level for non-blind

beneficiaries; 3 or If

you are an SSI-only

beneficiary, gross

earnings from employment or net

earnings from selfemployment which,

before SSI income

exclusions, are

more than the SGA

threshold amount

for non-blind beneficiaries.

First 12-month

progress review.

(c) First assigned your ticket 37 to 48

months ago, not counting certain months 1.

Second 12-month

progress review period.

6 months out of 12 .... Earnings at the SGA

level for non-blind

beneficiaries; 2 or If

you are an SSI-only

beneficiary, gross

earnings from employment or net

earnings from selfemployment which,

before SSI income

exclusions, are

more than the SGA

threshold amount

for non-blind beneficiaries.

Second 12-month

progress review.

(d) First assigned your ticket 49 to 60

months ago, not counting certain months 3.

Third 12-month

progress review period.

6 months out of 12 .... Earnings sufficient to

preclude Social Security disability and

Federal SSI cash

benefits for a month.

Third 12-month

progress review.

Note to table: In later 12-month progress review periods, the work and earnings requirements are the same as in the third 12-month progress

review period. 1 In counting the 24 months which make up the initial 24-month period that begins after you assign your ticket, we do not count any months

during which your ticket was unassigned or was not in use (see § 411.180(b)(1)). In counting the 12 months which make up any subsequent 12-

month progress revieww period, we do not count any months during which your ticket was unassigned (see § 411.180(b)(2)). 2 If you worked in one or more months during the initial 24-month period at the level of work applicable to the work requirement for the first 12-

month progress review period, each such month of work may be used to reduce by one month the number of months of work required for the

first 12-month progress review period (see § 411.180(c)(2)). 3For an explanation of how we determine if you meet this requirement if you are in a trial work period or if you are blind, see § 411.185(a)(1)

or (c)(1).

§ 411.195 How will the PM conduct my 24-

month progress review?

(a) In this review the PM will consider

the following: (1) Are you actively participating in

your employment plan? By ‘‘actively

participating in your employment

plan,’’ we mean that you are engaging in

activities outlined in your employment

plan on a regular basis and in the

approximate time frames specified in

the plan. These activities may include

employment, if agreed to in the

employment plan. (2) Does your employment plan have

a goal of at least three months of work

(as defined in § 411.185) by the time of

your first 12-month progress review? (3) Given your current progress in

your employment plan, can you

reasonably be expected to reach this

goal of at least three months of work (as

defined in § 411.185) at the time of your

first 12-month progress review?

Note to paragraph (a): If you worked in

one or more months during the initial 24-

month period at the level of work applicable

to the work requirement for the first 12-

month progress review period, each such

month of work may be used to reduce by one

month the number of months of work

referred to in paragraphs (a)(2) and (3) of this

section and the number of months of work

required for the first 12-month progress

review period (see § 411.180(c)(1) and (2)).

(b) If the answer to all three of these

questions is yes, the PM will find that

you are making timely progress toward

self-supporting employment. We will

consider you to be making timely

progress toward self-supporting

employment until your first 12-month

progress review.

(c) If the answer to any of these

questions is no, the PM will find that

you are not making timely progress

toward self-supporting employment.

The PM will send a written notice of the

decision to you at your last known

address. The notice will explain the

reasons for the decision and inform you

of the right to ask us to review the

decision. The decision will be effective

30 days after the date on which the PM

sends the notice of the decision to you,

unless you request that we review the

decision under § 411.205.

67430 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

§ 411.200 How will the PM conduct my 12-

month progress reviews?

(a) The 12-month progress review is a

two step process:

(1) Step one—Retrospective review.

Did you complete the work

requirements (as specified in § 411.180

and § 411.185) in the just completed 12-

month progress review period?

(i) If you have not completed the work

requirements, the PM will find that you

are not making timely progress toward

self-supporting employment.

(ii) If you have completed the work

requirements, the PM will go to step

two.

(2) Step two—Anticipated work level.

Do both you and your EN or State VR

agency expect that you will work at the

level required during the next 12-month

progress review period?

(i) If not, the PM will find that you are

not making timely progress toward selfsupporting employment.

(ii) If so, the PM will find that you are

making timely progress toward selfsupporting employment. We will

consider you to be making timely

progress toward self-supporting

employment until your next 12-month

progress review.

(b) If the PM finds that you are not

making timely progress toward selfsupporting employment, the PM will

send a written notice of the decision to

you at your last known address. The

notice will explain the reasons for the

decision and inform you of the right to

ask us to review the decision. The

decision will be effective 30 days after

the date on which the PM sends the

notice of the decision to you, unless you

request that we review the decision

under § 411.205.

§ 411.205 What if I disagree with the PM’s

decision about whether I am making timely

progress toward self-supporting

employment?

If you disagree with the PM’s

decision, you may request that we

review the decision. You must make the

request before the 30th day after the

date on which the PM sends the notice

of its decision to you. We will consider

you to be making timely progress

toward self-supporting employment

until we make a decision. We will send

a written notice of our decision to you

at your last known address. If we decide

that you are no longer making timely

progress toward self-supporting

employment, our decision will be

effective on the date on which we send

the notice of the decision to you.

Failure To Make Timely Progress

§ 411.21 What happens if I do not make

timely progress toward self-supporting

employment?

(a) General. If it is determined that

you are not making timely progress

toward self-supporting employment, we

will find that you are no longer using a

ticket. If this happens, you will once

again be subject to continuing disability

reviews. However, you may continue

participating in the Ticket to Work

program. Your EN (including a State VR

agency which is serving you as an EN)

also may receive any milestone or

outcome payments for which it is

eligible under § 411.500 et seq. If you

are working with a State VR agency

which elected payment under the cost

reimbursement payment system, your

State VR agency may receive payment

for which it is eligible under the cost

reimbursement payment system (see

subparts F and H of this part).

(b) Re-entering in-use status. If you

failed to meet the timely progress

guidelines for continuing to use a ticket,

you may re-enter in-use status. If you

believe that you meet the requirements

for re-entering in-use status described in

paragraph (b)(1), (b)(2), (b)(3), (b)(4) or

(b)(5) of this section, you may request

that you be reinstated to in-use status.

You must submit a written request to

the PM asking that you be reinstated to

in-use status. The PM will decide

whether you have satisfied the

applicable requirements for re-entering

in-use status. The requirements for reentering in-use status depend on how

far you progressed before you failed to

meet the timely progress guidelines.

(1) If you failed to meet the timely

progress guidelines during the initial 24-

month period.

(i) If you failed to meet the timely

progress guidelines during the initial

24-month period, you may re-enter inuse status by demonstrating three

consecutive months of active

participation in your employment plan

(see § 411.166(a)).

(ii) When you have satisfied this

requirement, you will be reinstated to

in-use status, provided that your ticket

is assigned to an EN or State VR agency.

See paragraph (c) of this section for

when your reinstatement to in-use

status will be effective.

(iii) After you are reinstated to in-use

status, your next review will be the 24-

month progress review described in

§ 411.195.

(2) If you failed to meet the timely

progress guidelines in your 24-month

progress review.

(i) If you failed to meet the timely

progress guidelines in your 24-month

progress review, you may re-enter in-use

status by completing three months of

work (as defined in § 411.185(a)(1),

(b)(1) or (c)(1)) within a rolling 12-

month period. The rolling 12-month

period must begin after the effective

date of the decision that you failed to

meet the timely progress guidelines.

You also must satisfy the test of

§ 411.200(a)(2) regarding the anticipated

level of your work during the 12-month

progress review period that may begin

under paragraph (b)(2)(iii) of this

section. The work requirements for this

12-month progress review period will be

the work requirements applicable

during the second 12-month progress

review period.

(ii) When you have satisfied these

requirements, you will be reinstated to

in-use status, provided that your ticket

is assigned to an EN or State VR agency.

See paragraph (c) of this section for

when your reinstatement to in-use

status will be effective.

(iii) After you are reinstated to in-use

status, the second 12-month progress

review period will begin. During this

12-month progress review period, you

will be required to work (as defined in

§ 411.185(a)(1), (b)(1) or (c)(1)) at least

six months. The PM will conduct a 12-

month progress review at the end of this

12-month progress review period to

determine if you have met this

requirement. After this, the PM will

conduct 12-month progress reviews in

the usual manner.

(3) If you failed to meet the timely

progress guidelines in your first 12-

month progress review.

(i) If you failed to meet the timely

progress guidelines in your first 12-

month progress review, you may reenter in-use status by completing three

months of work (as defined in

§ 411.185(a)(1), (b)(1) or (c)(1)) within a

rolling 12-month period. The rolling 12-

month period must begin after the

effective date of the decision that you

failed to meet the timely progress

guidelines. You also must satisfy the

test of § 411.200(a)(2) regarding the

anticipated level of your work during

the next 12-month progress review

period that may begin under paragraph

(b)(3)(iii) of this section.

(ii) When you have satisfied these

requirements, you will be reinstated to

in-use status, provided that your ticket

is assigned to an EN or State VR agency.

See paragraph (c) of this section for

when your reinstatement to in-use

status will be effective.

(iii) After you are reinstated to in-use

status, your next 12-month progress

review period will begin. During this

12-month progress review period, you

will be required to work (as defined in

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67431

§ 411.185(a)(1), (b)(1) or (c)(1)) at least

six months. The PM will conduct a 12-

month progress review at the end of this

12-month progress review period to

determine if you have met this

requirement. After this, the PM will

conduct 12-month progress reviews in

the usual manner.

(4) If you failed to meet the timely

progress guidelines in your second 12-

month progress review.

(i) If you failed to meet the timely

progress guidelines in your second 12-

month progress review, you may reenter in-use status by completing six

months of work (as defined in

§ 411.185(a)(1), (b)(1) or (c)(1)) within a

rolling 12-month period. The rolling 12-

month period must begin after the

effective date of the decision that you

failed to meet the timely progress

guidelines. You also must satisfy the

test of § 411.200(a)(2) regarding the

anticipated level of your work during

the next 12-month progress review

period that may begin under paragraph

(b)(4)(iii) of this section.

(ii) When you have satisfied these

requirements, you will be reinstated to

in-use status, provided that your ticket

is assigned to an EN or State VR agency.

See paragraph (c) of this section for

when your reinstatement to in-use

status will be effective.

(iii) After you are reinstated to in-use

status, your next 12-month progress

review period will begin. During this

12-month progress review period, you

will be required to work (as defined in

§ 411.185(a)(2), (b)(2) or (c)(2)) at least

six months. The PM will conduct a 12-

month progress review at the end of this

12-month progress review period to

determine if you have met this

requirement. After this, the PM will

conduct 12-month progress reviews in

the usual manner.

(5) If you failed to meet the timely

progress guidelines in any progress

review after your second 12-month

progress review.

(i) If you failed to meet the timely

progress guidelines in any progress

review after your second 12-month

progress review, you may re-enter in-use

status by completing six months of work

within a rolling 12-month period with

earnings in each of the six months at the

level specified in § 411.185(a)(2), (b)(2)

or (c)(2). The rolling 12-month period

must begin after the effective date of the

decision that you failed to meet the

timely progress guidelines. You also

must satisfy the test in § 411.200(a)(2)

regarding the anticipated level of your

work during the next 12-month progress

review period that may begin under

paragraph (b)(5)(iii) of this section.

(ii) When you have satisfied these

requirements, you will be reinstated to

in-use status, provided that your ticket

is assigned to an EN or State VR agency.

See paragraph (c) of this section for

when your reinstatement to in-use

status will be effective.

(iii) After you are reinstated to in-use

status, your next 12-month progress

review period will begin. During this

12-month progress review period, you

will be required to work at least six

months with earnings at the level

specified in § 411.185(a)(2), (b)(2) or

(c)(2). The PM will conduct a 12-month

progress review at the end of this 12-

month progress review period to

determine if you have met this

requirement. After this, the PM will

conduct 12-month progress reviews in

the usual manner.

(c) Decisions on whether you have

satisfied the requirements for reentering in-use status.

(1) After you have submitted a written

request to the PM asking that you be

reinstated to in-use status, the PM will

decide whether you have satisfied the

applicable requirements in this section

for re-entering in-use status. The PM

will send a written notice of the

decision to you at your last known

address. The notice will explain the

reasons for the decision and inform you

of the right to ask us to review the

decision. If the PM decides that you

have satisfied the requirements for reentering in-use status (including the

requirement that your ticket be assigned

to an EN or State VR agency), you will

be reinstated to in-use status effective

with the date on which the PM sends

the notice of the decision to you. If the

PM decides that you have not satisfied

the requirements for re-entering in-use

status, you may request that we review

the decision under paragraph (c)(2) of

this section.

(2) If you disagree with the PM’s

decision, you may request that we

review the decision. You must make the

request before the 30th day after the

date on which the PM sends the notice

of its decision to you. We will send you

a written notice of our decision at your

last known address. If we decide that

you have satisfied the requirements for

re-entering in-use status (including the

requirement that your ticket be assigned

to an EN or State VR agency), you will

be reinstated to in-use status effective

with the date on which we send the

notice of the decision to you.

The Extension Period

§ 411.220 What if my ticket is no longer

assigned to an EN or State VR agency?

(a) If your ticket was once assigned to

an EN or State VR agency and is no

longer assigned, you are eligible for an

extension period of up to three months

to reassign your ticket. You are eligible

for an extension period if your ticket is

in use and no longer assigned because—

(1) You retrieved your ticket because

you were dissatisfied with the services

being provided (see § 411.145(a)) or

because you relocated to an area not

served by your previous EN or State VR

agency; or

(2) Your EN went out of business, is

no longer approved to participate as an

EN in the Ticket to Work program, or is

no longer willing or able to provide you

with services as described in

§ 411.145(b), or your State VR agency

stopped providing services to you as

described in § 411.145(b).

(b) During the extension period, the

ticket will still be considered to be in

use. This means that you will not be

subject to continuing disability reviews

during this period.

(c) Time spent in the extension period

will not count toward the time

limitations for the timely progress

guidelines.

(d) The extension period—

(1) Begins on the first day on which

the ticket is no longer assigned (see

§ 411.145); and

(2) Ends three months after it begins

or when you assign your ticket to a new

EN or State VR agency, whichever is

sooner.

(e) If your extension period began

during the initial 24-month period, and

you reassign your ticket to an EN or

State VR agency (other than the EN or

State VR agency to which the ticket was

previously assigned), you will have a

new initial 24-month period when you

reassign your ticket. This initial 24-

month period will begin with the first

month beginning after the day on which

the reassignment of your ticket is

effective under § 411.150(c).

(f) If you do not assign your ticket by

the end of the extension period, the

ticket will no longer be in use and you

will once again be subject to continuing

disability reviews.

§ 411.225 What if I reassign my ticket after

the end of the extension period?

(a) General. You may reassign your

ticket after the end of the extension

period under the conditions described

in § 411.150. If you reassign your ticket

after the end of the extension period,

you will be reinstated to in-use status

beginning on the day on which the

reassignment of your ticket is effective

under § 411.150(c).

(b) Time limitations for the timely

progress guidelines. Any month during

which your ticket is not assigned, either

during or after the extension period,

67432 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

will not count toward the time

limitations for the timely progress

guidelines. See § 411.180(b)(1) and (2).

(c) If your extension period began

during the initial 24-month period. If

your extension period began during the

initial 24-month period, and you

reassign your ticket to an EN or State VR

agency (other than the EN or State VR

agency to which the ticket was

previously assigned), you will have a

new initial 24-month period when you

reassign your ticket. This initial 24-

month period will begin with the first

month beginning after the day on which

the reassignment of your ticket is

effective under § 411.150(c).

(d) If your extension period began

during any 12-month progress review

period. If your extension period began

during a 12-month progress review

period and you reassign your ticket after

the end of the extension period, the

period comprising the remaining

months in that 12-month progress

review period (see § 411.180(b)(2)) will

begin with the first month beginning

after the day on which the reassignment

of your ticket is effective under

§ 411.150(c).

Subpart D—Use of One or More

Program Managers To Assist in

Administration of the Ticket to Work

Program

§ 411.230 What is a PM?

A program manager (PM) is an

organization in the private or public

sector that has entered into a contract to

assist us in administering the Ticket to

Work program. We will use a

competitive bidding process to select

one or more PMs.

§ 411.235 What qualifications are required

of a PM?

A PM must have expertise and

experience in the field of vocational

rehabilitation or employment services.

§ 411.240 What limitations are placed on a

PM?

A PM is prohibited from directly

participating in the delivery of

employment services, vocational

rehabilitation services, or other support

services to beneficiaries with tickets in

the PM’s designated service delivery

area. A PM is also prohibited from

holding a financial interest in an

employment network (EN) or service

provider that provides services under

the Ticket to Work program in the PM’s

designated service delivery area.

§ 411.245 What are a PM’s responsibilities

under the Ticket to Work program?

A PM will assist us in administering

the Ticket to Work program by

conducting the following activities:

(a) Recruiting, recommending, and

monitoring ENs. A PM must recruit and

recommend for selection by us public

and private entities to function as ENs

under the program. A PM is also

responsible for monitoring the ENs

operating in its service delivery area.

Such monitoring must be done to the

extent necessary and appropriate to

ensure that adequate choices of services

are made available to beneficiaries with

tickets. A PM may not limit the number

of public or private entities being

recommended to function as ENs.

(b) Facilitating access by beneficiaries

to ENs. A PM must assist beneficiaries

with tickets in accessing ENs.

(1) A PM must establish and maintain

lists of the ENs available to beneficiaries

with tickets in its service delivery area

and make these lists generally available

to the public.

(2) A PM must ensure that all

information provided to beneficiaries

with tickets about ENs is in accessible

formats. For purposes of this section,

accessible format means by media that

is appropriate to a particular

beneficiary’s impairment(s).

(3) A PM must take necessary

measures to ensure that sufficient ENs

are available and that each beneficiary

under the Ticket to Work program has

reasonable access to employment

services, vocational rehabilitation

services, and other support services.

The PM shall ensure that services such

as the following are available in each

service area, including rural areas: case

management, work incentives planning,

supported employment, career

planning, career plan development,

vocational assessment, job training,

placement, follow-up services, and

other services that we may require in an

agreement with a PM.

(4) A PM must ensure that each

beneficiary with a ticket is allowed to

change ENs. When a change in the EN

occurs, the PM must reassign the ticket

based on the choice of the beneficiary.

(c) Facilitating payments to ENs. A

PM must facilitate payments to the ENs

in its service delivery area. Subpart H

explains the EN payment systems and

the PM’s role in administering these

systems.

(1) A PM must maintain

documentation and provide regular

assurances to us that payments to an EN

are warranted. The PM shall ensure that

an EN is complying with the terms of its

agreement and applicable regulations.

(2) Upon the request of an EN, the PM

shall make a determination of the

allocation of the outcome or milestone

payments due to an EN based on the

services provided by the EN when a

beneficiary has been served by more

than one EN.

(d) Administrative requirements. A

PM will perform such administrative

tasks as are required to assist us in

administering and implementing the

Ticket to Work program. Administrative

tasks required for the implementation of

the Program may include, but are not

limited to:

(1) Reviewing individual work plans

(IWPs) submitted by ENs for ticket

assignment. These reviews will be

conducted to ensure that the IWPs meet

the requirements of § 411.465. (The PM

will not review individualized plans for

employment developed by State VR

agencies and beneficiaries.)

(2) Reviewing amendments to IWPs to

ensure that the amendments meet the

requirements in § 411.465.

(3) Ensuring that ENs only refer an

individual to a State VR agency for

services pursuant to an agreement

regarding the conditions under which

such services will be provided.

(4) Resolving a dispute between an EN

and a State VR agency with respect to

agreements regarding the conditions

under which services will be provided

when an individual is referred by an EN

to a State VR agency for services.

Evaluation of Program Manager

Performance

§ 411.250 How will SSA evaluate a PM?

(a) We will periodically conduct a

formal evaluation of the PM. The

evaluation will include, but not be

limited to, an assessment examining the

following areas:

(1) Quality of services;

(2) Cost control;

(3) Timeliness of performance;

(4) Business relations; and

(5) Customer satisfaction.

(b) Our Project Officer will perform

the evaluation. The PM will have an

opportunity to comment on the

evaluation, and then the Contracting

Officer will determine the PM’s final

rating.

(c) These performance evaluations

will be made part of our database on

contractor past performance to which

any Federal agency may have access.

(d) Failure to comply with the

standards used in the evaluation may

result in early termination of our

agreement with the PM.

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67433

Subpart E—Employment Networks

§ 411.300 What is an EN?

An employment network (EN) is any

qualified entity that has entered into an

agreement with us to function as an EN

under the Ticket to Work program and

assume responsibility for the

coordination and delivery of

employment services, vocational

rehabilitation services, or other support

services to beneficiaries who have

assigned their tickets to that EN.

§ 411.305 Who is eligible to be an EN?

Any qualified agency or

instrumentality of a State (or political

subdivision thereof) or a private entity

that assumes responsibility for the

coordination and delivery of services

under the Ticket to Work program to

disabled beneficiaries is eligible to be an

EN. A single entity or an association of

or consortium of entities combining

their resources is eligible to be an EN.

The entity may provide these services

directly or by entering into an

agreement with other organizations or

individuals to provide the appropriate

services or other assistance that a

beneficiary with a ticket may need to

find and maintain employment that

reduces dependency on disability

benefits. ENs may include, but are not

limited to:

(a) Any public or private entity,

including charitable and religious

organizations, that can provide directly,

or arrange for other organizations or

entities to provide, employment

services, vocational rehabilitation

services, or other support services.

(b) State agencies administering or

supervising the administration of the

State plan approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.) may choose, on

a case-by-case basis, to be paid as an EN

under the payment systems described in

subpart H of this part. For the rules on

State VR agencies’ participation in the

Ticket to Work program, see subpart F

of this part. The rules in this subpart E

apply to entities other than State VR

agencies.

(c) One-stop delivery systems

established under subtitle B of title I of

the Workforce Investment Act of 1998

(29 U.S.C. 2841 et seq.).

(d) Alternate participants currently

operating under the authority of section

222(d)(2) of the Social Security Act.

(e) Organizations administering

Vocational Rehabilitation Services

Projects for American Indians with

Disabilities authorized under section

121 of part C of title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 750 et seq.).

(f) Public or private schools that

provide VR or employment services,

conduct job training programs, or make

services or programs available that can

assist students with disabilities in

acquiring specific job skills that lead to

employment. This includes transition

programs that can help students acquire

work skills.

(g) Employers that offer job training or

other support services or assistance to

help individuals with disabilities obtain

and retain employment or arrange for

individuals with disabilities to receive

relevant services or assistance.

§ 411.310 How does an entity other than a

State VR agency apply to be an EN and who

will determine whether an entity qualifies as

an EN?

(a) An entity other than a State VR

agency applies by responding to our

Request for Proposal (RFP), which we

published in the Commerce Business

Daily and which is available online

through the Federal government’s

electronic posting system (http://

www.eps.gov). This RFP also is available

through SSA’s website, http://

www.ssa.gov/work. Since recruitment of

ENs will be an ongoing process, the RFP

is open and continuous. The entity must

respond in a format prescribed in the

RFP announcement. In its response, the

entity must assure SSA that it is

qualified to provide employment

services, vocational rehabilitation

services, or other support services to

disabled beneficiaries, either directly or

through arrangements with other

entities.

(b) The PM will solicit service

providers and other qualified entities to

respond to the RFP on an ongoing basis.

(See § 411.115(k) for a definition of the

PM.) The PM will conduct a preliminary

review of responses to the RFP from

applicants located in the PM’s service

delivery area and make

recommendations to the Commissioner

regarding selection. The Commissioner

will decide which applicants will be

approved to serve as ENs under the

program.

(c) State VR agencies must comply

with the requirements in subpart F of

this part to participate as an EN in the

Ticket to Work program. (See

§§ 411.360ff).

§ 411.315 What are the minimum

qualifications necessary to be an EN?

To serve as an EN under the Ticket to

Work program, an entity must meet and

maintain compliance with both general

selection criteria and specific selection

criteria.

(a) The general criteria include:

(1) having systems in place to protect

the confidentiality of personal

information about beneficiaries seeking

or receiving services;

(2) being accessible, both physically

and programmatically, to beneficiaries

seeking or receiving services (examples

of being programmatically accessible

include the capability of making

documents and literature available in

alternate media including Braille,

recorded formats, enlarged print, and

electronic media; and insuring that data

systems available to clients are fully

accessible for independent use by

persons with disabilities);

(3) not discriminating in the provision

of services based on a beneficiary’s age,

gender, race, color, creed, or national

origin;

(4) having adequate resources to

perform the activities required under

the agreement with us or the ability to

obtain them;

(5) complying with the terms and

conditions in the agreement with us,

including delivering or coordinating the

delivery of employment services,

vocational rehabilitation services, and

other support services; and

(6) implementing accounting

procedures and control operations

necessary to carry out the Ticket to

Work program.

(b) The specific criteria that an entity

must meet to qualify as an EN include:

(1)(i) Using staff who are qualified

under applicable certification, licensing,

or registration standards that apply to

their profession including certification

or accreditation by national accrediting

or certifying organizations; or

(ii) Using staff that are otherwise

qualified based on education or

experience, such as by using staff with

experience or a college degree in a field

related to the services the EN wants to

provide, such as vocational counseling,

human relations, teaching, or

psychology; and

(2) Taking reasonable steps to assure

that if any medical and related health

services are provided, such medical and

health related services are provided

under the formal supervision of persons

licensed to prescribe or supervise the

provision of these services in the State

in which the services are performed.

(c) Any entity must have applicable

certificates, licenses or other credentials

if such documentation is required by

State law to provide vocational

rehabilitation services, employment

services or other support services.

(d) We will not use the following as

an EN:

(1) any entity that has had its license,

accreditation, certification, or

registration suspended or revoked for

reasons concerning professional

67434 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

competence or conduct or financial

integrity;

(2) any entity that has surrendered a

license, accreditation, certification, or

registration with a disciplinary

proceeding pending; or

(3) any entity that is precluded from

Federal procurement or nonprocurement programs.

§ 411.320 What are an EN’s

responsibilities as a participant in the

Ticket to Work program?

An EN must—

(a) Enter into an agreement with us.

(b) Serve a prescribed service area.

The EN must designate the geographic

area in which it will provide services.

This will be designated in the EN’s

agreement with us.

(c) Provide services directly, or enter

into agreements with other entities to

provide employment services,

vocational rehabilitation services, or

other support services to beneficiaries

with tickets.

(d) Ensure that employment services,

vocational rehabilitation services, and

other support services provided under

the Ticket to Work program are

provided under appropriate individual

work plans (IWPs).

(e) Elect a payment system at the time

of signing an agreement with us (see

§ 411.505).

(f) Develop and implement each IWP

in partnership with each beneficiary

receiving services in a manner that

affords the beneficiary the opportunity

to exercise informed choice in selecting

an employment goal and specific

services needed to achieve that

employment goal. Each IWP must meet

the requirements described in § 411.465.

§ 411.321 Under what conditions will SSA

terminate an agreement with an EN due to

inadequate performance?

We will terminate our agreement with

an EN if it does not comply with the

requirements under §§ 411.320,

§ 411.325, or the conditions in the

agreement between SSA and the EN,

including minimum performance

standards relating to beneficiaries

achieving self-supporting employment

and leaving the benefit rolls.

§ 411.325 What reporting requirements are

placed on an EN as a participant in the

Ticket to Work program?

An EN must:

(a) Report to the PM each time it

accepts a ticket for assignment;

(b) Submit a copy of each signed IWP

to the PM;

(c) Submit to the PM copies of

amendments to a beneficiary’s IWP;

(d) Submit to the PM a copy of any

agreement the EN has established with

a State VR agency regarding the

conditions under which the State VR

agency will provide services to

beneficiaries who are referred by the EN

under the Ticket to Work program;

(e) Submit information to assist the

PM conducting the reviews necessary to

assess a beneficiary’s timely progress

towards self-supporting employment to

determine if a beneficiary is using a

ticket for purposes of suspending

continuing disability reviews (see

subpart C of this part);

(f) Report to the PM the specific

outcomes achieved with respect to

specific services the EN provided or

secured on behalf of beneficiaries whose

tickets it accepted for assignment. Such

reports shall conform to a national

model prescribed by us and shall be

submitted to the PM at least annually;

(g) Provide a copy of its most recent

annual report on outcomes to each

beneficiary considering assigning a

ticket to it and assure that a copy of its

most recent report is available to the

public while ensuring that personal

information on beneficiaries is kept

confidential;

(h) Meet our financial reporting

requirements. These requirements will

be described in the agreements between

ENs and the Commissioner, and will

include submitting a financial report to

the program manager on an annual

basis;

(i) Collect and record such data as we

shall require, in a form prescribed by us;

and

(j) Adhere to all requirements

specified in the agreement with the

Commissioner and all regulatory

requirements in this part 411.

§ 411.330 How will SSA evaluate an EN’s

performance?

(a) We will periodically review the

results of the work of each EN to ensure

effective quality assurance in the

provision of services by ENs.

(b) In conducting such a review, we

will solicit and consider the views of

the individuals the EN serves and the

PM which monitors the EN.

(c) ENs must make the results of these

periodic reviews available to disabled

beneficiaries to assist them in choosing

among available ENs.

Subpart F—State Vocational

Rehabilitation Agencies’ Participation

Participation in the Ticket to Work

Program

§ 411.350 Must a State VR agency

participate in the Ticket to Work program?

Yes. Each State agency administering

or supervising the administration of the

State plan approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), must participate

in the Ticket to Work program if it

wishes to receive payments from SSA

for serving disabled beneficiaries who

are issued a ticket.

§ 411.355 What payment options does a

State VR agency have under the Ticket to

Work program?

(a) The Ticket to Work program

provides different payment options that

are available to a State VR agency for

providing services to disabled

beneficiaries who have a ticket. A State

VR agency participates in the program

in one of two ways when providing

services to a particular disabled

beneficiary under the program. On a

case-by-case basis, subject to the

limitations in § 411.585, the State VR

agency may participate either—

(1) As an employment network (EN);

or

(2) Under the cost reimbursement

payment system (see subpart V of part

404 and subpart V of part 416 of this

chapter).

(b) When the State VR agency serves

a beneficiary with a ticket as an EN, the

State VR agency will use the EN

payment system it has elected for this

purpose, either the outcome payment

system or the outcome-milestone

payment system (described in subpart H

of this part). The State VR agency will

have periodic opportunities to change

the payment system it uses when

serving as an EN.

(c) The State VR agency may seek

payment only under its elected EN

payment system whenever it serves as

an EN. When serving a beneficiary who

was not issued a ticket, the State VR

agency may seek payment only under

the cost reimbursement payment

system.

(d) A State VR agency can choose to

function as an EN or to receive payment

under the cost reimbursement payment

system each time that a ticket is

assigned or reassigned to it if payment

has not previously been made with

respect to that ticket. If payment has

previously been made with respect to

that ticket, the State VR agency can

receive payment only under the

payment system under which the earlier

payment was made.

§ 411.360 How does a State VR agency

become an EN?

(a) As the Ticket to Work program is

implemented in States, we will notify

the State VR agency by letter about

payment systems available under the

program. The letter will ask the State VR

agency to choose a payment system to

use when it functions as an EN.

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67435

(b) When serving a beneficiary

holding a ticket, the State VR agency

may choose, on a case-by-case basis, to

seek payment under its elected EN

payment system or under the cost

reimbursement payment system, subject

to the limitations in § 411.585.

§ 411.365 How does a State VR agency

notify SSA about its choice of a payment

system for use when functioning as an EN?

(a) When the State VR agency receives

our letter described in § 411.360(a)

regarding implementation of the Ticket

to Work program, the State VR agency

must respond by sending us a letter

telling us which EN payment system it

will use when it functions as an EN

with respect to a beneficiary who has a

ticket.

(b) The director of the State agency

administering or supervising the

administration of the State plan

approved under title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.), or the director’s

designee must sign the State VR

agency’s letter described in paragraph

(a) of this section.

§ 411.370 Does a State VR agency ever

have to function as an EN?

A State VR agency does not have to

function as an EN when serving a

beneficiary with a ticket if the ticket has

not previously been assigned to an EN

or State VR agency or, if it has been

previously assigned, we have not made

payment under an EN payment system

with respect to that ticket. However, as

described in § 411.585(b), a State VR

agency is precluded from being paid

under the cost reimbursement payment

system if an EN or a State VR agency

serving a beneficiary as an EN has been

paid by us under one of the EN payment

systems with respect to the same ticket.

§ 411.375 Does a State VR agency

continue to provide services under the

requirements of the State plan approved

under title I of the Rehabilitation Act of

1973, as amended (29 U.S.C. 720 et seq.),

when functioning as an EN?

Yes. The State VR agency must

continue to provide services under the

requirements of the State plan approved

under title I of the Rehabilitation Act of

1973, as amended (29 U.S.C. 720 et

seq.), even when functioning as an EN.

Ticket Status

§ 411.380 What does a State VR agency do

if the State VR agency wants to determine

whether a person seeking services has a

ticket?

A State VR agency can contact the

Program Manager (PM) to determine if

a person seeking VR services has a ticket

and, if so, whether the ticket may be

assigned to the State VR agency (see

§ 411.140) or reassigned to the State VR

agency (see § 411.150). (See § 411.115(k)

for a definition of the PM.)

§ 411.385 What does a State VR agency do

if a beneficiary who is eligible for VR

services has a ticket that is available for

assignment or reassignment?

(a) Once the State VR agency

determines that a beneficiary is eligible

for VR services, the beneficiary and a

representative of the State VR agency

must agree to and sign the

individualized plan for employment

(IPE) required under section 102(b) of

the Rehabilitation Act of 1973, as

amended (29 U.S.C. 722(b)). This

requirement must be met in order for a

beneficiary to assign or reassign his or

her ticket to the State VR agency.

Section 411.140(d) describes the other

requirements which must be met in

order for a beneficiary to assign a ticket.

Section 411.150(a) and (b) describe the

other requirements which must be met

in order for a beneficiary to reassign a

ticket. Under § 411.140(d)(3) and

§ 411.150(b)(4), the State VR agency

must submit the following information

to the PM in order for the beneficiary’s

ticket to be assigned or reassigned to the

State VR AGENCY:

(1) A statement that the beneficiary

has decided to assign or reassign the

ticket to the State VR agency and that an

IPE has been agreed to and signed by

both the beneficiary and a

representative of the State VR agency;

(2) A statement of the vocational goal

outlined in the beneficiary’s IPE; and

(3) A statement of the State VR

agency’s selection of the payment

system (either the cost reimbursement

payment system or the previously

elected EN payment system) under

which the State VR agency will seek

payment for providing services to the

beneficiary.

(b) This information must be

submitted to the PM in a format

prescribed by us and must include the

signatures of both the beneficiary, or a

representative of the beneficiary, and a

representative of the State VR agency.

§ 411.390 What does a State VR agency do

if a beneficiary to whom it is already

providing services has a ticket that is

available for assignment?

If a beneficiary who is receiving

services from the State VR agency under

an existing IPE becomes eligible for a

ticket that is available for assignment

and decides to assign the ticket to the

State VR agency, the State VR agency

must submit the information required in

§ 411.385(a)(1)–(3) and (b) to the PM.

This requirement must be met in order

for the beneficiary to assign his or her

ticket to the State VR agency. Section

411.140(d) describes the other

requirements which must be met in

order for a beneficiary to assign a ticket.

§ 411.395 Is a State VR agency required to

provide periodic reports?

(a) For cases where a State VR agency

provided services functioning as an EN,

the State VR agency will be required to

prepare periodic reports on the specific

outcomes achieved with respect to the

specific services the State VR agency

provided to or secured for disabled

beneficiaries whose tickets it accepted

for assignment. These reports must be

submitted to the PM at least annually.

(b) Regardless of the payment method

selected, a State VR agency must submit

information to assist the PM conducting

the reviews necessary to assess a

beneficiary’s timely progress toward

self-supporting employment to

determine if a beneficiary is using a

ticket for purposes of suspending

continuing disability reviews (see

§§ 411.190, 411.195 and 411.200).

Referrals by Employment Networks to

State VR Agencies

§ 411.400 Can an EN to which a

beneficiary’s ticket is assigned refer the

beneficiary to a State VR agency for

services?

Yes. An EN may refer a beneficiary it

is serving under the Ticket to Work

program to a State VR agency for

services. However, a referral can be

made only if the State VR agency and

the EN have an agreement that specifies

the conditions under which services

will be provided by the State VR agency.

This agreement must be in writing and

signed by the State VR agency and the

EN prior to the EN referring any

beneficiary to the State VR agency for

services.

Agreements Between Employment

Networks and State VR Agencies

§ 411.405 When does an agreement

between an EN and the State VR agency

have to be in place?

Each EN must have an agreement with

the State VR agency prior to referring a

beneficiary it is serving under the Ticket

to Work program to the State VR agency

for specific services.

§ 411.410 Does each referral from an EN to

a State VR agency require its own

agreement?

No. The agreements between ENs and

State VR agencies should be broadbased and apply to all beneficiaries who

may be referred by the EN to the State

VR agency for services, although an EN

and a State VR agency may want to

67436 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

enter into an individualized agreement

to meet the needs of a single beneficiary.

§ 411.415 Who will verify the

establishment of agreements between ENs

and State VR agencies?

The PM will verify the establishment

of these agreements. Each EN is required

to submit a copy of the agreement it has

established with the State VR agency to

the PM.

§ 411.420 What information should be

included in an agreement between an EN

and a State VR agency?

The agreement between an EN and a

State VR agency should state the

conditions under which the State VR

agency will provide services to a

beneficiary when the beneficiary is

referred by the EN to the State VR

agency for services. Examples of this

information include-

(a) Procedures for making referrals

and sharing information that will assist

in providing services;

(b) A description of the financial

responsibilities of each party to the

agreement;

(c) The terms and procedures under

which the EN will pay the State VR

agency for providing services; and

(d) Procedures for resolving disputes

under the agreement.

§ 411.425 What should a State VR agency

do if it gets an attempted referral from an

EN and no agreement has been established

between the EN and the State VR agency?

The State VR agency should contact

the EN to discuss the need to establish

an agreement. If the State VR agency

and the EN are not able to negotiate

acceptable terms for an agreement, the

State VR agency should notify the PM

that an attempted referral has been

made without an agreement.

§ 411.430 What should the PM do when it

is informed that an EN has attempted to

make a referral to a State VR agency

without an agreement being in place?

The PM will contact the EN to explain

that a referral cannot be made to the

State VR agency unless an agreement

has been established that sets out the

conditions under which services will be

provided when a beneficiary’s ticket is

assigned to the EN and the EN is

referring the beneficiary to the State VR

agency for specific services.

Resolving Disputes Arising Under

Agreements Between Employment

Networks and State VR Agencies

§ 411.435 How will disputes arising under

the agreements between ENs and State VR

agencies be resolved?

Disputes arising under agreements

between ENs and State VR agencies

must be resolved using the following

steps:

(a) When procedures for resolving

disputes are spelled out in the

agreement between the EN and the State

VR agency, those procedures must be

used.

(b) If procedures for resolving

disputes are not included in the

agreement between the EN and the State

VR agency and procedures for resolving

disputes under contracts and

interagency agreements are provided for

in State law or administrative

procedures, the State procedures must

be used to resolve disputes under

agreements between ENs and State VR

agencies.

(c) If procedures for resolving

disputes are not spelled out in the

agreement or in State law or

administrative procedures, the EN or the

State VR agency may request that the

PM recommend a resolution to the

dispute.

(1) The request must be in writing and

include:

(i) a copy of the agreement;

(ii) information on the issue(s) in

dispute; and

(iii) information on the position of

both the EN and the State VR agency

regarding the dispute.

(2) The PM has 20 calendar days after

receiving a written request to

recommend a resolution to the dispute.

If either the EN or the State VR agency

does not agree with the PM’s

recommended resolution to the dispute,

the EN or the State VR agency has 30

calendar days after receiving the PM’s

recommendation to request a decision

by us on the matter in dispute.

Subpart G—Requirements For

Individual Work Plans

§ 411.450 What is an Individual Work

Plan?

An individual work plan (IWP) is a

required written document signed by an

employment network (EN) (other than a

State VR agency) and a beneficiary, or

a representative of a beneficiary, with a

ticket. It is developed and implemented

in partnership when a beneficiary and

an EN have come to a mutual

understanding to work together to

pursue the beneficiary’s employment

goal under the Ticket to Work program.

§ 411.455 What is the purpose of an IWP?

The purpose of an IWP is to outline

the specific employment services,

vocational rehabilitation services and

other support services that the EN and

beneficiary have determined are

necessary to achieve the beneficiary’s

stated employment goal. An IWP

provides written documentation for

both the EN and beneficiary. Both

parties should develop and implement

the IWP in partnership. The EN shall

develop and implement the plan in a

manner that gives the beneficiary the

opportunity to exercise informed choice

in selecting an employment goal.

Specific services needed to achieve the

designated employment goal are

discussed and agreed to by both parties.

§ 411.460 Who is responsible for

determining what information is contained

in the IWP?

The beneficiary and the EN share the

responsibility for determining the

employment goal and the specific

services needed to achieve that

employment goal. The EN will present

information and options in a way that

affords the beneficiary the opportunity

to exercise informed choice in selecting

an employment goal and specific

services needed to achieve that

employment goal.

§ 411.465 What are the minimum

requirements for an IWP?

(a) An IWP must include at least—

(1) A statement of the vocational goal

developed with the beneficiary,

including, as appropriate, goals for

earnings and job advancement;

(2) A statement of the services and

supports necessary for the beneficiary to

accomplish that goal;

(3) A statement of any terms and

conditions related to the provision of

these services and supports;

(4) A statement that the EN may not

request or receive any compensation for

the costs of services and supports from

the beneficiary;

(5) A statement of the conditions

under which an EN may amend the IWP

or terminate the relationship;

(6) A statement of the beneficiary’s

rights under the Ticket to Work

program, including the right to retrieve

the ticket at any time if the beneficiary

is dissatisfied with the services being

provided by the EN;

(7) A statement of the remedies

available to the beneficiary, including

information on the availability of

advocacy services and assistance in

resolving disputes through the State

Protection and Advocacy (P&A) System;

(8) A statement of the beneficiary’s

rights to privacy and confidentiality

regarding personal information,

including information about the

beneficiary’s disability;

(9) A statement of the beneficiary’s

right to seek to amend the IWP (the IWP

can be amended if both the beneficiary

and the EN agree to the change); and

(10) A statement of the beneficiary’s

right to have a copy of the IWP made

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67437

available to the beneficiary, including in

an accessible format chosen by the

beneficiary.

(b) The EN will be responsible for

ensuring that each IWP contains this

information.

§ 411.470 When does an IWP become

effective?

(a) An IWP becomes effective if the

following requirements are met—

(1) It has been signed by the

beneficiary or the beneficiary’s

representative, and by a representative

of the EN;

(2)(i) The beneficiary is eligible to

assign his or her ticket under

§ 411.140(a); or

(ii) The beneficiary is eligible to

reassign his or her ticket under

§ 411.150(a) and (b); and

(3) A representative of the EN submits

a copy of the signed IWP to the PM and

the PM receives the copy of the IWP.

(b) If all of the requirements in

paragraph (a) of this section are met, the

IWP will be effective on the first day on

which the requirements of paragraphs

(a)(1) and (a)(2) of this section are met.

Subpart H—Employment Network

Payment Systems

§ 411.500 Definitions of terms used in this

subpart.

(a) Payment Calculation Base means

for any calendar year—

(1) In connection with a title II

disability beneficiary (including a

concurrent title II/title XVI disability

beneficiary), the average monthly

disability insurance benefit payable

under section 223 of the Act for months

during the preceding calendar year to all

beneficiaries who are in current pay

status for the month for which the

benefit is payable; and

(2) In connection with a title XVI

disability beneficiary (who is not

concurrently a title II disability

beneficiary), the average monthly

payment of Supplemental Security

Income (SSI) benefits based on

disability payable under title XVI

(excluding State supplementation) for

months during the preceding calendar

year to all beneficiaries who—

(i) Have attained age 18 but have not

attained age 65;

(ii) Are not concurrent title II/title XVI

beneficiaries; and

(iii) Are in current pay status for the

month for which the payment is made.

(b) Outcome Payment Period means a

period of 60 months, not necessarily

consecutive, for which Social Security

disability benefits and Federal SSI cash

benefits are not payable to the

individual because of the performance

of substantial gainful activity (SGA) or

by reason of earnings from work. This

period begins with the first month,

ending after the date on which the ticket

was first assigned, for which such

benefits are not payable due to SGA or

earnings. This period ends with the 60th

month, consecutive or otherwise,

ending after such date, for which such

benefits are not payable due to SGA or

earnings.

(c) Outcome Payment System is a

system providing a schedule of

payments to an employment network

(EN) for each month, during an

individual’s outcome payment period,

for which Social Security disability

benefits and Federal SSI cash benefits

are not payable to the individual

because of work or earnings.

(d) Outcome Payment means the

payment for an outcome payment

month.

(e) Outcome Payment Month means a

month, during the individual’s outcome

payment period, for which Social

Security disability benefits and Federal

SSI cash benefits are not payable to the

individual because of work or earnings.

The maximum number of outcome

payment months for each ticket is 60.

(f) Outcome-Milestone Payment

System is a system providing a schedule

of payments to an EN that includes, in

addition to any outcome payments

which may be made during the

individual’s outcome payment period,

payment for completion by a beneficiary

of up to four milestones directed toward

the goal of permanent employment. The

milestones for which payment may be

made must occur prior to the beginning

of the individual’s outcome payment

period.

§ 411.505 How is an EN paid by SSA?

An EN can elect to be paid under

either the outcome payment system or

the outcome-milestone payment system.

The EN will elect a payment system at

the time the EN enters into an

agreement with SSA. (For State VR

agencies, see § 411.365.) The EN may

periodically change its elected payment

system as described in § 411.515.

§ 411.510 How is the State VR agency paid

under the Ticket to Work program?

(a) The State VR agency’s payment

choices are described in § 411.355.

(b) The State VR agency’s decision to

serve the beneficiary must be

communicated to the program manager

(PM). (See § 411.115(k) for a definition

of the PM.) At the same time, the State

VR agency must notify the PM of its

selected payment system for that

beneficiary.

(c) For each beneficiary who is

already a client of the State VR agency

prior to receiving a ticket, the State VR

agency will notify the PM of the

payment system election for each such

beneficiary at the time the beneficiary

decides to assign the ticket to the State

VR agency.

§ 411.515 Can the EN change its elected

payment system?

(a) Yes. Any change by an EN in its

elected EN payment system will apply

to beneficiaries who assign their ticket

to the EN after the EN’s change in

election becomes effective. A change in

the EN’s election will become effective

with the first day of the month

following the month in which the EN

notifies us of the change. For

beneficiaries who already assigned their

ticket to the EN under the EN’s earlier

elected payment system, the EN’s earlier

elected payment system will continue to

apply. These rules also apply to a

change by a State VR agency in its

elected EN payment system for cases in

which the State VR agency serves a

beneficiary as an EN.

(b) After an EN (or a State VR agency)

first elects an EN payment system, the

EN (or State VR agency) can choose to

make one change in its elected payment

system at any time prior to the close of

which of the following is later:

(1) The 12th month following the

month in which the EN (or State VR

agency) first elects an EN payment

system; or

(2) The 12th month following the

month in which we implement the

Ticket to Work program in the State in

which the EN (or State VR agency)

operates.

(c) After an EN (or a State VR agency)

first elects a payment system, as part of

signing the EN agreement with us (for

State VR agencies, see § 411.365), the

EN (or State VR agency) will have the

opportunity to change from its existing

elected payment system during times

announced by us. We will offer the

opportunity for each EN (and State VR

agency) to make a change in its elected

payment system at least every 18

months.

§ 411.520 How are beneficiaries whose

tickets are assigned to an EN affected by a

change in that EN’s elected payment

system?

A change in an EN’s (or State VR

agency’s) elected payment system has

no effect upon the beneficiaries who

have assigned their ticket to the EN (or

State VR agency).

67438 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

§ 411.525 How are the EN payments

calculated under each of the two EN

payment systems?

(a) For payments for outcome

payment months, both EN payment

systems use the payment calculation

base as defined in § 411.500(a)(1) or

(a)(2), as appropriate.

(1)(i) Under the outcome payment

system, we can pay up to 60 monthly

payments to the EN. For each month for

which Social Security disability benefits

and Federal SSI cash benefits are not

payable to the individual because of

work or earnings, the EN is eligible for

a monthly outcome payment. Payment

for an outcome payment month under

the outcome payment system is equal to

40 percent of the payment calculation

base for the calendar year in which such

month occurs, rounded to the nearest

whole dollar. (See § 411.550.)

(ii) If a disabled beneficiary’s

entitlement to Social Security disability

benefits ends (see §§ 404.316(b),

404.337(b) and 404.352(b) of this

chapter) or eligibility for SSI benefits

based on disability or blindness

terminates (see § 416.1335 of this

chapter) because of the performance of

SGA or by reason of earnings from work

activity, we will consider any month

after the month with which such

entitlement ends or eligibility

terminates to be a month for which

Social Security disability benefits and

Federal SSI cash benefits are not

payable to the individual because of

work or earnings if—

(A) The individual has gross earnings

from employment (or net earnings from

self-employment as defined in

§ 416.1110(b) of this chapter) in that

month that are more than the SGA

threshold amount in § 404.1574(b)(2) of

this chapter (or in § 404.1584(d) of this

chapter for an individual who is

statutorily blind); and

(B) The individual is not entitled to

any monthly benefits under title II or

eligible for any benefits under title XVI

for that month.

(2) Under the outcome-milestone

payment system, we can pay the EN for

up to four milestones achieved by a

beneficiary who has assigned his or her

ticket to the EN. The milestones for

which payment may be made must

occur prior to the beginning of the

beneficiary’s outcome period and meet

the requirements of § 411.535. In

addition to the milestone payments,

monthly outcome payments can be paid

to the EN during the outcome payment

period.

(b) The outcome-milestone payment

system is designed so that the total

payments to the EN for a beneficiary are

less than the total amount to which

payments would be limited if the EN

were paid under the outcome payment

system. Under the outcome-milestone

payment system, the EN’s total potential

payment is about 85 percent of the total

that would have been potentially

payable under the outcome payment

system for the same beneficiary.

(c) We will pay an EN to whom the

individual has assigned a ticket only for

milestones or outcomes achieved in

months prior to the month in which the

ticket terminates (see § 411.155). We

will not pay a milestone or outcome

payment to an EN based on an

individual’s work activity or earnings in

or after the month in which the ticket

terminates.

§ 411.530 How will the outcome payments

be reduced when paid under the outcomemilestone payment system?

Under the outcome-milestone

payment system, each outcome payment

made to an EN with respect to an

individual will be reduced by an

amount equal to 1⁄60th of the milestone

payments made to the EN with respect

to the same individual.

§ 411.535 What are the milestones for

which an EN can be paid?

(a) Under the outcome-milestone

payment system, there are four

milestones for which the EN can be

paid. The milestones occur after the

date on which the ticket was first

assigned and after the beneficiary starts

to work. The milestones are based on

the earnings levels that we use when we

consider if work activity is SGA. We

will use the SGA threshold amount in

§ 404.1574(b)(2) of this chapter for

beneficiaries who are not statutorily

blind, and we will use the SGA

threshold amount in § 404.1584(d) of

this chapter for beneficiaries who are

statutorily blind. We will use these SGA

threshold amounts in order to measure

if the beneficiary’s earnings level meets

the milestone objective.

(1) The first milestone is met when

the beneficiary has worked for one

calendar month and has gross earnings

from employment (or net earnings from

self-employment as defined in

§ 416.1110(b) of this chapter) for that

month that are more than the SGA

threshold amount.

(2) The second milestone is met when

the beneficiary has worked for three

calendar months within a 12-month

period and has gross earnings from

employment (or net earnings from selfemployment as defined in § 416.1110(b)

of this chapter) for each of the three

months that are more than the SGA

threshold amount. The month used to

meet the first milestone can be included

in the three months used to meet the

second milestone.

(3) The third milestone is met when

the beneficiary has worked for seven

calendar months within a 12-month

period and has gross earnings from

employment (or net earnings from selfemployment as defined in § 416.1110(b)

of this chapter) for each of the seven

months that are more than the SGA

threshold amount. Any of the months

used to meet the first two milestones

can be included in the seven months

used to meet the third milestone.

(4) The fourth milestone is met when

the beneficiary has worked for 12

calendar months within a 15-month

period and has gross earnings from

employment (or net earnings from selfemployment as defined in § 416.1110(b)

of this chapter) for each of the 12

months that are more than the SGA

threshold amount. Any of the months

used to meet the first three milestones

can be included in the 12 months used

to meet the fourth milestone.

(b) An EN can be paid for a milestone

only if the milestone is attained after a

beneficiary has assigned his or her ticket

to the EN. See § 411.575 for other

milestone payment criteria.

§ 411.540 What are the payment amounts

for each of the milestones?

(a) The payment for the first milestone

is equal to 34 percent of the payment

calculation base for the calendar year in

which the month of attainment of the

milestone occurs, rounded to the nearest

whole dollar.

(b) The payment for the second

milestone is equal to 68 percent of the

payment calculation base for the

calendar year in which the month of

attainment of the milestone occurs,

rounded to the nearest whole dollar.

(c) The payment for the third

milestone is equal to 136 percent of the

payment calculation base for the

calendar year in which the month of

attainment of the milestone occurs,

rounded to the nearest whole dollar.

(d) The payment for the fourth

milestone is equal to 170 percent of the

payment calculation base for the

calendar year in which the month of

attainment of the milestone occurs,

rounded to the nearest whole dollar.

(e) The month of attainment of the

first milestone is the first month in

which the individual has the required

earnings as described in § 411.535.

(f) The month of attainment of the

second milestone is the 3rd month,

within a 12-month period, in which the

individual has the required earnings as

described in § 411.535.

(g) The month of attainment of the

third milestone is the 7th month, within

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67439

a 12-month period, in which the

individual has the required earnings as

described in § 411.535.

(h) The month of attainment of the

fourth milestone is the 12th month,

within a 15-month period, in which the

individual has the required earnings as

described in § 411.535.

§ 411.545 What are the payment amounts

for outcome payment months under the

outcome-milestone payment system?

The amount of each monthly outcome

payment under the outcome-milestone

payment system is equal to 34 percent

of the payment calculation base for the

calendar year in which the month

occurs, rounded to the nearest whole

dollar, and reduced, if necessary, as

described in § 411.530.

§ 411.550 What are the payment amounts

for outcome payment months under the

outcome payment system?

Under the outcome payment system,

the payment for an outcome payment

month is equal to 40 percent of the

payment calculation base for the

calendar year in which the month

occurs, rounded to the nearest whole

dollar.

§ 411.555 Can the EN keep the milestone

and outcome payments even if the

beneficiary does not achieve all 60 outcome

months?

(a) Yes. The EN can keep each

milestone and outcome payment for

which the EN is eligible, even though

the beneficiary does not achieve all 60

outcome months.

(b) Payments which we make or deny

to an EN or State VR agency serving a

beneficiary as an EN may be subject to

adjustment (including recovery, as

appropriate) if we determine that more

or less than the correct amount was

paid. This may happen, for example,

because we determine that the payment

determination was in error or because

of—

(1) An allocation of a payment under

§ 411.560; or

(2) A determination or decision we

make about an individual’s right to

benefits which causes the payment or

denial of a payment to be incorrect (see

§ 411.590(d)).

(c) If we determine that an

overpayment or underpayment has

occurred, we will notify the EN or State

VR agency serving a beneficiary as an

EN of the adjustment. Any dispute

which the EN or State VR agency has

regarding the adjustment may be

resolved under the rules in § 411.590(a)

and (b).

§ 411.560 Is it possible to pay a milestone

or outcome payment to more than one EN?

Yes. It is possible for more than one

EN to receive payment based on the

same milestone or outcome. If the

beneficiary has assigned the ticket to

more than one EN at different times, and

more than one EN requests payment for

the same milestone or outcome payment

under its elected payment system, the

PM will make a determination of the

allocation of payment to each EN. The

PM will make this determination based

upon the contribution of the services

provided by each EN toward the

achievement of the outcomes or

milestones. Outcome and milestone

payments will not be increased because

the payments are shared between two or

more ENs.

§ 411.565 What happens if two or more

ENs qualify for payment on the same ticket

but have elected different EN payment

systems?

We will pay each EN according to its

elected EN payment system in effect at

the time the beneficiary assigned the

ticket to the EN.

§ 411.570 Can an EN request payment

from the beneficiary who assigned a ticket

to the EN?

No. Section 1148(b)(4) of the Act

prohibits an EN from requesting or

receiving compensation from the

beneficiary for the services of the EN.

§ 411.575 How does the EN request

payment for milestones or outcome

payment months achieved by a beneficiary

who assigned a ticket to the EN?

The EN will send its request for

payment, evidence of the beneficiary’s

work or earnings and other information

to the PM.

(a) Milestone payments. (1) We will

pay the EN for milestones only if—

(i) The outcome-milestone payment

system was the EN’s elected payment

system in effect at the time the

beneficiary assigned a ticket to the EN;

(ii) The milestones occur prior to the

outcome payment period (see

§ 411.500(b));

(iii) The requirements in § 411.535 are

met; and

(iv) The ticket has not terminated for

any of the reasons listed in § 411.155.

(2) The EN must request payment for

each milestone achieved by a

beneficiary who has assigned a ticket to

the EN. The request must include

evidence that the milestone was

achieved, and other information as we

may require, to evaluate the EN’s

request. We do not have to stop monthly

benefit payments to the beneficiary

before we can pay the EN for milestones

achieved by the beneficiary.

(b) Outcome payments. (1) We will

pay an EN an outcome payment for a

month if—

(i)(A) Social Security disability

benefits and Federal SSI cash benefits

are not payable to the individual for that

month due to work or earnings; or

(B) The requirements of

§ 411.525(a)(1)(ii) are met in a case

where the beneficiary’s entitlement to

Social Security disability benefits has

ended or eligibility for SSI benefits

based on disability or blindness has

terminated because of work activity or

earnings; and

(ii) We have not already paid for 60

outcome payment months on the same

ticket; and

(iii) The ticket has not terminated for

any of the other reasons listed in

§ 411.155.

(2) The EN must request payment for

outcome payment months on at least a

quarterly basis. Along with the request,

the EN must submit evidence of the

beneficiary’s work or earnings (e.g. a

statement of monthly earnings from the

employer or the employer’s designated

payroll preparer, an unaltered copy of

the beneficiary’s pay stub). Exception: If

the EN does not currently hold the

ticket because it is unassigned or

assigned to another EN, the EN must

request payment, but is not required to

submit evidence of the beneficiary’s

work or earnings.

§ 411.580 Can an EN receive payments for

milestones or outcome payment months

that occur before the beneficiary assigns a

ticket to the EN?

No. An EN may be paid only for

milestones or outcome payment months

that are achieved after the ticket is

assigned to the EN.

§ 411.585 Can a State VR agency and an

EN both receive payment for serving the

same beneficiary?

Yes. It is possible if the State VR

agency serves the beneficiary as an EN.

In this case, both the State VR agency

serving as an EN and the other EN may

be eligible for payment based on the

same ticket (see § 411.560).

(a) If a State VR agency is paid by us

under the cost reimbursement payment

system with respect to a ticket, such

payment precludes any subsequent

payment by us based on the same ticket

to an EN or to a State VR agency serving

as an EN under either the outcome

payment system or the outcomemilestone payment system.

(b) If an EN or a State VR agency

serving a beneficiary as an EN is paid by

us under one of the EN payment

systems with respect to a ticket, such

payment precludes subsequent payment

to a State VR agency under the cost

67440 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

reimbursement payment system based

on the same ticket.

§ 411.587 Which provider will SSA pay if,

with respect to the same ticket, SSA

receives a request for payment from an EN

or a State VR agency that elected payment

under an EN payment system and a request

for payment from a State VR agency that

elected payment under the cost

reimbursement payment system?

(a) We will pay the provider that first

meets the requirements for payment

under its elected payment system

applicable to the beneficiary who

assigned the ticket.

(b) In the event that both providers

first meet the requirements for payment

under their respective payment systems

in the same month, we will pay the

claim of the provider to which the

beneficiary’s ticket is currently assigned

or, if the ticket is not currently assigned

to either provider, the claim of the

provider to which the ticket was most

recently assigned.

§ 411.590 What can an EN do if the EN

disagrees with our decision on a payment

request?

(a) If an EN other than a State VR

agency has a payment dispute with us,

the dispute shall be resolved under the

dispute resolution procedures contained

in the EN’s agreement with us.

(b) If a State VR agency serving a

beneficiary as an EN has a dispute with

us regarding payment under an EN

payment system, the State VR agency

may, within 60 days of receiving notice

of our decision, request reconsideration

in writing. The State VR agency must

send the request for reconsideration to

the PM. The PM will forward to us the

request for reconsideration and a

recommendation. We will notify the

State VR agency of our reconsidered

decision in writing.

(c) An EN (including a State VR

agency) cannot appeal determinations

we make about an individual’s right to

benefits (e.g. determinations that

disability benefits should be suspended,

terminated, continued, denied, or

stopped or started on a different date

than alleged). Only the beneficiary or

applicant or his or her representative

can appeal these determinations. See

§ 404.900 et seq. and 416.1400 et seq. of

this chapter.

(d) Determinations or decisions which

we make about an individual’s right to

benefits may affect an EN’s eligibility for

payment, and may cause payments

which we have already made to an EN

(or a denial of a payment to an EN) to

be incorrect, resulting in an

overpayment or underpayment to the

EN. If this happens, we will make any

necessary adjustments to the payments

(see § 411.555). While an EN cannot

appeal our determination about an

individual’s right to benefits, the EN

may furnish any evidence the EN has

which relates to the issue(s) to be

decided on appeal if the individual

appeals our determination.

§ 411.595 What oversight procedures are

planned for the EN payment systems?

We use audits, reviews, studies and

observation of daily activities to identify

areas for improvement. Internal reviews

of our systems security controls are

regularly performed. These reviews

provide an overall assurance that our

business processes are functioning as

intended. The reviews also ensure that

our management controls and financial

management systems comply with the

standards established by the Federal

Managers’ Financial Integrity Act and

the Federal Financial Management

Improvement Act. These reviews

operate in accordance with the Office of

Management and Budget Circulars A–

123, A–127 and Appendix III to A–130.

Additionally, our Executive Internal

Control Committee meets periodically

and provides further oversight of

program and management control

issues.

§ 411.597 Will SSA periodically review the

outcome payment system and the outcomemilestone payment system for possible

modifications?

(a) Yes. We will periodically review

the system of payments and their

programmatic results to determine if

they provide an adequate incentive for

ENs to assist beneficiaries to enter the

work force, while providing for

appropriate economies.

(b) We will specifically review the

limitation on monthly outcome

payments as a percentage of the

payment calculation base, the difference

in total payments between the outcomemilestone payment system and the

outcome payment system, the length of

the outcome payment period, and the

number and amount of milestone

payments, as well as the benefit savings

and numbers of beneficiaries going to

work. We will consider altering the

payment system conditions based upon

the information gathered and our

determination that an alteration would

better provide for the incentives and

economies noted above.

Subpart I—Ticket to Work Program

Dispute Resolution

Disputes Between Beneficiaries and

Employment Networks

§ 411.600 Is there a process for resolving

disputes between beneficiaries and ENs

that are not State VR agencies?

Yes. After an IWP is signed, a process

is available which will assure each party

a full, fair and timely review of a

disputed matter. This process has three

steps.

(a) The beneficiary can seek a solution

through the EN’s internal grievance

procedures.

(b) If the EN’s internal grievance

procedures do not result in an agreeable

solution, either the beneficiary or the

EN may seek a resolution from the PM.

(See § 411.115(k) for a definition of the

PM.)

(c) If either the beneficiary or the EN

is dissatisfied with the resolution

proposed by the PM, either party may

request a decision from us.

§ 411.605 What are the responsibilities of

the EN that is not a State VR agency

regarding the dispute resolution process?

The EN must:

(a) Have grievance procedures that a

beneficiary can use to seek a resolution

to a dispute under the Ticket to Work

program;

(b) Give each beneficiary seeking

services a copy of its internal grievance

procedures;

(c) Inform each beneficiary seeking

services of the right to refer a dispute

first to the PM for review, and then to

us for a decision; and

(d) Inform each beneficiary of the

availability of assistance from the State

P&A system.

§ 411.610 When should a beneficiary

receive information on the procedures for

resolving disputes?

Each EN that is not a State VR agency

must inform each beneficiary seeking

services under the Ticket to Work

program of the procedures for resolving

disputes when—

(a) The EN and the beneficiary

complete and sign the IWP;

(b) Services in the beneficiary’s IWP

are reduced, suspended or terminated;

and

(c) A dispute arises related to the

services spelled out in the beneficiary’s

IWP or to the beneficiary’s participation

in the program.

§ 411.615 How will a disputed issue be

referred to the PM?

The beneficiary or the EN that is not

a State VR agency may ask the PM to

review a disputed issue. The PM will

Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations 67441

contact the EN to submit all relevant

information within 10 working days.

The information should include:

(a) A description of the disputed

issue(s);

(b) A summary of the beneficiary’s

position, prepared by the beneficiary or

a representative of the beneficiary,

related to each disputed issue;

(c) A summary of the EN’s position

related to each disputed issue; and

(d) A description of any solutions

proposed by the EN when the

beneficiary sought resolution through

the EN’s grievance procedures,

including the reasons the beneficiary

rejected each proposed solution.

§ 411.620 How long does the PM have to

recommend a resolution to the dispute?

The PM has 20 working days to

provide a written recommendation. The

recommendation should explain the

reasoning for the proposed resolution.

§ 411.625 Can the beneficiary or the EN

that is not a State VR agency request a

review of the PM’s recommendation?

(a) Yes. After receiving the PM’s

recommendation, either the beneficiary

or the EN may request a review by us.

The request must be in writing and

received by the PM within 15 working

days of the receipt of the PM’s

recommendation for resolving the

dispute.

(b) The PM has 10 working days to

refer the request for a review to us. The

request for a review must include:

(1) A copy of the beneficiary’s IWP;

(2) Information and evidence related to

the disputed issue(s); and

(3) The PM’s conclusion(s) and

recommendation(s).

§ 411.630 Is SSA’s decision final?

Yes. Our decision is final. If either the

beneficiary or the EN that is not a State

VR agency is unwilling to accept our

decision, either has the right to

terminate its relationship with the other.

§ 411.635 Can a beneficiary be

represented in the dispute resolution

process under the Ticket to Work program?

Yes. Both the beneficiary and the EN

that is not a State VR agency may use

an attorney or other individual of their

choice to represent them at any step in

the dispute resolution process. The P&A

system in each State and U.S. Territory

is available to provide assistance and

advocacy services to beneficiaries

seeking or receiving services under the

Ticket to Work program, including

assistance in resolving issues at any

stage in the dispute resolution process.

Disputes Between Beneficiaries and

State VR Agencies

§ 411.640 Do the dispute resolution

procedures of the Rehabilitation Act of

1973, as amended (29 U.S.C. 720 et seq.),

apply to beneficiaries seeking services from

the State VR agency?

Yes. The procedures in the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.) apply to any

beneficiary who has assigned a ticket to

a State VR agency. ENs that are State VR

agencies are subject to the provisions of

the Rehabilitation Act. The

Rehabilitation Act requires the State VR

agency to provide each person seeking

or receiving services with a description

of the services available through the

Client Assistance Program authorized

under section 112 of the Rehabilitation

Act of 1973, as amended (29 U.S.C.

732). It also provides the opportunity to

resolve disputes using formal mediation

services or the impartial hearing process

in section 102(c) of the Rehabilitation

Act of 1973, as amended (29 U.S.C.

722(c)). ENs that are not State VR

agencies are not subject to the

provisions of Title I of the

Rehabilitation Act of 1973, as amended

(29 U.S.C. 720 et seq.).

Disputes Between Employment

Networks and Program Managers

§ 411.650 Is there a process for resolving

disputes between ENs that are not State VR

agencies and PMs, other than disputes on

a payment request?

Yes. Under the agreement to assist us

in administering the Ticket to Work

program, a PM is required to have

procedures to resolve disputes with ENs

that do not involve an EN’s payment

request. (See § 411.590 for the process

for resolving disputes on EN payment

requests.) This process must ensure that:

(a) The EN can seek a solution

through the PM’s internal grievance

procedures; and

(b) If the PM’s internal grievance

procedures do not result in a mutually

agreeable solution, the PM shall refer

the dispute to us for a decision.

§ 411.655 How will the PM refer the dispute

to us?

The PM has 20 working days from the

failure to come to a mutually agreeable

solution with an EN to refer the dispute

to us with all relevant information. The

information should include:

(a) A description of the disputed

issue(s);

(b) A summary of the EN’s and PM’s

position related to each disputed issue;

and

(c) A description of any solutions

proposed by the EN and PM when the

EN sought resolution through the PM’s

grievance procedures, including the

reasons each party rejected each

proposed solution.

§ 411.660 Is SSA’s decision final?

Yes. Our decision is final.

Subpart J—The Ticket to Work

Program and Alternate Participants

Under the Programs For Payments For

Vocational Rehabilitation Services

§ 411.700 What is an alternate participant?

An alternate participant is any public

or private agency (other than a

participating State VR agency described

in §§ 404.2104 and 416.2204 of this

chapter), organization, institution, or

individual with whom the

Commissioner has entered into an

agreement or contract to provide VR

services to disabled beneficiaries under

the programs described in subpart V of

part 404 and subpart V of part 416 of

this chapter. In this subpart J, we refer

to these programs as the programs for

payments for VR services.

§ 411.705 Can an alternate participant

become an EN?

In any State where the Ticket to Work

program is implemented, each alternate

participant whose service area is in that

State will be asked to choose if it wants

to participate in the program as an EN.

§ 411.710 How will an alternate participant

choose to participate as an EN in the Ticket

to Work program?

(a) When the Ticket to Work program

is implemented in a State, each alternate

participant whose service area is in that

State will be notified of its right to

choose to participate as an EN in the

program in that State. The notification

to the alternate participant will provide

instructions on how to become an EN

and the requirements that an EN must

meet to participate in the Ticket to Work

program.

(b) An alternate participant who

chooses to become an EN must meet the

requirements to be an EN, including—

(1) Enter into an agreement with SSA to

participate as an EN under the Ticket

to Work program (see § 411.320);

(2) Agree to serve a prescribed service

area (see § 411.320);

(3) Agree to the EN reporting

requirements (see § 411.325); and

(4) Elect a payment option under one of

the two EN payment systems (see

§ 411.505).

§ 411.715 If an alternate participant

becomes an EN, will beneficiaries for whom

an employment plan was signed prior to

implementation be covered under the Ticket

to Work program payment provisions?

No. When an alternate participant

becomes an EN in a State in which the

67442 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

Ticket to Work program is implemented,

those beneficiaries for whom an

employment plan was signed prior to

the date of implementation of the

program in the State, will continue to be

covered for a limited time under the

programs for payments for VR services

(see § 411.730).

§ 411.720 If an alternate participant

chooses not to become an EN, can it

continue to function under the programs for

payments for VR services?

Once the Ticket to Work program has

been implemented in a State, the

alternate participant programs for

payments for VR services begin to be

phased-out in that State. We will not

pay any alternate participant under

these programs for any services that are

provided under an employment plan

that is signed on or after the date of

implementation of the Ticket to Work

program in that State. If an employment

plan was signed before that date, we

will pay the alternate participant, under

the programs for payments for VR

services, for services provided prior to

January 1, 2004 if all other requirements

for payment under these programs are

met. We will not pay an alternate

participant under these programs for

any services provided on or after

January 1, 2004.

§ 411.725 If an alternate participant

becomes an EN and it has signed

employment plans, both as an alternate

participant and an EN, how will SSA pay for

services provided under each employment

plan?

We will continue to abide by the

programs for payments for VR services

in cases where services are provided to

a beneficiary under an employment plan

signed prior to the date of

implementation of the Ticket to Work

program in the State. However, we will

not pay an alternate participant under

these programs for services provided on

or after January 1, 2004. For those

employment plans signed by a

beneficiary and the EN after

implementation of the program in the

State, the EN’s elected EN payment

system under the Ticket to Work

program applies.

§ 411.730 What happens if an alternate

participant signed an employment plan with

a beneficiary before Ticket to Work program

implementation in the State and the

required period of substantial gainful

activity is not completed by January 1,

2004?

The beneficiary does not have to

complete the nine-month continuous

period of substantial gainful activity

(SGA) prior to January 1, 2004, in order

for the costs of the services to be

payable under the programs for

payments for VR services. The ninemonth SGA period can be completed

after January 1, 2004. However, SSA

will not pay an alternate participant

under these programs for the costs of

any services provided after December

31, 2003.

[FR Doc. 01–31567 Filed 12–27–01; 8:45 am]

BILLING CODE 4191–02–P