E7-16071. Proposed Suspension of New Claims to the Federal Reviewing Official Review Level, Changes to the Role of the Medical and Vocational Expert System, and Future Demonstration Projects

AGENCY:

Social Security Administration.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

We propose to modify our disability administrative adjudication processes to suspend new claims to the Federal reviewing official (FedRO) level, now operating in the Boston region. Claims already received will continue to be processed by the FedRO and a related component of the disability determination process, the Medical and Vocational Expert System (MVES), commonly known as the Office of Medical and Vocational Expertise (OMVE). We also propose to remove the MVES/OMVE from the disability adjudication process for new claims. We are making these proposals to ensure that we continually improve our disability adjudication process. Lastly, we are requesting comments on using the MVES/OMVE to develop and manage a national registry of experts.

DATES:

To be sure that we consider your comments on our proposed changes, we must receive them no later than September 14, 2007. However, we also invite comments by November 13, 2007 on the merits of a national registry of experts, including MVES/OMVE management of the registry, and the rates to be paid to the experts affiliated with the registry.

ADDRESSES:

You may give us your comments by: Internet through the Federal eRulemaking Portal at http://www.regulations.gov;​; e-mail to [e-mail]; telefax to [phone]; or letter to the Commissioner of Social Security, P.O. Box 17703, Baltimore, MD 21235-7703. You may also deliver them to the Office of Regulations, Social Security Administration, 960 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, between 8 a.m. and 4:30 p.m. on regular business days. Comments are posted on the Federal eRulemaking Portal, or you may inspect them on regular business days by making arrangements with the contact person shown in this preamble.

FOR FURTHER INFORMATION CONTACT:

James A. Winn, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, [phone] for information about this notice. 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 site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

The electronic file of this document is available on the date of publication in the Federal Register at http://www.gpoaccess.gov/​fr/​index.html.

Introduction

We are dedicated to providing high-quality service to the American public. When in March 2006 we announced changes to our administrative review process for initial disability claims, we explained that we expected that the changes would improve disability service. Our commitment to continuous improvement in the way we process disability claims did not end with the publication of those rules as we continually explore ways to improve service to some of the most vulnerable in our society. We face, now and in the foreseeable future, significant challenges to our ability to provide the level of service that disability benefit claimants deserve because of the increased complexity of and growth in claims for those benefits. Consequently, we propose modifications to our administrative review process that will further help us evaluate changes put in place in March 2006 and help us provide accurate and timely service to claimants for Social Security disability benefits and supplemental security income payments based on disability or blindness.

The importance of these disability benefits to the lives and subsistence of many Americans cannot be underestimated. Nearly 15 million disabled Social Security beneficiaries and supplemental security income recipients receive over $10 billion in Federal monthly payments. The adjudication of disability claims requires evaluating complex medical and vocational evidence.

The number of claims and requests for hearings that we receive has continued to expand. In 2004-2006, we received an annual average of 2.6 million disability claims that required decisions on medical grounds, the most time and labor intensive basis for deciding such claims. Along with this expansion in the number of claims, there has been a concomitant increase in the number of hearing requests. Our hearing offices have received an average of over 564,000 titles II and XVI disability hearing requests each year from 2002 through 2006, a significant increase from the annual average of almost 472,000 hearing requests in 1997-2001. As these figures show, over the 5-year period from 2002 through 2006, we received each year over 90,000 more requests for titles II and XVI hearings than we annually received during the period from 1997 through 2001. The vast number of disability claims now filed each year, as well as other factors such as the expected increase in disability claims as the baby boomers move into their disability-prone years, probable limitations on our resources to process these claims, and the projected impending increase in filings for retirement and survivors benefits as baby boomers retire, will continue to place an even greater strain on the system.

We expected that the spring 2006 changes to the administrative review process for initial disability claims would “improve the accuracy, consistency, and timeliness of decision-making throughout the disability determination process.” 71 FR 16424 (March 31, 2006). We planned a gradual roll-out of the changes so that we could determine their effect on the disability process overall. As we explained then, “Gradual implementation will allow us to monitor the effects that our changes are having on the entire disability determination process * * * We will carefully monitor the implementation process in the Boston region and quickly address any problems that may arise.” 71 FR at 16440-41. Based on initial reviews of the quick disability determination (QDD) and FedRO elements of that process, and mindful of the workload challenges that we now face—especially at the hearing level—we believe we need to modify some of the changes made last spring.

As we explain in our recently published notice of proposed rulemaking on the QDD process (July 10, 2007; 72 FR 37496), we are proposing to retain and expand the QDD process, and, as we explain here, we propose to suspend new claims going through the FedRO and the MVES, organizationally known as the OMVE. However, claims already received will continue through the FedRO and MVES so we can continue to evaluate their effectiveness. These proposals are based on our commitment to outstanding service and to continuously improving our service as we realign our resources to ensure that we are capable of processing the current and anticipated number of disability claims and reducing the number of pending hearings.

1. Suspending OFedRO and MVES/OMVE Allows Reallocation of Resources to the Backlog at the Hearings Level

In the March 2006 final rule, we replaced the State agency reconsideration level with a Federal adjudicative level, called the FedRO. Attorneys staff the FedRO positions, and they, along with the managerial, support, and administrative staff, make up the Office of the FedRO (OFedRO). OFedRO uses the MVES/OMVE to develop the medical and vocational evidence in the claims before them. The goal of FedRO and OMVE is to have this level of review help ensure more accurate and consistent decision making earlier in the process. We are continuing to evaluate the effect of these new components on our program and administrative functions. Our experience over the last year in the Boston region demonstrates that the administrative costs associated with OFedRO and its consequent use of the MVES/OMVE to develop medical and vocational evidence is greater over the foreseeable future than originally anticipated. We do not yet have sufficient results to fully evaluate the potential improvements in program efficacy that are the goals of the FedRO and OMVE. Therefore, we propose to suspend new claims going through the FedRO and OMVE, so that we can reallocate resources to reduce the backlog at the hearing level, while we evaluate the FedRO and OMVE through the processing of claims already received. Once this evaluation is completed and alternative approaches analyzed, we will make a decision whether to reinstate the processing of new claims at the FedRO or to pursue an alternative approach to improving the disability determination process.

Under this proposal, we are amending part 405 with provisions that will suspend new claims to the OFedRO and MVES/OMVE. This change will allow us to continue to evaluate the FedRO and OMVE through the processing of claims already received. We expect to have approximately 15,500 cases pending FedRO review when this rule becomes effective. We will complete the processing of those pending cases, but will not assign to FedRO any more cases originally filed under the new process in Boston that otherwise would have been slated for FedRO review. Instead, if cases are at the initial level in Boston or not assigned to FedRO on the effective date of this rule, those cases will be assigned to State agencies for reconsidered determinations or to administrative law judges for hearing, whichever is applicable in that particular New England State. In other words, States in the Boston region, where the FedRO and MVES/OMVE are currently functioning, would return to the same process they were following before August 2006, whether that process was reconsideration under 20 CFR 404.907 and 416.1407 or the testing procedures under 20 CFR 404.906 and 416.1406.

2. Request for Comments on a National Registry of Experts

Even though we propose to suspend new claims to the MVES/OMVE from the administrative review process under part 405 of our rules, we are considering using the MVES/OMVE in a more limited role to develop and manage a national registry of medical, psychological, and vocational experts to assist disability adjudicators in developing and/or clarifying information within the record. Once the MVES/OMVE has developed the registry, the MVES/OMVE would continue to manage the registry. Disability adjudicators at the State and Federal levels would be able to directly access the experts affiliated with the registry without having to go through the MVES/OMVE to arrange for expert assistance.

We ask for comments on the merits of such a registry, including MVES/OMVE management of the registry, and the rates to be paid to the experts affiliated with the registry. Questions upon which you may wish to comment include, but are not limited to: What qualifications should experts on the national registry have? Should experts be required to have experience or training related to our disability programs? Should disability adjudicators be required to use the registry when they require expert assistance? Should we pay experts flat rates nationally or should the rates be based on locality? If rates are based on locality, what factors should we consider in setting those rates? Regardless of whether the rates we pay the experts are based on national or local rates, should we vary rates to account for the individual's level of expertise, and if so, how should that be done? Should we build in an automatic adjustment for inflation and, if so, which measure would be most appropriate for this function? We would be very interested in your thoughts regarding these issues and request that they be submitted within 90 days of the publication of this notice. We will consider comments submitted within this time period as we continue to develop our plans for a national registry. We will not respond to these comments until such time as we may publish a notice of proposed rulemaking setting out more detailed plans for such a registry.

Clarity of These Proposed Rules

Executive Order 12866, as amended, requires each agency to write all rules in plain language. In addition to your substantive comments on these final rules, we invite your comments on how to make them easier to understand. For example:

• Have we organized the material to suit your needs?
• Are the requirements in the rules clearly stated?
• Do the rules contain technical language or jargon that isn't clear?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the rules easier to understand?
• Would more (but shorter) sections be better?
• Could we improve clarity by adding tables, lists, or diagrams?
• What else could we do to make the rules easier to understand?

Regulatory Procedures

Pursuant to sections 205(a), 702(a)(5), and 1631(d)(1) of the Social Security Act, 42 U.S.C. 405(a), 902(a)(5), and 1383(d)(1), we follow the Administrative Procedure Act (APA) rulemaking procedures specified in 5 U.S.C. 553 in the development of our regulations. We ordinarily publish a notice of proposed rulemaking in the Federal Register and permit a 60-day comment period. This period, however, may be shortened when the agency finds good cause that a 60-day comment period would be impracticable, unnecessary, or contrary to the public interest and incorporates a statement of the finding and its reasons in the rule issued. For this proposed rule, we find that there is good cause for allowing a 30-day comment period on the issue of suspending OFedRO and MVES/OMVE (section 1 above) because we believe that it would be contrary to the public interest not to effectuate these rules as quickly as we can. However, if it appears that 30 days is not sufficient time to comment—for example, if the volume of comments indicates that there is great public interest in this rule—we will consider extending the comment period to 60 days.

We intend to shift the resources required for the FedRO and MVES/OMVE to the effort to reduce the pending hearing requests to a manageable level. In order to shift those resources as quickly as we can, we must suspend new claims to the appeal procedure to the FedRO, and thereby, stem the flow of cases to the FedRO and the MVES/OMVE. Upon the effective date of the final rules, the first level of appeal would be reconsideration for any claimant who has not yet requested FedRO review, unless the State is a part of the prototype test in which case the first level of review would be to an administrative law judge. Claimants who have not yet been issued an initial determination would be advised in the initial determination notice that their first level of appeal would be reconsideration or a hearing, whichever applies. This would allow the FedRO and the MVES/OMVE to complete the processing of the cases in the pipeline, allow us to redirect resources to other tasks, including assisting us in reducing the backlog at the hearing level.

However, we are providing a 90-day comment period on the issue of a national registry of experts (section 2 above).

Executive Order 12866, as Amended

We have consulted with the Office of Management and Budget (OMB) and determined that this proposed rule meets the criteria for an economically significant regulatory action under Executive Order 12866, as amended. Thus, it was reviewed by OMB.

The Office of the Chief Actuary (OCACT) estimates that this rule will result in program savings of roughly $1.0 billion in OASDI benefit payments and cost of $0.1 billion in Federal SSI payments over the next 10 years, as shown below (in millions of dollars):

Table 1.—Estimated Effect on OASDI and Federal SSI Benefit Payments of a Proposed Regulation Eliminating New Claims to the Federal Reviewing Official and Modifying the Role of the Medical and Vocational Expert System, Fiscal Years 2008-17

[In millions]

Fiscal year	OASDI	SSI	Total
2008	−$14	−$3	−$18
2009	−42	−9	−51
2010	−51	−8	−60
2011	−57	−15	−72
2012	−45	−6	−51
2013	−53	9	−44
2014	−122	22	−100
2015	−192	29	−163
2016	−248	40	−208
2017	−219	82	−137
Totals:
2008-12	−209	−41	−251
2008-17	−1,042	140	−902
Notes:
1. The estimates are based on the assumptions underlying the President's FY 2008 Budget.
2. Federal SSI payments due on October 1st in fiscal years 2012, 2017 and 2018 are included with payments for the prior fiscal year.
3. Totals may not equal sum of components due to rounding.

Table 1 above presents the estimated short-range effects on OASDI benefit payments and Federal SSI payments that would result from implementation of this NPRM, measured relative to the baseline used for the President's Fiscal Year 2008 Budget and assuming that a final rule implementing these changes would become effective for initial determinations made on or after April 1, 2008. The FY 2008 Budget assumed that DSI would be gradually implemented at the pace of one region per year and be fully implemented for new claims in all regions by the beginning of FY 2016. For the 10 States where the Prototype determination process has been or is being tested, the effect of this NPRM would be to retain or restore the Prototype process so that the first level of appeal of an initial disability decision would be to an administrative law judge.

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/​omb/​circulars/​a004/​a-4.pdf), in Table 2, we have prepared an accounting statement showing the annualized economic impact of suspending new claims to the FedRO level. All estimated impacts are classified as transfers.

Table 2.—Accounting Statement: Estimated Economic Impact of Suspending New Claims to the FedRO Level From 2008-2016 in 2007 Dollars

Category	Transfers
Annualized Monetized Transfers	$81.3 million (7% discount rate). $86.4 million (3% discount rate).
From Whom To Whom?	From SSA beneficiaries to the Social Security trust fund and the general fund.

Suspending new claims going through the FedRO and OMVE will allow us to reallocate resources to reduce the backlog at the hearing level by holding more hearings and making system improvements to increase the efficiency of our hearings process.

We will also continue to evaluate the FedRO and OMVE through the processing of claims already received. This evaluation will include an assessment of DSI, as the pilot is currently implemented in the Boston region, with existing claims. In the analysis we will analyze DSI's impact on the timeliness of disability determinations, on overall program costs, as well as its impact on the administrative costs required to implement this new process. Once this evaluation is complete and alternative approaches analyzed, we will make a decision whether to reinstate the processing of new claims into the FedRO or pursue an alternative approach to improving the disability determination process.

Regulatory Flexibility Act

We certify that this proposed rule, when published in final, will not have a significant economic impact on a substantial number of small entities as it affects only States and individuals. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.

Paperwork Reduction Act

These rules impose no new reporting or recordkeeping requirements requiring OMB clearance.

Federalism Impact and Unfunded Mandates Impact

We have reviewed this proposed rule under the threshold criteria of Executive Order 13132 and the Unfunded Mandates Reform Act and have determined that it does not have substantial direct effects on the States, on the relationship between the national government and the States, on the distribution of power and responsibilities among the various levels of government, or on imposing any costs on State, local, or tribal governments. This proposed rule does not affect the roles of the State, local, or tribal governments. However, the proposed rule takes administrative notice of existing statutes governing the roles and relationships of the State agencies with us with respect to disability determinations under the Act.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; 96.006, Supplemental Security Income)

List of Subjects in 20 CFR Part 405

• Administrative practice and procedure; Blind
• Disability benefits; Old-Age
• Survivors, and Disability Insurance; Public assistance programs
• Reporting and recordkeeping requirements; Social Security; Supplemental Security Income (SSI)

Dated: August 7, 2007.

Michael J. Astrue,

Commissioner of Social Security.

For the reasons set out in the preamble, we are amending subparts A and C of part 405 as set forth below:

PART 405—ADMINISTRATIVE REVIEW PROCESS FOR ADJUDICATING INITIAL DISABILITY CLAIMS

1. The authority citation for part 405 continues to read as follows:

Authority: Secs. 201(j), 205(a)-(b), (d)-(h), and (s), 221, 223(a)-(b), 702(a)(5), 1601, 1602, 1631, and 1633 of the Social Security Act (42 U.S.C. 401(j), 405(a)-(b), (d)-(h), and (s), 421, 423(a)-(b), 902(a)(5), 1381, 1381a, 1383, and 1383b).

Subpart A—[Amended]

2. Amend § 405.10 by adding paragraph (d) to read as follows:

§ 405.10

Medical and Vocational Expert System.

* * * * *

(d) This section will no longer be effective on the same date as described in § 405.240(c) of this part unless the Commissioner decides that the Medical and Vocational Expert System should be continued and extends the sunset date as described in § 405.240(d) of this part by publishing a notice of proposed rulemaking in the Federal Register before that date.

3. Revise the appendix to subpart A of part 405 to read as follows:

Appendix to Subpart A of Part 405—Claims That Will Be Handled Under the Procedures in This Part

(a) We will apply the procedures in this part to disability claims (as defined in § 405.5) filed in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, or Connecticut.

(b) If you move from one State to another after your disability claim has been filed, adjudicators at subsequent levels of review will apply the regulations that initially applied to the disability claim. For example, if you file a claim in a State in which we apply the procedures in this part, the procedures in this part will apply to the disability claim at subsequent levels of review, even if you move to a State where we would otherwise not apply these procedures. Conversely, if you file a claim in a State where we do not apply the procedures in this part, we will adjudicate the claim using the procedures in part 404 or 416 of this chapter, as appropriate, even if you subsequently move to a State where we would otherwise apply the procedures in this part.

Subpart C—[Amended]

4. Add § 405.240 to read as follows:

§ 405.240

Sunset of this Subpart.

(a) If you have filed a request for review by a Federal reviewing official on or before the effective date of this section, the Federal reviewing official will review and issue a decision on your claim.

(b) If you have not filed a request for review by a Federal reviewing official on or before the effective date of this section and you have received an initial determination under subpart B of this part, we will process any request for additional administrative review filed after the effective date as either a request for reconsideration by the State agency or a request for hearing before an administrative law judge if your State uses the testing procedures under §§ 404.906 and 416.1406 of this title.

(c) This subpart will no longer be effective the day after a Federal reviewing official issues a decision on the last of the claims accepted for review under paragraph (a) of this section.

(d) If compelling evidence shows that the Federal reviewing official process is efficient, effective, and sustainable given available Agency resources, the Commissioner may reinstate the Federal reviewing official process by publishing a notice of proposed rulemaking in the Federal Register.