The proposed rules differ somewhat from our current rules for submitting evidence to the Appeals Council. Under our current rules, the Appeals Council will accept new evidence only if it relates to the period on or before the date of the ALJ decision. The proposed rules contain the same restriction that the evidence must relate to the period on or before the date of the ALJ decision, but they also require the individual to show that there is a reasonable probability that the evidence would change the outcome of the decision and that there was some good reason, as described above, that the individual could not have submitted the evidence earlier.

This limitation would apply only to evidence offered by a party. Should the Review Board believe additional evidence is needed to decide the issues in the case, it will be able to obtain that evidence itself or remand the case to an ALJ to obtain the evidence, and any evidence so obtained would be made part of the evidentiary record.

Also, we propose to revise our rules on reopening to make them consistent with these proposed limits on an individual's ability to submit new evidence after a hearing decision or dismissal. Specifically, we propose to remove ``new and material evidence'' as a basis for reopening any decision made at the hearing or Review Board levels on a claim for benefits based on disability. We believe this change is necessary because without it, a claimant who submits additional evidence to the Review Board that does not meet the standard described above for admitting the evidence would be able to circumvent our limits simply by asking to have our final decision reopened based on the additional evidence we declined to admit.
Limiting the Period of Time Covered by the Review Board's Adjudication and Adjudication Following Administrative or Court Remands

When cases are remanded for further proceedings, either from a Federal court or the Appeals Council, our current rules allow ALJs and the Appeals Council to consider changes in the individual's condition after the date of the first ALJ decision on the claim, such as an increase in severity of the claimant's original impairment(s) or the development of a new impairment. Under our current rules, for example, when the Appeals Council grants an individual's request that it review the decision made by an ALJ and finds reasons to reverse that decision and remand the case for further proceedings, it has typically ``vacated'' the decision of the ALJ. As a result, we consider the case during the subsequent proceedings on remand as if the earlier ALJ's decision had not been issued. This same situation may arise where a Federal court remands a case for further proceedings. In practical terms, this approach allowed individuals to continue to submit evidence freely throughout the subsequent proceedings or to attempt to establish an onset of disability even after the date of the first hearing decision.

It became possible, therefore, for the final decision on remand to be based on evidence submitted well after the evidentiary record should have closed, on evidence that related to a period of time after the date of the hearing decision that was reviewed, or even on evidence of a physical or mental impairment that did not begin until after the date of the hearing decision that was reviewed. This openended approach is administratively very inefficient, as we often are reviewing ALJ decisions based on evidence not presented to the ALJ.

The approach we are proposing in this rule would modify that process. We believe that the first ALJ hearing decision on a claim for benefits, regardless of whether that decision becomes our final decision, generally must close both the evidentiary record (as discussed above) and the period of time within which the claimant must establish entitlement to the benefits sought. Therefore, we propose in these rules that throughout any appeal to the Review Board, and during any subsequent administrative proceedings on remand from the Review Board or a Federal court, the proceedings will consider only the claimant's eligibility for benefits on or before the date of that first ALJ hearing decision on the claim for benefits.

We believe this proposed closing of the record will not unduly disadvantage claimants. Consistent with existing policy, claimants applying for disability benefits who experience a worsening of condition or new impairments during the intervening time between the ALJ decision and the Review Board's decisionor while the case is pending on remandmay file a new claim for benefits. The average processing time for initial determinations by State agencies is currently faster than the average processing time for Appeals Council review, particularly when cases are remanded. If these proposed rules become final, we plan to modify the notices we send to claimants when their cases are denied or remanded to ensure that claimants are aware that they can file new applications. We welcome comments from the public about how we can best ensure that claimants understand their right to file new applications while prior applications are pending review.

The changes we are proposing are consistent with the governing statute. Specifically, sections 202(j) and 223(b) of the Act provide that an individual's claim for benefits may be allowed only if the claimant satisfies the requirements for ``before a decision based upon the evidence adduced at the hearing is made (regardless of whether such decision becomes the final decision of the Commissioner of Social Security).'' This proposed approach would be consistent with the role we envision for the Review Board, which would be to review a decision that has already been made, based on a record that has already been developed, for the precise period of time considered by the ALJ who made the decision that is being reviewed.

Removal of Special Provision for Cases Remanded by a Court

Our current rules (Sec. Sec. 404.984 and 416.1484) contain a separate process for further administrative review of hearing decisions made after a remand by a Federal court. Under those rules, when a Federal court has remanded a case to the Commissioner for further proceedings, and the Appeals Council in turn has remanded the case to an ALJ, the ALJ's decision on remand becomes the final decision of the Commissioner unless, within 30 days of the date the claimant receives notice of the decision, the claimant files written exceptions asking the Appeals Council to review the ALJ's decision or, within 60 days of the date of the ALJ's decision, the Appeals Council notifies the claimant that it has taken jurisdiction of the case. That procedure replaced earlier procedures which generally required ALJs to issue recommended decisions in all court remands, even when the ALJ's decision on remand was favorable to the claimant. Our intent when we adopted the current process in 1989 was primarily to eliminate the requirement that ALJs issue recommended decisions
[[Page 61223]]
and thus permit favorable ALJ decisions on remand to be effectuated more quickly.

In the interests of administrative efficiency, we believe it is better to have one uniform appeal process for all of our cases. As discussed earlier, we are proposing to eliminate the option for ALJs to issue recommended decisions, except on remand by direction of the Review Board. Therefore, the rationale for our current special procedure for cases remanded by a Federal court no longer applies in cases where the ALJ's decision is favorable to the claimant. Those favorable decisions would be effectuated promptly under our proposed procedures, without the need for action by the Review Board. However, cases where the ALJ's decision on remand is unfavorable and the claimant continues to disagree are ones we believe the Review Board should see before the case goes back to court. We believe it is important to ensure that our policies have been applied consistently and that the problems identified by the court have been addressed before the case returns to Federal court. Therefore, we propose to remove Sec. Sec. 404.984 and 416.1484, and instead channel any further review of these hearing decisions through the Review Board appeal process described above.

Advisory Function for Review Board

The Review Board's primary function will be to adjudicate the cases that come before it pursuant to an appeal by the claimant or when the Review Board selects the case for review on its own initiative under the procedure described in proposed Sec. Sec. 404.970 and 416.1470. We anticipate that the Review Board's work also will provide its members with a unique and valuable perspective on the issues, policies, or procedures that may tend to impede the efficient and consistent adjudication of cases at all levels of our administrative adjudicative process. Therefore, we propose as an additional function of the Review Board that it may from time to time make recommendations for changes in policy or procedure that it believes may improve the efficiency and consistency of our adjudicative process. We do not intend to establish a specific process for this advisory function in the regulations themselves, as we believe the structure for such internal deliberations must be kept as flexible as possible. We currently anticipate that the Review Board would make such recommendations through the Deputy Commissioner for Disability Adjudication and Review or her designee, and would consider in its recommendations any anecdotal case experiences and any relevant statistical information that is available to the Review Board. However, we would welcome any suggestions as to how this advisory function might best be implemented.

Comparison of Current and Proposed Policy

The table below summarizes the changes we are proposing to make to the hearings and appeals provisions discussed above. In the table, we first summarize the current process and then describe the proposed process.
Current policy
Topic (outside the Boston Proposed policy region)
Three Levels of Disability 1. Reconsideration 1. Reconsideration Appeals. (except in (unchanged). prototype states 2. ALJ hearing where no Notify claimant at reconsideration). least 75 days prior 2. ALJ Hearing to hearing. ``Time Notify claimant at and place'' least 20 days prior objections no later to hearing. than 30 days after Claimant makes any receipt of notice. ``time, place or ``Issues'' issue'' objections objections at least ``at the earliest 5 days before possible hearing. opportunity''. 3. Review Board. 3. Appeals Council..
Requesting an ALJ Hearing... Request must be in Request must be in writing and should writing and should include the name, include claimant's SSN of the wage name and SSN, the earner; the reasons name and SSN of the you disagree with wage earner if the the previous case concerns determination or benefits under decision; a another person's statement of account, the additional evidence specific reasons to be submitted and you disagree with the date it will be the reconsidered submitted; and the determination, name and address of description of any designated impairment (if representative. disability), any The request must be available evidence, filed within 60 name and address of days after the date representative, if claimant receives any.
notice of the The request must be previous filed within 60 determination or days after the date decision. The time claimant receives can be extended. notice of the Good cause applies.. reconsidered The ALJ may decide determination. The case without an time can be oral hearing if extended. Good claimant waives cause applies. right to appear.. The ALJ may decide case without an oral hearing if claimant waives right to appear. Submitting Evidence......... ALJ accepts evidence ALJ will accept up to and including evidence submitted day of hearing. ALJ at least 5 business may choose at days before the hearing to hold hearing. ALJ will record open for a accept evidence defined time period submitted within if claimant advises the 5 business days additional material before the hearing evidence if there is good forthcoming. ALJ cause for late may hold submission. ALJ supplemental will accept hearing or take evidence submitted other action. after the hearing In proceedings on but before the remand from the hearing decision is Appeals Council or issued if there is a Federal court, good cause for late ALJ accepts submission and evidence relating there is a to period following reasonable first ALJ decision.. possibility that Appeals Council the evidence would accepts new and affect the outcome material evidence of the case. ALJ relating to the may choose at period on or before hearing to hold the date of the ALJ record open for a hearing decision.. defined time period if claimant advises additional material evidence forthcoming. ALJ may hold supplemental hearing or take other action. In proceedings on remand from the Review Board or a Federal court, ALJ will not accept evidence relating to period following first ALJ decision. Review Board will accept evidence only if it relates to the period on or before the date of the first ALJ decision, there is a reasonable probability that the evidence would change the outcome of the case, and there is good cause for late submission. [[Page 61224]]
Prehearing Statements and Claimant can submit Claimant can submit, Conferences. a written summary or ALJ can request of the case or that claimant written statements submit, a about the facts and prehearing law material to the statement case. describing why the ALJ can decide on claimant disagrees his or her own, or with the at the request of reconsidered any party, to hold determination. a prehearing Statement should conference. The ALJ discuss briefly generally must tell issues involved in the parties of the the proceeding, time, place, and facts, witnesses, purpose of the the evidentiary and conference at least legal basis upon 7 days in advance. which claimant There is no believes the ALJ sanction if the should decide the claimant/ case in claimant's representative does favor, and any not appear. Current other comments, regulation is suggestions, or silent as to information that whether the might assist the conference is held ALJ in preparing in person or by for the hearing. telephone. A record ALJ can decide on of the conference his or her own, or is made.. at the claimant's request, to conduct a prehearing conference if the ALJ finds that a conference would facilitate the hearing or the decision. The ALJ will give claimant reasonable notice of the time, place, and manner of the conference. If neither claimant nor representative appears, hearing might be dismissed. Good cause applies. The conference will normally be held by telephone. The ALJ will summarize in writing, or on the record at the hearing, the actions taken or to be taken as a result of the conference. Appearance at Hearing....... ALJ determines ALJ determines whether claimant whether claimant or and any other any other witness witness will appear will appear in in person or by person, by VCT, or video by telephone. ALJ teleconference will only direct (VCT). Claimant can claimant to appear object to time or by telephone if place of the claimant's hearing. Objection appearance in must be made at the person is not earliest possible possible (e.g., opportunity before claimant is the hearing. ALJ incarcerated and will change time or facility will not place of hearing if allow a hearing at there is good cause the facility) and to do so. If VCT is not claimant objects to available. Claimant appearing by VCT, can object to time ALJ will reschedule or place of the hearing for in hearing. Objection person appearance. must be in writing and made no later than 30 days after receipt of notice of hearing. ALJ will consider claimant's reasons for requesting change and the impact of the proposed change on the efficient administration of the hearing process. If claimant objects to appearing by VCT, ALJ will reschedule hearing for in person appearance. If claimant objects to another witness appearing by VCT or telephone, ALJ will decide whether to have that person appear in person, by VCT, or by telephone. Posthearing Conferences..... ALJ can decide on ALJ can decide on his or her own, or his or her own, or at the request of at the claimant's any party, to hold request, to hold a a posthearing posthearing conference. The ALJ conference to generally must tell facilitate the the parties of the hearing decision. time, place, and The ALJ will give purpose of the claimant reasonable conference at least notice of the time, 7 days in advance. place, and manner Current regulation of the conference. is silent as to If neither claimant whether the nor representative conference is held appears and there in person or by is no good cause telephone. A record for failure to of the conference appear, ALJ will is made. decide on record. The ALJ Decision............ The ALJ must issue a ALJ must issue a written decision written decision which gives the that explains in findings of fact clear and and the reason for understandable the decision; made language the reason part of the record. for decision; made Exception is oral part of record. (bench) fully Exception is oral favorable decision (bench) fully issued at the favorable decision hearing; claimant issued at hearing; receives a notice claimant receives a incorporating the notice oral decision. incorporating the Notice advises oral decision. claimant can appeal Notice advises to Appeals Council. claimant can appeal to Review Board. Appeal to Review Board...... Appeals Council can Review Board must deny claimant's consider and issue request that it a decision in any review the ALJ's case that is decision. appealed to it Appeals Council timely. applies Review Board will ``substantial use ``substantial evidence'' test to evidence'' test, ALJ fact finding; consider any considers any question of law as question of law as if it were if it were considering it for considering it for the first time, the first time; apply ``harmless applies ``abuse of error'' test; discretion'' test applies ``abuse of to ALJ exercise of discretion'' test discretion.. to ALJ exercise of Claimant may submit discretion. ``new and material Additional evidence evidence'' which requirements relates to the similar to those at period on or before hearing level, with the date of ALJ the added decision. The AC requirement that will consider the evidence will be entire record accepted only if including any new the Review Board and material determines that evidence related to there is a the period on or reasonable before the date of probability that ALJ decision and the new evidence, will review the alone or in case if ALJ's consideration with action, findings, other evidence of or conclusion is record, would contrary to the change the outcome ``weight of the of the decision. evidence.''. Review Board can:

Transitional Rules

Our goal is to move as many cases to these new procedures as quickly as possible. Therefore, if we adopt these proposed rules, we plan to follow them with regard to any (1) cases for which a request for an ALJ hearing is made on or after the effective date of the final rules and (2) further review of ALJ hearing decisions or dismissals on or after the effective date of the final rules. On the effective date of the final rules, we also plan to transfer to the Review Board any cases then pending before the Decision Review Board or the Appeals Council, and to treat any pending request for review by the Appeals Council as a notice of appeal to the Review Board.

We recognize, however, that on the date the final rules become effective there will be pending cases in which the first ALJ decision on the claim had been issued prior to the effective date of these rules, perhaps even several years prior to the date the new rules take effect. We believe it would be unfair to those claimants if we were to apply strictly the new provision in these proposed rules that limits the period of time covered by the claim to the date of the first ALJ decision.

Therefore, for cases pending on the effective date of the final rules in which the first decision by an ALJ on the claim was issued prior to the effective date of the final rules, we propose to apply the new provision on limiting the period of time covered by the application for benefits in a different manner. For such cases, we will use the date of the first hearing or Review Board decision on the claim that is issued on or after the effective date of the final rules as the date by which entitlement must be established. For those cases, during the period between the effective date of the final rules and the date of the first hearing decision or dismissal or Review Board decision issued thereafter, we propose to apply the rest of these proposed rules to the extent practicable, but will accord the claimant the benefit of the prior procedures where necessary to avoid disadvantaging the claimant or any other party. For example, if the claimant has new evidence to submit that would not be admitted under the new rules we are proposing here, but would have been admissible under the rules previously in effect, we will accord the claimant the benefit of those earlier rules and accept the evidence.

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 proposed rules, we invite your comments on how to make them easier to understand. For example:

When Will We Start To Use These Rules?

We will not use these rules until we evaluate the public comments we receive on them, determine whether they should be issued as final rules, and issue final rules in the Federal Register. If we publish final rules, we will explain in the preamble how we will apply them, and summarize and respond to the public comments. Until the effective date of any final rules, we will continue to use our current rules. Regulatory Procedures

Executive Order 12866, as Amended

We have consulted with the Office of Management and Budget (OMB) and determined that this proposed rule is subject to OMB review because it meets the criteria for an economically significant regulatory action under Executive Order 12866, as amended. The Office of the Chief Actuary estimates that this proposed rule, if finalized, would reduce the program costs of the Old Age, Survivors, and Disability Insurance (OASDI) and the SSI programs by $1.5 billion. That Office estimates that there would be a small increase in program costs in the first year, followed by savings that increase at first but then begin to decrease in 2013. Specifically, that Office estimates that program costs would be reduced by the following amounts ($ in millions) if this proposed rule were adopted in a final rule.
Table 1.Estimated Effect on OASDI and Federal SSI Benefit Payments of a Proposed Regulation Making Amendments to the Administrative Law Judge, Appeals Council,

FOR FURTHER INFORMATION CONTACT

Brent Hillman, Social Security Administration, 5107 Leesburg Pike, Falls Church, VA 220413260, (703) 6058280 for information about this notice. For information on eligibility or filing for benefits, call our national tollfree number, 18007721213 or TTY 18003250778, or visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.