Hearings Held by Administrative Appeals Judges of the Appeals Council

Cited as:85 FR 73138
Court:Social Security Administration
Publication Date:16 Nov 2020
Record Number:2020-23856
Federal Register, Volume 85 Issue 221 (Monday, November 16, 2020)
[Federal Register Volume 85, Number 221 (Monday, November 16, 2020)]
                [Rules and Regulations]
                [Pages 73138-73162]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-23856]
                [[Page 73137]]
                Vol. 85
                Monday,
                No. 221
                November 16, 2020
                Part II
                 Social Security Administration
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                20 CFR Parts 404, 408, 411, et al.
                Hearings Held by Administrative Appeals Judges of the Appeals Council;
                Final Rule
                Federal Register / Vol. 85 , No. 221 / Monday, November 16, 2020 /
                Rules and Regulations
                [[Page 73138]]
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                SOCIAL SECURITY ADMINISTRATION
                20 CFR Parts 404, 408, 411, 416, and 422
                [Docket No. SSA-2017-0073]
                RIN 0960-AI25
                Hearings Held by Administrative Appeals Judges of the Appeals
                Council
                AGENCY: Social Security Administration.
                ACTION: Final rule.
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                SUMMARY: We are revising our rules to clarify when and how
                administrative appeals judges (AAJ) on our Appeals Council may hold
                hearings and issue decisions. The Appeals Council already has the
                authority to hold hearings and issue decisions under our existing
                regulations, but we have not exercised this authority or explained the
                circumstances under which it would be appropriate for the Appeals
                Council to assume responsibility for holding a hearing and issuing a
                decision. This final rule will ensure the Appeals Council is not
                limited in the type of claims for which it may hold hearings. We expect
                that this rule will increase our adjudicative capacity when needed, and
                allow us to adjust more quickly to fluctuating short-term workloads,
                such as when an influx of cases reaches the hearing level. Our ability
                to use our limited resources more effectively will help us quickly
                optimize our hearings capacity, which in turn will allow us to issue
                accurate, timely, high-quality decisions.
                DATES: This final rule will be effective December 16, 2020.
                FOR FURTHER INFORMATION CONTACT: Debra Sundberg, Office of Appellate
                Operations, Social Security Administration, 5107 Leesburg Pike, Falls
                Church, VA 22041, (703) 605-7100. 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: On December 20, 2019, we published a Notice
                of Proposed Rulemaking (NPRM), ``Hearings Held by Administrative
                Appeals Judges of the Appeals Council.'' \1\ In our NPRM, we proposed
                to clarify that an AAJ from our Appeals Council may hold a hearing and
                issue a decision on any case pending at the hearings level under titles
                II, VIII, or XVI of the Social Security Act (Act). With this final
                rule, we adopt the proposed changes, with some exceptions.
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                 \1\ 84 FR 70080 (Dec. 20, 2019).
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                 The final rule differs from our proposed rule in the following
                ways:
                 We are not making the proposed changes to Sec. 402.60
                because we are considering the possibility of reorganizing sections
                within 20 CFR part 402. We will consider revisions to Sec. 402.60 as
                part of that reorganization.
                 We revised Sec. Sec. 404.929, 416.1429, 404.976, and
                416.1476 to conform to the current CFR text, which we recently revised
                as part of our final rule, ``Setting the Manner for the Appearance of
                Parties and Witnesses at a Hearing,'' published on December 18,
                2019.\2\
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                 \2\ 84 FR 69298 (Dec. 18, 2019).
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                 We removed proposed paragraph (d) from Sec. Sec. 404.970
                and 416.1470 in response to the public comments we received, which we
                discuss in more detail below. We also removed the corresponding
                language in proposed paragraph (a) of the same sections.
                 We revised Sec. Sec. 404.973 and 416.1473 in response to
                the public comments we received, to clarify that prior notice is not
                needed where the Appeals Council issues a decision that is favorable in
                part, and remands the remaining issues for further proceedings. We
                discuss this in more detail in the response to the public comments
                below.
                 We revised Sec. Sec. 404.976(b) and 416.1476(b) to
                clarify that if we file a certified administrative record in Federal
                court, we will include all additional evidence the Appeals Council
                received during the administrative review process, including additional
                evidence that the Appeals Council received but did not exhibit or make
                part of the official record.
                 We revised Sec. Sec. 404.983 and 416.1483 in response to
                public comments to clarify when the Appeals Council will hold a hearing
                after court remand. In these sections, we revised paragraph (b) to
                pertain only to circumstances when the Appeals Council will issue a
                decision without holding a hearing after a court remand, and we
                inserted a new paragraph (c) to clarify when the Appeals Council will
                hold a hearing after court remand. As such, we redesignated the prior
                paragraphs (c) and (d) as paragraphs (d) and (e), respectively.
                 We revised Sec. Sec. 404.984 and 416.1484 to clarify that
                the Appeals Council may assume jurisdiction of a case after an
                administrative law judge (ALJ) or administrative appeals judge (AAJ)
                issues a hearing decision in a case remanded by Federal court. We also
                revised Sec. Sec. 404.984 and 416.1484 to clarify that the Appeals
                Council will not dismiss the request for a hearing in a claim where we
                are otherwise required by law or a judicial order to file the
                Commissioner's additional and modified findings of fact and decision
                with a court.
                 We revised Sec. 422.205(a) to clarify that AAJs issue
                hearing level decisions and dismissals.
                 We received 275 comments on the NPRM, 204 of which related to the
                proposed rule and are available for public viewing at http://www.regulations.gov. \3\ These comments were from:
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                 \3\ We excluded two comments from employees of the Social
                Security Administration who submitted the comments in their capacity
                as agency employees. The other comments we excluded were out of
                scope or nonresponsive to the proposal.
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                 Individual citizens and claimant representatives;
                 Members of Congress;
                 National groups representing claimant representatives,
                such as the National Organization of Social Security Claimants'
                Representatives;
                 Groups representing administrative law judges (ALJ), such
                as the Forum of United States Administrative Law Judges and the
                Association of Administrative Law Judges; and
                 Advocacy groups, such as the Consortium for Citizens with
                Disabilities and the Disability Law Center.
                 We carefully considered these comments. We discuss and respond to
                the significant issues raised by the commenters that were within the
                scope of the NPRM below.
                Comments and Responses
                Change Is Overdue and the Proposed Rule Would Allow Us To Use Our
                Resources Better
                 Comment: One commenter, who supported the proposal, said this
                change is overdue, and will ensure shorter wait times and due process
                for claimants. Another commenter said the proposed rule would allow us
                to use resources better.
                 Response: We acknowledge the commenters' support for our rule. The
                goal of this final rule is to use our available resources in the best
                possible way.
                The Administrative Procedure Act (APA) and the Use of ALJs To Hear and
                Decide Cases
                 Comment: Several commenters said that Congress passed the APA in
                part to ensure that the public had a right to a
                [[Page 73139]]
                neutral and impartial arbiter of facts to adjudicate appeals of agency
                decisions. One commenter said that our proposed rule would upend our
                longstanding consistency with the APA's requirements, and would deviate
                from our past practices and Congressional intent. One commenter
                referred to sections of the APA that state that ``in every case of
                adjudication required by statute to be determined on the record after
                opportunity for an agency hearing,'' \4\ the agency, one or more
                members of the body that comprises the agency, or an ALJ, must
                ``preside at the taking of evidence.'' \5\ The commenter opined that
                SSA disability cases are adjudications required by the Act to be
                determined on the record and that the statute mandates that ``if a
                hearing is held, [the Commissioner] shall, on the basis of evidence
                adduced at the hearing, affirm, modify, or reverse the Commissioner's
                findings of fact and such decision.'' \6\ According to the commenter,
                the statute's mandate triggers application of the APA and this is
                consistent with the APA's definition of ``adjudication,'' which,
                according to the commenter, was intended to include proceedings such as
                ``claims under Title II (Old Age and Survivors' Insurance) of the
                Act.'' \7\
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                 \4\ 5 U.S.C. 554(a).
                 \5\ 5 U.S.C 556(b)(1)-(3).
                 \6\ Sections 205(b) and Sec. 1631(c)(1)(A) of the Act (42
                U.S.C. 405(b)(1) and 42 U.S.C. 1383(c)(1)(A)).
                 \7\ The commenter cited the ``Attorney General's Manual on the
                Administrative Procedure Act'' 15 (1947), a law review article,
                Kenneth Culp Davis, Separation of Functions in Administrative
                Agencies, 61 Harv. L. Rev. 612, 636 (1948), and our statement when
                responding to public comment on hearing procedures under title XVI,
                39 FR 37976 (Oct. 25, 1974).
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                 Some commenters acknowledged that Congress has never explicitly
                included the requirement to use ALJs in the Act, but said that it has
                made clear in legislative history that our hearing process is covered
                by the provisions of the APA.\8\ One commenter cited a statement from
                Congress when it enacted the statute that converted SSA hearing
                examiners into ALJs under the APA pursuant to 5 U.S.C. 3105 as evidence
                that Congress intended that we use ALJs.\9\ Similarly, a commenter
                asserted that because our procedures are nearly identical to those
                specified by the APA, it is clear that we observe the APA's procedural
                and due process protections, which includes requiring ALJs to preside
                over hearings. According to a commenter, the APA and Act are so similar
                that the Supreme Court noted that it did not have to distinguish
                between the two laws because ``social security administrative procedure
                does not vary from that prescribed by the APA.'' \10\ Additionally,
                commenters stated that Congress has ``understood that hearings under
                the Social Security Act would [continue to] be presided over by APA-
                qualified hearing examiners.'' \11\
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                 \8\ The commenter quoted material from Robin J. Arzt,
                Adjudications by Administrative Law Judges Pursuant to the Social
                Security Act are Adjudications Pursuant to the Administrative
                Procedure Act, 22 J. Nat'l Ass'n Admin. L. Judges (2002), available
                at: http://digitalcommons.pepperdine.edu/naalj/vol22/iss2/1.).
                 \9\ See Social Security Amendments of 1977, Pub. L. 95-216, 91
                Stat. 1509 (1977); 5 U.S.C. 3105 (2000); and H.R. Rep. No. 95-617,
                pt. 2, at 2 (1977).
                 \10\ See Richardson v. Perales, 402 U.S. 389, 409 (1971).
                 \11\ Paul R. Verkuil, Daniel J. Gifford, Charles H. Koch, Jr.,
                Richard J. Pierce, Jr., and Jeffrey S. Lubbers, Report for
                Recommendation 92-7: The Federal Administrative Judiciary, 1992
                Administrative Conference of the United States (ACUS) 769, 820
                (1992) (1992 ACUS Report).
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                 According to one commenter, the APA requires the use of ALJs as
                presiding officers in administrative appeals in virtually all
                circumstances, the exceptions to which do not apply in the Social
                Security context.
                 One commenter referred us to a publication that the commenter said
                discussed applicable law that invalidates our NPRM.\12\
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                 \12\ Arzt, supra, n.8.
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                 Response: We disagree with these comments. Congress established our
                administrative hearings process through the Social Security Act
                Amendments of 1939.\13\ The original version of section 205(b)(1) of
                the Act stated:
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                 \13\ Social Security Act Amendments of 1939, ch. 666, section
                201, 53 Stat. 1360, 1362-1369 (1939).
                 The [Social Security] Board is directed to make findings of
                fact, and decisions as to the rights of any individual applying for
                a payment under this title. Whenever requested by such individual .
                . . who makes a showing in writing that his or her rights may be
                prejudiced by any decision the Board has rendered, it shall give
                such applicant . . . reasonable notice and opportunity for a hearing
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                with respect to such decision. . . .
                 These broad provisions, though slightly modified over the years,
                generally have remained substantively unchanged since their
                enactment.\14\ Therefore, it has been clear that the head of our
                agency, initially, the Social Security Board, and currently, the
                Commissioner, has had the discretion to decide how our hearings process
                is structured and who may preside over a hearing.\15\ From the
                beginning of our hearings process, the head of our agency has delegated
                to the Appeals Council the authority to conduct hearings and issue
                decisions.\16\ Indeed, giving the Appeals Council the authority to hold
                hearings was part of our original vision for our hearings process,
                predating and forming the basis for the 1940 regulations that
                authorized the Appeals Council to hold hearings.\17\
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                 \14\ See Heckler v. Day, 467 U.S. 104, 125 (1984) (Marshall, J.,
                dissenting). Title XVI of the Act contains substantially the same
                language as section 205(b)(1). See section 1631(c)(1)(A) of the Act.
                 \15\ See also section 702(a)(4)-(a)(7) of the Act.
                 \16\ 5 FR 4169, 4172 (Oct. 22, 1940) (codified at 20 CFR
                403.709(d) (1940 Supp.)). The original regulation governing this
                issue stated that, ``The hearing provided for in this section shall
                be, except as herein provided, conducted by a referee designated by
                the Chairman of the Appeals Council. The Chairman may designate a
                member of the Appeals Council to conduct a hearing. The Territorial
                Director of the Social Security Board may conduct hearings in the
                Territories of Alaska and Hawaii. The provisions of this section
                governing the referee shall be applicable to a member of the Appeals
                Council or a Territorial Director in conducting a hearing.''
                 \17\ Basic Provisions Adopted by the Social Security Board for
                the Hearing and Review of Old-Age and Survivors Insurance Claims 39
                (Jan. 1940) (Basic Provisions). The Basic Provisions are reprinted
                in Administrative Procedure in Government Agencies: Monograph of the
                Attorney General's Committee on Administrative Procedure, Part 3
                (Social Security Board), S. Doc. No. 77-10, 33-59 (1940).
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                 Six years after the commencement of our administrative hearings
                process, and the commencement of the Appeals Council's delegated
                authority to conduct hearings and issue decisions, Congress enacted the
                APA.\18\ The APA's formal adjudication procedures apply, with limited
                exceptions, ``in every case of adjudication required by statute to be
                determined on the record after opportunity for an agency hearing.''
                \19\ Significantly, neither the text nor the legislative history of the
                Act explicitly defines what constitutes a ``hearing'' under the Act,
                and nothing in the statute or its legislative history requires us to
                hold hearings ``on the record.'' While it is true that Congress modeled
                many of the hearing procedures in the APA on the Act,\20\ there are
                significant differences between an informal, non-adversarial Social
                Security hearing and the type of formal, adversarial adjudication to
                which the APA applies.
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                 \18\ By its own terms, the APA does not repeal delegations of
                authority as provided by law. Public Law 79-404, section 2, 60 Stat.
                237 (1946).
                 \19\ 5 U.S.C. 554(a).
                 \20\ Richardson v. Perales, 402 U.S. at 409.
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                 This view of our hearings process as distinct from the type of
                hearings process to which the APA applies is consistent with the
                legislative history of the APA, as well as the legislative history of
                the Act. The legislative history of both statutes highlights the
                differences between formal, adversarial adjudications by regulatory
                agencies and informal, non-adversarial proceedings by agencies that
                administer
                [[Page 73140]]
                certain Federal benefit programs.\21\ Most notably, under our
                ``inquisitorial'' hearings process, an ALJ fulfills a role that
                requires him or her to act as a neutral decisionmaker and to develop
                facts for and against a benefit claim. The ALJ's multiple roles
                involve, in essence, wearing ``three hats'': helping the claimant
                develop facts and evidence; helping the government investigate the
                claim; and issuing an independent decision. The APA, on the other hand,
                specifies that ``An employee or agent engaged in the performance of
                investigative or prosecuting functions for an agency in a case may not,
                in that or a factually related case, participate or advise in the
                decision . . . . '' \22\ The APA, therefore, embodies an internal
                ``separation-of-functions'' in agency adjudications that are subject to
                that statute. Indeed, ensuring such an internal separation-of-functions
                was one of the APA's fundamental purposes.\23\ The internal separation-
                of-functions required in formal adjudications under the APA is
                inconsistent with the concept of the ``three-hat'' role of an
                adjudicator in a Social Security hearing, which by its very nature, is
                an investigatory function.\24\ Thus, contrary to the restrictions noted
                in the APA, the SSA adjudicator both performs an investigative function
                for SSA and participates in the decision.
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                 \21\ The legislative history of the Social Security Act
                Amendments of 1939 states that, ``Administrative and judicial review
                provisions not now provided in the Social Security Act are included,
                and administrative provisions are included which are similar to
                those under which the Veterans' Administration operates. . . .
                Section 205(b) outlines the general functions of the Board in
                determining rights to benefits. It requires the Board to offer
                opportunity for a hearing, upon request, to an individual whose
                rights are prejudiced by any decision of the Board.'' H.R. Rep. No.
                728, 76th Cong., 1st Sess. 42 (1939); S. Rep. No. 734, 76th Cong.,
                1st Sess. 51 (1939). The legislative history of section 205(b) of
                the Act therefore links the provisions that Congress contemplated
                for our administrative review process with the process used by the
                Veterans' Administration (now the Department of Veterans Affairs),
                another benefit-granting agency. This linkage to the Department of
                Veterans Affairs procedures is significant, because ``[t]he
                prevailing pre-World War II view was that benefits decisionmaking
                was significantly different from regulatory decisionmaking.'' 1992
                ACUS Report, at 815. The Final Report of Attorney General's
                Committee on Administrative Procedure, on which Congress relied when
                it enacted the APA, also highlights the distinction between the
                regulatory agencies and the benefit granting agencies. S. Doc. No.
                77-8, at 55, 69, 263 (1941). ``When the Attorney General's Committee
                recommended the creation of the office of independent hearing
                examiner, it was focusing on the operation of regulatory agencies.
                Benefit adjudication was not a matter of primary concern to the
                Committee, and there is ground for the belief that the Committee
                viewed benefit adjudication very differently from regulatory
                adjudication.'' 1992 ACUS Report, at 825.
                 \22\ 5 U.S.C. 554(d). The APA, 5 U.S.C. 554(d)(2), also provides
                that the ``employee who presides at the reception of evidence'' may
                not ``be responsible to or subject to the supervision or direction
                of an employee or agent engaged in the performance of investigative
                or prosecuting functions for an agency.''
                 \23\ Wong Yang Sung v. McGrath, 339 U.S. 33, 41 (1950).
                 \24\ See, e.g., 1992 ACUS Report, at 792 n.53 (``Obviously, had
                the formal hearing requirements of the APA been mandatory, the
                separation-of-functions requirements would have forbidden the ALJ to
                assume total control of the process.''); Gary J. Edles, An APA-
                Default Presumption for Administrative Hearings: Some Thoughts on
                ``Ossifying'' the Adjudication Process, 55 Admin. L. Rev. 787, 809-
                10 (2003) (``[D]isability cases under the Social Security Act--the
                largest adjudicatory regime to use ALJs as presiding officers--are
                arguably not even governed by the APA . . . . Historically, the
                Social Security Administration decided to use administrative law
                judges even though it was not required to do so by any `on-the-
                record' hearing requirement . . . . Moreover, Social Security cases
                are non-adversarial, the government is not typically represented
                and, more like the inquisitorial model, the presiding administrative
                law judge has an affirmative obligation to develop the record even
                if counsel represents the claimant. Social Security cases have been
                described as `the best example' of agency adjudication not based on
                a judicial model. Although Social Security cases are, in numbers at
                least, the predominant form of ALJ hearing today, they are plainly
                not the prototypical regulatory hearing of the mid-1940s or the
                accusatory-style proceeding likely to lead to a finding of
                culpability or imposition of severe economic sanction whose
                procedural uniformity appears to be the predicate for an APA-default
                provision.''); Bernard Schwartz, Adjudication and the Administrative
                Procedure Act, 32 Tulsa L. J. 203, 209 (1996) (``At first glance,
                this three-hat system may appear to contravene the APA separation-
                of-functions requirements because the Social Security ALJ is not
                limited to hearing and deciding. The ALJ also has the task of
                developing both the claimant's and the government's case.'').
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                 The ALJ's three-hat role is consistent with the prevailing view of
                benefit decision making at the time Congress enacted the APA in 1946.
                When Congress was considering whether and how to reform the Federal
                administrative process between the mid-1930s and 1946, it had the
                benefit of a number of studies on the issue, including the Final Report
                of Attorney General's Committee on Administrative Procedure and a
                series of monographs that the Attorney General's Committee prepared on
                numerous Federal agencies, including the Veterans Administration and
                the Social Security Board. The Final Report of the Attorney General's
                Committee recognized a dichotomy between ``regulatory'' decision making
                and ``benefits'' decision making.\25\ ``It did so on the ground that
                hearings conducted by these agencies merely augmented ex parte
                investigations which the agencies conducted on the claims before them.
                This subordinate role played by hearings in the benefit-granting
                agencies made the Committee's general analysis of agency adjudication-
                including its careful review of separations-of-functions issues-
                inapplicable to the benefit agencies.'' \26\
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                 \25\ ``Final Report of Attorney General's Committee on
                Administrative Procedure,'' S. Doc. No. 77-8, at 55, 69, 263 (1941);
                see 1992 ACUS Report, at 815-17.
                 \26\ Daniel J. Gifford, Adjudication in Independent Tribunals:
                The Role of an Alternative Agency Structure, 66 Notre Dame L. Rev.
                965, 987 (1991); see also Daniel J. Gifford, Federal Administrative
                Law Judges: The Relevance of Past Choices to Future Directions, 49
                Admin. L. Rev. 1, 20-21 (1997) (Gifford, Past Choices).
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                 The Supreme Court approved the ``three-hat'' role of our
                adjudicators in Richardson v. Perales, without addressing the APA's
                separation-of-functions requirements.\27\ In Perales, the Court was
                less concerned with the position title of our adjudicators than with
                ensuring that the hearings process worked fairly and efficiently. The
                Court declined to consider whether a Social Security hearing was a
                formal adjudication under the APA because, in the Court's view, our
                hearings process, including the ``three-hat role'' for the adjudicator
                at the hearing, was fair and worked efficiently to process our
                tremendous volume of cases.\28\ The fairness and efficiency of the
                process, however, did not depend on the fact that an ALJ, as opposed to
                another type of adjudicator, presided over the hearing.
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                 \27\ 402 U.S. 389, 410 (1971).
                 \28\ The Perales court relied on statistics showing that the
                agency received ``over 20,000 disability claim hearings annually,''
                402 U.S. at 406; see also id. at 403 n.7 (citing agency statistics
                showing that ``in fiscal 1968, 515,938 disability claims were
                processed.'') Those numbers pale in comparison to our more recent
                workload numbers. In 2019, we received and completed approximately
                2.3 million initial disability claims, received more than 510,000
                hearing requests, and completed more than 793,000 hearings. ``Annual
                Performance Report, Fiscal Years 2019-2021'' at 44, 46 (2020)).
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                 Consequently, in light of the significant differences between our
                informal, inquisitorial hearings process and the type of hearings
                process to which the APA applies, our hearings process is properly
                viewed as comparable to the APA's process, but governed only by the
                requirements of the Act and procedural due process.\29\
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                 \29\ See, e.g., 1992 ACUS Report, at 791-92 (``The Social
                Security Administration had long utilized ALJs even though the APA
                on-the-record hearing requirements may not have required it to do
                so. . . . By the 1970s the number of disability determinations
                skyrocketed with the advent of expanded coverage. It became quickly
                apparent that the number of ALJs making disability determinations
                would far outstrip those making all formal decisions in government.
                The remarkable thing about this expanded use of ALJs was that it
                emerged without APA compulsion because no on-the-record hearing was
                mandated in the disability context.''); Kent Barnett, Against
                Administrative Judges, 49 U.C. Davis L. Rev, 1643, 1664-65 (2016)
                (Barnett, Against Administrative Judges) (``SSA has chosen to use
                ALJs in the absence of any `on the record' language.''); Paul R.
                Verkuil, Reflections Upon the Federal Administrative Judiciary, 39
                UCLA L, Rev. 1341, 1348-49 (1992); Phyllis E. Bernard, Social
                Security and Medicare Adjudications at HHS: Two Approaches to
                Administration Justice in an Ever-Expanding Bureaucracy, 3 Health
                Matrix 339, 353 n.18 (1993) (``SSA decides large numbers of
                disability cases informally--that is outside the formal adjudication
                requirements of the APA--yet it uses ALJs to do so.''); cf., ACUS,
                Equal Employment Opportunity Commission: Evaluating the Status and
                Placement of Adjudicators in the Federal Sector Hearing Program, at
                11-12 (2014)). (https://www.acus.gov/sites/default/files/documents/FINAL%20EEOC%20Final%20Report%20%5B3-31-14%5D.pdf) (discussing SSA's
                use of ALJs and noting that, ``The relevant provision of the Social
                Security Act, however, required only an `opportunity for hearing,'
                not a `hearing on the record.' This language would not ordinarily be
                read to require observance of formal APA adjudication
                procedures.'').
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                [[Page 73141]]
                 We recognize, as some commenters noted, that on two prior
                occasions, Congress explicitly authorized us, on a temporary basis, to
                use non-ALJ adjudicators in our hearings process: first, after Congress
                created the disability program in the 1950s, and again when Congress
                created the Supplemental Security Income (SSI) program in the
                1970s.\30\ One possible explanation for these temporary authorizations
                is that they reflect a congressional belief that, without such
                authorization, the APA would have compelled us to use ALJs in our
                hearings process. The commenters seemed to proceed from that
                assumption. However, an equally plausible explanation for Congress's
                action is a need for expediency: Congress preferred to address the
                service delivery problems that arose after enactment of the disability
                and SSI programs through means that were the least disruptive to our
                existing processes. In this context, ``Congress's temporary
                authorization for non-ALJ adjudication [after enactment of the
                disability program] was merely intended to provide relief to the SSA
                without revising the SSA's decisional format. Under such a view,
                Congress did not consider the larger question of whether Title II
                proceedings were or were not governed by the APA or whether they
                required APA-qualified ALJs as presiding officers.'' \31\
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                 \30\ Public Law 85-766, 72 Stat. 864, 878 (1958); Public Law 86-
                158, 73 Stat. 339, 352 (1959); Public Law 92-603, 86 Stat. 1329,
                1475 (1972). Notably, the legislation that authorized us to use non-
                ALJ adjudicators at the outset of the SSI program may have had an
                unintended effect. At the outset of the SSI program in 1974, as now,
                many claimants who applied for SSI payments under title XVI of the
                Act also applied for benefits under title II of the Act. We needed a
                feasible way to decide these concurrent claims, and using a
                different adjudicator to decide each claim would not have been
                supportable because concurrent claims usually involve common issues.
                Congress subsequently enacted legislation to address the issue. See
                Public Law 94-202, 89 Stat. 1135 (1976); H.R. Rep. No. 679, 94th
                Cong., 1st Sess. 3 (1975); S. Rep. No. 550, 94th Cong., 1st Sess. 3-
                4 (1975), reprinted in 1975 U.S.C.C.A.N. 2347, 2349-2350 (1975);
                Public Law 95-216, 371, 91 Stat. 1509, 1559 (1977); H.R. Conf. Rep.
                No. 837, 95th Cong., 1st Sess. 74 (1977), reprinted in 1977
                U.S.C.C.A.N. 4308, 4320. The first law, Public Law 94-202, made the
                requirements for hearings held under title XVI of the Act consistent
                with those held under title II, and provided that the hearing
                examiners who had been hired under the original version of the SSI
                statute would be considered ALJs on a temporary basis. The second
                law, Public Law 95-216, made these adjudicators ALJs on a permanent
                basis.
                 \31\ 1992 ACUS Report, at 820-21; see also Gifford, Past
                Choices, at 26, n.139.
                ---------------------------------------------------------------------------
                 We also disagree with those commenters who expressed possible due
                process concerns. It is important to note that there is no due process
                violation inherent in a hearing system that relies on adjudicators
                other than ALJs. Indeed, adjudicators other than ALJs significantly
                outnumber ALJs, and they preside over hundreds of thousands of
                adjudications in the Federal government each year, including many, such
                as those conducted by the Department of Veterans Affairs, that involve
                issues similar to the ones that our adjudicators are required to
                decide.\32\ With respect to the issue of who may be a decisionmaker in
                an adjudicatory proceeding, the fundamental requirement of due process
                is that the decisionmaker be fair and impartial.\33\
                ---------------------------------------------------------------------------
                 \32\ See Kent H. Barnett, Some Kind of Hearing Officer, 94 Wash.
                L. Rev. 515, 541-43 (2019) (recognizing that non-ALJs significantly
                outnumber ALJs in the Federal government, and noting that, as of
                approximately June 2019, there were 1,931 ALJs versus at least
                10,831 non-ALJs in the Federal government); John H. Frye, III,
                Survey of Non-ALJ Hearing Programs in the Federal Government 59-79
                (August 1991) (available at: https://www.acus.gov/sites/default/files/documents/00000001.pdf.)
                 \33\ See, e.g., Schweiker v. McClure, 456 U.S. 188, 195 (1982)
                (noting that, ``due process demands impartiality on the part of
                those who function in judicial or quasi-judicial capacities'' and
                rejecting a due process challenge to the use of non-ALJ hearing
                officers who ``serve[d] in a quasi-judicial capacity, similar in
                many respects to that of administrative law judges'' in certain
                Medicare hearings).
                ---------------------------------------------------------------------------
                 As we explained in the preamble of the NPRM, we will not implement
                these changes in a way that will undermine the independence and
                integrity of our existing administrative review process. We take
                seriously our responsibility to ensure that claimants receive accurate
                decisions from impartial decisionmakers, arrived at through a fair
                process that provides each claimant with the full measure of due
                process protections. Since the beginning of our administrative review
                process in 1940, we have held an unwavering commitment to a full and
                fair hearings process. This final rule will not alter the fundamental
                fairness of our longstanding hearings process. Under our current rules,
                and under sections 404.956(c) and 416.1456(c) of this final rule, our
                AAJs will apply the same rules that our ALJs apply when they hold
                hearings. As they do currently, under the authority prescribed by
                sections 404.979 and 416.1479, AAJs will independently decide cases
                based on the facts in each case and in accordance with agency policy
                set out in regulations, rulings, and other policy statements. They will
                continue to maintain the same responsibility and independence as ALJs
                to make fair and accurate decisions, free from agency interference.
                Because AAJs and ALJs have similar levels of training, will follow the
                same set of policies, and have equivalent decisional independence, we
                anticipate that when AAJs are used at the hearing level, they will
                provide the same level of service and fairness as ALJs do.
                 Comment: A commenter said that the regulations and policies
                currently in place, which we cited as support for our NPRM, have only
                stood because they have not been previously implemented, and thus were
                never challenged. The commenter opined that the two regulations that
                give AAJs the authority to hear cases are in conflict with the APA,
                which requires adjudications on the record to be conducted only by the
                agency, one of the members of the body that comprise the agency, or an
                ALJ appointed under 5 U.S.C. 3105.
                 Response: We disagree. As explained above, in light of the
                significant differences between our hearings process and the type of
                hearings process to which the APA applies, we believe our hearings
                process is properly viewed as comparable to the APA's process, but
                governed only by the requirements of the Act and procedural due
                process. For the reasons discussed above, this final rule is consistent
                with the Act and safeguards the individual's right to procedural due
                process.
                 Comment: A commenter stated that it is only by regulations, not
                statute, that we use the Appeals Council to hear appeals at our agency.
                The commenter opined that if agencies could promulgate regulations and
                make anyone a member of the body that comprises the agency, then
                agencies would never need to use ALJs. The commenter cited the Supreme
                Court's decision in Wong Yang Sung v. McGrath \34\ as demonstrating
                that adjudicators authorized to conduct hearings only by regulation
                must give way to ALJs.
                ---------------------------------------------------------------------------
                 \34\ See Wong Yang Sung v. McGrath, 339 U.S. 33, 50 (1950).
                ---------------------------------------------------------------------------
                 Response: We disagree with this comment. Contrary to the
                commenter's assumption, we are not providing our
                [[Page 73142]]
                AAJs with the authority to hold hearings because we consider them
                members of the body that comprise the agency under the APA. As we
                explained above, from the beginning of our hearings process, the head
                of our agency--initially, the Social Security Board, and currently, the
                Commissioner--has had statutory authority to decide, through
                rulemaking, how to structure our hearings process and who may preside
                over a hearing.\35\ Moreover, from the beginning of our hearings
                process, the head of our agency has delegated to the Appeals Council
                the authority to conduct hearings and issue decisions.
                ---------------------------------------------------------------------------
                 \35\ See sections 205(b)(1), 702(a)(4)-(7), 1631(c)(1)(A) of the
                Act.
                ---------------------------------------------------------------------------
                 We also disagree with the commenter's characterization of the
                Court's decision in Wong Yang Sung. In that case, the Court found that
                the APA's formal adjudication requirements, which apply in every case
                of adjudication ``required by statute'' to be determined on the record
                after opportunity for a hearing, applied to immigration deportation
                hearings that were not required by statute, but by the Constitution and
                procedural due process. The court also held that immigrant inspectors,
                who held deportation hearings pursuant to regulations, did not fall
                within the APA's exception for proceedings conducted by ``officers
                specially provided for by or designated pursuant to statute.'' \36\ As
                previously discussed, our hearings process is required under sections
                205(b)(1) and 1631(c)(1)(A) of the Act. In light of the significant
                differences between our hearings process and the type of hearings
                process to which the APA applies, the proper view of our hearings
                process is that it is comparable to the APA's process, but governed by
                the requirements of the Act and procedural due process. Because our
                hearing process does not fall under the APA's requirements for a formal
                adjudication, there is no basis to consider whether our AAJs would
                qualify as ``officers specially provided for by or designated pursuant
                to statute.'' Consequently, the commenter's reliance on Wong Yang Sung
                is inapposite.
                ---------------------------------------------------------------------------
                 \36\ 339 U.S. at 51-52.
                ---------------------------------------------------------------------------
                 Comment: Several commenters said that our agency has previously
                made statements indicating that we operate under the APA. For example,
                in responding to public comments on hearing procedures under title XVI,
                we said, ``The regulations herewith governing full administrative
                hearing and review are in accordance with the Social Security Act, as
                amended, and Administrative Procedure Act (5 U.S.C. 554, 556, and 557)
                and comply with requirements for administrative due process.'' \37\
                ---------------------------------------------------------------------------
                 \37\ 39 FR 37976 (Oct. 25, 1974).
                ---------------------------------------------------------------------------
                 Response: We disagree with these comments. We recognize that the
                Department of Health, Education, and Welfare (HEW), our parent agency
                in the 1970s, and what was then called the Civil Service Commission
                (CSC) had a dispute over the appointment of ALJs to hear and decide
                claims under the SSI program after Congress enacted the program in
                1972. In that intragovernmental dispute, HEW took the position that an
                SSI hearing was one to which the APA applied; the CSC took the opposite
                position, and contended that it had no authority to appoint ALJs for
                SSI hearings because an SSI hearing was not one to which the APA
                applied.\38\ The Department of Justice agreed with CSC's position, and
                Congress ultimately resolved the dispute.\39\ Regardless of the
                position that HEW took on the issue in the 1970s, however, we have long
                held the view that our hearings process is governed by the requirements
                of the Act and due process, and is not subject to the formal
                adjudication requirements of the APA. As explained above, in light of
                the significant differences between our hearings process and the type
                of hearings process to which the APA applies, we believe our hearings
                process is properly viewed as comparable to the APA's process, but
                governed by the requirements of the Act and procedural due process. For
                the reasons discussed above, this final rule is consistent with the Act
                and safeguards the individual's right to procedural due process.
                ---------------------------------------------------------------------------
                 \38\ See Gifford, Past Choices, at 16-17.
                 \39\ See supra note 30.
                ---------------------------------------------------------------------------
                 Comment: According to a commenter, the recent U.S. Supreme Court
                decision Smith v. Berryhill \40\ confirms that ALJs must conduct our
                hearings. The commenter said that the language of this decision
                indicates that it is not within the agency's discretion to define a
                ``hearing'' or appropriate ``due process.'' The commenter said both are
                reserved for the judicial branch to interpret as a means of further
                protecting the public from agency over-reaching and ensuring the public
                receives the protections of the APA as intended by Congress. Another
                commenter said Smith v. Berryhill held that 42 U.S.C. 405(g) provides
                for judicial review of any final decision made after a hearing before
                an ALJ, not another group of people. Another commenter said SSA is
                ignoring the negative impact this rule change will have on due process
                and increasing the likelihood that claimants will need to appeal
                decisions directly to the Federal district courts based on the recent
                decision of Smith v. Berryhill.
                ---------------------------------------------------------------------------
                 \40\ 139 S. Ct. 1765 (May 28, 2019).
                ---------------------------------------------------------------------------
                 Response: We disagree with these comments. The Supreme Court did
                not decide in Smith the type of adjudicator who may preside over our
                administrative hearings. Rather, Smith concerned the narrow issue of
                ``whether a dismissal by the Appeals Council on timeliness grounds
                after a claimant has received an ALJ hearing on the merits qualifies as
                a `final decision . . . made after a hearing' for purposes of allowing
                judicial review under [section 205(g) of the Act].'' \41\
                ---------------------------------------------------------------------------
                 \41\ Id. at 1771.
                ---------------------------------------------------------------------------
                 The Court held that ``[w]here, . . . a claimant has received a
                claim-ending timeliness determination from the agency's last-in-line
                decisionmaker after bringing his claim past the key procedural post (a
                hearing) mentioned in [section 205(g) of the Act], there has been a
                `final decision . . . made after a hearing under [section 205(g)].''
                \42\
                ---------------------------------------------------------------------------
                 \42\ Id. at 1777.
                ---------------------------------------------------------------------------
                 We recognize that the Court noted, in dicta, that ``the `hearing'
                referred to in [section 205(g)] cannot be a hearing before the Appeals
                Council.'' \43\ However, we do not interpret this statement to have any
                effect on this final rule clarification. The Court made this statement
                in support of its conclusion that ``the fact that there was no Appeals
                Council hearing . . . does not bar review.'' \44\ In other words, the
                Court ruled that the claimant in Smith could obtain judicial review of
                the Appeals Council's dismissal of his request for review even though
                the Appeals Council did not hold a hearing. The Supreme Court in Smith
                did not decide the type of adjudicator who may preside over our
                administrative hearings. The Court noted, moreover, that it need not
                conclusively define ``hearing'' as used in section 205(g), because the
                claimant in Smith had clearly obtained the type of hearing on the
                merits contemplated by the statute.\45\
                ---------------------------------------------------------------------------
                 \43\ Id. at 1775 n.10.
                 \44\ Id.
                 \45\ Id. at 1775.
                ---------------------------------------------------------------------------
                 When an AAJ removes a request for a hearing under this final rule,
                the claimant will still receive the type of merits hearing contemplated
                by the statute. The AAJ will conduct all proceedings in accordance with
                the rules that apply to ALJs, and if the claimant is dissatisfied with
                the hearing decision or dismissal, he or she may ask the Appeals
                Council to review that action. The AAJ who conducted the
                [[Page 73143]]
                hearing or issued the decision or dismissal will not participate in any
                action associated with the request for review. In effect, hearings and
                appeals will remain separate and distinct. The claimant will also
                retain the right to request judicial review of the agency's final
                decision.
                 Because this final rule does not affect a claimant's right to a
                hearing on the merits as contemplated by the Act, we do not believe the
                Supreme Court's decision in Smith precludes the rule.
                Comments About the Congressional Intent Underlying the Act
                 Comment: According to one commenter, Congressional action makes
                clear that Congress has long understood that we were required to use
                ALJs to decide cases. One commenter asserted that, historically, it has
                only been at the explicit direction of Congress, through the enactment
                of new law, that we have been empowered to use non-ALJs to decide
                cases. The commenter said that twice in the 1950s, Congress enacted
                emergency legislation to permit non-ALJ adjudication, but both times
                the legislation included a time limit. According to the commenter, the
                most recent time Congress legislated on our use of ALJs was in 1977, to
                repeal a provision that permitted us to use non-ALJs to preside over
                appeals for the recently created SSI program. The commenter opined that
                these examples demonstrate that Congress understood that we were
                required to use ALJs and legislation is necessary to permit us to use
                non-ALJs.
                 Response: We disagree with these comments. As previously discussed,
                we recognize that on two prior occasions, Congress explicitly
                authorized us, on a temporary basis, to use non-ALJ adjudicators in our
                hearings process: First, after Congress created the disability program
                in the 1950s and again when Congress created the SSI program in the
                1970s.\46\ We have previously explained above that, as the
                Administrative Conference of the United States has recognized, these
                congressional actions do not unambiguously indicate that Congress
                intended us to use ALJs to hear and decide all claims. Moreover,
                Congress has, in fact, made conflicting statements on this issue. For
                example, in the Conference Report on H.R. 4277, which became the Social
                Security Independence and Program Improvements Act of 1994, the
                conference committee expressed its understanding of present law as
                being that our hearings process was not subject to the APA.\47\
                ---------------------------------------------------------------------------
                 \46\ Public Law 85-766, 72 Stat. 864, 878 (1958); Public Law 86-
                158, 73 Stat. 339, 352 (1959); Public Law 92-603, 86 Stat. 1329,
                1475 (1972).
                 \47\ H.R. Conf. Rep. No. 103-670, at 98 (1994), reprinted in
                1994 U.S.C.C.A.N. 1553, 1564 (noting that, ``Although not required
                by law, the agency follows the procedures of the Administrative
                Procedures [sic] Act (APA) with respect to the appointment of ALJs
                and the conduct of hearings.''). See, e.g., Barnett, Against
                Administrative Judges, at 1664-65 (``[I]t is far from clear that the
                SSA is required to use ALJs or formal adjudication under the APA.
                After all, legislative history to statutory amendments in 1994
                states that although the SSA uses ALJs, the use of ALJs and formal
                APA proceedings are `not required by law.' ''); ACUS Final Report on
                EEOC Adjudication, at 11-12, n.73 (``There nonetheless remains some
                dispute over whether Congress intended to require DI and SSI
                hearings be conducted under the APA.'').
                ---------------------------------------------------------------------------
                 Notably, we have previously used non-ALJs to issue decisions
                without an enactment of new law. Under our current rules, attorney
                advisors have authority to conduct prehearing proceedings in some
                cases, and issue fully favorable decisions, as a result of those
                proceedings.\48\ We adopted our attorney advisor program during the
                1990s when we were again confronted with an unprecedented volume of
                hearing requests. In an effort to process those requests more timely,
                we published final rules in June 1995 establishing the attorney advisor
                program for a limited period of two years.\49\ The program's success
                prompted us to renew it several times until it expired in April
                2001.\50\ In August 2007, we published an interim final rule that
                reinstituted the attorney advisor program,\51\ and in March 2008, we
                issued a final rule without change.\52\ As before, we intended the
                program to be a temporary modification to our procedures, but with the
                potential to become a permanent program. Since that time, we
                periodically extended the sunset date of the program,\53\ until we
                decided to make it permanent in August 2018 because it had become an
                integral tool in providing timely decisions to the public while
                maximizing the use of our ALJs.\54\
                ---------------------------------------------------------------------------
                 \48\ 20 CFR 404.942 and 416.1442.
                 \49\ 60 FR 34126 (June 30, 1995).
                 \50\ 62 FR 35073 (June 30, 1997) (extending expiration date to
                June 30, 1998); 63 FR 35515 (June 30, 1998) (extending expiration
                date to April 1, 1999); 64 FR 13677 (Mar. 22, 1999) (extending
                expiration date to April 1, 2000), 64 FR 51892 (Sept. 27, 1999)
                (extending expiration date to April 2, 2001).
                 \51\ 72 FR 44763 (Aug. 9, 2007).
                 \52\ 73 FR 11349 (Mar. 3, 2008).
                 \53\ 74 FR 33327 (July 13, 2009) (extending expiration date to
                August 10, 2011); 76 FR 18383 (May 4, 2011) (extending expiration
                date to August 9, 2013); 78 FR 45459 (July 29, 2013) (extending
                expiration date to August 7, 2015); 80 FR 31990 (June 5, 2015)
                (extending expiration date to August 4, 2017); 82 FR 34400 (July 25,
                2017) (extending expiration date to February 5, 2018); and 83 FR 711
                (Jan. 8, 2018) (extending expiration date to August 3, 2018).
                 \54\ 83 FR 40451 (Aug. 15, 2018).
                ---------------------------------------------------------------------------
                Comments About the Clarity of Our NPRM
                 Comment: Several commenters said there are a number of questions
                that we did not address in our NPRM, which makes it difficult for the
                public to evaluate the proposal. Some commenters said the proposal was
                so vague that it is impossible for the public to provide meaningful
                comment on it and, as a result, the proposal does not meet the basic
                requirements of rulemaking under the APA.
                 Among the questions raised, commenters asked when an AAJ would be
                assigned a claim, hold a hearing, and issue a decision. Others asked
                when and how often we expect AAJs to exercise the authority to hold
                hearings (e.g., if there will be a threshold for the number of pending
                hearing requests above which we would exercise this authority). Some
                commenters wanted to know if we would give AAJs the same goals as ALJs
                in terms of case processing. Others asked if we envision hiring more
                AAJs, if AAJs will hold hearings by video teleconference, and if we
                would place AAJs in local offices. One commenter asked if a claimant
                could object to a hearing by an AAJ and ask for an ALJ instead. Some
                commenters wanted to know if AAJ decisions would be subject to quality
                reviews and if AAJs who hear cases would continue to hear appeals at
                the same time.
                 Response: We continually evaluate our available authority to best
                handle our work. As discussed above and in the preamble of our NPRM,
                AAJs have had authority to remove hearing requests, hold hearings, and
                issue decisions since the beginning of our hearings process in 1940.
                This final rule merely seeks to clarify the rules that would govern
                when and how AAJs hold hearings and issue decisions. Furthermore, this
                rule provides that AAJs will be subject to the same policies and
                procedures as ALJs, if they remove a request for a hearing. We expect
                that these revisions will provide us with much-needed flexibility to
                respond to, and mitigate, the impact of surges in hearing requests and
                to meet the needs of the public we serve. There may be nationwide
                caseload surges, regionalized caseload surges, or other circumstances
                that warrant staffing hearings with new or reallocated AAJ staff. For
                example, the caseload surge in the wake of the 2008 recession serves as
                a clear example of a system-wide backlog where, under this rule, new or
                [[Page 73144]]
                reallocated AAJs could augment the current number of ALJs conducting
                hearings. Using AAJs can allow the agency to conduct more hearings with
                less wait time for claimants. This rule is intended to provide
                flexibility when there is a need for additional support at the hearings
                level. As another example, in a situation where a regional office
                unexpectedly needs to re-hear a substantial number of cases, this rule
                will allow SSA to add additional AAJs to the hearing level review.
                 We did not specify when we would exercise this authority so that we
                are able to address unforeseen circumstances. For example, since March
                2020, we have had to modify substantially our normal hearings process
                in light of the national public health emergency resulting from the
                COVID-19 global pandemic. We closed our hearing offices to the public
                and began offering claimants the opportunity for a hearing by
                telephone. Such unforeseen scenarios have the potential to disrupt
                substantially our normal operations and the availability of all of our
                adjudicators. We therefore should prepare for this type of
                unforeseeable circumstance by ensuring that our rules allow us the
                maximum flexibility to hear and decide claims, in order to provide an
                appropriate level of public service. This final rule will help us do
                that. In terms of the other specific questions, we will apply the same
                rules that apply to ALJs when AAJs hold hearings and issue decisions.
                 In addition to this rule, we will continue to utilize other
                flexibilities during surges in hearing requests and during case
                backlogs, such as shifting cases from hearing offices that are
                overburdened to hearing offices that have less of a demand or
                reassigning cases to ALJs or AAJs that have the capacity to take on
                additional cases, to help reduce the number of pending hearing requests
                and use all of our adjudicative resources in the most effective manner.
                Comments About the Data and Evidence That Justifies the Rule
                 Comment: Some commenters said that we did not comply with the
                rulemaking provisions of the APA because we did not provide technical
                studies or data to explain or support the necessity of this change. One
                commenter said our NPRM makes conclusory statements that having AAJs
                conduct hearings will help us process claims faster, with no data or
                information on how we reached this conclusion. Further, the commenter
                stated the NPRM does not provide information on how we will track or
                monitor the data to see if the rule leads to faster claims processing.
                 One commenter said that we did not substantiate our assertions
                related to our need for flexibility and increased capacity to address
                short-term workloads. According to the commenter, our only rationale
                for needing additional adjudicative flexibility is the difference in
                hearing wait times across the country. In the commenter's opinion, we
                already have enough flexibility to address such disparities. The
                commenter said that we should use our existing flexibility (e.g., our
                national first in, first out case assignment policy; our ability to
                transfer workloads between hearing offices; and our ability to schedule
                appearances by video teleconferencing) to balance the hearing level
                workload and address any future surge in hearing requests rather making
                the proposed changes final.
                 Response: We disagree that our NPRM required technical studies or
                data to support this change. As we explained above, this final rule
                merely clarifies the existing authority of AAJs to hold hearings and
                issue decisions, in response to questions raised about our existing
                authority for AAJs to assume ALJ hearings.
                 Additionally, the commenter mischaracterized our rationale for
                using AAJs to hold hearings and issue decisions. We have not asserted
                that having AAJs hold hearings and issue decisions will result in
                faster claim processing times. Instead, we believe this final rule will
                allow us flexibility to prevent an increase in waiting times that would
                naturally occur, if there were no increase in adjudicatory capacity to
                respond to a surge in hearing requests. In our experience, expanding
                our adjudicative capacity allows us to hear and decide more cases. By
                expanding our adjudicative capacity, we anticipate that if there is a
                surge in hearing requests, as we have regularly seen over the history
                of our programs, we can use AAJs to hear and decide cases pending at
                the hearing level. As such, we anticipate this change will assist in
                reducing the amount of time a claimant must wait before we hold a
                hearing on his or her claim for benefits, if there were no increase in
                adjudicatory capacity.
                 Currently we have 71 AAJs, which is in alignment with staffing
                needs relative to the current workload at the Appeals Council. In
                certain circumstances, we may be able to use existing AAJ staff at the
                hearing level to supplement hearing level caseload surges, and we may
                have to use AAJs even when Appeals Council pending cases are average or
                above average, if there is a relative critical need at the hearings
                level. However, to avoid creating a subsequent backlog at the Appeals
                Council or to provide greater support, we may need to hire additional
                AAJs to conduct hearings or to assist with pending cases at the Appeals
                Council. When additional flexibility is needed, the additional AAJs may
                help to reduce processing wait times and may avoid the development of a
                backlog at the Appeals Council.
                Comments About the Timing and Necessity of the Rule
                 Comment: One commenter said that we did not give a compelling
                explanation for (1) why we have not exercised this authority in the
                past; (2) why we have decided to exercise the authority now; and (3)
                why the regulation is necessary if the authority already exists.
                 Response: We acknowledge that although AAJs already have authority
                under our current regulations to remove a request for a hearing that is
                pending before an ALJ, hold a hearing, and issue a decision,\55\ we
                have not exercised this authority in the past. A major reason we had
                not previously exercised this authority was a lack of regulatory
                guidance on how we would exercise the authority. For this reason, this
                final rule clarifies that if the Appeals Council assumes responsibility
                for a hearing request, it must conduct all proceedings in accordance
                with the rules set forth in sections 404.929 through 404.961 or
                416.1429 through 416.1461, as applicable. This final rule also
                clarifies in section 422.205(a) that Appeals Council decisions and
                dismissals issued on hearing requests removed under sections 404.956 or
                416.1456 require only one AAJ's signature. Additionally, this final
                rule clarifies that if a claimant is dissatisfied with a hearing level
                decision issued by an AAJ, he or she may request Appeals Council
                review. Further, as stated above, we are providing guidance now in
                preparation of exercising this authority, should the need arise.
                ---------------------------------------------------------------------------
                 \55\ See 20 CFR 404.956 and 416.1456.
                ---------------------------------------------------------------------------
                 Comment: One commenter said that it is now as easy to hire ALJs as
                it is to hire AAJs, because we (not the Office of Personnel Management
                (OPM)) now predominantly administer the process. The commenter
                questioned why we would choose now to assert this regulatory authority,
                when presumably there is no practical need for us to do so.
                 Response: We acknowledge that our agency is now predominately
                responsible for hiring ALJs. However,
                [[Page 73145]]
                we are not pursuing this regulation because of previous hiring
                practices. The change in the hiring process is not directly relevant to
                this final rule and our reasons for pursuing this final rule, which we
                previously explained, still exist.
                 Comment: Several commenters asserted there are more than sufficient
                numbers of ALJs to handle the current workload and, therefore, there is
                no need to revise our rules. A commenter said that our ALJs reduced the
                pending number of cases to its lowest point in 15 years at the end of
                Fiscal Year 2019 and virtually eliminated the backlog. According to the
                commenter, ALJs have met expectations and are keeping pace with the
                number of cases filed.
                 Response: Currently there are 1,389 ALJs and 71 AAJs. At the end of
                May 2020, we had approximately 450,048 applicants for benefits who were
                waiting for a hearing before an ALJ.\56\ Though our number of current
                pending cases is not as high as it has been at peak levels, we expect
                that these revisions will provide us with much-needed flexibility to
                respond to, and mitigate, the impact of surges in hearing requests as
                necessary in the future.
                ---------------------------------------------------------------------------
                 \56\ We are making the national Hearing Office Workload from
                June 2020 available as supporting documentation, at https://www.regulations.gov, under ``supporting and related material'' for
                this docket, SSA-2017-0073. The national Hearing Office Workload
                information is also available at https://www.ssa.gov/appeals/DataSets/02_HO_Workload_Data.html.
                ---------------------------------------------------------------------------
                 Furthermore, we wanted to allow the public the opportunity for
                public comment, as we prefer not to implement changes on a temporary
                basis in times of immediate need. Given the length of time that it
                takes to engage in the notice and comment process required in
                rulemaking, we are engaging in the rulemaking process now before any
                potential future surge in hearing receipts. If we delay the start of
                the rulemaking process, a sudden increase in hearing receipts could
                potentially overwhelm our limited administrative resources by the time
                the rulemaking process is complete. We have seen this happen in the
                past, such as when the sudden rise in claims and hearing requests after
                the 2008 recession resulted in more than 1.1 million pending hearing
                requests. In order to be appropriate stewards of the Social Security
                programs, we need to plan for such inevitable surges, and not merely be
                reactive to them.
                Comments About Our Motives for the Rule
                 Comment: Multiple commenters opined that we were pursuing this
                regulation for reasons other than those we stated. One commenter stated
                this rule was an attempt to circumvent fair labor laws and intimidate
                the Association of Administrative Law Judges (AALJ) union into backing
                off its position during the current labor negotiations. Another
                commenter opined that AAJs do not have enough work to do and this
                proposal is an attempt to save AAJ jobs. Multiple commenters said that
                this proposal was a step toward discontinuing our use of ALJs. Several
                commenters opined that we want to get rid of ALJs so we may have more
                control over disability determinations. Another commenter asked if this
                rule is the first step toward combining the hearing and Appeals Council
                levels of review.
                 Response: The commenters' characterizations of and speculations
                about the purposes behind our rule are incorrect. As we stated in the
                NPRM, we are pursuing this final rule to increase our adjudicative
                capacity when needed, allowing us to adjust more quickly to fluctuating
                short-term workloads, such as when an influx of cases reaches the
                hearing level. Our ability to use our limited resources more
                effectively will help us quickly optimize our hearings capacity, which
                in turn will allow us to issue accurate, timely, and high-quality
                decisions. We are not pursuing this regulation to affect labor
                negotiations, save jobs, discontinue the use of ALJs, or combine the
                ALJ and Appeals Council levels of review.
                Comments About the Decisional Independence of ALJs Versus AAJs
                 Comment: Commenters said that ALJs are appointed with the specific
                purpose of ensuring a neutral and impartial fact-finder, free from
                pressure from their hiring agency and political influence, to
                adjudicate appeals of agency decisions. Measures such as independent
                proceedings for termination protect ALJs, as they are not subject to
                performance evaluations and are ineligible for bonuses. The commenter
                said that ALJs have these protections so they can make decisions
                objectively, independently, and fairly, without fear of interference or
                influence from an agency.
                 Commenters asserted that, in contrast, AAJs receive performance
                evaluations and potential bonuses, and the Commissioner can more easily
                remove them from their positions. Commenters said that the ALJ and AAJ
                positions could never be equivalent, if one is subject to agency-
                imposed performance standards, while the other is not. Commenters
                concluded that allowing AAJs to hold hearings would effectively subject
                the entire administrative adjudication process to performance appraisal
                control by our agency.
                 Response: We disagree with these comments. We take seriously, and
                always have taken seriously, our responsibility to ensure that
                claimants receive accurate decisions from an impartial decisionmaker,
                arrived at through a fair process that provides each claimant with the
                full measure of due process protections. We have held an unwavering
                commitment to a full and fair hearings process since the beginning of
                the Social Security administrative review process in 1940, and we do
                not intend to alter the fundamental fairness of our longstanding
                process in this final rule. Under this final rule, our AAJs, like our
                ALJs, will have the same responsibility that they always have had to
                make fair and accurate decisions, free from agency interference. As
                explained in the preamble, any AAJ who holds hearings and issues
                decisions on any case pending at the hearing level under titles II,
                VIII, or XVI of the Act, would be required to follow the same rules as
                ALJs including exercising independent judgment and discretion in
                individual cases.
                 Comment: Commenters opined that it is not enough for us to say that
                non-ALJs presiding over hearings would have qualified decisional
                independence under agency policy. They said that statement is
                insufficient because we can easily change this ``internal agency
                policy.''
                 Response: We disagree with this comment. As noted in the response
                above, when AAJs hold hearings and issue hearing level decisions, they
                are required to exercise independent judgment and discretion.
                Furthermore, AAJs currently issue decisions independently under the
                authority prescribed by sections 404.979 and 416.1479. We do not intend
                to change this requirement of their position, and disagree that this is
                just an ``internal agency policy'' that is easily changed. We would not
                compromise the integrity and fairness of our programs by infringing
                upon an AAJ's ability to exercise independent judgment and discretion
                in individual cases.
                 Comment: One commenter said using AAJs would create the appearance
                of partiality that violates the due process clause of the U.S.
                Constitution. According to the commenter, due process concerns itself
                with the appearance of partiality and not an actual showing of
                partiality. Another commenter said recent decisions from the Supreme
                Court support the assertion that there are legitimate due process
                concerns about the impartiality of AAJs,
                [[Page 73146]]
                because we retain the ability to control the decision making and,
                therefore, there remains the appearance of partiality.\57\ The
                commenter also said decisions issued by AAJs who are not impartial will
                be held invalid, and these cases could usher in class action lawsuits
                in light of Lucia v. SEC.\58\ The commenter said that ALJs increase the
                likelihood of deferential judicial review and absolute official
                immunity for our adjudicators.\59\ According to another commenter, this
                proposal could make our system unfair or perceived to be unfair, and
                for that reason, the courts could overturn more decisions.
                ---------------------------------------------------------------------------
                 \57\ One commenter cited Caperton v. A.T. Massey Coal Co, 556
                U.S. 868 (2009). According to the commenter, it did not matter if
                Justice Benjamin said that he was not biased, the appearance of
                partiality was so strong, he should have recused himself from
                deciding the case.
                 \58\ 138 S.Ct. 2044 (2018).
                 \59\ The commenter cited Butz v. Economou, 438 U.S. 478, 513, 98
                S. Ct. 2894, 57 L.Ed. 2d 895 (1978).
                ---------------------------------------------------------------------------
                 Response: We disagree with this comment. As stated previously,
                there is no due process violation inherent in a hearing system that
                relies on adjudicators other than ALJs.\60\ We will not implement this
                final rule in a way that could undermine the independence and integrity
                of our existing administrative review process. We take seriously our
                responsibility to ensure that claimants receive accurate decisions from
                impartial decisionmakers, arrived at through a fair process that
                provides each claimant with the full measure of due process
                protections. This revised rule would not alter the fundamental fairness
                of our longstanding hearings process because it requires AAJs to follow
                the same rules that apply to ALJs in a process that the Supreme Court
                has long held is consistent with due process. Additionally, if the
                Appeals Council denies a request for review of an AAJ decision, parties
                would have the ability to seek judicial review in Federal district
                court pursuant to section 205(g) of the Act.
                ---------------------------------------------------------------------------
                 \60\ See, e.g., Schweiker v. McClure, 456 U.S. 188, 195 (1982).
                ---------------------------------------------------------------------------
                 Comment: One commenter said it is best to have a local hearing with
                an ALJ. The commenter said that in his or her experience, AAJs ``rubber
                stamp'' denials or find reasons to remand cases, which prolongs cases
                unnecessarily and does not ultimately help claimants win. The commenter
                asserted that AAJs work together in the Washington, DC, area and seem
                to be ``company men and women,'' while ALJs are in local communities
                across the country. The commenter opined that a local ALJ is better
                than an AAJ because the AAJs do not know local areas and are concerned
                more about keeping their employer happy than helping people.
                 Response: Under this final rule, AAJs would apply the same rules as
                ALJs when holding hearings. While our AAJs work from several locations
                near Baltimore, Maryland, and Washington, DC, the physical location of
                our hearing level adjudicators is not relevant because we administer
                national programs and apply uniform policies and procedures nationwide
                to the extent feasible. Additionally, our AAJs will continue to possess
                the same responsibility and independence they have always had to make
                fair and accurate decisions, free from agency interference.\61\ We also
                note that the ALJs in the National Hearing Centers adjudicate cases
                outside of their locality.
                ---------------------------------------------------------------------------
                 \61\ Our ALJs have protections that provide them with qualified
                decisional independence, which ensures that they conduct impartial
                hearings. They must decide cases based on the facts in each case and
                in accordance with agency policy set out in regulations, rulings,
                and other policy statements. Further, because of their qualified
                decisional independence, ALJs make their decisions free from agency
                pressure or pressure by a party to decide a particular case, or a
                particular percentage of cases, in a particular way. Consistent with
                our longstanding policy and practice, our AAJs will continue to
                follow these same principles.
                ---------------------------------------------------------------------------
                 Comment: A commenter asserted it would appear unfair for the
                Appeals Council to act on a request for review of a hearing level
                decision or dismissal issued by an AAJ. A different AAJ would have to
                consider the request, but that AAJ would be a colleague of the AAJ who
                issued the decision or dismissal.
                 Response: To ensure impartiality, this final rule precludes an AAJ
                who conducted a hearing, issued the decision in a case, or dismissed a
                hearing request, from participating in any action associated with a
                request for Appeals Council review in that case. Similarly, AAJs will
                also be precluded from participating in quality reviews or own motion
                reviews of any decisions they issued at the hearing level. An AAJ
                reviewing a hearings level decision will consider the circumstances of
                the case in accordance with agency policy set forth in the regulations,
                rulings, and other policy statements, and will exercise independent
                judgement, free from agency pressure. We also intend to provide
                subregulatory guidance on AAJ recusals in requests for hearings, as we
                do for ALJs in the Hearings, Appeals, and Litigation Law (HALLEX)
                manual I-2-1-60A.\62\
                ---------------------------------------------------------------------------
                 \62\ See https://www.ssa.gov/OP_Home/hallex/I-02/I-2-1-60.html.
                ---------------------------------------------------------------------------
                 In addition, we note that under our current business processes,
                AAJs already review the work of other AAJs. The Appeals Council
                conducts a random sampling of AAJ work product in its in-line quality
                review process, where an AAJ reviews the work product of another AAJ.
                Comments About the Experience and Skills Levels of AAJs and ALJs
                 Comment: According to one group of commenters, the title,
                ``Administrative Appeals Judge,'' in many ways confuses this issue as
                it does not accurately describe the position and is a misnomer. The
                commenters said, before the mid-1990s, the Appeals Council was composed
                of members, not judges. According to the commenter, the title,
                ``member,'' aptly described the position: A member of a group that
                ensures the consistency and uniformity of agency decisions. The
                commenters also said that the mission of the Appeals Council is to
                adjudicate cases similarly to ensure that we treat claimants fairly and
                consistently throughout the nation. The commenters, who formerly served
                on the Appeals Council, said when they were part of the Appeals
                Council, they regularly met as a group to debate and decide questions
                of policy and procedure. They bound themselves according to the policy
                interpretations to ensure they reviewed cases consistently and
                uniformly. Conversely, ALJs hear and decide benefit cases de novo.
                Using the Commissioner's rules and regulations, ALJs render
                individualized decisions, tailored to the evidence presented on the
                record. According to the commenter, while both positions require a
                thorough knowledge of our agency's rules and regulations, the skill
                sets for each job are radically different. Further, another commenter
                questioned why we have two different positions if we believe that there
                is no difference between the skills and experience of ALJs and AAJs.
                 Response: We disagree with the commenter's assertion regarding the
                description of the duties of AAJs. While part of the position
                description of an AAJ requires ``formulating, determining, or
                influencing the policies of an agency,'' that role is distinct from an
                AAJ's other responsibilities of exercising independent judgment and
                discretion when reviewing decisions of ALJs. Like an ALJ, an AAJ's
                responsibilities include that they ``may hold hearings or supplemental
                hearings.'' \63\ In addition, an AAJ may hold an oral argument with a
                claimant
                [[Page 73147]]
                or representative to decide issues based on the record.\64\ Therefore,
                AAJs have additional responsibilities than what the comment asserts.
                ---------------------------------------------------------------------------
                 \63\ See USA Jobs announcement number SV-10664781, closed
                December 6, 2019, available at https://www.usajobs.gov/GetJob/ViewDetails/552976200.
                 \64\ See 20 CFR 404.976 and 416.1476.
                ---------------------------------------------------------------------------
                 We also disagree that the skill sets for AAJ and ALJ jobs are
                radically different. To become an ALJ or AAJ, applicants must have at
                least 7 years of progressively more responsible experience as a
                licensed attorney preparing for, participating in, or reviewing formal
                hearings or trials involving litigation or administrative law at the
                Federal, State, or local level. An applicant for either position is
                required to have experience in preparation, presentation, or hearing of
                formal cases before courts or governmental bodies. Additionally, in
                April 2001, Congress made the pay scales for AAJs identical to that of
                ALJs, which further supports similarities in the skill sets required
                for the two positions.\65\ Moreover, we note that under our current
                rules, AAJs, like ALJs, issue individualized decisions using the same
                skill of applying agency policy to the facts of the case.\66\ In the
                past, we have had ALJs detailed on a temporary basis to serve as AAJs,
                further demonstrating that the two positions share similar skill sets.
                ---------------------------------------------------------------------------
                 \65\ See https://www.chcoc.gov/content/new-pay-system-administrative-appeals-judges; 5 U.S.C. 5372 and 5372b.
                 \66\ See 20 CFR 404.979 and 416.1479.
                ---------------------------------------------------------------------------
                 Comment: One commenter questioned if an ALJ's knowledge, skills,
                and abilities and other qualifications would be identical to an AAJ's
                requirements when we release a new position description for ALJs now
                that we are responsible for our own ALJ hiring. According to another
                commenter, the most recent job announcements for AAJs and ALJs do not
                support the contention that AAJs and ALJs have the same skills and
                experience. The commenter said that the AAJ position requires
                formulating, determining, or influencing the policies of the agency.
                According to the commenter, AAJs review cases for policy compliance
                \67\ and may take a variety of actions, including: Dismissing or
                denying a request for review of an ALJ decision; issuing a decision
                affirming, modifying or reversing the ALJ decision; and conducting own
                motion pre-effectuation and other quality reviews. The commenter said,
                while AAJs engage in a range of activities, their adjudication ``. . .
                mostly involves error correction.'' \68\ In addition, unlike ALJs, AAJs
                cannot complete some actions on their own. Two AAJs are required to
                grant a request for review or to initiate a review on own motion, and
                as a result, about one-fifth of Appeals Council annual actions involve
                sign-off by two AAJs. According to the commenter, ALJs play a very
                different role. They do not set policy or perform a quality review
                function. Instead, ALJs' day-to-day work is holding non-adversarial, on
                the record, de novo hearings. As noted in the position description,
                ALJs make and issue decisions directly and their decisions ``may not be
                substantively reviewed before issuance.'' ALJs must possess ``special
                knowledge and abilities'' that are not required for AAJs, outlined in
                the ALJ position description.
                ---------------------------------------------------------------------------
                 \67\ The commenter cited the Social Security Administration,
                ``Fiscal Year 2020 Congressional Justification,'' 16 (2019),
                available at https://www.ssa.gov/budget/FY20Files/FY20-JEAC_2.pdf.
                 \68\ The commenter cited ``ACUS, A Study of Social Security
                Litigation in the Federal Courts'' (2016), available at https://www.acus.gov/report/report-study-social-security-litigation-federal-courts.
                ---------------------------------------------------------------------------
                 Response: While we have not yet finalized any new ALJ position
                description, we disagree with any assertion that the position
                description would have to be identical to the knowledge, skills, and
                abilities, and other qualifications of an AAJ, because the primary
                duties of these positions are not identical. Nonetheless, the
                qualifying knowledge, skills, and abilities will be substantially
                similar, if not identical to the requirements of the AAJ position.
                 We also disagree that the most recent job announcements for AAJs
                and ALJs do not require the same skills and experience. While we
                acknowledge that the required skills and experience in the recent
                postings for AAJ and ALJs use different terminology in describing the
                required experiences, the required underlying skills and experience are
                the same and can be obtained through at least 7 years of experience
                preparing for, participating in, or reviewing cases at formal hearings
                or trials involving administrative law or courts.\69\ In addition,
                qualifications for both positions require the applicant to be licensed
                and authorized to practice law under the laws of a State, the District
                of Columbia, the Commonwealth of Puerto Rico, or any territorial court
                established under the United States Constitution.\70\
                ---------------------------------------------------------------------------
                 \69\ The ALJ posting indicates that individuals may meet the
                minimum qualifications for the position through a general
                description of qualifying experiences (e.g., participate in
                settlement or plea negotiations in advance of hearing cases or
                trial; prepare for trial or hearings; prepare opinions; hear cases;
                participate in or conduct arbitration, mediation, or other
                alternative dispute resolution approved by the court; or participate
                in appeals related to the types of cases above). An individual can
                meet the qualifying experiences for the AAJ position through the
                same types of tasks listed under the ALJ position description;
                however, the minimum qualifications use different terminology. For
                example, instead of using the broad description of ``preparing
                opinions'' in the ALJ posting, the AAJ posting lists specific
                examples of qualifying experiences (e.g., review, analyze, evaluate,
                and recommend action to be taken; assimilate, analyze, and evaluate
                complex facts; interpret and apply law, regulations, court
                decisions, and other precedents; propose fair and equitable
                solutions in accordance with applicable law and regulations; and
                write clear, cogent opinions). Compare ALJ job posting (USA Jobs
                announcement SV-10423180, closed April 12, 2019, available at
                https://www.usajobs.gov/GetJob/ViewDetails/529866200) with AAJ job
                posting (USA Jobs announcement number SV-10664781, closed December
                6, 2019, available at https://www.usajobs.gov/GetJob/ViewDetails/552976200).
                 \70\ We note that AAJs must remain licensed attorneys throughout
                their tenure, while incumbent ALJs need not maintain licensure (see
                5 CFR 930.204(b); 78 FR 71987 (Dec. 2, 2013) (eliminating the
                licensure requirement for incumbent ALJs)).
                ---------------------------------------------------------------------------
                 This final rule clarifies under section 422.205(a) that Appeals
                Council decisions and dismissals issued on hearing requests removed
                under sections 404.956 or 416.1456 require only one AAJ's signature Two
                AAJ signatures will continue to be required when the Appeals Council
                grants a request for review or decides on its own motion to review an
                action.
                 Comment: Some commenters offered the fact that we hired our current
                ALJs through the competitive service hiring process overseen by OPM as
                evidence that they were more highly qualified than AAJs. The commenters
                said that the OPM screening process was extensive and included a
                rigorous interview process as well as an exam to evaluate the
                competencies, knowledge, skills, and abilities essential to performing
                the work of an ALJ. Some commenters questioned if AAJs take an exam
                before we hire them, and, if so, how it compares to the exam ALJs took.
                They also asked what experience is required to be an AAJ compared to
                ALJs. Commenters said we did not provide evidence, data, or information
                to allow the public to evaluate if AAJs possess the same skills and
                experience as that of our ALJs.
                 Response: The President issued Executive Order 13843 in July 2018
                requiring appointments of ALJs be made under Schedule E of the excepted
                service.\71\ Therefore, the comments regarding ALJs hiring through the
                OPM and competitive service process are moot. Although AAJs are not
                required to take an exam before we hire them, we note that the most
                recent ALJ posting \72\ does not require an exam. Further, as discussed
                above, the knowledge, skills, and underlying experience required in
                [[Page 73148]]
                the job postings for AAJ and ALJ are very similar, if not the same.
                ---------------------------------------------------------------------------
                 \71\ 83 FR 32755 (July 10, 2018).
                 \72\ See https://www.usajobs.gov/GetJob/ViewDetails/529866200/.
                ---------------------------------------------------------------------------
                 Comment: Some commenters asked what type of training AAJs receive
                and how it is different from the training ALJs undergo. One commenter
                asked what additional training AAJs would receive to ensure they have
                the skills needed to conduct hearings at the ALJ level. These
                commenters questioned the cost of additional training, asked when AAJs
                would receive the training, and inquired how long it would take to get
                AAJs trained if we exercise the authority.
                 Response: When we exercise this authority, we will ensure that the
                AAJs possess the knowledge, skills, and training required to conduct
                hearings. We would use existing ALJ training materials, as applicable,
                to train our AAJs. Because any AAJs who may have to use this authority
                will have experience with our programs due to their work as Appeals
                Council members, we do not anticipate the training to take as long as
                for someone unfamiliar with our programs. While newly-hired ALJs
                receive four weeks of in-person training, only about one of those four
                weeks focuses on conducting hearings. The remaining three weeks focus
                on training ALJs on our programs and other internal procedures related
                to our disability adjudication process. So, we do not anticipate that
                AAJs will need more than a week or two of training in order to exercise
                this authority. In addition, AAJs currently have access, and will
                continue to have access, to the Office of Hearings Operations'
                Continuing Education Program, so continuing education will be available
                to AAJs as well.
                 Comment: Commenters said that candidates for ALJ positions must
                have significant experience prior to being hired through the OPM
                screening process and they questioned if AAJs possess the same
                experience. According to the commenter, the most important experience
                requirement is participation in hearings or similar proceedings. The
                commenter said that the ability to assess the credibility of claimants
                and other witnesses, to effectively question claimants and other
                witnesses to establish facts and prove or disprove assertions of
                claimants, and to oversee a hearing proceeding in a fair, respectful,
                and impartial manner are extremely important skills for an adjudicator
                holding hearings. Commenters noted that applicants for ALJ positions
                hired through the OPM screening process were required to demonstrate 7
                years of experience as a licensed attorney preparing for, participating
                in, or reviewing formal hearings or trials involving litigation or
                administrative law. The commenter questioned if any of the current AAJs
                comprising the Appeals Council have experience holding or participating
                in hearings, and if so, the amount of time that may have elapsed since
                AAJs last participated in hearings. According to the commenter,
                hearings experience between an AAJ and an ALJ would not be equivalent
                because an ALJ holds hearings as a regular, routine, ongoing duty, and
                we would be asking AAJs to hold hearings only periodically.
                 Another commenter said that ALJs regularly exercise the skill of
                independently reviewing copious amounts of medical records and
                conducting their own independent analysis of the evidence when
                performing their work. In contrast, the commenter asserted, AAJs do
                not.
                 Response: As discussed in our responses above, AAJs and ALJs have
                similar hiring requirements and skills, and we will ensure that AAJs
                receive the proper initial and continuing training in order to conduct
                hearings.
                 We disagree that AAJs do not possess the skill to review and
                analyze medical records. Currently, in acting on requests for review
                and performing own motion review of ALJ decisions, AAJs review the same
                record that was before the ALJ in order to assess the sufficiency of
                the ALJ's decision.
                 Comment: One commenter said that AAJs use other SSA employees,
                known as analysts, who do the bulk of the work for them. The commenter
                said that the analysts are not vetted as ALJs are, and more
                importantly, they are subject to performance evaluations.
                 Response: We disagree that analysts do the bulk of the work for
                AAJs. In any event, ALJs also receive support from non-adjudicator
                employees, known as ``decision writers,'' who are subject to
                performance evaluations. Decision writers assist ALJs in preparing for
                hearings and drafting decisions, and the ALJ/decision writer
                relationship is analogous to the AAJ/analyst relationship.
                 Comment: One commenter asserted the Appeals Council was never
                intended to conduct initial hearings and make decisions on whether to
                grant benefits. Instead, the Appeals Council was created to ``oversee
                the hearings and appeals process, promote national consistency in
                hearing decisions made by . . . administrative law judges . . . and
                make sure that the Social Security Board's (now Commissioner's) records
                were adequate for judicial review.\73\ The commenter also said that
                appeals officers in the Appeals Council are not judges and this rule
                creates a new position for the work that Attorney-Examiners/appeals
                officers had been doing. The commenter further asserted that we sought
                a new position description from OPM to give these employees the title
                of administrative appeals judges.
                ---------------------------------------------------------------------------
                 \73\ The commenter cited https://www.ssa.gov/appeals/about_ac.html.
                ---------------------------------------------------------------------------
                 Response: We disagree. Our proposal to clarify when AAJs may
                conduct hearings and issue decisions under the same rules that apply to
                ALJs is supported by our existing regulations (see sections 404.956 and
                416.1456), which have authorized this option since the beginning of our
                hearings and appeals process in 1940.\74\ Indeed, as we noted
                previously, the original vision for our hearings and appeals process,
                the Basic Provisions, which predated our 1940 regulations,\75\
                expressly contemplated that the Appeals Council would hold hearings on
                occasion. Under section 205(b) of the Act, the authority to hold
                hearings rests with the Commissioner. In accordance with section 205(l)
                of the Act, the Commissioner's predecessor, the Social Security Board,
                delegated the authority to hold hearings and issue decisions to the
                Appeals Council and to the agency's referees (now ALJs) when the Board
                established the Appeals Council in 1940.\76\ The Appeals Council has
                continued to retain that authority from 1940 to the present.
                ---------------------------------------------------------------------------
                 \74\ 5 FR 4169, 4172 (Oct. 22, 1940) (codified at 20 CFR
                403.709(d) (1940 Supp.)).
                 \75\ See supra note 17.
                 \76\ 11 FR 177A-567 (Sept. 11, 1946) (codified at 20 CFR
                421.6(a) (1946 Supp.)).
                ---------------------------------------------------------------------------
                Comments About the Perceived Effectiveness and Consequences of the Rule
                 Comment: Several commenters assumed that we would spend more money
                to employ AAJs to act in lieu of ALJs, since ALJs are not eligible for
                bonuses, whereas AAJs are. Thus, the proposal is not cost effective.
                 Response: We are revising our regulations to increase our
                adjudicative capacity so that we will be better prepared to address
                challenges that may arise in the future, including spikes in requests
                for hearings and hiring freezes. We disagree that having AAJs hold
                hearings would necessarily be more costly than employing ALJs. For
                example, during a hiring freeze, we may be prohibited from hiring new
                ALJs, and therefore, if there were a need to increase adjudicative
                capacity, we could use our existing AAJs to conduct hearings and issue
                decisions during that
                [[Page 73149]]
                time. As such, we see this flexibility as being cost effective.
                 Comment: Another commenter stated that the Appeals Council has only
                approximately 53 AAJs available to perform the Appeals Council's review
                function. Several commenters stated that backlogs and processing time
                at the Appeals Council increase significantly when requests for
                hearings increase, such as during the recent historically large backlog
                in disability hearings that began in 2010. Having a particular AAJ
                adjudicate claims at the hearings level necessarily means that the AAJ
                is not available to review ALJ decisions in his or her role at the
                Appeals Council. According to the commenters, it is likely that if we
                use AAJs to hold hearings and issue hearing level decisions, we will
                shift backlogs and increased processing times from the hearings level
                to the Appeals Council level.
                 Response: We acknowledge the commenters' concerns about how having
                AAJs hold hearings and issue hearing level decisions could affect the
                workloads and processing times associated with existing Appeals Council
                review. We would consider these implications after assessing all
                relevant factors at the time we implement this rule. We are publishing
                this final rule now to clarify the Appeals Council's authority to hold
                hearings and issue decisions so that the authority will be available
                for us to use when we need it.
                 Comment: Commenters opined that these changes could substantially
                alter workflows within the agency and create significant complications
                in the appeals process for claimants and agency employees alike.
                 Response: We disagree with this comment. Our intention is to use
                the Appeals Council's authority to hold hearings and issue hearing
                level decisions to assist with our workflow as needed, including
                addressing any hearings backlog and helping to reduce case processing
                time by increasing our adjudicative capacity. Other than substituting
                AAJs for ALJs in some cases, our hearings level process will remain the
                same. Furthermore, regardless of whether an ALJ or AAJ issues a hearing
                decision, our ordinary request for review procedures will apply, except
                that if an AAJ issued the hearing decision, he or she will not
                participate in any action associated with the request for Appeals
                Council review. As we explained in the preamble of our NPRM, regardless
                of whether an ALJ or AAJ holds a hearing, the claimant will receive all
                the same due process protections. Thus, we do not expect that this
                final rule will complicate the process for claimants or agency
                employees.
                 Comment: According to a commenter, the constitutional litigation in
                Hart v. Colvin and Lucia v. SEC \77\ resulted in uncertainty as to
                whether adequate due process was provided in individual claims, a
                disruption and delay of ongoing claims and appeals, and a diversion of
                agency attention toward administering agency-wide relief. The commenter
                said that the due process and APA concerns arising from this final rule
                could very well lead to the same experience for claimants who have
                their hearings presided over by an AAJ, and may require the agency to
                expend resources to remediate the final rule. Another commenter said
                any hearing held and decision issued by an AAJ would be subject to
                remand and rehearing, as is presently happening across the country with
                decisions issued by non-Commissioner appointed ALJs in the aftermath of
                the Lucia decision. The commenter said that decisions issued by AAJs
                who are ``not impartial'' would be held invalid, and these cases could
                usher in class action lawsuits in light of Lucia. Another commenter
                stated that this rule change would have a negative impact on due
                process and increase the likelihood of claimants appealing decisions
                directly to the Federal district courts.
                ---------------------------------------------------------------------------
                 \77\ 138 S.Ct. 2044 (2018).
                ---------------------------------------------------------------------------
                 Response: We disagree with these comments. There is no due process
                violation inherent in a hearing system that relies on adjudicators
                other than ALJs. With respect to the issue of who may be a
                decisionmaker in an adjudicatory proceeding, the fundamental
                requirement of due process is that the decisionmaker be fair and
                impartial.
                 As we explained above and in the preamble of our NPRM, we will not
                implement this final rule in a way that could undermine the decisional
                independence of our adjudicators or the integrity of our existing
                administrative review process. We take seriously our responsibility to
                ensure that claimants receive accurate decisions from impartial
                decisionmakers, arrived at through a fair process that provides each
                claimant with the full measure of due process protections. Since the
                beginning of our administrative review process in 1940, we have held an
                unwavering commitment to a full and fair hearings process. This final
                rule will not alter the fundamental fairness of our longstanding
                hearings process. Our AAJs will continue to possess the same
                responsibility and independence they have always had to make fair and
                accurate decisions, free from agency interference.
                 Further, in response to the commenter who suggested that an AAJ
                hearing level decision would be subject to remand based on the Supreme
                Court's decision in Lucia v. SEC,\78\ we note that the Acting
                Commissioner of Social Security ratified the appointment of our AAJs in
                July 2018.\79\
                ---------------------------------------------------------------------------
                 \78\ 138 S. Ct. 2044 (2018).
                 \79\ See Social Security Ruling 19-1p, Titles II and XVI: Effect
                of the Decision in Lucia v. Securities and Exchange Commission (SEC)
                On Cases Pending at the Appeals Council, 84 FR 9582, 9583 (Mar. 15,
                2019).
                ---------------------------------------------------------------------------
                 Comment: According to one commenter, the lack of clarity in the
                NPRM, and the likelihood that our implementation would result in
                different claimants facing different processes, will create confusion
                and inconsistency in the appeals process to the detriment of our agency
                and claimants alike.
                 Response: When we implement this final rule, we will use uniform
                procedures and processes for all claimants. Regardless of whether an
                ALJ or an AAJ hears a claimant's case, we are required to apply the
                same rules and procedures to all cases.
                Comments About Our 2016 Proposal To Use AAJs To Hear and Decide Cases
                 Comment: Many commenters alleged that since we did not pursue an
                earlier proposal to use AAJs to hear and decide cases in 2016 (as part
                of our Compassionate and Responsive Services (CARES) backlog reduction
                plan), we should not pursue it now.
                 Response: In January 2016, we recommended that AAJs hold hearings
                in certain cases as part of our adjudication augmentation strategy
                under the CARES backlog reduction plan.\80\ We ultimately decided
                against implementing the adjudication augmentation strategy due to
                resource constraints.\81\ We then decided to address the issue through
                changes to our regulation, adopted in accordance with the APA's notice
                and comment rulemaking procedures.
                ---------------------------------------------------------------------------
                 \80\ The adjudication augmentation strategy was part of our 2016
                Plan for Compassionate and Responsive Service (CARES), available at
                https://www.ssa.gov/appeals/documents/cares_plan_2016.pdf. Under the
                strategy, we would have expanded (on a temporary basis) the number
                of cases in which AAJs on the Appeals Council could hold hearings
                under the authority of the regulations.
                 \81\ See letter from Theresa Gruber, then Deputy Commissioner
                for Disability Adjudication and Review, to The Honorable James
                Lankford, dated August 4, 2016, available at page 89 of https://www.govinfo.gov/content/pkg/CHRG-114shrg21182/pdf/CHRG-114shrg21182.pdf.
                ---------------------------------------------------------------------------
                [[Page 73150]]
                 Comment: One commenter, referring to our proposal for AAJs to hold
                hearings in 2016 as part of our CARES backlog reduction plan, asked why
                we changed the types of cases we would have AAJs hear. The commenter
                said when we proposed to exercise our existing regulatory authority for
                AAJs to hold hearings in 2016 as part of the CARES backlog reduction
                plan, we proposed to have AAJs hold hearings in ``nondisability'' cases
                specifically. According to the commenter, we indicated that we made
                this decision because, ``the cases targeted for the augmentation
                strategy represent only 3.6 percent of our hearings pending and the
                non-disability cases often involve issues that ALJs do not typically
                encounter. A small number of AAJs and staff will specialize in
                adjudicating the non-disability issues, thus freeing up critical ALJ
                resources to handle disability hearings.'' \82\ The commenter asserted
                that the rationale we presented for using AAJs to hold hearings and
                issue decisions in 2016 undercuts our assertions that AAJs and ALJs
                have the same experience and skills and that AAJs should be able to
                obtain jurisdiction over any type of claim. The commenter questioned
                what changed between our rationale in 2016 and now, and what data,
                studies, or evidence we relied on in making this determination. The
                commenter said that we must provide the public with whatever evidence
                led us to change our proposal and allow the public to examine and
                comment on that information. According to the commenter, not doing so
                is a procedural error under the rulemaking requirements of the APA
                because the public cannot understand and meaningfully comment on the
                NPRM.
                ---------------------------------------------------------------------------
                 \82\ The commenter cited ``Theresa Gruber, Statement for the
                Record, Hearing Examining Due Process in Administrative Hearings,''
                Committee on Homeland Security and Governmental Affairs,
                Subcommittee on Regulatory Affairs and Federal Management, United
                States Senate, May 12, 2016. See https://www.hsgac.senate.gov/imo/media/doc/Gruber%20Statement.pdf.
                ---------------------------------------------------------------------------
                 Response: When we proposed our adjudication augmentation strategy
                under the CARES backlog reduction plan in 2016, we intended for AAJs to
                hold hearings and issue decisions in non-disability cases. Our proposal
                attracted significant public and congressional interest,\83\ and we
                ultimately decided to pursue clarifying changes to our regulations
                instead of pursuing the adjudication augmentation strategy. Although we
                decided to have AAJs hold hearing and issue decisions in non-disability
                cases as part of our backlog reduction plan in 2016, we do not believe
                it would be prudent to specify in our regulations that AAJs are always
                limited to non-disability cases when they hold hearings and issue
                decisions. As previously stated, we are clarifying our regulations in
                order to be better prepared to address unforeseen challenges that may
                arise in the future.
                ---------------------------------------------------------------------------
                 \83\ ``Examining Due Process in Administrative Hearings,''
                Committee on Homeland Security and Governmental Affairs,
                Subcommittee on Regulatory Affairs and Federal Management, United
                States Senate, May 12, 2016, available at https://www.gpo.gov/fdsys/pkg/CHRG-114shrg21182/pdf/CHRG-114shrg21182.pdf.
                ---------------------------------------------------------------------------
                 Furthermore, the fact that we thought it would be best for AAJs to
                hold hearing and issue decisions in non-disability cases as part of our
                2016 backlog reduction plan does not signify that AAJs and ALJs have
                different experience and skills. Indeed, in our CARES plan,\84\ we also
                emphasized that AAJs and ALJs have the same experience and skills. Our
                position on that issue has not changed in promulgating this final rule.
                ---------------------------------------------------------------------------
                 \84\ https://www.ssa.gov/appeals/documents/cares_plan_2016.pdf.
                ---------------------------------------------------------------------------
                Comments About Notices of Appeals Council Review
                 Comment: In the NPRM, we proposed to add a statement to sections
                404.973 and 416.1473 that says, ``However, when the Appeals Council
                plans to issue a decision that is fully favorable to all parties or
                plans to remand the case for further proceedings, it may send the
                notice of Appeals Council review to all parties with the decision or
                remand order.'' Some commenters disagreed with this proposed language.
                 According to one commenter, under our current process, when the
                Appeals Council reviews a fully or partially favorable case on its own
                motion and the Appeals Council intends to remand the case, we must give
                notice to the claimant. The commenter noted that the Appeals Council
                mails an interim notice that outlines the proposed action, and gives
                the claimant 30 days to respond to the Appeals Council with arguments
                or evidence that may cause the Appeals Council to take a different
                action. The Appeals Council then issues an order that outlines the
                Appeals Council's final action. According to the commenter, responses
                from claimants frequently do not change the Appeals Council's decision
                to remand the case, but the current process gives the claimant the
                opportunity to change the Appeals Council's mind before it remands the
                case to the hearing level. The commenter also opined that it would be a
                violation of due process to allow the Appeals Council to exercise own
                motion review of a favorable hearing level decision and remand the case
                to the hearing level without giving the claimant any opportunity to
                weigh in or correct the deficiencies identified by the Appeals Council.
                 The commenter also said that if the Appeals Council is too slow in
                taking its final action, claimants could continue to receive interim
                benefits while the Appeals Council has jurisdiction over the matter.
                According to the commenter, remanding the case without giving the
                claimant an opportunity to respond would result in the termination of
                benefits without due process. The commenter said to allow the Appeals
                Council to remand a case to the hearing level without allowing the
                claimant to respond is in direct conflict with the requirements of due
                process, and is more problematic given the length of time that a
                claimant would have to wait before appearing at another hearing. The
                commenter proposed that we remove ``or plans to remand the case for
                further proceedings'' from the proposed sections.
                 Response: We disagree with the commenters' assertions that the
                proposed language would violate due process. In terms of fully
                favorable Appeals Council decisions, we revised our rules for
                administrative efficiency and to codify our longstanding practice.\85\
                By sending the notice with the fully favorable decision, the claimant
                does not have to wait for a separate notice.
                ---------------------------------------------------------------------------
                 \85\ See HALLEX I-3-6-20 A, available at https://www.ssa.gov/OP_Home/hallex/I-03/I-3-6-20.html, which includes a note that,
                ``[w]hen the [Appeals Council] exercises its own motion review
                authority and issues a fully favorable decision, notice is not
                required.''
                ---------------------------------------------------------------------------
                 In terms of removing the notice requirement for Appeals Council
                remands, we are revising our rules for administrative efficiency. As
                the commenter aptly points out, responses to our notices rarely change
                the Appeals Council's proposed action to remand a case. We expect that
                this final rule will result in claimants receiving final decisions on
                their claim(s) faster and will help to streamline our business
                processes. Moreover, if the Appeals Council decides to remand a case to
                the hearing level, the claimant will have an opportunity to be heard
                before the agency issues its final decision.
                 We disagree with the commenter's statement that remanding a fully
                favorable or partially favorable case on own motion review would result
                in a termination of benefits without due process. Section 1631(a)(8) of
                the Act requires us to pay prospective monthly benefits (``interim
                benefits'') to the
                [[Page 73151]]
                claimant if we have not made a final decision within 110 calendar days
                after the date of the ALJ decision. Those interim benefits do not end
                until the month in which we make a final decision. Therefore, the
                claimant would continue to receive benefits until there is a final
                agency decision.
                 We also note that there are situations where a claimant is not in
                pay status, following the issuance of favorable decision, because an
                effectuating component cannot process payments. If, for example, the
                decision is contrary to the Act, regulations or a published ruling, or
                the decision is vague, ambiguous, internally inconsistent, or otherwise
                does not resolve the issues under dispute, the effectuating component
                may refer the cases to the Appeals Council to consider taking own
                motion review or reopening and revising the decision.\86\ In these
                cases, the claimant would not receive benefits until 110 days after the
                favorable hearing level decision. If the Appeals Council were unable to
                correct the deficiency and issue a fully favorable decision, the
                Appeals Council's ability to remand the case to correct the deficiency
                without prior notice would expedite the claimant receiving a final
                decision on his or her case.
                ---------------------------------------------------------------------------
                 \86\ See generally 20 CFR 404.969, 416.1469, 404.987, and
                416.1487.
                ---------------------------------------------------------------------------
                 Comment: One commenter suggested that in sections 404.973 and
                416.1473, we clarify that if the Appeals Council plans to issue a
                combined partially favorable decision (finding, for example, that the
                claimant became disabled after his or her alleged onset date) and a
                remand order (ordering further proceedings regarding the period the
                claimant alleged to be disabled to the date the claimant was found to
                be disabled), it may send the notice of Appeals Council review to all
                parties with the combined decision and remand order (without sending a
                prior notice of review).
                 Response: We agree with this suggestion. We further revised
                sections 404.973 and 416.1473 to clarify that when the Appeals Council
                plans to issue a decision that is favorable in part and remand the
                remaining issues for further proceedings, we may send the notice of
                Appeals Council review to all parties with the decision or remand
                order.
                Adding a ``Reasonable Probability'' Standard to Sections 404.970 and
                416.1470
                 Comment: We received many comments relating to our proposed
                inclusion of paragraph (d) to sections 404.970 and 416.1470.\87\ We
                proposed to revise paragraph (d) of these sections to state that the
                Appeals Council would not review a case based on an error or abuse of
                discretion in the admission or exclusion of evidence or based on an
                error, defect, or omission in any ruling or decision unless the Appeals
                Council found a reasonable probability that the error, abuse of
                discretion, defect, or omission, either alone or when considered with
                other aspects of the case, changed the outcome of the case or the
                amount of benefits owed to any party. Commenters expressed perceived
                due process concerns, stating that the proposed rule would limit the
                Appeals Council's ability to review an ALJ's decision, and that the
                changed standard of review could virtually eliminate Appeals Council
                review in all but extremely limited circumstances, making the Appeals
                Council a meaningless step in the adjudication process. Commenters
                expressed that we would no longer know of the errors in an ALJ's
                decision if we do not remand these cases to the ALJ to correct the
                error. Commenters also expressed concerns that there would be no cost
                savings associated with the proposed change, as the Appeals Council
                would have to evaluate the entire record, which would increase the time
                to review a case. Additionally, commenters expressed concerns that the
                proposal would increase the number of claimants who appeal to Federal
                court, potentially straining court resources and increasing the time
                that individuals must wait to receive final decisions.
                ---------------------------------------------------------------------------
                 \87\ See 84 FR 70085, 70087.
                ---------------------------------------------------------------------------
                 Some commenters also misconstrued the proposed standard of review
                at the Appeals Council level of review with the ``preponderance of the
                evidence'' standard that applies when an adjudicator issues a
                determination or decision.\88\ Other commenters expressed alternative
                language for paragraph (d) or suggested ways to clarify how the
                reasonable probability standard would apply to the substantial evidence
                standard.
                ---------------------------------------------------------------------------
                 \88\ The commenter cited 20 CFR 404.953, 404.979, 416.1453, and
                416.1479.
                ---------------------------------------------------------------------------
                 Response: Upon consideration of the comments regarding our proposal
                to add a reasonable probability standard in paragraph (d) of sections
                404.970 and 416.1470, we have decided not to proceed with that
                proposal. Because we are not finalizing proposed paragraph (d) of
                sections 404.970 and 416.1470, we are not finalizing the corresponding
                language that we proposed to add to the beginning of paragraph (a) of
                the same sections, ``Subject to paragraph (d) of this section, . . .
                .'' Additionally, we will not respond to the individual comments
                regarding our proposal to add a reasonable probability standard in
                paragraph (d) of sections 404.970 and 416.1470, because they are no
                longer relevant.
                Comments Regarding Federal Court Cases
                 Comment: One commenter suggested changes to proposed sections
                404.984 and 416.1484, which provide that when a Federal court remands a
                case and the Appeals Council remands the case to an ALJ, the ALJ's
                decision will become the Commissioner's final decision unless the
                Appeals Council assumes jurisdiction using the standard set forth in
                section 404.970 or 416.1470, as applicable. The commenter said it is
                imprudent for the Appeals Council to use a reasonable probability
                standard when deciding whether to assume jurisdiction of a case that
                was previously remanded by Federal court. The commenter stated that the
                Appeals Council must grant review of a case that is remanded from the
                Federal court. The commenter opined that failure to grant review
                because of the ``reasonable probability'' standard would be viewed
                unfavorably by the court if the claimant requested judicial review once
                again. The commenter stated that any action by the Appeals Council must
                be consistent with the court's remand. If the court orders a remand,
                the Appeals Council must remand the case (unless it can issue a fully
                favorable decision).
                 Response: Appeals Council review of court remands under sections
                404.983 and 416.1483 should not be confused with its review of hearing
                decisions issued after a court remand under sections 404.984 and
                416.1484. If a Federal court remands a case, the Appeals Council may
                issue a decision pursuant to sections 404.983(b) and 416.1484(b), hold
                a hearing and issue a decision pursuant to sections 404.983(c) and
                416.1484(c), or remand the case to an ALJ with instructions to take
                action and issue a decision or return the case to the Appeals Council
                with a recommended decision. However, this situation is distinct from
                when the Appeals Council decides whether to assume jurisdiction after
                an ALJ, or AAJ, issues a hearing decision in a case remanded by Federal
                court. In that situation, the Appeals Council may assume jurisdiction
                based on written exceptions to the hearing decision filed by the
                claimant or based on its authority pursuant to paragraph (c) of
                sections 404.984 and 416.1484. However, we do not currently have a
                regulatory standard to govern how the Appeals Council will
                [[Page 73152]]
                decide whether to assume jurisdiction after an ALJ, or AAJ, issues a
                hearing decision in a case remanded by Federal court. The revisions to
                sections 404.984 and 416.1484 make clear that the standard for assuming
                jurisdiction after an ALJ, or AAJ, issues a hearing decision in a case
                remanded by Federal court is the same as the standard that applies when
                the Appeals Council decides whether to review a hearing decision or
                dismissal under sections 404.970 and 416.1470. We will not respond to
                any comments relating to our proposal to add a reasonable probability
                standard in paragraph (d) of sections 404.970 and 416.1470 because, as
                previously explained, we are not proceeding with that proposal.
                Comments About Additional Evidence at the Appeals Council Level of
                Review
                 Comment: A commenter stated that our proposal to revise sections
                404.976(b) and 416.1476(b) to clarify that the Appeals Council will
                consider all evidence it receives, but will exhibit that evidence only
                if it meets the requirements of sections 404.970(a)(5) and (b) and
                416.1470(a)(5) and (b) would be unhelpful and superfluous. The
                commenter said there were three possible options. First, if the
                evidence were sufficient to warrant review and the Appeals Council
                issues a decision, it would be exhibited in the record. Second, if the
                evidence were sufficient to warrant review and a remand to the hearing
                level, it would not be exhibited. Rather, it would be returned to the
                hearing office for the ALJ's consideration. Lastly, if the evidence did
                not warrant review, there would be an open question of when it could be
                used to provide a protective filing date for a subsequent application
                (Social Security Ruling 11-1p).\89\ The commenter questioned the
                purpose of this additional reasonable probability standard.
                ---------------------------------------------------------------------------
                 \89\ The commenter refers to Social Security Ruling 11-1p:
                Titles II and XVI: Procedures for Handling Requests to File
                Subsequent Applications for Disability Benefits, available here:
                https://www.ssa.gov/OP_Home/rulings/di/01/SSR2011-01-di-01.html.
                ---------------------------------------------------------------------------
                 Response: We disagree that the revisions to sections 404.976(b) and
                416.1476(b) are unhelpful and superfluous. As we explained in the
                preamble of our NPRM, the revisions to sections 404.976(b) and
                416.1476(b) clarify when the Appeals Council will mark additional
                evidence as an exhibit and make it part of the official record.
                Additionally, we already provide the claimant a protective filing date
                for a new application whenever a claimant submits additional evidence
                to the Appeals Council that does not relate to the period on or before
                the date of the hearing decision, or whenever the Appeals Council finds
                that the claimant did not have good cause for missing the deadline to
                submit written evidence.\90\
                ---------------------------------------------------------------------------
                 \90\ 20 CFR 404.970(c) and 416.1470(c).
                ---------------------------------------------------------------------------
                 Comment: Regarding our proposed revisions to sections 404.976(b)
                and 416.1476(b), one commenter suggested that we should: (1) Eliminate
                paragraph (b) altogether; (2) if the paragraph stays, add a sentence
                stating that any evidence that meets the ``reasonable probability
                standard'' in sections 404.970(a)(5) and 416.1470(a)(5) automatically
                meets the ``good cause'' standard in sections 404.970(b) and
                416.1470(b); or (3) create a truly clarifying and time-saving policy
                that the Appeals Council, when it grants review to issue a decision,
                will evaluate and mark as exhibit(s) all relevant evidence.
                 Response: We disagree with these suggestions. As explained above,
                regarding (1), we are revising sections 404.976(b) and 416.1476(b) to
                clarify when the Appeals Council marks additional evidence as an
                exhibit and makes it part of the official administrative record.
                Regarding (2), we disagree that good cause for missing the deadline to
                submit evidence under sections 404.970(b) and 416.1470(b) would always
                exist whenever the Appeals Council finds, under sections 404.970(a)(5)
                and 416.1470(a)(5), that there is a reasonable probability that
                additional evidence would change the outcome of the hearing decision.
                The good cause requirement in sections 404.970(b) and 416.1470(b) is
                based on the 5-day rule set forth in sections 404.935(a) and
                416.1435(a). Under the 5-day rule, a claimant generally must inform us
                about or submit written evidence at least 5 business days before the
                date of his or her scheduled hearing. We adopted the 5-day rule, in
                part, to ensure that the evidentiary record is more complete when ALJs
                hold hearings.\91\ The commenter's suggestion that we revise our
                regulations to state that any evidence that meets the ``reasonable
                probability standard'' in sections 404.970(a)(5) and 416.1470(a)(5)
                automatically meets the ``good cause'' standard in sections 404.970(b)
                and 416.1470(b) would be inconsistent with the intent of the 5-day
                rule. Finally, regarding the third suggestion, it is altogether unclear
                to us how revising our regulations as the commenter proposed would
                result in greater clarity and save time.
                ---------------------------------------------------------------------------
                 \91\ 81 FR 90987, 90989 (Dec. 16, 2016).
                ---------------------------------------------------------------------------
                 Comment: One commenter agreed with the Appeals Council's current
                practice of including in a certified administrative record filed in
                Federal court any additional evidence that the Appeals Council
                receives, regardless of whether the Appeals Council marks the evidence
                as an exhibit and makes it part of the official record. The commenter
                suggested that we memorialize this practice in the regulatory text at
                section 404.970(a)(5).
                 Response: We decline to add language about including additional
                evidence in certified administrative records to be filed in Federal
                court in sections 404.970(a)(5) and 416.1470(a)(5), because those rules
                regard when the Appeals Council will review a case. However, we agree
                that it would be helpful to clarify in our regulations that additional
                evidence the Appeals Council received during the administrative review
                process, including additional evidence that the Appeals Council
                received but did not exhibit or make part of the official record, would
                be included in the certified administrative record filed in Federal
                court. We have added that clarifying language to sections 404.976(b)
                and 416.1476(b) in this final rule.
                Comments About the Wording of Our Paperwork Reduction Act (PRA)
                Information in the NPRM
                 Comment: One commenter referred to the PRA section of the NPRM, in
                which we proposed to update forms to reflect the new regulatory
                language stating that ``Judges'' will review the cases, hold hearings,
                and issue decisions. Currently, our forms use the narrow, specific
                designation, ``Administrative Law Judges.'' In the NPRM, we stated that
                once we published the final rule, we would obtain approval from the
                Office of Management and Budget for this revision through non-
                substantive change requests for these information collections, which
                does not require public notice and comment under the PRA. The commenter
                disagreed with our statement that this is a ``non-substantive change''
                that does not require public comment.
                 The commenter said ALJs and AAJs do completely different jobs and
                treating them the same is either a misunderstanding of the system or a
                breach of public trust. The commenter said that the public should know
                what kind of judge they have in a case, and that we should not hide
                this from the public by changing the title.
                 Response: The PRA statement in our NPRM focused on the significance
                of the changes we were planning to make to information collections
                associated with the regulation. In the NPRM, we
                [[Page 73153]]
                indicated plans to change ``Administrative Law Judges'' to ``judges''
                to reflect that if the rule were finalized, there would be a
                possibility that a claimant's case could be heard and decided by an AAJ
                from the Appeals Council. In that case, the ``Administrative Law
                Judge'' appellation would not be accurate. However, to the commenter's
                point about whether this change is significant, we note that the change
                will not occur at the forms/PRA level. We are merely proposing a
                language change to reflect our revised regulations. The appropriate
                time for interested parties to express comments about our proposed rule
                was during the notice-and-comment period, not in the PRA/forms arena.
                We note that many interested parties did submit public comments on this
                issue, and we addressed those comments in this preamble to the final
                rule. To the commenter's assertion that the public should know what
                kind of judge they have in a case, we note that this is a policy issue
                outside the realm of the PRA, as addressed in the final rule. We have
                transparently conveyed our proposed change in the NPRM. For these
                reasons, we will not be changing the PRA statement.
                Comments That Suggested Alternate Proposals
                 Comment: One commenter suggested assigning ALJs to the Appeals
                Council, and eliminating the position of AAJs. According to the
                commenter, ALJs on the Appeals Council would bolster the independence
                of disability hearings at all levels within the agency.
                 Response: We acknowledge the commenter's suggestion. However, the
                goal of this final rule is to increase our adjudicative capacity when
                needed, allowing us to adjust more quickly to fluctuating short-term
                workloads, such as when an influx of cases reaches the hearing level.
                Eliminating current positions would be at odds with this goal.
                 Comment: One commenter said that we should change our rule so the
                only people who can be AAJs are retired and rehired ALJs or ALJs sent
                to the Appeals Council on special detail. The commenter said that would
                allow for flexibility and would eliminate the issue of claimants having
                inexperienced and agency-controlled AAJs conduct their hearings.
                Further, according to the commenter, it would improve the quality of
                the appellate decisions. Another commenter suggested having interested
                AAJs apply for long-term details as ALJs.
                 Response: We disagree that the commenter's proposal to use rehired
                ALJs to act as AAJs would create more flexibility, because the rehired
                ALJs would have to be retrained in current policies and procedures. We
                also disagree with the suggestion to have currently serving ALJs apply
                for details to the Appeals Council, as that would defeat the purpose of
                the revised rule, which is to increase our adjudicative capacity. We
                seek to use AAJs to assist with hearing level workloads, so taking ALJs
                away from those workloads would be counter-productive. Lastly, we
                believe that detailing AAJs to serve as ALJs may be a feasible option,
                depending on the circumstances surrounding the need; however, as we do
                not know all the circumstances that may arise in the future, we want to
                be prepared and have options available to us to best address all
                potential situations. Our goal is to clarify the Appeals Council's
                existing authority to hold hearings and issue decisions.
                 Comment: Some commenters said we should keep the hearings and
                appeals level adjudications separate and distinct, as they have been
                traditionally. They recommended that if the AAJs wish to have a more
                significant role in the adjudication process, that they hold oral
                arguments to address important broad policy or procedural issues that
                affect the general public interest. According to the commenter, this
                would be in keeping with the AAJs' primary role to ensure our decisions
                are uniform and consistent.
                 Response: We understand the concerns of keeping hearings and
                appeals level adjudications separate and distinct. In effect, the
                hearings and appeals will remain separate and distinct. As discussed
                above, under this final rule, the claimant will still have the
                opportunity to appear at a hearing, receive a hearing decision, and
                request Appeals Council review. The only change is that, in some cases,
                the hearing and decision may be by an AAJ. Furthermore, this final rule
                specifies that if an AAJ conducts a hearing, issues a hearing decision,
                or dismisses a hearing request, he or she will not participate in any
                action associated with a request for Appeals Council review of that
                case. In addition, as discussed above, AAJs are expected to recuse
                themselves from a case if they have any interest in the case, as ALJs
                would. We will be vigilant in ensuring that the hearings and Appeals
                Council review levels of administrative review remain separate and
                distinct, and that claimants are afforded fair and impartial hearing
                decisions and reviews of those hearing decisions, as we always have.
                 We also disagree about the ``primary role'' of the Appeals Council,
                as the Appeals Council's role has evolved over the years to address
                current needs. For example, we created the Appeals Council's Division
                of Quality to exercise quality review responsibilities to oversee and
                help improve the accuracy and policy compliance of ALJ decisions.
                Moreover, we are not expanding the role of AAJs. AAJs have long had the
                authority to conduct hearings, but we have not exercised this
                authority.
                 Comment: One commenter said we should provide additional
                information related to our statement that we would remove the
                regulations at sections 404.966 and 416.1466, which authorize us to
                test the elimination of the request for Appeals Council review. The
                commenter said that the NPRM does not state the conclusions reached by
                the test or the Appeals Council's fate.
                 Response: As we explained in the preamble to our proposed rule,
                given our experience over the last 21 years, we no longer intend to
                test the elimination of the request for Appeals Council review. We
                amended our rules to establish authority to test request for review
                elimination (RRE) in September 1997.\92\ Our goal in testing
                elimination of the request for Appeals Council review was to assess the
                effects of that change in conjunction with other modifications in the
                disability claim process under the full process model (FPM),
                established in April 1997.\93\ In July 1998, we provided notice of
                limited extended testing of the FPM with two additional features
                designed to maximize the resources of a Federal processing center.\94\
                Thereafter, in June 2000, we published a notice announcing a new test
                of the elimination of the request for Appeals Council review in
                conjunction with our disability prototype test.\95\ At that time, we
                explained that before making any decision on the merits of eliminating
                the request for review, we would obtain valid and reliable data about
                the effects
                [[Page 73154]]
                of such elimination.\96\ Our testing results showed that the number of
                cases that would be appealed to the courts would likely increase
                substantially.\97\ Additionally, other attempts to remove the Appeals
                Council level of review have not been successful.\98\ As such, we no
                longer intend to test eliminating the request for Appeals Council
                review, and we are removing that authority in sections 404.966 and
                416.1466.
                ---------------------------------------------------------------------------
                 \92\ 62 FR 49598 (Sept. 23, 1997).
                 \93\ Id. at 49598-99. Under the FPM, also known as the
                integrated model, we originally tested four modifications to the
                disability claim process: the use of a single decisionmaker,
                conducting predecisional interviews in certain cases, eliminating
                the reconsideration step in the administrative review process, and
                use of an adjudication officer to conduct prehearing proceedings
                and, if appropriate, issue fully favorable decisions. See 62 FR
                16210 (Apr. 4, 1997); see also 63 FR 58444 (noting case selection
                for testing ended in January 1998). Testing elimination of the
                request for Appeals Council review was the fifth modification to the
                FPM. See 62 FR 49598 (Sept. 23, 1997); see also 63 FR 40946 (July
                31, 1998).
                 \94\ See 63 FR 40946 (July 31, 1998). We announced the beginning
                of additional testing in October 1998, but that testing did not
                include RRE. See 63 FR 58444 (Oct. 30, 1998).
                 \95\ See 65 FR 36210 (June 7, 2000).
                 \96\ 65 FR 36210.
                 \97\ See the January 2001 report from the Social Security
                Advisory Board (SSAB), ``Charting the Future of Social Security's
                Disability Programs: The Need for Fundamental Change,'' available at
                https://www.ssab.gov/research/charting-the-future-of-social-securitys-disability-programs-the-need-for-fundamental-change/. See
                also the June 28, 2001 testimony of Hon. Ronald G. Bernoski, at the
                Hearing Before Subcommittee on Social Security of the Committee on
                Ways and Means House of Representative, where he noted ``the SSAB
                Report also correctly points out the impracticality of this step [to
                eliminate the Appeals Council level of review], since the SSA has
                shown by testing that this would result in a large increase in court
                appeals.'' Our initial RRE testing failed to produce sufficient
                data. See 65 FR 36210 (June 7, 2000).
                 \98\ For example, we tested the elimination of the Appeals
                Council, under a different authority, the Disability Service
                Improvement (DSI) Process, by creation of the Disability Review
                Board (DRB). Under the DSI Process, an ALJ's decision became final
                unless the claim was referred to the DRB. If the DRB reviewed a
                claim and issued a decision, that decision was our final decision,
                and if a claimant was dissatisfied with it, he or she could seek
                judicial review in Federal court. The Appeals Council had no
                involvement with the DRB, which we established with the intent to
                phase out the Appeals Council. See 71 FR 16424 (Mar. 31, 2006); and
                correction 71 FR 17990 (Aug. 10, 2006). Ultimately, we eliminated
                the DRB because it did not function as intended and did not provide
                efficiencies in reducing the hearings backlog. See 76 FR 24802 (May
                3, 2011).
                ---------------------------------------------------------------------------
                 Comment: One commenter recommended adding the sentence, ``The
                Appeals Council comprises the AAJs, the Appeals Officers, and the
                Deputy Chair of the Appeals Council'' to sections 404.2(b)(2),
                416.120(b)(2), and 408.110(b)(2). The commenter said that this expanded
                definition may be useful when considering section 422.205(c).
                 Response: We disagree with this recommendation. Currently, sections
                404.2(b)(2), 416.120(b)(2), and 408.110(b)(2) indicate that the Appeals
                Council includes the member or members thereof as may be designated by
                the Chair of the Appeals Council. We do not intend to adopt the
                commenter's suggestion because we seek to remain flexible in our
                staffing.
                 Comment: One commenter suggested that we clarify what the commenter
                perceived as an inconsistency in sections 404.976(c) and 416.1476(c).
                This rule provides, ``If your request to appear is granted, the Appeals
                Council will tell you the time and place of the oral argument at least
                10 business days before the scheduled date.'' The commenter said that
                in the summary, we indicate the Appeals Council would be required to
                follow the rules that govern ALJ hearings, which include mailing a
                notice of hearing at least 75 days before the date of the hearing.
                 Response: The commenter conflates a request to appear before the
                Appeals Council to present oral argument with a request for a hearing.
                Paragraph (c) of final sections 404.976 and 416.1476 regard a
                claimant's ability to request to appear before the Appeals Council to
                present oral argument, which the Appeals Council will grant if it
                decides that the case raises an important question of law or policy, or
                that oral argument would help to reach a proper decision. However, if
                the Appeals Council assumes responsibility for a hearing request under
                section 404.956 or 416.1456, we would mail a notice of hearing pursuant
                to the relevant section(s) 404.938(a) or 416.1438(a), which generally
                require that we mail a notice of a hearing at least 75 days before the
                date of the hearing.
                 Comment: One commenter made suggestions for editing sections
                404.984 and 416.1484. According to the commenter, these sections
                require that, if the Appeals Council assumes jurisdiction of an ALJ
                decision after remand, the Appeals Council will ``either make a new,
                independent decision based on the preponderance of the evidence in the
                record that will be the final decision of the Commissioner after
                remand, dismiss a claim(s), or remand the case to an administrative law
                judge for further proceedings, including a new decision.'' First, the
                commenter recommended changing the phrase ``dismiss a claim(s)'' to
                ``dismiss the request for a hearing or request for review, consistent
                with the Federal court's remand.'' Second, the commenter recommended
                that the Appeals Council never dismiss a request for a hearing or a
                request for review after the case has been considered and remanded by
                the court, including a sentence four remand.\99\
                ---------------------------------------------------------------------------
                 \99\ Under sentence four of section 205(g) of the Act, a court
                may remand a case in conjunction with a judgment affirming,
                modifying, or reversing the decision of the Commissioner. The
                judgment of the court ends the court's jurisdiction over the case,
                but either the claimant or agency may appeal the district court's
                action to a court of appeals. See HALLEX I-4-6-1 available here:
                https://www.ssa.gov/OP_Home/hallex/I-04/I-4-6-1.html.
                ---------------------------------------------------------------------------
                 Response: We partially adopted the commenter's first suggestion and
                revised paragraph (a) of sections 404.984 and 416.1484 to use the more
                specific phrase ``dismiss the request for a hearing.'' However, we did
                not adopt the suggestion to include ``dismiss a request for review.''
                When the Appeals Council assumes jurisdiction after an ALJ or AAJ has
                issued a hearing decision in a case remanded by a Federal court, the
                request for review is no longer at issue. The Appeals Council may
                assume jurisdiction of the case based on written exceptions filed by
                the claimant or based on its authority pursuant to paragraph (c) of
                section 404.984 or section 416.1484.
                 We also partially adopted the commenter's second recommendation.
                Since the Federal court retains jurisdiction for remands under sentence
                six of section 205(g) of the Act (42 U.S.C. 405(g)), we added language
                to clarify that the Appeals Council will not dismiss the request for a
                hearing in these cases. We disagree that the Appeals Council cannot
                dismiss a request for a hearing in cases remanded under sentence four
                of section 205(g) of the Act. Once a Federal court has remanded a case
                under sentence four, jurisdiction returns to the Appeals Council to
                take appropriate action, which may include dismissing a request for a
                hearing.
                 Comment: One commenter questioned the reason for changing the
                procedure in section 422.205(a). The commenter noted that proposed
                section 422.205(a) provides that an Appeals Council decision on a case
                removed under sections 404.956 or 416.1456 may be signed by one Appeals
                Council member. The commenter further noted that currently two AAJs
                sign Appeals Council decisions, and that appeals officers are also
                members of the Appeals Council, but, currently, they have no authority
                to sign decisions or dismissals. The commenter questioned whether we
                sought to change this authority deliberately, or if it was an
                oversight. The commenter also questioned if this proposed change would
                alter current policy permitting AAJs only to sign Appeals Council
                decisions and dismissals, as well as Appeals Council denials of review
                of ALJ dismissals.
                 Response: We acknowledge that it would be helpful to clarify in
                section 422.205(a) who has authority to sign hearings level decisions
                and dismissals. We do not intend for appeals officers to sign hearings
                level decisions or dismissals. As such, we revised the language in
                section 422.205(a) to clarify the requirement of one AAJ to sign
                decisions and dismissals on requests for hearings removed under
                sections 404.956 or 416.1456 for consistency with the signature
                requirement for ALJs. One signature by an appeals officer, or by such
                member of the Appeals Council as may be designated by the Chair or
                [[Page 73155]]
                Deputy Chair, continues to be the requirement for denials of requests
                for reviews as set forth in section 422.205(c). Furthermore, the
                signatures of at least two AAJs will continue to be required for
                decisions issued on requests for review or own motion review when the
                claimant does not appear before the Appeals Council to present oral
                argument, but that requirement now appears in section 422.205(d).
                Therefore, we are not changing the signature requirements for Appeals
                Council actions on requests for review or own motion reviews of hearing
                level decisions or dismissals.
                 Comment: One commenter said section 422.205(c) contains a
                redundancy because it provides that a request for review may be denied
                by an appeal officer, appeals officers, or members of the Appeals
                Council, as designated. The commenter noted that appeals officers are
                members of the Appeals Council. According to the commenter, appeals
                officers need not be listed separately from the Appeals Council, and it
                might be clearer to state that the request for review may be denied by
                an AAJ, an appeals officer, or any member of the Appeals Council, as
                designated.
                 Response: We disagree that the language, which appears in current
                section 422.205(c), is redundant. This final rule merely adds a title
                to paragraph (c), and does not revise the rest of the section including
                who may deny a request for review.
                 Comment: One commenter suggested that a statement of when judicial
                review is available after an Appeals Council dismissal might prove
                useful for section 422.210(a). The commenter noted that that regulation
                does not provide that judicial review is available when the Appeals
                Council dismisses the request for review or the request for a hearing.
                 Response: We are considering whether and how to change our
                regulations based on the Supreme Court's holding in Smith v.
                Berryhill.\100\ Therefore, we are not revising section 422.210(a) to
                clarify when a claimant may seek judicial review following an Appeals
                Council dismissal as part of this final rule. We will propose any
                changes we plan to make based on the Supreme Court's decision in Smith
                as part of a separate rulemaking proceeding.
                ---------------------------------------------------------------------------
                 \100\ 139 S. Ct. 1765 (2019).
                ---------------------------------------------------------------------------
                Regulatory Procedures
                Executive Order 12866, as Supplemented by Executive Order 13563
                 We consulted with the Office of Management and Budget (OMB) and
                determined that this final rule meets the criteria for a significant
                regulatory action under Executive Order 12866 and is subject to OMB
                review. Details about the impacts of our rule follow.
                Anticipated Benefits
                 We expect this final rule will benefit us by providing additional
                flexibility and by allowing us to increase our hearing capacity without
                incurring permanent new costs. Having AAJs hold hearings and issue
                decisions will create flexibility for us to shift resources when there
                is an increase in pending cases at the hearings level. Before using
                AAJs to hold hearings and issue decisions, we will determine whether it
                makes sense to do so, considering the Appeals Council's workload
                relative to the hearing level workload. If necessary, we will hire
                additional AAJs to augment the current number of ALJs conducting
                hearings. Additionally, the numbers of new AAJs could be increased or
                decreased based on the demand of the workload.
                Anticipated Costs
                 We anticipate that this final rule would result in minimal, if any,
                quantified costs when implemented. Before implementing, we would
                provide appropriate training to our AAJs, make minor systems updates,
                and perhaps obtain additional equipment. As discussed above, when we
                exercise this authority, we would ensure that the AAJs possess the
                knowledge, skills, and training required to conduct hearings. However,
                we expect that the cost of training AAJs would be minimal because the
                AAJs would already have experience with our programs, and we could use
                existing ALJ training materials, as applicable. We expect that we would
                need to train our AAJs and other Appeals Council personnel, in
                particular, on the procedural and technical issues involved in
                conducting hearings. For example, AAJs would need to be trained on how
                to (1) prepare for a hearing (e.g., handle specific development issues
                such as requesting medical records, if necessary; scheduling
                consultative examinations; issuing subpoenas; and ensuring proper
                notices are sent), and (2) conduct a hearing (e.g., handle technical
                matters regarding the hearing recording; ensure that unrepresented
                claimants receive proper notice of the right to representation; and
                work with interpreters, witnesses, and experts). Because we believe
                AAJs holding a hearing will be equivalently trained to ALJs and will be
                following the same set of hearing policies as ALJs, we do not believe,
                as suggested by some commenters, that AAJ determinations are more
                likely to increase the volume of claimants who choose to appeal a
                decision that is not fully favorable to the Appeals Council level.
                 In addition, we would need to train our Appeals Council personnel
                how to use the hearings systems. We expect this would be a minimal cost
                as such systems are similar to systems our Appeals Council personnel
                already use. Lastly, we would need to equip our Appeals Council offices
                to hold hearings. For example, we would need to provide computers for
                video teleconference hearings and recording equipment. We may be able
                to utilize existing internal resources to meet these needs.
                 Qualitatively, we acknowledge that some commenters have suggested
                that the use of AAJs at the hearing level could create a perception of
                lessened impartiality than a hearing held by an ALJ. This is largely a
                qualitative cost related to the perception of received due process,
                although claimants who believe they did not receive a fair hearing may
                be more likely to pursue a review at the Appeals Council and in a
                Federal district court. However, for the reasons outlined above as well
                as reasons discussed previously in the preamble, we do not believe
                there will be different outcomes in adjudications between hearings held
                by AAJs and ALJs, and as such do not believe this is, in fact, either a
                qualitative or quantitative cost.
                Executive Order 13132 (Federalism)
                 We analyzed this final rule in accordance with the principles and
                criteria established by Executive Order 13132, and determined that the
                rule will not have sufficient Federalism implications to warrant the
                preparation of a Federalism assessment. We also determined that this
                rule would not preempt any State law or State regulation or affect the
                States' abilities to discharge traditional State governmental
                functions.
                Executive Order 13771
                 This final rule is not subject to the requirements of Executive
                Order 13771 because it is administrative in nature and will result in
                no more than de minimis costs.
                [[Page 73156]]
                Regulatory Flexibility Act
                 We certify that this final rule will not have a significant
                economic impact on a substantial number of small entities, because it
                affects individuals only. Therefore, a regulatory flexibility analysis
                is not required under the Regulatory Flexibility Act, as amended.
                Paperwork Reduction Act
                 SSA already has existing OMB PRA-approved information collection
                tools relating to this final rule: The Request for Review of ALJ
                Decision or Dismissal (Form HA-520, OMB No. 0960-0277); the Waiver of
                Your Right to Personal Appearance Before an Administrative Law Judge
                (Form HA-4608, OMB No. 0960-0284); the Request to Withdraw a Hearing
                Request (Form HA-85, OMB No. 0960-0710); the Acknowledgement of Receipt
                of Notice of Hearing (Form HA-504, OMB No. 0960-0671); the Request to
                Show Case for Failure to Appear (Form HA-L90, OMB No. 0960-0794); and
                the Request for Hearing by Administrative Law Judge (Form HA-501, OMB
                No. 0960-0269). Because this final rule will allow for both
                Administrative Appeals Judges and Administrative Law Judges to hold
                hearings and issue decisions, we will update the content of these forms
                to reflect the new language stating that ``Judges'' will review the
                cases, hold hearings, and issue decisions; however, we will not change
                the titles of these forms. Currently these forms use the narrow,
                specific designation, ``Administrative Law Judges.'' Once we publish
                this final rule, we will obtain OMB approval for this revision through
                non-substantive change requests for these information collections,
                which does not require public notice and comment under the PRA. Thus,
                this final rule does not create or significantly alter any existing
                information collections under the PRA.
                (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; and 96.006,
                Supplemental Security Income)
                List of Subjects
                20 CFR Part 404
                 Administrative practice and procedure, Blind, Disability benefits,
                Public assistance programs, Reporting and recordkeeping requirements,
                Social security.
                20 CFR Part 408
                 Administrative practice and procedure, Reporting and recordkeeping
                requirements, Social security, Supplemental Security Income (SSI),
                Veterans.
                20 CFR Part 411
                 Administrative practice and procedure, Blind, Disability benefits,
                Public assistance programs, Reporting and recordkeeping requirements,
                Vocational rehabilitation.
                20 CFR Part 416
                 Administrative practice and procedure, Reporting and recordkeeping
                requirements, Supplemental Security Income (SSI).
                20 CFR Part 422
                 Administrative practice and procedure, Reporting and recordkeeping
                requirements, Social security.
                 The Commissioner of the Social Security Administration, Andrew
                Saul, having reviewed and approved this document, is delegating the
                authority to electronically sign this document to Faye I. Lipsky, who
                is the primary Federal Register Liaison for SSA, for purposes of
                publication in the Federal Register.
                Faye I. Lipsky,
                Federal Register Liaison, Office of Legislation and Congressional
                Affairs, Social Security Administration.
                 For the reasons set out in the preamble, we amend 20 CFR chapter
                III, parts 404, 408, 411, 416 and 422, as set forth below:
                PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
                (1950-)
                Subpart A--Introduction, General Provisions and Definitions
                0
                1. The authority citation for subpart A of part 404 continues to read
                as follows:
                 Authority: Secs. 203, 205(a), 216(j), and 702(a)(5) of the
                Social Security Act (42 U.S.C. 403, 405(a), 416(j), and 902(a)(5))
                and 48 U.S.C. 1801.
                0
                2. Amend Sec. 404.2 by revising paragraph (b) to read as follows:
                Sec. 404.2 General definitions and use of terms.
                * * * * *
                 (b) Commissioner; Appeals Council; Administrative Law Judge;
                Administrative Appeals Judge defined--(1) Commissioner means the
                Commissioner of Social Security.
                 (2) Appeals Council means the Appeals Council of the Office of
                Analytics, Review, and Oversight in the Social Security Administration
                or such member or members thereof as may be designated by the Chair of
                the Appeals Council.
                 (3) Administrative Law Judge means an Administrative Law Judge in
                the Office of Hearings Operations in the Social Security
                Administration.
                 (4) Administrative Appeals Judge means an Administrative Appeals
                Judge serving as a member of the Appeals Council.
                * * * * *
                Subpart J--Determinations, Administrative Review Process, and
                Reopening of Determinations and Decisions
                0
                3. The authority citation for subpart J of part 404 continues to read
                as follows:
                 Authority: Secs. 201(j), 204(f), 205(a)-(b), (d)-(h), and (j),
                221, 223(i), 225, and 702(a)(5) of the Social Security Act (42
                U.S.C. 401(j), 404(f), 405(a)-(b), (d)-(h), and (j), 421, 423(i),
                425, and 902(a)(5)); sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42
                U.S.C. 405 note); secs. 5, 6(c)-(e), and 15, Pub. L. 98-460, 98
                Stat. 1802 (42 U.S.C. 421 note); sec. 202, Pub. L. 108-203, 118
                Stat. 509 (42 U.S.C. 902 note).
                0
                4. Revise Sec. 404.929 to read as follows:
                Sec. 404.929 Hearing before an administrative law judge--general.
                 If you are dissatisfied with one of the determinations or decisions
                listed in Sec. 404.930, you may request a hearing. Subject to Sec.
                404.956, the Deputy Commissioner for Hearings Operations, or his or her
                delegate, will appoint an administrative law judge to conduct the
                hearing. If circumstances warrant, the Deputy Commissioner for Hearings
                Operations, or his or her delegate, may assign your case to another
                administrative law judge. In general, we will schedule you to appear by
                video teleconferencing or in person. When we determine whether you will
                appear by video teleconferencing or in person, we consider the factors
                described in Sec. 404.936(c)(1)(i) through (iii), and in the limited
                circumstances described in Sec. 404.936(c)(2), we will schedule you to
                appear by telephone. You may submit new evidence (subject to the
                provisions of Sec. 404.935), examine the evidence used in making the
                determination or decision under review, and present and question
                witnesses. The administrative law judge who conducts the hearing may
                ask you questions. He or she will issue a decision based on the
                preponderance of the evidence in the hearing record. If you waive your
                right to appear at the hearing, the administrative law judge will make
                a decision based on the preponderance of the evidence that is in the
                file and, subject to the provisions of Sec. 404.935, any new evidence
                that may have been submitted for consideration.
                [[Page 73157]]
                0
                5. Amend Sec. 404.955 by revising the section heading, redesignating
                paragraphs (c) through (f) as paragraphs (d) through (g), and adding
                new paragraph (c) to read as follows:
                Sec. 404.955 The effect of a hearing decision.
                * * * * *
                 (c) The Appeals Council decides on its own motion to review the
                decision under the procedures in Sec. 404.969;
                * * * * *
                0
                6. Revise Sec. 404.956 to read as follows:
                Sec. 404.956 Removal of a hearing request(s) to the Appeals Council.
                 (a) Removal. The Appeals Council may assume responsibility for a
                hearing request(s) pending at the hearing level of the administrative
                review process.
                 (b) Notice. We will mail a notice to all parties at their last
                known address telling them that the Appeals Council has assumed
                responsibility for the case(s).
                 (c) Procedures applied. If the Appeals Council assumes
                responsibility for a hearing request(s), it shall conduct all
                proceedings in accordance with the rules set forth in Sec. Sec.
                404.929 through 404.961, as applicable.
                 (d) Appeals Council review. If the Appeals Council assumes
                responsibility for your hearing request under this section and you or
                any other party is dissatisfied with the hearing decision or with the
                dismissal of a hearing request, you may request that the Appeals
                Council review that action following the procedures in Sec. Sec.
                404.967 through 404.982. The Appeals Council may also decide on its own
                motion to review the action that was taken in your case under Sec.
                404.969. The administrative appeals judge who conducted a hearing,
                issued a hearing decision in your case, or dismissed your hearing
                request will not participate in any action associated with your request
                for Appeals Council review of that case.
                 (e) Ancillary provisions. For the purposes of the procedures
                authorized by this section, the regulations of part 404 shall apply to
                authorize a member of the Appeals Council to exercise the functions
                performed by an administrative law judge under subpart J of part 404.
                Sec. 404.966 [Removed and Reserved]
                0
                7. Section 404.966 is removed and reserved.
                0
                8. Amend Sec. 404.970 by revising paragraph (a) to read as follows:
                Sec. 404.970 Cases the Appeals Council will review.
                 (a) The Appeals Council will review a case at a party's request or
                on its own motion if--
                 (1) There appears to be an abuse of discretion by the
                administrative law judge or administrative appeals judge who heard the
                case;
                 (2) There is an error of law;
                 (3) The action, findings or conclusions in the hearing decision or
                dismissal order are not supported by substantial evidence;
                 (4) There is a broad policy or procedural issue that may affect the
                general public interest; or
                 (5) Subject to paragraph (b) of this section, the Appeals Council
                receives additional evidence that is new, material, and relates to the
                period on or before the date of the hearing decision, and there is a
                reasonable probability that the additional evidence would change the
                outcome of the decision.
                * * * * *
                0
                9. Revise Sec. 404.973 to read as follows:
                Sec. 404.973 Notice of Appeals Council review.
                 When the Appeals Council decides to review a case, it shall mail a
                prior notice to all parties at their last known address stating the
                reasons for the review and the issues to be considered. However, when
                the Appeals Council plans to issue a decision that is fully favorable
                to all parties, plans to remand the case for further proceedings, or
                plans to issue a decision that is favorable in part and remand the
                remaining issues for further proceedings, it may send the notice of
                Appeals Council review to all parties with the decision or remand
                order.
                0
                10. Amend Sec. 404.976 by revising the section heading, revising
                paragraph (b), and adding paragraph (c) to read as follows:
                Sec. 404.976 Procedures before the Appeals Council.
                * * * * *
                 (b) Evidence the Appeals Council will exhibit. The Appeals Council
                will evaluate all additional evidence it receives, but will only mark
                as an exhibit and make part of the official record additional evidence
                that it determines meets the requirements of Sec. 404.970(a)(5) and
                (b). If we need to file a certified administrative record in Federal
                court, we will include in that record all additional evidence the
                Appeals Council received during the administrative review process,
                including additional evidence that the Appeals Council received but did
                not exhibit or make part of the official record.
                 (c) Oral argument. You may request to appear before the Appeals
                Council to present oral argument in support of your request for review.
                The Appeals Council will grant your request if it decides that your
                case raises an important question of law or policy or that oral
                argument would help to reach a proper decision. If your request to
                appear is granted, the Appeals Council will tell you the time and place
                of the oral argument at least 10 business days before the scheduled
                date. The Appeals Council will determine whether your appearance will
                be by video teleconferencing or in person, or, when the circumstances
                described in Sec. 404.936(c)(2) exist, the Appeals Council may
                schedule you to appear by telephone. The Appeals Council will determine
                whether any other person relevant to the proceeding will appear by
                video teleconferencing, telephone, or in person as based on the
                circumstances described in Sec. 404.936(c)(4).
                0
                11. Revise Sec. 404.983 to read as follows:
                Sec. 404.983 Case remanded by a Federal court.
                 (a) General rule. When a Federal court remands a case to the
                Commissioner for further consideration, the Appeals Council, acting on
                behalf of the Commissioner, may make a decision following the
                provisions in paragraph (b) or (c) of this section, dismiss the
                proceedings, except as provided in paragraph (d) of this section, or
                remand the case to an administrative law judge following the provisions
                in paragraph (e) of this section with instructions to take action and
                issue a decision or return the case to the Appeals Council with a
                recommended decision. Any issues relating to the claim(s) may be
                considered by the Appeals Council or administrative law judge whether
                or not they were raised in the administrative proceedings leading to
                the final decision in the case.
                 (b) Appeals Council decision without a hearing. If the Appeals
                Council assumes responsibility under paragraph (a) of this section for
                issuing a decision without a hearing, it will follow the procedures
                explained in Sec. Sec. 404.973 and 404.979.
                 (c) Administrative appeals judge decision after holding a hearing.
                If the Appeals Council assumes responsibility for issuing a decision
                and a hearing is necessary to complete adjudication of the claim(s), an
                administrative appeals judge will hold a hearing using the procedures
                set forth in Sec. Sec. 404.929 through 404.961, as applicable.
                 (d) Appeals Council dismissal. After a Federal court remands a case
                to the
                [[Page 73158]]
                Commissioner for further consideration, the Appeals Council may dismiss
                the proceedings before it for any reason that an administrative law
                judge may dismiss a request for a hearing under Sec. 404.957. The
                Appeals Council will not dismiss the proceedings in a claim where we
                are otherwise required by law or a judicial order to file the
                Commissioner's additional and modified findings of fact and decision
                with a court.
                 (e) Appeals Council remand. If the Appeals Council remands a case
                under paragraph (a) of this section, it will follow the procedures
                explained in Sec. 404.977.
                0
                12. Revise Sec. 404.984 to read as follows:
                Sec. 404.984 Appeals Council review of hearing decision in a case
                remanded by a Federal court.
                 (a) General. In accordance with Sec. 404.983, when a case is
                remanded by a Federal court for further consideration and the Appeals
                Council remands the case to an administrative law judge, or an
                administrative appeals judge issues a decision pursuant to Sec.
                404.983(c), the decision of the administrative law judge or
                administrative appeals judge will become the final decision of the
                Commissioner after remand on your case unless the Appeals Council
                assumes jurisdiction of the case. The Appeals Council may assume
                jurisdiction, using the standard set forth in Sec. 404.970, based on
                written exceptions to the decision which you file with the Appeals
                Council or based on its authority pursuant to paragraph (c) of this
                section. If the Appeals Council assumes jurisdiction of the case, it
                will not dismiss the request for a hearing where we are otherwise
                required by law or a judicial order to file the Commissioner's
                additional and modified findings of fact and decision with a court.
                 (b) You file exceptions disagreeing with the hearing decision. (1)
                If you disagree with the hearing decision, in whole or in part, you may
                file exceptions to the decision with the Appeals Council. Exceptions
                may be filed by submitting a written statement to the Appeals Council
                setting forth your reasons for disagreeing with the decision of the
                administrative law judge or administrative appeals judge. The
                exceptions must be filed within 30 days of the date you receive the
                hearing decision or an extension of time in which to submit exceptions
                must be requested in writing within the 30-day period. A timely request
                for a 30-day extension will be granted by the Appeals Council. A
                request for an extension of more than 30 days should include a
                statement of reasons as to why you need the additional time.
                 (2) If written exceptions are timely filed, the Appeals Council
                will consider your reasons for disagreeing with the hearing decision
                and all the issues presented by your case. If the Appeals Council
                concludes that there is no reason to change the hearing decision, it
                will issue a notice to you addressing your exceptions and explaining
                why no change in the hearing decision is warranted. In this instance,
                the hearing decision is the final decision of the Commissioner after
                remand.
                 (3) When you file written exceptions to the hearing decision, the
                Appeals Council may assume jurisdiction at any time, even after the 60-
                day time period which applies when you do not file exceptions. If the
                Appeals Council assumes jurisdiction of your case, any issues relating
                to your claim may be considered by the Appeals Council whether or not
                they were raised in the administrative proceedings leading to the final
                decision in your case or subsequently considered by the administrative
                law judge or administrative appeals judge in the administrative
                proceedings following the court's remand order. The Appeals Council
                will either make a new, independent decision pursuant to Sec.
                404.983(b) or Sec. 404.983(c), based on a preponderance of the
                evidence in the record that will be the final decision of the
                Commissioner after remand, dismiss the request for a hearing, or remand
                the case to an administrative law judge for further proceedings,
                including a new decision.
                 (c) Appeals Council assumes jurisdiction without exceptions being
                filed. Any time within 60 days after the date of the hearing decision,
                the Appeals Council may decide to assume jurisdiction of your case even
                though no written exceptions have been filed. Notice of this action
                will be mailed to all parties at their last known address. You will be
                provided with the opportunity to file briefs or other written
                statements with the Appeals Council about the facts and law relevant to
                your case. After the Appeals Council receives the briefs or other
                written statements, or the time allowed (usually 30 days) for
                submitting them has expired, the Appeals Council will either make a
                new, independent decision pursuant to Sec. 404.983(b) or Sec.
                404.983(c), based on a preponderance of the evidence in the record that
                will be the final decision of the Commissioner after remand, dismiss
                the request for a hearing, or remand the case to an administrative law
                judge for further proceedings, including a new decision.
                 (d) Exceptions are not filed and the Appeals Council does not
                otherwise assume jurisdiction. If no exceptions are filed and the
                Appeals Council does not assume jurisdiction of your case, the decision
                of the administrative law judge or administrative appeals judge becomes
                the final decision of the Commissioner after remand.
                0
                13. Amend Sec. 404.999c by revising paragraph (d)(3)(i)(C) to read as
                follows:
                Sec. 404.999c What travel expenses are reimbursable.
                * * * * *
                 (d) * * *
                 (3) * * *
                 (i) * * *
                 (C) The designated geographic service area of the Office of
                Hearings Operations hearing office having responsibility for providing
                the hearing.
                * * * * *
                PART 408--SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS
                Subpart A--Introduction, General Provision and Definitions
                0
                14. The authority citation for subpart A of part 408 continues to read
                as follows:
                 Authority: Secs. 702(a)(5) and 801-813 of the Social Security
                Act (42 U.S.C. 902(a)(5) and 1001-1013).
                0
                15. Amend Sec. 408.110 by revising paragraph (b) to read as follows:
                Sec. 408.110 General definitions and use of terms.
                * * * * *
                 (b) Commissioner; Appeals Council; Administrative Law Judge
                defined--(1) Commissioner means the Commissioner of Social Security.
                 (2) Appeals Council means the Appeals Council of the Office of
                Analytics, Review, and Oversight in the Social Security Administration
                or such member or members thereof as may be designated by the Chair of
                the Appeals Council.
                 (3) Administrative Law Judge means an Administrative Law Judge in
                the Office of Hearings Operations in the Social Security
                Administration.
                * * * * *
                PART 411--THE TICKET TO WORK AND SELF-SUFFICIENCY PROGRAM
                0
                16. The authority citation for part 411 continues to read as follows:
                 Authority: Secs. 702(a)(5) and 1148 of the Social Security Act
                (42 U.S.C. 902(a)(5) and 1320b-19); sec. 101(b)-(e), Public Law 106-
                [[Page 73159]]
                170, 113 Stat. 1860, 1873 (42 U.S.C. 1320b-19 note).
                Subpart C--Suspension of Continuing Disability Reviews for
                Beneficiaries Who Are Using a Ticket
                0
                17. Amend Sec. 411.175 by revising paragraph (a) to read as follows:
                Sec. 411.175 What if a continuing disability review is begun before
                my ticket is in use?
                 (a) If we begin a continuing disability review before the date on
                which your ticket is in use, you may still assign the ticket and
                receive services from an employment network or a State vocational
                rehabilitation agency acting as an employment network under the Ticket
                to Work program, or you may still receive services from a State
                vocational rehabilitation agency that elects the vocational
                rehabilitation cost reimbursement option. 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 your ticket was in use before we
                determined that you are no longer disabled, in certain circumstances
                you may continue to receive benefit payments (see Sec. Sec.
                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 or a
                hearing before a judge on the cessation determination (see Sec. Sec.
                404.1597a and 416.996 of this chapter).
                * * * * *
                PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND
                DISABLED
                Subpart A--Introduction, General Provisions and Definitions
                0
                18. The authority citation for subpart A of part 416 continues to read
                as follows:
                 Authority: Secs. 702(a)(5) and 1601-1635 of the Social Security
                Act (42 U.S.C. 902(a)(5) and 1381-1383d); sec. 212, Pub. L. 93-66,
                87 Stat. 155 (42 U.S.C. 1382 note); sec. 502(a), Pub. L. 94-241, 90
                Stat. 268 (48 U.S.C. 1681 note).
                0
                19. Amend Sec. 416.120 by revising paragraph (b) to read as follows:
                Sec. 416.120 General definitions and use of terms.
                * * * * *
                 (b) Commissioner; Appeals Council; Administrative Law Judge;
                Administrative Appeals Judge defined--(1) Commissioner means the
                Commissioner of Social Security.
                 (2) Appeals Council means the Appeals Council of the Office of
                Analytics, Review, and Oversight in the Social Security Administration
                or such member or members thereof as may be designated by the Chair of
                the Appeals Council.
                 (3) Administrative Law Judge means an Administrative Law Judge in
                the Office of Hearings Operations in the Social Security
                Administration.
                 (4) Administrative Appeals Judge means an Administrative Appeals
                Judge serving as a member of the Appeals Council.
                * * * * *
                Subpart N--Determinations, Administrative Review Process, and
                Reopening of Determinations and Decisions
                0
                20. The authority citation for subpart N of part 416 continues to read
                as follows:
                 Authority: Secs. 702(a)(5), 1631, and 1633 of the Social
                Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b); sec. 202, Pub.
                L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note).
                0
                21. Revise Sec. 416.1429 to read as follows:
                Sec. 416.1429 Hearing before an administrative law judge--general.
                 If you are dissatisfied with one of the determinations or decisions
                listed in Sec. 416.1430, you may request a hearing. Subject to Sec.
                416.1456, the Deputy Commissioner for Hearings Operations, or his or
                her delegate, will appoint an administrative law judge to conduct the
                hearing. If circumstances warrant, the Deputy Commissioner for Hearings
                Operations, or his or her delegate, may assign your case to another
                administrative law judge. In general, we will schedule you to appear by
                video teleconferencing or in person. When we determine whether you will
                appear by video teleconferencing or in person, we consider the factors
                described in Sec. 416.1436 (c)(1)(i) through (iii), and in the limited
                circumstances described in Sec. 416.1436(c)(2), we will schedule you
                to appear by telephone. You may submit new evidence (subject to the
                provisions of Sec. 416.1435), examine the evidence used in making the
                determination or decision under review, and present and question
                witnesses. The administrative law judge who conducts the hearing may
                ask you questions. He or she will issue a decision based on the
                preponderance of the evidence in the hearing record. If you waive your
                right to appear at the hearing, the administrative law judge will make
                a decision based on the preponderance of the evidence that is in the
                file and, subject to the provisions of Sec. 416.1435, any new evidence
                that may have been submitted for consideration.
                0
                22. Amend Sec. 416.1455 by revising the section heading, redesignating
                paragraphs (c) through (f) as paragraphs (d) through (g), and adding
                new paragraph (c) to read as follows:
                Sec. 416.1455 The effect of a hearing decision.
                * * * * *
                 (c) The Appeals Council decides on its own motion to review the
                decision under the procedures in Sec. 416.1469;
                * * * * *
                0
                23. Revise Sec. 416.1456 to read as follows:
                Sec. 416.1456 Removal of a hearing request(s) to the Appeals Council.
                 (a) Removal. The Appeals Council may assume responsibility for a
                hearing request(s) pending at the hearing level of the administrative
                review process.
                 (b) Notice. We will mail a notice to all parties at their last
                known address telling them that the Appeals Council has assumed
                responsibility for the case(s).
                 (c) Procedures applied. If the Appeals Council assumes
                responsibility for a hearing request(s), it shall conduct all
                proceedings in accordance with the rules set forth in Sec. Sec.
                416.1429 through 416.1461, as applicable.
                 (d) Appeals Council review. If the Appeals Council assumes
                responsibility for your hearing request under this section and you or
                any other party is dissatisfied with the hearing decision or with the
                dismissal of a hearing request, you may request that the Appeals
                Council review that action following the procedures in Sec. Sec.
                416.1467 through 416.1482. The Appeals Council may also decide on its
                own motion to review the action that was taken in your case under Sec.
                416.1469. The administrative appeals judge who conducted a hearing,
                issued a hearing decision in your case, or dismissed your hearing
                request will not participate in any action associated with your request
                for Appeals Council review of that case.
                 (e) Ancillary provisions. For the purposes of the procedures
                authorized by this section, the regulations of part 416 shall apply to
                authorize a member of the Appeals Council to exercise the functions
                performed by an administrative law judge under subpart N of part 416.
                Sec. 416.1466 [Removed and Reserved]
                0
                24. Section 416.1466 is removed and reserved.
                [[Page 73160]]
                0
                25. Amend Sec. 416.1470 by revising paragraph (a) to read as follows:
                Sec. 416.1470 Cases the Appeals Council will review.
                 (a) The Appeals Council will review a case at a party's request or
                on its own motion if--
                 (1) There appears to be an abuse of discretion by the
                administrative law judge or administrative appeals judge who heard the
                case;
                 (2) There is an error of law;
                 (3) The action, findings or conclusions in the hearing decision or
                dismissal order are not supported by substantial evidence;
                 (4) There is a broad policy or procedural issue that may affect the
                general public interest; or
                 (5) Subject to paragraph (b) of this section, the Appeals Council
                receives additional evidence that is new, material, and relates to the
                period on or before the date of the hearing decision, and there is a
                reasonable probability that the additional evidence would change the
                outcome of the decision.
                * * * * *
                0
                26. Revise Sec. 416.1473 to read as follows:
                Sec. 416.1473 Notice of Appeals Council review.
                 When the Appeals Council decides to review a case, it shall mail a
                prior notice to all parties at their last known address stating the
                reasons for the review and the issues to be considered. However, when
                the Appeals Council plans to issue a decision that is fully favorable
                to all parties, plans to remand the case for further proceedings, or
                plans to issue a decision that is favorable in part and remand the
                remaining issues for further proceedings, it may send the notice of
                Appeals Council review to all parties with the decision or remand
                order.
                0
                27. Amend Sec. 416.1476 by revising the section heading, revising
                paragraph (b), and adding paragraph (c) to read as follows:
                Sec. 416.1476 Procedures before the Appeals Council.
                * * * * *
                 (b) Evidence the Appeals Council will exhibit. The Appeals Council
                will evaluate all additional evidence it receives, but will only mark
                as an exhibit and make part of the official record additional evidence
                that it determines meets the requirements of Sec. 416.1470(a)(5) and
                (b). If we need to file a certified administrative record in Federal
                court, we will include in that record all additional evidence the
                Appeals Council received during the administrative review process,
                including additional evidence that the Appeals Council received but did
                not exhibit or make part of the official record.
                 (c) Oral argument. You may request to appear before the Appeals
                Council to present oral argument in support of your request for review.
                The Appeals Council will grant your request if it decides that your
                case raises an important question of law or policy or that oral
                argument would help to reach a proper decision. If your request to
                appear is granted, the Appeals Council will tell you the time and place
                of the oral argument at least 10 business days before the scheduled
                date. The Appeals Council will determine whether your appearance will
                be by video teleconferencing or in person, or, when the circumstances
                described in Sec. 416.1436(c)(2) exist, the Appeals Council may
                schedule you to appear by telephone. The Appeals Council will determine
                whether any other person relevant to the proceeding will appear by
                video teleconferencing, telephone, or in person as based on the
                circumstances described in Sec. 416.1436(c)(4).
                0
                28. Revise Sec. 416.1483 to read as follows:
                Sec. 416.1483 Case remanded by a Federal court.
                 (a) General rule. When a Federal court remands a case to the
                Commissioner for further consideration, the Appeals Council, acting on
                behalf of the Commissioner, may make a decision following the
                provisions in paragraph (b) or (c) of this section, dismiss the
                proceedings, except as provided in paragraph (d) of this section, or
                remand the case to an administrative law judge following the provisions
                in paragraph (e) of this section with instructions to take action and
                issue a decision or return the case to the Appeals Council with a
                recommended decision. Any issues relating to the claim(s) may be
                considered by the Appeals Council or administrative law judge whether
                or not they were raised in the administrative proceedings leading to
                the final decision in the case.
                 (b) Appeals Council decision without a hearing. If the Appeals
                Council assumes responsibility under paragraph (a) of this section for
                issuing a decision without a hearing, it will follow the procedures
                explained in Sec. Sec. 416.1473 and 416.1479.
                 (c) Administrative appeals judge decision after holding a hearing.
                If the Appeals Council assumes responsibility for issuing a decision
                and a hearing is necessary to complete adjudication of the claim(s), an
                administrative appeals judge will hold a hearing using the procedures
                set forth in Sec. Sec. 416.1429 through 416.1461, as applicable.
                 (d) Appeals Council dismissal. After a Federal court remands a case
                to the Commissioner for further consideration, the Appeals Council may
                dismiss the proceedings before it for any reason that an administrative
                law judge may dismiss a request for a hearing under Sec. 416.1457. The
                Appeals Council will not dismiss the proceedings in a claim where we
                are otherwise required by law or a judicial order to file the
                Commissioner's additional and modified findings of fact and decision
                with a court.
                 (e) Appeals Council remand. If the Appeals Council remands a case
                under paragraph (a) of this section, it will follow the procedures
                explained in Sec. 416.1477.
                0
                29. Revise Sec. 416.1484 to read as follows:
                Sec. 416.1484 Appeals Council review of hearing decision in a case
                remanded by a Federal court.
                 (a) General. In accordance with Sec. 416.1483, when a case is
                remanded by a Federal court for further consideration and the Appeals
                Council remands the case to an administrative law judge, or an
                administrative appeals judge issues a decision pursuant to Sec.
                416.1483(c), the decision of the administrative law judge or
                administrative appeals judge will become the final decision of the
                Commissioner after remand on your case unless the Appeals Council
                assumes jurisdiction of the case. The Appeals Council may assume
                jurisdiction, using the standard set forth in Sec. 416.1470, based on
                written exceptions to the decision which you file with the Appeals
                Council or based on its authority pursuant to paragraph (c) of this
                section. If the Appeals Council assumes jurisdiction of the case, it
                will not dismiss the request for a hearing in a claim where we are
                otherwise required by law or a judicial order to file the
                Commissioner's additional and modified findings of fact and decision
                with a court.
                 (b) You file exceptions disagreeing with the hearing decision. (1)
                If you disagree with the hearing decision, in whole or in part, you may
                file exceptions to the decision with the Appeals Council. Exceptions
                may be filed by submitting a written statement to the Appeals Council
                setting forth your reasons for disagreeing with the decision of the
                administrative law judge or administrative appeals judge. The
                exceptions must be filed within 30 days of the date you receive the
                hearing decision or an extension of time in which to submit exceptions
                must be
                [[Page 73161]]
                requested in writing within the 30-day period. A timely request for a
                30-day extension will be granted by the Appeals Council. A request for
                an extension of more than 30 days should include a statement of reasons
                as to why you need the additional time.
                 (2) If written exceptions are timely filed, the Appeals Council
                will consider your reasons for disagreeing with the hearing decision
                and all the issues presented by your case. If the Appeals Council
                concludes that there is no reason to change the hearing decision, it
                will issue a notice to you addressing your exceptions and explaining
                why no change in the hearing decision is warranted. In this instance,
                the hearing decision is the final decision of the Commissioner after
                remand.
                 (3) When you file written exceptions to the hearing decision, the
                Appeals Council may assume jurisdiction at any time, even after the 60-
                day time period which applies when you do not file exceptions. If the
                Appeals Council assumes jurisdiction of your case, any issues relating
                to your claim may be considered by the Appeals Council whether or not
                they were raised in the administrative proceedings leading to the final
                decision in your case or subsequently considered by the administrative
                law judge or administrative appeals judge in the administrative
                proceedings following the court's remand order. The Appeals Council
                will either make a new, independent decision pursuant to Sec.
                416.1483(b) or Sec. 416.1483(c), based on a preponderance of the
                evidence in the record that will be the final decision of the
                Commissioner after remand, dismiss the request for a hearing, or remand
                the case to an administrative law judge for further proceedings,
                including a new decision.
                 (c) Appeals Council assumes jurisdiction without exceptions being
                filed. Any time within 60 days after the date of the hearing decision,
                the Appeals Council may decide to assume jurisdiction of your case even
                though no written exceptions have been filed. Notice of this action
                will be mailed to all parties at their last known address. You will be
                provided with the opportunity to file briefs or other written
                statements with the Appeals Council about the facts and law relevant to
                your case. After the Appeals Council receives the briefs or other
                written statements, or the time allowed (usually 30 days) for
                submitting them has expired, the Appeals Council will either make a
                new, independent decision pursuant to Sec. 416.1483(b) or Sec.
                416.1483(c), based on a preponderance of the evidence in the record
                that will be the final decision of the Commissioner after remand,
                dismiss the request for a hearing, or remand the case to an
                administrative law judge for further proceedings, including a new
                decision.
                 (d) Exceptions are not filed and the Appeals Council does not
                otherwise assume jurisdiction. If no exceptions are filed and the
                Appeals Council does not assume jurisdiction of your case, the decision
                of the administrative law judge or administrative appeals judge becomes
                the final decision of the Commissioner after remand.
                0
                30. Amend Sec. 416.1498 by revising paragraph (d)(3)(i)(C) to read as
                follows:
                Sec. 416.1498 What travel expenses are reimbursable.
                * * * * *
                 (d) * * *
                 (3) * * *
                 (i) * * *
                 (C) The designated geographic service area of the Office of
                Hearings Operations hearing office having responsibility for providing
                the hearing.
                * * * * *
                PART 422--ORGANIZATION AND PROCEDURES
                0
                31. Revise the heading for subpart C to read as follows:
                Subpart C--Hearings, Appeals Council Review, and Judicial Review
                Procedures
                0
                32. The authority citation for subpart C of part 422 continues to read
                as follows:
                 Authority: Secs. 205, 221, and 702(a)(5) of the Social Security
                Act (42 U.S.C. 405, 421, and 902(a)(5)); 30 U.S.C. 923(b).
                0
                33. Amend Sec. 422.201 by revising the introductory text to read as
                follows:
                Sec. 422.201 Material included in this subpart.
                 This subpart describes in general the procedures relating to
                hearings, review by the Appeals Council of the hearing decision or
                dismissal, and court review in cases decided under the procedures in
                parts 404, 408, 410, and 416 of this chapter. It also describes the
                procedures for requesting a hearing or Appeals Council review, and for
                instituting a civil action for court review of cases decided under
                these parts. For detailed provisions relating to hearings, review by
                the Appeals Council, and court review, see the following references as
                appropriate to the matter involved:
                * * * * *
                0
                34. Amend Sec. 422.203 by revising paragraphs (b) and (c) to read as
                follows:
                Sec. 422.203 Hearings.
                * * * * *
                 (b) Request for a hearing. (1) A request for a hearing under
                paragraph (a) of this section may be made using the form(s) we
                designate for this purpose, or by any other writing requesting a
                hearing. The request shall be filed either electronically in the manner
                we prescribe or at an office of the Social Security Administration,
                usually a district office or a branch office, or at the Veterans'
                Administration Regional Office in the Philippines (except in title XVI
                cases), or at a hearing office of the Office of Hearings Operations, or
                with the Appeals Council. A qualified railroad retirement beneficiary
                may choose to file a request for a hearing under part A of title XVIII
                with the Railroad Retirement Board.
                 (2) Unless an extension of time has been granted for good cause
                shown, a request for a hearing must be filed within 60 days after the
                receipt of the notice of the reconsidered or revised determination, or
                after an initial determination described in 42 CFR 498.3(b) and (c)
                (see Sec. Sec. 404.933, 410.631, and 416.1433 of this chapter and 42
                CFR 405.722, 498.40, and 417.260.)
                 (c) Hearing decision or other action. Generally, the administrative
                law judge, or an administrative appeals judge under Sec. 404.956 or
                Sec. 416.1456 of this chapter, will either decide the case after
                hearing (unless hearing is waived) or, if appropriate, dismiss the
                request for a hearing. With respect to a hearing on a determination
                under paragraph (a)(1) of this section, the administrative law judge
                may certify the case with a recommended decision to the Appeals Council
                for decision. The administrative law judge, or an attorney advisor
                under Sec. 404.942 or Sec. 416.1442 of this chapter, or an
                administrative appeals judge under Sec. 404.956 or Sec. 416.1456 of
                this chapter, must base the hearing decision on the preponderance of
                the evidence offered at the hearing or otherwise included in the
                record.
                0
                35. Revise Sec. 422.205 to read as follows:
                Sec. 422.205 Proceedings before the Appeals Council.
                 (a) Administrative Appeals Judge hearing decisions. Administrative
                Appeals Judge decisions and dismissals issued on hearing requests
                removed under Sec. Sec. 404.956 and 416.1456 of this chapter and
                decisions and dismissals described in Sec. 422.203(c) require the
                signature of one Administrative Appeals Judge. Requests for review of
                hearing decisions issued by an Administrative Appeals Judge may be
                filed pursuant to
                [[Page 73162]]
                Sec. Sec. 404.968 and 416.1468 of this chapter and paragraph (b) of
                this section.
                 (b) Appeals Council review. Any party to a hearing decision or
                dismissal may request a review of such action by the Appeals Council.
                This request may be made on Form HA-520, Request for Review of Hearing
                Decision/Order, or by any other writing specifically requesting review.
                Form HA-520 may be obtained from any Social Security district office or
                branch office, or at any other office where a request for a hearing may
                be filed. (For time and place of filing, see Sec. Sec. 404.968 and
                416.1468 of this chapter.)
                 (c) Review of a hearing decision, dismissal, or denial. The denial
                of a request for review of a hearing decision concerning a
                determination under Sec. 422.203(a)(1) shall be by such appeals
                officer or appeals officers or by such member or members of the Appeals
                Council as may be designated in the manner prescribed by the Chair or
                Deputy Chair. The denial of a request for review of a hearing
                dismissal, the dismissal of a request for review, the denial of a
                request for review of a hearing decision whenever such hearing decision
                after such denial would not be subject to judicial review as explained
                in Sec. 422.210(a), or the refusal of a request to reopen a hearing or
                Appeals Council decision concerning a determination under Sec.
                422.203(a)(1) shall be by such member or members of the Appeals Council
                as may be designated in the manner prescribed by the Chair or Deputy
                Chair.
                 (d) Appeals Council review panel. Whenever the Appeals Council
                reviews a hearing decision under Sec. Sec. 404.967, 404.969, 416.1467,
                or 416.1469 of this chapter and the claimant does not appear personally
                or through representation before the Appeals Council to present oral
                argument, such review will be conducted by a panel of not less than two
                members of the Appeals Council designated in the manner prescribed by
                the Chair or Deputy Chair of the Appeals Council. In the event of
                disagreement between a panel composed of only two members, the Chair or
                Deputy Chair, or his or her delegate, who must be a member of the
                Appeals Council, shall participate as a third member of the panel. When
                the claimant appears in person or through representation before the
                Appeals Council in the location designated by the Appeals Council, the
                review will be conducted by a panel of not less than three members of
                the Appeals Council designated in the manner prescribed by the Chair or
                Deputy Chair. Concurrence of a majority of a panel shall constitute the
                decision of the Appeals Council unless the case is considered as
                provided under paragraph (e) of this section.
                 (e) Appeals Council meetings. On call of the Chair, the Appeals
                Council may meet en banc or a representative body of Appeals Council
                members may be convened to consider any case arising under paragraph
                (c) or (d) of this section. Such representative body shall be comprised
                of a panel of not less than five members designated by the Chair as
                deemed appropriate for the matter to be considered. The Chair or Deputy
                Chair shall preside, or in his or her absence, the Chair shall
                designate a member of the Appeals Council to preside. A majority vote
                of the designated panel, or of the members present and voting, shall
                constitute the decision of the Appeals Council.
                 (f) Temporary assignments of ALJs. The Chair may designate an
                administrative law judge to serve as a member of the Appeals Council
                for temporary assignments. An administrative law judge shall not be
                designated to serve as a member on any panel where such panel is
                conducting review on a case in which such individual has been
                previously involved.
                0
                36. Amend Sec. 422.210 by revising paragraph (a) and adding paragraph
                (e) to read as follows:
                Sec. 422.210 Judicial review.
                 (a) General. A claimant may obtain judicial review of a decision by
                an administrative law judge or administrative appeals judge if the
                Appeals Council has denied the claimant's request for review, or of a
                decision by the Appeals Council when that is the final decision of the
                Commissioner. A claimant may also obtain judicial review of a
                reconsidered determination, or of a decision of an administrative law
                judge or an administrative appeals judge, where, under the expedited
                appeals procedure, further administrative review is waived by agreement
                under Sec. 404.926 or Sec. 416.1426 of this chapter or as
                appropriate. There are no amount-in-controversy limitations on these
                rights of appeal.
                * * * * *
                 (e) Appeals Council review panel after Federal court remand. When
                the Appeals Council holds a hearing under Sec. 404.983 or Sec.
                416.1483 of this chapter, such hearing will be conducted and a decision
                will be issued by a panel of not less than two members of the Appeals
                Council designated in the manner prescribed by the Chair or Deputy
                Chair of the Appeals Council. When the Appeals Council issues a
                decision under Sec. Sec. 404.983 and 416.1483 of this chapter without
                holding a hearing, a decision will be issued by a panel of not less
                than two members of the Council designated in the same manner
                prescribed by the Chair or Deputy Chair of the Council. In the event of
                disagreement between a panel composed of only two members, the Chair or
                Deputy Chair, or his or her delegate, who must be a member of the
                Council, shall participate as a third member of the panel.
                [FR Doc. 2020-23856 Filed 11-13-20; 8:45 am]
                BILLING CODE 4191-02-P