AR 88-5(1): McCuin v. Secretary of Health and Human Services, 817 F.2d 161 (1st Cir. 1987) -- Reopening by the Appeals Council of Decisions of Administrative Law Judges under Titles II and XVI of the Social Security Act

ISSUE:

Whether the Appeals Council of the Social Security Administration (SSA) may reopen an administrative law judge's decision on its own initiative more than 60 days after the date of the administrative law judge's decision (i.e., after the own-motion review period has expired).

STATUE/REGULATION/RULING CITATION:

Sections 205 and 1631(d) of the Social Security Act (42 U.S.C. Sections 405 and 1383(d)); 20 C.F.R. Sections 404.987, 404.988, 416.1487 and 416.1488

CIRCUIT:

FIRST (MAINE, MASSACHUSETTS, NEW HAMPSHIRE, RHODE ISLAND, AND PUERTO RICO^[1])

McCuin v. Secretary of Health and Human Services, 817 F2d 161 (1st Cir. 1987)

APPLICABILITY OF RULING:

The court's holding affects only cases at the Appeals Council level. Therefore, the Ruling applies only to actions at the Appeals Council level and only to cases in which the claimant resides in Maine, Massachusetts, New Hampshire, Rhode Island or, for title II only, in Puerto Rico.

DESCRIPTION OF CASE:

The plaintiff sought reimbursement for hospital expenses under the Medicare, Part A, provisions of the Social Security Act, 42 U.S.C. 1395(c)-(i)(1982). Her claim was denied initially, on reconsideration, and by an administrative law judge (ALJ). She appealed this decision to the Appeals Council, which remanded the case to the ALJ for a new hearing.

The ALJ issued a second decision which granted coverage for part of her hospital stay and found her not liable for the costs of noncovered services. Eight months later, the Appeals Council informed the plaintiff that it was reopening the ALJ's decision for good cause pursuant to 42 C.F.R. Section 405.750(b) and 20 C.F.R. Section 404.988.^[2] The Appeals Council then reversed the ALJ's decision granting waiver of liability for noncovered services. Claimant filed suit in the United States District Court for the District of New Hampshire to challenge only the propriety of the Appeals Council's reopening of her case on its own initiative. Claimant did not argue the merits of her Medicare claim. She alleged that the policy which permits the Appeals Council to reopen an ALJ decision on its own initiative violated the Social Security regulations as well as her rights to due process of law. Claimant based her due process claim on the lack of finality that results from allowing the Appeals Council to initiate reopening once the 60-day own-motion review period has expired.

The district court certified a statewide class action consisting of Social Security (title II), Supplemental Security Income (title XVI), and Medicare (title XVIII) claimants, and held that a reopening of a hearing decision more than 60 days after the date of the ALJ's decision can be initiated only by a claimant and not by the Appeals Council. The Secretary appealed this decision to the United States Court of Appeals for the First Circuit.

HOLDING:

The First Circuit agreed with the conclusion of the district court that, once the 60-day period for the Appeals Council's own- motion review had expired, 20 C.F.R. Sections 404.987 and 404.988 only allowed reopening of an ALJ decision on the claimant's motion.^[3] While the court noted that the regulations could be interpreted in several different ways, it found that "there [was] no reading which would not stretch the language of the regulations to a considerable extent." (Emphasis in the original.)

The court specifically rejected the Secretary's interpretation that the regulations allowed the Appeals Council to reopen a decision on its own initiative. The court stated that this interpretation would take away the "finality that adjudication normally affords." Moreover, the court found that the lack of finality would make it impossible for SSA to give a claimant a full and honest explanation of the status of his claim for benefits since the Appeals Council could, on its own initiative, later reopen cases and withdraw benefits due to errors made in the prior determination. The court stated that the notice of a decision subject to reopening on the Appeals Council's own initiative would be misleading and would signify nothing other than that " a final decision [would] not occur for at least four years." The court concluded, therefore, that, following the 60-day period for the Appeals Council's own-motion review, the regulations should be interpreted as allowing reopening by the Appeals Council of ALJ decisions only on the basis of motions by claimants.

STATEMENT AS TO HOW McCuin DIFFERS FROM SOCIAL SECURITY POLICY:

SSA has interpreted the reopening regulations (20 C.F.R. Sections 404.987 and 416.1487) to allow for reopening of ALJ decisions on the motion of a claimant or on the Appeals Council's own initiative. Therefore, under SSA policy the Appeals Council may reopen and revise a final decision if the procedures and conditions set forth in 20 C.F.R. Sections 404.987 and 404.988 or 416.1487 and 416.1488 are met. Such actions are subject to the time limits and other conditions found in those provisions.

The holding in McCuin bars the Appeals Council from reopening and revising ALJ decisions on its own initiative under 20 C.F.R. Sections 404.987, 404.988, 416.1487 and 416.1488.

EXPLANATION OF HOW SSA WILL APPLY THE DECISION WITHIN THE CIRCUIT:

This Ruling applies only to cases in which the claimant resides in Maine, Massachusetts, New Hampshire, Rhode Island or, for title II only, in Puerto Rico at the time of the ALJ's decision.

Where an ALJ's decision has become final (i.e., the time for requesting Appeals Council review of the decision has expired and no request for such review has been filed by the claimant and the Appeals Council has not taken own-motion review within the 60-day time limit), the Appeals Council may not reopen and revise the decision on its own initiative under 20 C.F.R. Sections 404.987, 404.988, 416.1487 and 416.1488.

SSA intends to clarify the reopening regulations at issue in this case through the rulemaking process. SSA will continue to apply this Ruling until such clarification is made.

EFFECTIVE DATE:

Date of Publication 10/27/88

^[1] Since there is no Supplemental Security Income Program in Puerto Rico, this Ruling will apply only to title II claims there.

^[2] The Social Security regulations were at issue in this case because the Medicare regulations at 42 C.F.R. Section 405.701 provide that the Social Security regulations governing the administrative review process also apply to determinations as to the amount payable under Medicare, Part A, except to the extent specific provisions are contained in the Medicare regulations. Section 405.750(b) of the Medicare regulations governing requests for reopenings of such determinations for good cause also refers to the Social Security regulations at 20 C.F.R. Sections 404.988(b) and 404.989.

^[3] The court based its decision on the reopening regulations applicable to title II cases. However, since the reopening regulations applicable to title XVI cases are similar, this Ruling extends to both title II and title XVI cases.

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