LOUIS W. SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES,
PETITIONER V. BRIAN ZEBLEY, ET AL.

   No. 88-1377

   In the Supreme Court of the United States

   October Term, 1989

   On Writ of Certiorari to the United States Court of Appeals for the
Third Circuit

   Supplemental Brief for the Petitioner

   Pursuant to Rule 35.5 of the Rules of this Court, the Solicitor
General, on behalf of the Secretary of Health and Human Services,
respectfully files this supplemental brief to inform the Court of
recent legislative and administrative developments that have a bearing
on the issues in this case.

   1. Legislative Developments.  We informed the Court in our reply
brief (at 18-19) that Congress was considering several provisions
affecting the children's disability program as part of the omnibus
reconciliation bill for fiscal year 1990.  We wish to inform the Court
that those provisions have been deleted from the bill, which passed
the House of Representatives and the Senate early in the morning of
November 22, 1989.

   The House of Representatives passed a version of the budget
reconciliation bill on October 5, 1989, that would have affected the
SSI children's disability program in several respects.  Gov't Reply
Br. 18-19 & n.13.  Of particular relevance here, that bill would have
amended Title XVI, effective October 1, 1989, expressly to require an
"individualized assessment" of a child's impairments that "prevent or
significantly interfere with the activities of daily living
appropriate to the age of the child." H.R. 3299, 101st Cong., 1st
Sess. Section 10222 (1989) (135 Cong. Rec. H6131 (daily ed. Sept. 27,
1989)).

   The Senate Budget Committee's budget reconciliation bill, which was
based in this respect on recommendations by the Senate Finance
Committee, omitted any such provision.  /1/ Instead, that bill would
have established a 15-member Commission to study the definition of
disability under Title XVI as it applies to determining whether a
child under age 18 is eligible to receive benefits.  S. 1750, 101st
Cong., 1st Sess. Section 5001 (Oct. 12, 1989).  In particular, the
Commission would have considered:  (A) "whether individualized
functional assessments of children can appropriately be used in
determining disability, and if a determination of appropriateness is
made, the types of assessment and criteria to be employed";  and (B)
recommendations for revisions of the Part B Listing for children,
"including the degree to which age-appropriate medical and functional
criteria can validly be included in such Childhood Listing of
Impairments." Id. Section 5001(e)(2)(A) and (B).  Other provisions of
the Senate Committee's bill would have:  required pediatricians to
participate in disability determinations affecting children (id.
Section 5002(a)), sought to enhance decision-making by mandating that
the Social Security Administration (SSA) review at least 50% of all
state-agency decisions that a child is not disabled (id. Section
5002(b)), and required the Secretary to submit to Congress a schedule
for the updating and revision of Part B of the Listing of Impairments
for children (id. Section 5002(c)).  See 135 Cong. Rec. S13,205 (daily
ed. Oct. 12, 1989).  However, all of the SSI children's disability
proposals were deleted (along with many other provisions) from the
version of the budget reconciliation bill that passed the Senate on
October 13, 1989.  Id. at S13,369 (daily ed. Oct. 13, 1989).  /2/

   Like the Senate-passed version of H.R. 3299, the budget
reconciliation bill reported by the Conference Committee on November
20, 1989, omitted the SSI provisions in the House-passed bill, as well
as the Senate Committees' proposals.  The bill reported by the
Conference Committee was passed by the House of Representatives and
the Senate on November 22, 1989.  Congress thus declined to adopt the
House provision that would have restructured the disability
determination process for children.

   2. Administrative Developments.  a. On November 21, 1989, the
Secretary of Health and Human Services announced several initiatives
concerning the children's disability program (App., infra, 1a-2a), in
order "to better ensure that needy children with severe disabilities
receive the Supplemental Security Income benefits to which they are
entitled." Id. at 1a.  The Secretary explained that "(i)n our efforts
to strive for the best possible program administration, we constantly
watch how we are managing our programs." Ibid.  In this connection,
the Secretary noted that the Social Security Administration (SSA)
recently released preliminary findings from a study that reviewed
decisions made in childhood disability cases, and that those findings
indicated that certain categories of such cases warrant more
attention.  Ibid.; see pages 6-8, infra.  The Secretary's November 21
statement announces four initiatives in response to these preliminary
findings (App., infra, 1a-2a):

         (1) all disability claims for children from birth through age
      three, and claims for older children whose impairments give rise
      to a greater likelihood of error, will be reviewed twice before
      they can be denied;

         (2) all entities that adjudicate and review children's
      disability claims will include pediatricians among their medical
      personnel;

         (3) an across-the-board review of the existing medical
      criteria for all childhood impairments will be undertaken (a
      process that was begun with the publication of the notice of
      proposed rulemaking to expand the criteria for evaluating mental
      impairments in children (54 Fed. Reg. 33,238 (Aug. 14, 1989),
      discussed in Gov't Reply Br. 4-5);  /3/ and

         (4) education and training of all disability examiners and
      medical personnel will be intensified to ensure complete
      understanding of the requirements for adjudicting children's
      disability claims.

   b. The preliminary findings to which the Secretary referred in
announcing his initiatives on November 21 are those contained in the
report prepared by SSA for the staff of the Senate Finance Committee
in connection with its consideration of the pending legislation,
discussed above.  See SSA, Office of Disability, Preliminary Staff
Report:  Childhood Disability Study (Sept. 20, 1989) (hereinafter
Preliminary Report).  We lodged a copy of the Preliminary Report with
the Clerk of this Court when we filed our reply brief at the merits
stage, and it is mentioned in our reply brief (at 19 & nn. 15, 16) and
discussed in respondents' supplemental brief (at 9-14), which we
received in typescript on November 13, 1989, and in printed form on
November 17, 1989.

   The study on which the Preliminary Report was based reviewed 927
children's disability cases decided by state agencies in which
benefits were denied, in order to determine whether cases are being
correctly decided under the existing Listing and to determine whether
the criteria in the Listing adequately identify disabled children who
meet the general level of impairment severity articulated in the Act
and regulations.  Id. Tab C, at 1.  The Preliminary Report found that
in the entire sample of 927 surveyed cases, the overall rate of
erroneous denials under existing standards was approximately 6.4% (id.
Tab D, Table 2), which HHS informs us does not differ significantly
from the range of error that is experienced under the disability
programs generally.  /4/ However, the Preliminary Report did identify
several categories of impairments for which the error rate may be
considerably higher.  /5/ The tentative error rate of 41.9% for growth
impairments was of particular concern (id. Tab A, at 2;  Tab D, Table
3), as was the error rate of 10.4% for mental impairments (id. Tab D,
Table 3), since approximately 60% of all childhood disability claims
involve allegations of a mental impairment (id., Tab E, at 1).  The
Preliminary Report concluded that the initial review of the study
findings "provides no indication that there are any overall or
generalized problems with the childhood disability evaluation
criteria," but that "the criteria for several specific impairments may
need to be reevaluated and revised" and that "certain impairment
categories may be more prone to adjudicator error." Id. Tab F, at 1.

   The initiatives announced by the Secretary on November 21 respond
to these findings and are based on similar recommendations in Tab F of
the Preliminary Report.  Those initiatives demonstrate the Secretary's
determination to ensure that the children's disability program is
administered in a fair and sound manner and to review and, where
appropriate, revise the criteria in the Listing of Impairments in
light of experience.  By the same token, the Secretary's actions
address several matters (review of certain denials to ensure proper
application of standards, use of pediatricians, and review of the
children's listings) that were the subject of the legislative
proposals that Congress deleted from the budget reconciliation bill.
These measures underscore that modifications of the children's
disability program are properly committed to the Secretary and
Congress, not the courts.

   c. The discussion in respondents' supplemental brief (at 9-14) of
the Preliminary Report that underlies the Secretary's recent actions
is misleading in two important respects.  First, respondents argue
(Supp. Br. 10) that the Preliminary Report is inconsistent with Social
Security Ruling (SSR) 83-19, which, in their view (Supp. Br. 5-6, 10),
altogether prohibits consideration of the functional impact of an
impairment (or combination of impairments) in determining whether it
equals the Listing.  However, as we have explained in our reply brief
(at 15 n.10), SSR 83-19 does not bar consideration of
impairment-related functional limitations in determining whether an
impairment is of sufficient severity to equal a listed impairment.
The passages in SSR 83-19 upon which respondents rely (J.A. 239-240)
merely stress that an equivalency determination is not to be made on
the basis of an assessment of residual functional capacity (RFC), as
respondents urge, or solely on the basis of an overall assessment of
functional impact that is not tied closely to the criteria in the
Listing.

   The Preliminary Report in fact confirms that SSR 83-19 does not
rule out consideration of impairment-related functional limitations in
making an equivalency determination, because it states that the errors
identified in cases in the study sample that should have been found to
equal the mental impairment listing were "almost exclusively based on
the failure to consider how all documented impairments combined to
affect a child's overall functional capacity." Id. Tab E, at 2.  /6/
As respondents concede (Supp. Br. 10), the Secretary also made clear
at the outset of the SSI program that impairment-related functional
limitations could be taken into account in appropriate circumstances
in making an equivalency determination.  J.A. 97.  The Secretary's
position on this issue therefore has been consistent throughout.  In
attempting to paint a picture of administrative inconsistency in this
regard, respondents construe SSR 83-19 in a manner that is contrary
not only to the Secretary's interpretation of his own administrative
ruling (compare Udall v. Tallman, 380 U.S. 1, 16-17 (1965)), but also
to their own interests, which presumably are served by a policy that
takes impairment-related functional limitations into account in an
equivalency determination in appropriate circumstances.

   Second, respondents erroneously assert (Supp. Br. 9-10, 11-13) that
the Preliminary Report actually supports the notion that the Act
requires an individualized assessment of a child's RFC and non-medical
factors similar to an adult's vocational factors of age, education and
work experience.  They rest this assertion on the fact that the
Preliminary Report discusses the importance of collecting data on a
child's activities of daily living (id. Tab A, at 2;  Tab B, at 2) /7/
and acknowledges that the impact of an impairment on age-appropriate
activities warrants particularized consideration under the Listing in
appropriate circumstances, especially in the case of mental
impairments (id. Tab E, at 1-3;  id. Tab F, at 1).  What respondents
ignore is that, as the Preliminary Report makes clear, the regulatory
framework that has been in place for more than 15 years provides for
consideration of activities of daily living and impairment-related
functional limitations, where appropriate, for purposes of measuring
the severity of the impairment itself -- i.e., in determining whether
the individual's impairment meets or equals the Listing.  That is
something quite different from the approach respondents propose, which
would cut the disability determination loose from the objective
measures of impairment severity in the Listing and instead require an
RFC/non-medical-factors assessment of children -- albeit without the
benefit of an objective benchmark (parallel to an adult's ability to
work) against which to make such an assessment.

   For the foregoing reasons and those set forth in our opening and
reply briefs, it is respectfully submitted that the judgment of the
court of appeals should be reversed.

   KENNETH W. STARR

      Solicitor General

   NOVEMBER 1989

   /1/ The Senate Committees thus declined to accept the proposals in
the bills introduced by Senator Heinz and Senator Moynihan, cited by
respondents (Supp. Br. 2-3).

   /2/ In considering the budget reconciliation bill on October 13,
1989, the Senate first adopted Amendment 1004, which deleted the
children's disability provisions and all other matter from S. 1750
that did not reduce the deficit.  See 135 Cong. Rec. S13,349, S13,357
(daily ed. Oct. 13, 1989).  The Senate then substituted the text of S.
1750, as so amended, for the text of H.R. 3299 as it passed the House,
and passed this substitute version of H.R. 3299.  Id. at
S13,368-S13,369.  The Senate-passed bill is printed in the
Congressional Record of October 18, 1989, and shows that Sections 5001
and 5002 of S. 1750, which addressed SSI disability determinations in
children, were deleted.  135 Cong. Rec. S13,692, S13,701 (daily ed.).

   /3/ This reassessment also is reflected in the new listing for Down
Syndrome and other Hereditary, Congenital and Acquired Disorders,
which was published in proposed form in October 1987 (52 Fed. Reg.
37,161) and is scheduled for publication in final form in February
1990.  Contrary to respondent's contention (Supp. Br. 8), the absence
of a specific listing for Down Syndrome and other disorders covered by
this proposal at the present time does not mean that otherwise
qualified children with those disorders have heretofore been denied
benefits.  Such children are found eligible if they meet or equal
other provisions of the current Listing.  For example, children with
Down Syndrome typically are evaluated under the listing for mental
retardation (Section 112.05), and, depending on associated physical
problems, under the growth impairment (Section 100.00), cardiovascular
(Section 104.00), or other body system categories.  Fox & Greaney,
Disabled Children's Access to Supplemental Security Income and
Medicaid Benefits 48 (Dec. 1988) (lodged with the Clerk by
respondents).

   /4/ Of course, individuals whose claims were denied at the initial
determination stage on the basis of the state agency's finding may
seek reconsideration of that denial and then may also seek an ALJ
hearing and Appeals Council review to correct any error in the
preliminary stages of the review process.  We have been informed by
HHS that cases in which the claimant sought further review and was
found disabled at later stages of the review process were excluded
from the sample.

   /5/ The small sample size for several categories renders the
percentage rate subject to a very high margin of error.  Preliminary
Report Tab C;  id. Tab D, Table 2 (note).  For example, we have been
informed by HHS that, because of the small sample size for
cardiovascular claims, the rate of erroneous denials of 28.6% (id. Tab
D, Table 2) is itself subject to a sampling error of plus or minus
25%.  The Preliminary Report also urges caution in the use of the raw
data because the cases were not drawn entirely at random.  The study
was designed to ensure that cases would be drawn from four age
groupings and specific impairment categories, and the percentages in
the Preliminary Report have not yet been weighted to compensate for
this sampling methodology.  Id. Tab C;  id. Tab D, Table 2 (note).  We
have been informed by HHS that the data will be weighted and refined
in the final report based on the study, which is due to be issued
early in 1990.

   /6/ This same understanding is set forth in the training manual for
physicians who review claims under the disability programs.  SSA,
Office of Disability, Physician Training Manual on Impairment
Evaluation (June 1988).  The introduction to that Manual states (at
10):

         Medical equivalency permits a physician to arrive at a
      judgment that the findings, although not exactly matching the
      listed criteria, have the same effect as a listed impairment
      with regard to inability to perform work-related activities for
      at least 12 months or result in death.  In addition, individuals
      may have more than one impairment or a combination of
      impairments, none of which alone matches in its clinical
      presentation, the criteria that are listed, but together, the
      findings as presented have the same impact on inability to
      perform gainful activity for at least 12 months or result in
      death as the findings provided in a listed impairment.  Under
      these circumstances, the physician may arrive at a judgment of
      "equals the listings." Caution should be used in arriving at
      equals decisions to avoid misuse in inadequately documented
      cases and in cases of lesser than listing severity.  Great care
      must be taken to provide a thorough and complete rationale for
      this decision.

This passage discusses equivalency determinations for adults, but the
point that impairment-related functional limitations may be taken into
account in an equivalency determination would apply equally to
children.  We have lodged a copy of the Physician Training Manual with
the Clerk of this Court.

   /7/ The current application form to be completed by or on behalf of
individuals seeking children's disability benefits requests
information about the applicant's activities of daily living.  Form
SSA-3820-F6, question 13, included in Preliminary Report Tab B.  SSA
is considering the promulgation of a uniform nationwide form that
solicits more detailed information in this area.  Preliminary Report
Tab B, at 2.

   APPENDIX