Full opinion text
ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT ROTHSTEIN, District Judge. THIS MATTER comes before the court on cross motions for summary judgment. These motions were referred to Magistrate Philip K. Sweigert, who has now filed a detailed Report and Recommendation. The court has carefully considered the Report and Recommendation and all the materials submitted by the parties in response thereto. The court has also studied the relevant file and records. This action is composed of two claims for relief. First, plaintiff seeks reversal of a decision by the Secretary of Health and Human Services to terminate his disability benefits under Title II of the Social Security Act and his Supplemental Security Income (“SSI”) benefits under Title XVI of the Social Security Act. Plaintiff alleges that this decision is not supported by substantial evidence and is based on errors of law. Second, plaintiff, as representative of a class of individuals seeking disability and SSI benefits, challenges the validity of the so-called Bellmon Review Program implemented by the Secretary in 1981. Plaintiff alleges that the adoption of the Bellmon Review Program violated the notice and comment requirements of the Administrative Procedure Act (“APA”). I. FACTUAL BACKGROUND Plaintiff received disability and SSI benefits for a number of years. On February 17, 1982, the Social Security Administration (“SSA”) terminated his benefits based on a determination that his disability had healed and that, therefore, he was able to return to work. Plaintiff requested and received a hearing before an administrative law judge (“AU”). The AU found that plaintiffs disability continues, and he reversed the termination of plaintiffs benefits. Review of this AU decision was initiated on July 14, 1982, by a motion of the SSA Appeals Council, the body that issues final decisions on behalf of the Secretary of Health and Human Services. On April 21, 1983, the Appeals Council reversed the AU decision and terminated plaintiffs benefits. It is undisputed that the AU decision in plaintiffs case was reviewed under the Bellmon Review Program. This program was implemented by the Secretary in response to the Bellmon Amendment to the Social Security Act. The Bellmon Amendment provides: The Secretary of Health and Human Services shall implement a program of reviewing, on his own motion, decisions rendered by administrative law judges as a result of hearings under section 221(d) of the Social Security Act, and shall report to the Congress by January 1, 1982, on his progress. Social Security Disability Amendments of 1980, Pub.L. No. 96-265, § 304(g), 94 Stat. 441, 456. The Bellmon Amendment grew out of congressional concerns about the increasing number of disability decisions being appealed to AUs, the high number of allowance decisions issued by AUs, the accuracy of those decisions, and the policy that only AU decisions denying claims were subject to review. H.R.Rep. No. 944, 96th Cong., 2d Sess. 57, reprinted in [1980] U.S.Code Cong. & Ad.News 1392, 1405; S.Rep. No. 408, 96th Cong., 2d Sess. 53, reprinted in [1980] U.S.Code Cong. & Ad.News 1277, 1331. In response to the Bellmon Amendment, the Secretary established the Bellmon Review Program, which was announced in Social Security Ruling (“SSR”) 82-13. The program was described in detail in a memorandum, dated September 24, 1982, from Louis B. Hays, Associate Commissioner of the SSA Office of Hearings and Appeals, to all SSA AUs. According to the Hays memorandum, the program was begun on October 1, 198Í. The program provided for own-motion review of AU decisions allowing disability benefits under Title II of the Social Security Act or allowing both disability and SSI benefits under Titles II and XVI of the Social Security Act. AUs with individual allowance rates of 70 percent or higher and AUs in hearing offices with aggregate allowance rates of 74 percent or higher were targeted for review. Half of the allowance decisions issued by targeted AUs were evaluated by the Office of Hearings and Appeals for possible review, and 7V2 percent of the allowance decisions issued by these AUs were formally reviewed by the Appeals Council. On April 1, 1982, the targeted AUs were divided into four groups based on own-motion rates. Each and every allowance decision by AUs in the group with the highest own-motion rates was evaluated for possible review. In the group with the second-highest rates, 75 percent of the AUs’ allowance decisions were thus evaluated; in the group with the third-highest rates, 50 percent; and in the group with the lowest rates, 25 percent. In addition, the program was expanded so that 15 percent of all allowance decisions by targeted AUs were formally reviewed by the Appeals Council. Finally, the program was expanded to provide review of a national random sample of AU allowance decisions, AU decisions referred from the SSA Office of Disability Operations, and decisions of all new AUs. While the record does not clearly set forth more recent developments concerning the Bellmon Review Program, the court understands that in early 1983 the Secretary ceased to target AUs for review based on allowance rates. The Secretary continued, however, to target AUs for review based on own-motion rates calculated from cases evaluated or reviewed as part of the national random sample. For a brief period, The Bellmon Review Program included some unappealed denial decisions issued by AUs with high grant-review rates. On June 21, 1984, the Secretary eliminated from the Bellmon Review Program all review targeted at particular AUs on the basis of prior performance. Under the Bellmon Review Program, four AUs in the State of Washington were targeted for review beginning October 1, 1981. Attachment to Letter of November 4, 1982, from P.J. Kurapka to William Rutzick, filed as Attachment to Declaration of Kristin Houser, May 3, 1984. Two more, including AU George W. Wise, who heard plaintiff’s case, were targeted based on allowance rates for the six-month period ending January 1,1982. Id. The AU decision in plaintiff’s case was therefore among the decisions reviewed by the Appeals Council as a consequence of the decisionmaker’s high allowance rate. Plaintiff filed this action on June 24, 1983. In the Complaint, plaintiff alleges that the Appeals Council decision to terminate his benefits was not supported by substantial evidence and was based on errors of law. He therefore seeks reversal of the Appeals Council decision. He further alleges that the Bellmon Review Program, as outlined in SSR 82-13 and the Hays memorandum, was improperly adopted without APA notice and comment procedures. He therefore seeks an injunction against enforcement of all Appeals Council decisions in cases reviewed under the Bellmon Review Program. Plaintiff’s APA claim focuses on the Secretary’s former practice of targeting high allowance AUs for own-motion review. For purposes of this Order, therefore, the term “Bellmon Review Program” will ordinarily refer to prior versions of the program in which AUs were targeted for review based on allowance rates. On September 21, 1983, plaintiff moved for class certification with respect to his APA claim. On October 26, 1983, the Secretary moved to remand plaintiff’s individual claim for benefits in accordance with a preliminary injunction issued in Morrison v. Heckler, 582 F.Supp. 321 (W.D.Wash.1983), a class action in which plaintiff was an unnamed class member. Pursuant to the Morrison v. Heckler preliminary injunction, the Secretary was to reconsider all class» members’ cases on a priority basis and determine whether her denial of benefits to each class member was consistent with certain Ninth Circuit decisions to which she had not acquiesced. In pertinent part, these Ninth Circuit decisions deal with the issues of medical improvement and uncontradicted treating physician opinion. By the Order of January 25, 1984, the court denied the Secretary’s motion to remand and certified a class defined as follows: All claimants within the State of Washington for Title II Social Security disability benefits or Title XVI Supplemental Security Income benefits who have received (or who receive during the pendency of his litigation) decisions from ALJ’s reversing initial denials or terminations of disability and whose cases are then reviewed by the Appeals Council on its own motion pursuant to the Bellmon Amendment. However, the court stayed proceedings for 60 days so that the Secretary might reconsider her termination of plaintiffs benefits. On March 19, 1984, the Appeals Council issued a supplemental decision which states that the termination of plaintiffs benefits is proper under Ninth Circuit law concerning medical improvement and uncontradicted treating physician opinion. Plaintiff now moves for partial summary judgment on the class APA claim. The Secretary moves for summary judgment on both plaintiffs individual claim and the class APA claim. II. PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT The Magistrate recommends that the court grant plaintiff’s motion for partial summary judgment on the class claim that the Bellmon Review Program was adopted in violation of APA notice and comment requirements. The Secretary objects to this recommendation on the grounds that the court lacks jurisdiction over the class claim and that the Bellmon Review Program is exempt from notice and comment requirements. A. Jurisdiction The Secretary asserts that the Disability Reform Act of 1984, P.L. 98-460, § 2(d)(2), 98 Stat. 1794, 1797-98, requires remand of plaintiff’s individual claim and that such remand will leave the class without a representative and require dismissal of the class claim. As the Magistrate, points out, however, the Disability Reform act requires remand only “in actions relating to medical improvement.” Id., 98 Stat. at 1798. Such actions are defined as those, raising the issue of whether an individual who has had his entitlement to benefits under title II, XVI, or XVIII of the Social Security Act based on disability terminated (or period of disability ended) without consideration of whether there has beemedical improvement in the condition of such individual (or another individual on whose disability such entitlement is based) since the time of a prior determination that the individual was under a disability. Id. at § 2(d)(6), 98 Stat. at 1798. In the supplemental decision of the Appeals Council, the issue of possible medical improvement in plaintiff’s condition was explicitly considered. Therefore, plaintiff’s individual claim does not relate to medical improvement for purposes of the Disability Reform Act, and remand is not required. The Secretary also asserts that plaintiff’s APA claim is moot because his case already has been remanded to the Secretary and reviewed apart from the Bellmon Review Program. As plaintiff’s APA claim is moot, the Secretary argues, plaintiff is no longer a proper representative for the class, and the class claim must be dismissed. See General Telephone Co. of the Southwest v. Falcon, 457 U.S. 147, 156, 102 S.Ct. 2364, 2370, 72 L.Ed.2d 740 (1982) (named plaintiff must suffer same injury as class members). Cf. Sosna v. Iowa, 419 U.S. 393, 402, 95 S.Ct. 553, 559, 42 L.Ed.2d 532 (1975) (dictum that named plaintiff’s stake in action ordinarily must continue throughout litigation). It is incorrect, however, to say that plaintiff’s case was remanded to the Secretary. During a stay in this action, the Appeals Council issued a supplemental decision dealing with issues identified in the Morrison v. Heckler preliminary injunction. But the Appeals Council’s original decision, a product of the Bellmon Review Program, remains sub judice. Therefore, plaintiff still has a stake in the class claim challenging the Bellmon Review Program and may continue to serve as class representative. Finally, the Secretary asserts that numerous class members do not meet the prerequisites of 42 U.S.C. § 405(g) (1982) (“Section 405(g)”), which provides that a claimant may obtain judicial review of a denial of disability benefits only upon a final decision by the Secretary and only if he seeks review within sixty days after the decision is mailed to him. See Califano v. Yamasaki, 442 U.S. 682, 701, 99 S.Ct. 2545, 2557-58, 61 L.Ed.2d 176 (1979) (each class member must satisfy Section 405(g) requirements). The court agrees with the Magistrate’s conclusion that Section 405(g) does not bar class treatment of plaintiff’s APA claim. Clearly, all class members have received final decisions from the Secretary. Under the court’s Order of January 25, 1984, the class is defined to include only individuals whose claims for disability have been reviewed by the Appeals Council, which issues final decisions on behalf of the Secretary. Furthermore, the court believes that, with respect to the class claim, the sixty-day requirement is tolled by the Secretary’s failure to publish the aspects of the Bellmon Review Program that are the focus of the class claim. SSR 82-13, which announced the Bellmon Review Program, does not suggest that AUs were to be targeted for review based on allowance rates. The Hays memorandum, which informed AUs of the details of the program, was not circulated except among AUs. As a result, class members cannot be charged with notice that the AUs who heard their claims were targeted for review based on allowance rates. See Stieberger v. Heckler, 615 F.Supp. 1315, 1332-34 (S.D.N.Y.1985). Class members were entitled to believe that Appeals Council review of particular AU decisions was based solely on the general criteria set forth in published regulations, or perhaps on the idiosyncratic exercise of discretion, but not on specfic criteria set forth in an unpublished rule. It would simply be unfair, therefore, to bar any class members from this action based on the sixty-day requirement. Id. Even if the sixty-day requirement were not tolled, class treatment of plaintiff’s APA claim would not be defeated entirely. The sixty-day requirement is satisfied by all class members who received notice of final decisions in their respective cases on or after April 25, 1983, sixty days before plaintiff filed this action. Cf. Lopez v. Heckler, 725 F.2d 1489, 1506-07 (9th Cir.), vacated on other grounds and remanded, — U.S. -, 105 S.Ct. 583, 83 L.Ed.2d 694 (1984). The APA claim on behalf of these class members could not be dismissed under Section 405(g). In summary, the court agrees with the Magistrate that the court has jurisdiction over the class claim. The court must therefore consider the merits of plaintiff’s motion for partial summary judgment. B. APA Notice and Comment It is undisputed that the Bellmon Review Program is a rule for APA purposes. See 5 U.S.C. § 551(4) (1982). Therefore, adoption of the program presumptively requires notice and comment procedures. 5 U.S.C. § 553(b), (c) (1982). It is also undisputed that the Bellmon Review Program was adopted without notice and comment. Unless the program is exempt from such procedure, therefore, the program is invalid. See Buschmann v. Schweiker, 676 F.2d 352, 355-56 (9th Cir.1982); Western Oil & Gas Ass’n v. Environmental Protection Agency, 633 F.2d 803, 812-13 (9th Cir.1980). As a general matter, exceptions to APA notice and comment requirements are “narrowly construed and reluctantly countenanced.” Alcaraz v. Block, 746 F.2d 593, 612 (9th Cir.1984). The Secretary contends that the Bellmon Review Program fits within the exception provided in 5 U.S.C. § 553(b)(A) (1982), which states that notice and comment requirements do not apply to “interpretive rules, general statements or policy, or rules of agency organization, procedure, or practice.” In particular, the Secretary asserts that the Bellmon Review Program is either an interpretive rule or a procedural rule. 1. Interpretive Rule Exception Interpretive rules are those that merely clarify existing law or regulations. Powderly v. Schweiker, 704 F.2d 1092, 1098 (9th Cir.1983). An agency promulgates interpretive rules without exercising delegated legislative power to make law through rules. 2 K. Davis, Administrative Law Treatise, § 7:8, 36 (2d ed. 1979). See Stoddard Lumber Co., Inc. v. Marshall, 627 F.2d 984, 987 (9th Cir.1980). In contrast, legislative rules are those that effect a change in existing law or policy. Powderly, 704 F.2d at 1098. An agency must exercise delegated legislative power in order to promulgate legislative rules. Louisiana-Pacific Corp. v. Block, 694 F.2d 1205, 1209-10 (9th Cir.1982). SSR 82-13 states that the Bellmon Review Program is the Secretary’s response to the Bellmon Amendment, which directs the Secretary to implement a program of own-motion review of ALJ decisions. SSR 82-13 also cites as authority 42 U.S.C. § 405 (1982), which, inter alia, provides for promulgation of procedural rules governing claims for disability benefits and for own-motion review of particular cases at the discretion of the Secretary. The question is whether the Bellmon Review Program, as outlined in SSR 82-13 and the Hays memorandum, was merely an interpretation of existing law, including the Bellmon Amendment, or instead constituted new law promulgated through exercise of delegated legislative power. In other words, the court must determine whether the Bellmon Amendment or any other statute delegated legislative power to the Secretary and, if so, whether the Secretary exercised such power when she implemented the Bellmon Review Program. The court agrees with the Magistrate’s conclusion that the Bellmon Amendment delegates legislative power. The language of the amendment directing the Secretary to “implement a program” clearly contemplates the creation of rules beyond anything Congress was prepared to project or anticipate. Nothing in the amendment prescribes any particular strategy or procedure. The required program must be devised in the first instance by the Secretary, not gleened from the words of Congress. The Secretary argues that Congress did not intend the Bellmon Amendment to delegate legislative power. If Congress had intended to delegate such power, the Secretary argues, Congress would have expressly authorized promulgation of legislative rules. The court fails to see a significant difference between language requiring promulgation of rules and language requiring implementation of a program. A program is just a set of rules. Moreover, the failure of Congress to specify in the Bellmon Amendment that the Secretary may promulgate rules to systematize own-motion review may stem from the knowledge that 42 U.S.C. § 405(a) (1982) already provides the Secretary with authority to promulgate rules of procedure. The court also agrees with the Magistrate’s conclusion that the Bellmon Review Program reflects an exercise of legislative power. It is clear that the program was established pursuant to the Bellmon Amendment, which the court considers delegative. It is also clear that the Bellmon Amendment does not require or suggest that the Secretary target ALJs for review based on allowance rates. In fact, all reference to allowance rates was purposefully deleted from the amendment pri- or to enactment. H.R.Rep. No. 944, 96th cong., 2d Sess. 57, reprinted in [Í980] U.S. Code Cong. & Ad.News 1392, 1405. Insofar as the Secretary decided to implement a program of review based on allowance rates, therefore, the Secretary created new law. Since 1981, the Secretary has implemented at least four substantial revisions of the Bellmon Review Program. These frequent revisions tend to confirm that the Secretary has been developing her own program, not simply attempting to flesh out a congressional plan. The Secretary argues that the Bellmon Review Program is interpretive of the Secretary’s discretionary own-motion review authority as provided in 42 U.S.C. § 405(b) (1982). The court rejects this argument for two reasons. First, the Bellmon Review Program reflects a dramatic change in policy. Rules that effect a change in policy are ordinarily considered legislative. Powderly, 704 F.2d at 1098: American Trucking Ass’n, Inc. v. United States, 688 F.2d 1337, 1348 (11th Cir.1982), rev’d in part on other grounds, 467 U.S. 354, 104 S.Ct. 2458, 81 L.Ed.2d 282 (1984); Brown Express, Inc. v. United States, 607 F.2d 695, 702 (5th Cir.1979). It is undisputed that the Secretary’s own-motion review power had been for years exercised only rarely. Second, the program severely limited the Secretary’s discretion not to evaluate or review decisions by targeted AUs. Evaluation for own-motion review became essentially mandatory first for half of the decisions issued by high allowance AUs and later for all of the allowance decisions issued by some of these AUs. A rule that severely limits agency discretion is not merely interpretive. See Guardian Fed. Savings & Loan Ass’n v. Federal Savings & Loan Ins. Corp., 589 F.2d 658, 666-67 (D.C.Cir.1978); Pickus v. United States Board of Parole, 507 F.2d 1107, 1113 (D.C.Cir.1974), 2. Procedural Rule Exception In general, procedural rules relate to an agency’s internal operations. Batterton v. Marshall, 648 F.2d 694, 707 (D.C.Cir.1980). The distinguishing characteristic of procedural rules is that they do not alter private rights or interests, although they may alter the manner in which parties present themselves or their viewpoints to an agency. Id. The procedural rule exception to APA notice and comment requirements does not apply to rules that impact substantial private rights or interests. Id. at 708; National Ass’n of Home Health Agencies v. Schweiker, 690 F.2d 932, 949 (D.C.Cir.1982), cert. denied, 459 U.S. 1205, 103 S.Ct. 1193, 75 L.Ed.2d 438 (1983); Brown Express, Inc. v. United States, 607 F.2d 695, 702 (5th Cir.1979). The question is whether the Bellmon Review Program, as outlined in SSR 82-13 and the Hays memorandum, jeopardized private rights. The Magistrate takes the position that the program jeopardized such rights by compromising the decisional independence of AUs. In other words, the Magistrate feels that the program pressured certain AUs not to allow benefits in close cases. The court concludes that the Bellmon Review Program was not a procedural rule because the ultimate purpose of the program was to change the outcome of agency decisions. According to the Hays memorandum, the program was “intended to promote greater consistency and accuracy” among AU decisions. The program was to accomplish this goal in at least two ways. First, erroneous decisions were to be corrected upon review. Provisions for review are procedural. Second, the performance of AUs was to be “improved” prospectively. It is this envisioned prospective impact on AU decisions that threatened the substantive rights of disability claimants. To increase “consistency and accuracy” among future decisions is to effect a deliberate, systematic change in the results of individual cases at the AU level. Such change is inherently substantive. Because the program focused on high allowance AUs, the anticipated type of change was a reduction in the number of allowances. Even if this anticipated reduction was salutary in the sense that future decisions would more thoroughly conform to each other or better reflect agency positions on legal issues, reduction of allowances is a substantive policy, not merely a matter of procedure. One of the ways in which the Bellmon Review Program impacted future decisions was through a feedback system by which the Appeals Council disseminated analyses of the performance of certain high allowance AUs. The Hays memorandum states: An essential requirement to ensure the success of the Bellmon review program is to provide a companion system for providing feedback on the results of the review____ The purpose of the feedback system is to advise affected AUs of decisional weaknesses and to provide a mechanism for achieving long term improvement. Attachment B to Report and Recommendation of July 11, 1985, at 3. The court believes that the anticipated “long term improvement” was reduction of allowance rates. This belief is supported by certain other SSA internal correspondence and by the official SSA position that high allowance rates entail high error rates. It is also supported by common sense. To designate particular high allowance AUs for ongoing review of their allowance decisions inexorably tends to discourage these AUs from allowing benefits in close cases. There exists substantial evidence suggesting that’ALJs in fact felt pressured to deny claims for disability benefits. Other courts have found that the Bellmon Review Program created an atmosphere of tension and unfairness among ALJs that could have corrupted some ALJs’ ability to decide cases impartially. Association of Administrative Law Judges, Inc. v. Heckler, 594 F.Supp. 1132, 1143 (D.D.C.1984); Stieberger v. Heckler, 615 F.Supp. 1315, 1394-95 (S.D.N.Y.1985). In addition, the Senate Subcommittee on Oversight of Government Management of the Committee on Governmental Affairs has found that under the Bellmon Review Program and other concurrent policies the Secretary was “pressuring . . . AUs to reduce the rate at which they allow disabled persons to participate in or continue to participate in the Social Security disability program ____” Staff of Senate Comm, on Governmental Affairs, 98th Cong., 1st Sess. “The Role of the Administrative Law Judge in the Title II Social Security Disability Insurance Program” 36 (Comm.Print 1983) (“Subcommittee Report”). The Subcommittee concluded that the Secretary’s focus on allowance rates in the Bellmon Review Program resulted in “less impartial and fair hearings for some disability claimants____” Id. The Secretary asserts that her records show no significant reduction in aggregate allowance rates during the Bellmon Review Program. It is not entirely clear whether this is true. Allowance rates declined slightly in fiscal years 1981-83 after eight straight years of steady increases. One might infer, therefore, that but for the Bellmon Review Program allowance rates would have risen. Moreover, SSA statistics cited in the Subcommittee Report indicate a substantial decline in allowance rates among targeted ALJs. Certainly, this decline might well be considered significant. Whether or not a significant decline in allowance rates occurred, the court does not believe that mere statistics should govern the court’s characterization of the Bellmon Review Program as substantive or procedural. Allowance rates may prove nothing. Cf. Matthews v. Eldridge, 424 U.S. 319, 346, 96 S.Ct. 893, 908, 47 L.Ed.2d 18 (1976) (“Bare statistics rarely provide a satisfactory measure of the fairness of a decisionmaking process.”). The court’s characterization of the program must be based on the program’s essential purpose and reasonably foreseeable consequences. Insofar as one of the purposes of the program was to influence future ALJ decisions, the court has concluded that the program was substantive, not procedural. This conclusion need not rest on a finding that such influence was demonstrably effective. 3. Conclusion As the Bellmon Review Program was neither an interpretive rule nor a procedural rule, adoption of the program required APA notice and comment procedures under 5 U.S.C. § 553(b), (c) (1982). These procedures were not used, and adoption of the program was therefore invalid. Accordingly, plaintiffs motion for partial summary judgment must be granted. The court will set this matter down for a hearing on the question of appropriate relief. III. SECRETARY’S MOTION FOR SUMMARY JUDGMENT In accordance with the Magistrate’s Report and Recommendation, the court reserves ruling on the Secretary’s motion for summary judgment as to plaintiff’s individual claim. At the hearing on the question of relief to be granted on the class claim, the parties will address the impact of such relief on plaintiff’s individual claim. IT IS NOW, THEREFORE, ORDERED as follows: 1. The Magistrate’s Report and Recommendation of July 11, 1985 is adopted by the court. 2. Plaintiff’s motion for partial summary judgment is GRANTED. 3. On November 8, 1985, at 11:00 a.m., the court will conduct a hearing on the question of relief to be granted on the class claim. The Clerk of the Court is directed to forward copies of this Order to counsel of record. ORDER GRANTING RELIEF THIS COURT having entered an Order Granting Plaintiff’s Motion for Partial Summary Judgment in the above-entitled action on October 28, 1985, having heard from counsel for the plaintiff and defendant, and having considered the issue of appropriate relief in connection with that Order, now, therefore, IT IS HEREBY ORDERED that relief be granted as follows: 1. The Secretary of Health and Human Services (the “Secretary”) shall grant the relief specified in paragraph 2 to all claimants who: —applied for disability insurance benefits under Titles II and/or XYI of the Social Security act or were previously found entitled to receive such benefits; —received initial and/or reconsideration determinations denying their applications or terminating their disability benefits; ■ —received between August 1, 1981 and June 30, 1984, decisions from Administrative Law Judges at hearing offices in Washington who were targeted for review under the Bellmon Review Program based on allowance rates, which decisions revised those previous denials or terminations (hereinafter called “favorable AU decision”); and —received Appeals Council decisions vacating and revising or remanding those favorable AU decisions by own-motion review initiated between October 1, 1981 and June 30, 1984. The initials and social security numbers of these claimants are attached as an Addendum to this Order and made a part thereof. 2. The relief that shall be granted by the Secretary to each such person referred to in paragraph 1 above is the reinstatement of his or her favorable AU decision effective the date of such decision. 3. As part of such relief, each person referred to in paragraph 1 above shall be entitled to and paid all benefits under Titles II and/or XVI to which he or she was entitled under the favorable AU decision, including benefits for times prior to the date of the favorable AU decision, if called for by such decision. 4. The Secretary is ordered forthwith to advise its employees and agents of the above, to compute and pay within 180 days all benefits due persons referred to in paragraph 1 above based upon the favorable AU decision and to disregard any or all decisions taken by the Appeals Council reversing or remanding such favorable AU decisions. 5. The Secretary shall make the following efforts to notify the claimants referred to in paragraph 1 above: A. Mailing a letter by regular first-class mail to each claimant’s last known address, which letter shall be approved by counsel for plaintiff, and shall advise such claimants (in language understandable to persons of limited education) of the terms of this Order and shall give them the telephone number, both of plaintiff’s counsel and of an employee(s) of the Secretary, who can provide information and advice concerning how to obtain benefits due them. B. Advising the State of Washington, including the Washington Department of Social and Health Services, of the terms of this Order seeking their cooperation in locating these persons. The Secretary shall pay the reasonable expenses, not to exceed $10,000, incurred by the State in locating these persons. C. After the Secretary has attempted to locate class members through the means specified in paragraphs 5A and 5B, she shall place newspaper and other media announcements in a further effort to locate class members if more than 5 class members who are entitled to relief have not been located within 120 days of the entry of this order. The number and content of the announcements are to be agreed upon by the parties; however, if the parties cannot agree, this matter shall be decided by the court. 6. Plaintiffs may move for costs including attorneys fees within thirty (30) days of the entry of this Order. REPORT AND RECOMMENDATION July 11, 1985 PHILIP K. SWEIGERT, United States Magistrate. INTRODUCTION AND SUMMARY CONCLUSION This matter comes on for consideration of plaintiff’s class action challenging the defendant Secretary’s implementation of the Bellmon Amendment. Plaintiff has moved for partial summary judgment on the class claim' that the Secretary violated the requirements of the Administrative Procedure Act (APA) when she instituted the Bellmon Review Program. The Secretary has moved for summary judgment on W.C.’s individual claim for disability benefits. After careful review of the entire record, as well as the memoranda of the parties, I conclude that the Secretary violated the APA by failing to publish the Bellmon Review Program in the Federal Register and by not subjecting that program to the notice and comment requirements of 5 U.S.C. § 553(b), (c) (1982). Accordingly, I recommend that plaintiff’s motion for partial summary judgment be granted. The Court should further reserve ruling on defendant’s motion for summary judgment as to W.C.’s individual claim because the form of relief on the class claim may affect that result. DISCUSSION Plaintiff commenced the instant action to challenge the Bellmon Review Program, instituted by the Secretary to implement the 1980 Bellmon Amendment to the Social Security Act. Plaintiff’s May 3, 1984 motion for partial summary judgment alternatively sought a preliminary injunction. However, that issue is moot because the Secretary has discontinued targeting high allowance AUs under the Bellmon Program. Plaintiff also seeks a reversal of the Secretary’s decision terminating his disability benefits. On January 25, 1984, the Court certified a class with plaintiff as the representative of the class. The class is comprised of: “All claimants within the State of Washington for Title II Social Security disability benefits or Title XVI Supplemental Social Security Income benefits who have received (or who receive during the pending of this litigation) decisions from AUs reversing initial denials or terminations of disability and whose cases are then reviewed by the Appeals Council on its own motion pursuant to the Bellmon Amendment.” Plaintiff argues that the Secretary’s implementation of the Bellmon Review Program, under which the Secretary targeted AUs with high allowance rates for own motion review, constituted a substantive rule required to be published in the Federal Register and subjected to the notice and comment provisions of the APA. See 5 U.S.C. § 553(b), (c). Alternatively, plaintiff maintains that even if the Bellmon Program was merely an interpretative rule or statement of general policy rather than a substantive rule, it was nevertheless required to be published under the Freedom of Information Act. 5 U.S.C. § 552(a)(1)(D). Defendant argues that the Secretary’s regulations implementing the Bellmon Amendment were exempt from publication because they were interpretative or procedural rules implementing the Secretary’s preexisting own motion review authority. See 5 U.S.C. § 553(b)(A). The Secretary has further claimed that the Court lacks jurisdiction over the class because plaintiff failed to show that all class members exhausted their administrative remedies and sought judicial review within sixty days of the Secretary’s final decision. I. JURISDICTION. Before reaching the merits of this case, it is necessary to address several jurisdictional issues which arose subsequent to the parties’ motions for summary judgment. Following a hearing on December 7, 1984, plaintiff and defendant submitted supplemental briefs on these issues. (A) 1984 Disability Reform Act. Initially, the Court must determine whether the passage of the Disability Reform Act of 1984, P.L. 98-460, 98 Stat. 1794 et seq., requires a remand of plaintiff’s case to the Secretary for further proceedings. I conclude it does not. Section 2 of the Act provides a new medical improvement standard of review for determining Social Security disability benefits. The Secretary may terminate benefits by showing that an individual’s physical or mental impairment “has ceased, does not exist, or is not disabling,” so that “the individual is now able to engage in substantial gainful activity.” Id. § 2(a). Such a finding may only be made if there is substantial evidence which demonstrates medical improvement in the individual’s impairments so that the individual is now able to engage in substantial gainful activity. Id. Moreover, this determination is to be made solely: “... on the basis of the weight of the evidence and on a neutral basis with regard to the individual’s condition, without any initial inference as to the presence or absence of disability being drawn from the fact that the individual has previously been determined to be disabled.” Id. . The Secretary contends that § 2(d)(2) of the Act requires remand of W.C.’s case because it involves a termination of benefits. However, only W.C.’s individual claim involves a termination of benefits relating to medical improvement. The 1984 amendments do not otherwise affect plaintiff’s class action claim challenging Bellmon Review. The claims of the rest of the certified class members are not related to termination of benefits or the medical improvement standard, and are not subject to remand. A number of courts have recently held that the Act’s remand requirement is mandatory for all cases relating to medical improvement. See Soper v. Heckler, 754 F.2d 222 (7th Cir.1985); Nowells v. Heckler, 749 F.2d 1570 (11th Cir.1985); Parker v. Heckler, 750 F.2d 1474 (11th Cir.1985); Harmon v. Secretary of Health and Human Services, 749 F.2d 357 (6th Cir.1984); Steele v. Heckler, 748 F.2d 492 (8th Cir.1984); Jackson v. Heckler, 745 F.2d 1326 (10th Cir.1984). However, in cases where the Secretary’s prior decision included a determination of whether there has been a medical improvement, other courts have declined to remand the case to the Secretary. See Sebion v. Heckler, 757 F.2d 960 (8th Cir.1985) (remand not necessary in view of the fact that the ALJ adequately considered all evidence that is required under the new Act); Colella v. Heckler, 604 F.Supp. 593 (D.C.Pa.1985) (refusal to remand upon Rule 60(b) motion for reconsideration where Secretary’s termination of benefits included a consideration of whether claimant’s condition had improved medically); Claassen v. Heckler, 600 F.Supp. 1507 (D.C.Kan.1985) (no useful purpose served by remanding case under new law where that standard is more beneficial to plaintiff than previous standard already applied). W.C.’s individual case has previously been remanded to the Secretary pursuant to the medical improvement standard of the amended preliminary injunction in Morrison, et. al. v. Heckler, 582 F.Supp. 321 (W.D.Wash.1983). On March 18, 1984, after reconsidering plaintiff’s claim in light of the Morrison injunction, the Appeals Council upheld its previous decision (TR 4). The wording of the new Act’s provisions regarding the standard of review in medical improvement cases is almost identical to the standard in Patti v. Schweiker, 669 F.2d 582 (9th Cir.1982), which the Secretary was obliged to follow pursuant to the Morrison injunction. The only noticeable difference is that under the new Act, there is no longer any presumption of disability where benefits have been previously awarded. See § 2(a). I conclude that because the Secretary has already determined under the more liberal standard in Patti that plaintiff W.C. is no longer entitled to any benefits, a remand under the new Act would undoubtably lead to the same conclusion and would serve no useful purpose. Cf. Claassen v. Heckler, supra. A careful reading of the new Act provides yet another basis for not remanding plaintiff W.C.’s individual claim. Although the Act plainly requires a Court to remand “actions relating to medical improvement,” the definition of an action “relating to medical improvement” excludes cases in which the Secretary terminated benefits while considering whether the claimant’s condition had improved medically. § 2(d)(6). In W.C.’s case, the Secretary has already considered whether there has been a medical improvement in his condition. Therefore, the Act, by its own terms, precludes an additional remand of his ease. See Colella v. Heckler, supra at 595. (B) Mootness. Defendant argues that this case is now moot because the Secretary has discontinued the Bellmon Review Program’s targeting of individual ALJs. However, despite the discontinuation of the individual AU portion of the Bellmon Review Program, the Secretary has indicated in a related action that she has advised the AU corps of the possibility that Bellmon Review could be resumed. Association of Administrative Law Judges v. Heckler, 594 F.Supp. 1132, 1141 (D.D.C.1984) (hereinafter cited as ALJs v. Heckler ). For this reason, I conclude that there remains a live controversy between the parties, at least insofar as plaintiffs seek retrospective relief for the denial of benefits pursuant to the Appeals Council taking own motion review under the Bellmon Program. See Murphy v. Hunt, 455 U.S. 478, 480, 102 S.Ct. 1181, 1182, 71 L.Ed.2d 353 (1982). (C) Exhaustion of Administrative Remedies. The Court’s Order certifying the instant class action rejected defendant’s argument that there was no jurisdiction over members of the class who did not exhaust their administrative remedies or appeal their cases within sixty days pursuant to 42 U.S.C. § 405(g). Defendant has now reasserted this argument, relying upon several recent court decisions. Section 405(g) of the Social Security Act includes two requirements: (1) an individual must present a claim for benefits to the Secretary and (2) they must exhaust the administrative remedies established by the Secretary. The first requirement is jurisdictional and may not be waived; the second requirement may be waived by either the Secretary or the courts. Heckler v. Ringer, 466 U.S. 602, 104 S.Ct. 2013, 2021, 80 L.Ed.2d 622 (1984); Mathews v. Eldridge, 424 U.S. 319, 328, 96 S.Ct. 893, 899, 47 L.Ed.2d 18 (1975). Defendant’s argument that class members have failed to exhaust their administrative remedies is misplaced. Each class member has submitted a claim for disability benefits to the Secretary. By virtue of the Order certifying the class, all class members have had their cases reviewed by the Appeals Council pursuant to the Bellmon Review Program. It is therefore not necessary to address defendant’s argument that the Court should not waive the requirement of exhaustion because there has been a final decision rendered in the case of each class member. Nevertheless, the Court must decide whether each class member must have sought judicial review of the Secretary’s final decision within sixty days pursuant to § 405(g). Under the Social Security Act, claimants must seek judicial review of a final decision “within sixty days after the mailing ... of notice of such decision or within such further time as the Secretary may allow.” 42 U.S.C. § 405(g). Defendant argues that the sixty-day provision is jurisdictional; whereas plaintiff claims that it is merely a statute of limitations subject to waiver. The Supreme Court has not definitively decided this question, although the Court has previously construed the sixty-day requirement as a statute of limitations waivable by the parties. See Mathews v. Eldridge, 424 U.S. 319, 328 n. 9, 96 S.Ct. 893, 899 n. 9, 47 L.Ed.2d 18 (1976); Weinberger v. Salfi, 422 U.S. 749, 763-64, 95 S.Ct. 2457, 2465-66, 45 L.Ed.2d 522 (1975). I conclude that neither Heckler v. Ringer, 466 U.S. 602, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984), nor the stay entered by Justice Rehnquist in Heckler v. Lopez, 463 U.S. 1328, 104 S.Ct. 10, 77 L.Ed.2d 1431 (1983) (Rehnquist, Circuit Justice), motion to vacate stay denied, 464 U.S. 879, 104 S.Ct. 221, 78 L.Ed.2d 217 (1983), partial stay pending cert. granted, 466 U.S. 955, 104 S.Ct. 2164, 80 L.Ed.2d 548 (1984), vacated and remanded, — U.S. -, 105 S.Ct. 583-84, 83 L.Ed.2d 694 (1984), require a different result. Although Justice Steven’s partial dissent with respect to the denial of the motion to vacate the stay in Lopez, supra, 104 S.Ct. at 221, concluded that the sixty-day requirement would bar the claims of those class members who did not seek judicial review more than sixty days prior to the date the class action was filed, Justices Brennan and Marshall viewed the sixty-day requirement as waivable. Id. 104 S.Ct. at 225, 226. Moreover, in a separate opinion in Heckler v. Ringer, supra, 104 5. Ct. at 2028, 2033-36, Justice Stevens incorporated both the Salfi and Eldridge statements to the effect that § 405(g) contains a statute of limitations waivable by the parties. See City of New York v. Heckler, 742 F. 2d 729, 738 (2d Cir.1984), rehearing denied, 755 F.2d 31 (1985). In the absence of an authoritative ruling by the Supreme Court, I conclude that the sixty-day requirement is a waivable statute of limitations. Lopez v. Heckler, 725 F.2d 1489, 1508 (9th Cir.), vacated and remanded, — U.S. -, 105 S.Ct. 583, 83 L.Ed.2d 694 (1984). This conclusion is further supported by recent rulings by the Second and Third Circuits. See City of New York, supra, at 742 F.2d 738. Mental Health Ass’n of Minnesota v. Heckler, 720 F.2d 965, 973 n. 19 (8th Cir.1983); Johnson v. Heckler, 604 F.Supp. 1070, 1073-74 (N.D.Ill.1985); State of New York v. Heckler, 105 F.R.D. 118, 123 (S.D.N.Y.1985). Furthermore, I conclude that the Secretary waived the statute of limitations defense. Although the Secretary’s answer and memorandum in opposition to plaintiff’s complaint and motion for class certification contain references to the requirements of 42 U.S.C. § 405(g), defendant did not sufficiently raise the statute of limitations defense. Accordingly, the requirement was waived by the Secretary. Weinberger v. Salfi, supra, 422 U.S. at 763-64, 95 S.Ct. at 2665-66; Mathews v. Eldridge, supra, 424 U.S. at 328 n. 9, 96 S.Ct. at 899 n. 9; Lopez v. Heckler, supra, 725 F.2d at 1505; City of New York, supra, 742 F.2d at 738. Even if it could be said that the Secretary sufficiently raised the sixty-day limitation defense, that requirement would not bar the claims of any class members because the sixty-day period was effectively tolled during the time that the Secretary’s policy of targeting individual ALJs remained operative but undisclosed. The sixty-day limitation for filing individual actions was tolled on the date this action was commenced by W.C., the named class representative. This action would further include those class members who received a final decision from the Secretary on or before sixty days prior to June 24, 1983, the date the class action was commenced. Despite the fact that all other unnamed plaintiffs who did not seek judicial review of final decisions made prior to the cut-off date of April 25, 1983, would otherwise be barred by a timely assertion of the statute of limitations defense, because the Secretary concealed and refused to publish (for notice and comment) the Bellmon Review Program, the sixty-day requirement was effectively tolled. All of the class members who had their cases reviewed under the Bellmon Review Program were entitled to believe that the Secretary’s final decision was legally valid and not a product of an ill-fated program targeting individual AUs on the basis of their allowance rates. The sixty-day limitation is subject to equitable tolling on this basis. See Lopez v. Heckler, supra, 725 F.2d at 1505-07; Borzeka v. Heckler, 739 F.2d 444, 448 n. 3 (9th Cir.1984). Concealment of the Bellmon Review Program was sufficient to toll the sixty-day limitation requirement for all class members in this action. As the Court in City of New York, supra, held: “Where the Government’s secretive conduct prevents plaintiffs from knowing of a violation of rights, statutes of limitations have been tolled until such time as plaintiffs had a reasonable opportunity to learn the facts concerning the cause of action. See Lopez v. Heckler, supra, 725 F.2d [1489] 1505-07 (disability claim); Barett v. United States, 689 F.2d 324, 327-30 (2d Cir.1982) (claim under Federal Tort Claims Act), cert. denied, [462] U.S. [1131], 103 S.Ct. 3111, 77 L.Ed.2d 1366 (1983); Chiappa v. Califano, 480 F.Supp. 856 (S.D.N.Y.1979) (disability claim).” Id. 742 F.2d at 738; State of New York v. Heckler, supra, 105 F.R.D. at 123-24. II. MERITS OF CLASS ACTION. A. Bellmon Review Program. As part of the 1980 amendments to the Social Security Act, Congress enacted the Bellmon Amendment requiring the Social Security Administration to institute a program of ongoing review of ALJ disability claim decisions. Section 304(g) of the Bellmon Amendment provided that: “The Secretary of Health and Human Services shall implement a program of reviewing, on his own motion, decisions rendered by administrative law judges as a result of hearings under § 221(d) of the Social Security Act, and shall report to the Congress by January 1, 1982, on his progress.” Social Security Disability Amendments of 1980, Pub.L. No. 96-265, § 304(g), 94 Stat. 441, 456. The Bellmon Amendment was enacted out of congressional concerns about the increasing number of disability decisions being appealed to AUs, the high percentage of allowance rates by the AUs, the accuracy of those decisions, and because only AU decisions denying benefits were generally subject to review. H.R.Rep. No. 944, 96th Cong., 2d Sess. 57 (1980), reprinted in [1980] U.S.Code Cong. & Ad.News 1392, 1405; S.Rep. No. 408, 96th Cong., 2d Sess. 53 (1980), reprinted in [1980] U.S. Code Cong. & Ad.News 1277, 1331. See ALJs v. Heckler, supra, 594 F.Supp. at 1134. Prior to implementing the Bellmon Amendment, the Secretary undertook a random sample review of 3,600 AU decisions, including denials as well as allowances. The study indicated that “there was a higher probability of error in favorable decisions of administrative law judges with high overall allowance rates.” The Bellmon Review Program was instituted in October, 1981, as a means to improve decisional quality and accuracy. Initially, 7 ¥2% of the allowance decisions of AUs with allowance rates of 70 percent or higher were selected for review. In addition, hearing offices with allowance rates of 74% or higher were also reviewed. Approximately 13%, or 106 AUs, were placed on Bellmon Review in 1981 because of their high allowance rates. ALJs v. Heckler, supra, 594 F.Supp. at 1134. In April, 1982, the Bellmon Review Program was enlarged to include 15% of AU disability allowance decisions. In addition to targeting individual AUs on the basis of their allowance rates, the case selection criteria was expanded to include a national random sample of AU allowance decisions, referrals from the Social Security Administration’s Office of Disability Operations, and the decisions of all newly hired AUs. In December, 1982, the Secretary stopped using allowance rates to target AUs for Bellmon Review and reviewed individual AU’s decisions solely on the basis of their own motion rates under the national random sample. After a brief period of including in Bellmon Review unappealed decisions denying benefits by ALJs with high “grant-review” rates (the rate at which the Appeals Council grants claimants’ requests for review of denial decisions), the Secretary eliminated entirely the individual AU portion of the Bellmon Review Program. Notice of Filing June 22, 1984, Memorandum to all AUs, June 21, 1984. See ALJs v. Heckler, supra, 594 F.Supp. at 1135. B. APA Claim. Plaintiff contends that targeting individual AUs under the Bellmon Review Program without publication or opportunity for notice and comment violated the APA. 5 U.S.C. § 553(b), (c) (1982). Under the APA, an agency must publish notice of a proposed substantive rule in the Federal Register to allow an opportunity for interested members of the public to comment. 5 U.S.C. § 553(b), (c); Powderly v. Schweiker, 704 F.2d 1092, 1098 (9th Cir.1983). In January, 1982, the Secretary issued Social Security Rule 82-13 (SSR 82-13), which had been previously published as a “Program Policy Statement.” (See attachment A.) SSR 82-13’s stated purpose was: “To announce SSA’s institution of a program for ongoing review of administrative law judge decisions ... and to state the policy on Appeals Council review of hearing decisions upon the Appeals Council’s own motion under this program.” Id. SSR 82-13 further provided that the program was necessary because “in the past several years the Council has not conducted an ongoing, pre-effectuation review of favorable administrative law judge decisions for the purpose of identifying the need for, and, where necessary, taking corrective action.” Id. The Secretary announced that in accordance with the “statutory mandate” of the Bellmon Amendment, the Administration would begin to: “... conduct a comprehensive, ongoing program under which a prescribed percentage of administrative law judge decisions involving the issue of disability, particularly those allowing previously denied claims for disability benefits, will be evaluated prior to their effectuation, even though there is no request for review. When appropriate, the decision will be referred for possible review of the Appeals Council.” Id. SSR 82-13 was issued after the Secretary implemented the first portion of the Bellmon Review Program in October, 1981. The program was not even communicated to the AU corps until September, 1982. In a memorandum to the AU corps from Associate Commissioner Louis B. Hays on September 24, 1982 (“Hays Memorandum”), the Secretary first announced the specific categories of cases which would automatically be considered for review. (See Attachment B.) Neither the Hays Memorandum nor SSR 82-13 were published in the Federal Register or subjected to the APA’s notice and comment provisions. Plaintiff contends that the Bellmon Review Program was a new substantive rule subject to the requirements of the APA. Defendant argues that the challenged rules were not required to be published under the APA because they were “only interpretative rules” or “rules of procedure.” Although SSR 82-13 did not establish a new category or ground for review of AU decisions, it announced the implementation of a program for reviewing cases upon the Secretary’s own motion. The Hays Memorandum later set forth the specific criteria for targeting AUs. For purposes of review under the APA, these documents must be characterized as administrative rules. The APA “broadly defines an agency rule to include nearly every statement an agency can make.” Batterton v. Marshall, 648 F.2d 694, 700 (D.C.Cir.1980). 1. Interpretative Rule Exception. Except when required by statute, an administrative agency is exempted from the notice and comment requirements of the APA if the rule in question is determined to be an interpretative rule or a general statement of policy or rule of agency organization, procedure or practice. 5 U.S.C. § 553(b)(A). Substantive or legislative rules and interpretative rules are not always clearly distinguishable. The Court’s inquiry must focus primarily on the rules themselves. While the Court may not impose additional requirements beyond those of the APA, it is not bound by the Secretary’s classification of the rule in question because “the substance, not the label is determinative.” United States Department of Labor v. East Metals Corp., 744 F.2d 1145, 1149 (5th Cir.1984); Anderson v. Butz, 550 F.2d 459, 463 (9th Cir.1977). In addition, the exceptions to the notice and comment provisions of § 553 are to be “narrowly construed and reluctantly countenanced.” Alcaraz v. Block, 746 F.2d 593, 612 (9th Cir.1984) (citations omitted). See also National Ass’n of Home Health Agencies v. Schweiker, 690 F.2d 932, 949 (9th Cir.1982), cert. denied, 459 U.S. 1205, 103 S.Ct. 1193, 75 L.Ed.2d 438 (1983). The Bellmon Review Program for the first time instituted and created a program for selecting cases for own motion review. Prior to its implementation, the Secretary had the authority to reopen and revise any decision for certain specified reasons. See 20 C.F.R. §§ 404.987-404.989 (1984). In 1976, the Secretary promulgated new regulations governing own motion review of an ALJ’s decision. The regulations provide that the Appeals Council may decide on its own motion to review an AU’s decision within sixty days if one of four grounds is determined to be present. 20 C.F.R. §§ 404.969-404.970 (1984). Unless one of these four grounds is present, the Appeals Council has no authority to review the AU’s decision, either on its own motion or at the request of a claimant. See Newsome v. Secretary of Health and Human Services, 753 F.2d 44, 46 (6th Cir.1984); Parris v. Heckler, 733 F.2d 324, 325 (4th Cir.1984). One year after the Bellmon Program was instituted, 12,000 favorable ALJ decisions were considered for own motion review. 2,200 were actually reviewed in fiscal year 1982. During 1981, no favorable decisions were reviewed at all. The exercise of this authority was the direct result of the Bellmon Review Program. In 1982, the Secretary also considered approximately 64,000 denial decisions for review upon a claimant’s request. However, the more extensive review of AU denials has no bearing on whether the Secretary’s implementation of the Bellmon Review Program was a substantive rule. Indeed, the “rule” whereby claimants may request the Secretary to consider their' case for review following an AU’s denial was published and is codified at 20 C.F.R. § 404.967 and § 404.968. Substantive rules are “those which effect a change in existing law or policy.” Powderly, supra, 704 F.2d at 1098. Such rules affect individual rights and obligations. Chrysler Corp. v. Brown, 441 U.S. 281, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979); Morton v. Ruiz, 415 U.S. 199, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974). On the other hand, “[interpretative rules are those which merely clarify or explain existing law or regulations.” Powderly, supra, 704 F.2d at 1098. Such rules simply advise the public of the agency’s “construction of the statutes or regulations it administers.” American Medical Ass’n v. Heckler, 606 F.Supp. 1422, 1439 (S.D.Ind.1985). The “proper test” to distinguish legislative from interpretative rules, was stated in Gibson Wine Co. v. Snyder, 194 F.2d 329 (D.C.Cir.1952): “Administrative officials frequently announce their views as to the meaning of statutes or regulations. Generally speaking, it seems to be established that ‘regulations,’ ‘substantive rules, ’ or ‘legislative rules’ are those which create law, usually implementary to an existing law; where interpretative rules are statements as to what the administrative officer thinks the statute or regulation means.” Id. at 331 (emphasis added). See also Cabais v. Egger, 690 F.2d 234, 238 (D.C.Cir.1982); Alcaraz, supra, 746 F.2d at 613. The fundamental distinction between legislative and interpretative rules is that: “A legislative rule is the product of an exercise in delegated legislative power to make law through rules. An interpretative rule is any rule an agency issues without exercising delegated legislative power to make law through rules.” 2 K. Davis, Administrative Law Treatise, § 7:8 at 36 (2d ed. 1979 and 1982 supplement). See Stoddard Lumber Co., Inc. v. Marshall, 627 F.2d 984, 987 (9th Cir.1980). In addition, when an agency exercises its delegated power under a statute, its rules or regulations “clearly may be legislative even when they interpret the statute.” 2 K. Davis, supra, § 7:11 at 57. The Bellmon Amendment expressly delegated to the Secretary the authority to prescribe a program to implement own motion review of AU decisions