Sheila B. Stepp v. CAROLYN COLVIN , Acting Commissioner of Social Security

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-3163
S HEILA B. S TEPP ,
Plaintiff-Appellant,
v.
C AROLYN C OLVIN , Acting Commissioner of Social Security,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Terre Haute Division.
No. 2:13-CV-179 — William G. Hussmann, Jr., Magistrate Judge.
____________________
A RGUED M AY 20, 2015 — DECIDED J ULY 31, 2015
____________________
Before BAUER , F LAUM , and HAMILTON , Circuit Judges.
F LAUM , Circuit Judge. Appellant Sheila Stepp, who suffers
from degenerative disc disease and a variety of other im-
pairments, seeks disability insurance benefits under Title II
of the Social Security Act. Following a hearing, an Adminis-
trative Law Judge (“ALJ”) issued a decision denying Stepp’s
claim. While acknowledging that Stepp suffered from chron-
ic pain, the ALJ concluded that surgery, medication, and
therapy had resulted in an improvement in Stepp’s condition

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2 No. 14-3163
such that she retained the capacity to engage in sedentary
work. Stepp sought review of the ALJ’s decision by the Social
Security Administration’s Appeals Council, and submitted
additional evidence in the form of medical records created
just prior to the ALJ’s denial of her disability claim. This evi-
dence—specifically, the treatment notes of pain management
specialist Dr. Allan MacKay—tends to suggest that Stepp’s
condition did not improve over the course of the adjudica-
tive period to the extent that the ALJ estimated. The Appeals
Council summarily declined to engage in plenary review of
the ALJ’s decision and, in so doing, did not expressly ad-
dress Dr. MacKay’s notes. The United States District Court
for the Southern District of Indiana affirmed the ALJ’s final
decision.
Stepp appeals the district court’s determination on two
grounds: first, she contends that the ALJ’s denial of her bene-
fits request was not supported by substantial evidence; sec-
ond, she argues that a remand for further proceedings is
necessary in light of the “new and material” evidence pre-
sented by Dr. MacKay’s medical records. We believe that the
ALJ properly analyzed a range of conflicting testimony and
medical opinions and reached a conclusion adequately sup-
ported by the record before her. However, we agree with
Stepp that the denial notice from the Appeals Council indi-
cates that the Council did not accept Dr. MacKay’s treatment
notes as new and material evidence, and we conclude that
the Council made that determination in error. We therefore
remand the case to the agency so that it may re-evaluate
Stepp’s condition in light of the information presented in Dr.
MacKay’s notes.

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No. 14-3163 3
I. Background
In January 2010, Sheila Stepp—a former correctional of-
ficer, training secretary and coordinator, and parole proba-
tion officer—applied for a period of disability and disability
insurance benefits under Title II of the Social Security Act, 42
U.S.C. § 401 et seq., with an alleged disability onset date of
November 18, 2009. At the time, Stepp was 47 years old, 5’6”
tall, and weighed 237 pounds. Her asserted disabilities con-
sist primarily of degenerative disc disease and depression.
Stepp began seeking treatment for chronic neck pain in
October 2008 and underwent several MRIs, which revealed
multi-level degenerative disc disease of the cervical and up-
per thoracic spine, with multiple disc herniations as well as
significant foraminal stenosis. Stepp was referred to ortho-
pedic surgeon Dr. Stephen Ritter in February 2009. She com-
plained to Dr. Ritter of chronic pain in her neck, chest,
shoulder, and arm, and further alleged numbness in her legs
and her right hand, balance problems, memory loss, trouble
sleeping, and severely limited range of motion. Upon exam-
ination, Dr. Ritter observed that Stepp had balanced posture
and a balanced gait and that she had full grip strength; he
ranked her deltoid strength at 4 out of 5. He also noted
weakness in both upper extremities, though no obvious loss
of muscle tone. In April 2009, Dr. Ritter performed an ante-
rior cervical discectomy and fusion. At a follow-up ap-
pointment in June, Stepp reported total pain relief in her
neck and no pain, numbness, or tingling in her hands or
arms. Dr. Ritter concluded, however, that Stepp should re-
frain from working until she was “fairly far along” in the
healing process; he estimated that she would be able to re-

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4 No. 14-3163
turn to work “without restrictions” by mid-September, ap-
proximately five months after the surgery.
In late June 2009, Stepp sought treatment from primary
care physician Dr. Meredith McCormick. An MRI of Stepp’s
lumbar spine revealed multi-level degenerative changes and
slight retrolisthesis. Stepp began to see a physical therapist
for pain management but discontinued therapy in Septem-
ber 2009 as a result of “stabbing pain” in her lower back,
which worsened with bending, sitting, standing, or walking.
Nevertheless, Stepp returned to work by early November.
But during an appointment with Dr. McCormick on No-
vember 18, 2009, she complained of worsening back and
chest pain, prompting Dr. McCormick to order a thoracic
MRI; the MRI revealed severe degenerative disc disease and
arthritis, as well as significant spinal canal stenosis cord im-
pingement with possible myelomalacia.1 In early December,
Stepp again met with Dr. Ritter and described severe back
and abdominal wall pain. Dr. Ritter concluded that “Ms.
Stepp is pretty incapacit[ated] by her scapular and [ab-
dominal] wall pain at this time.” In December 2009 and Jan-
uary 2010, Dr. Ritter administered a selective thoracic nerve
root block and a thoracic epidural injection. At a follow-up
appointment on January 18, 2010, Stepp reported feeling
“much better” but explained that she did not feel that she
could “quite go back to work given the pain that she still
ha[d] with reaching and twisting.” Dr. Ritter agreed that
Stepp should “hold off on work for another few weeks.” Af-
ter renewed complaints of persistent back pain, Dr. Ritter
1 Since November 18, 2009, Stepp has been intermittently authorized by
physicians to return to work; however, she has not actually worked since
that date.

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No. 14-3163 5
performed additional surgery—a discectomy and fusion—in
March 2010. On April 15, 2010, Stepp reported that she had
“not felt this good in a long time,” and noted that the signifi-
cant lower extremity dysfunction that she experienced prior
to surgery was gone.
In April 2010, consulting psychologist Dr. J. Mark Dobbs
examined Stepp at the state agency’s request. Dr. Dobbs not-
ed that Stepp, who had undergone back surgery just two
weeks earlier, walked very slowly and used a walker. After
learning of Stepp’s lengthy history of depression, Dr. Dobbs
diagnosed her with post-traumatic stress disorder (a result
of childhood abuse) and dysthymia—a mild, long-term form
of depression. Dr. Dobbs assigned Stepp a Global Assess-
ment of Functioning (“GAF”) score of 59, indicating moder-
ate symptoms. State agency psychologist Dr. B. Randal Hor-
ton also completed a psychiatric review and concluded that
Stepp’s ability to work was unaffected by her mental im-
pairments.
Consulting physician Dr. Mohamad Mokadem also ex-
amined Stepp. He noted her reported improvement follow-
ing her two spinal surgeries but determined that she “still
[could] not go back to her job because of limitation in her
movement as well as … her persistent daily pain.” However,
Dr. Mokadem concluded that Stepp’s pain caused her only
“mild distress.” He also concluded that Stepp’s gait was
grossly normal, her muscle strength and tone were normal,
her deep tendon reflexes were normal, and her grip strength
and fine finger skills were normal. State agency physician
Dr. A. Dobson reviewed the record in late May 2010 and per-
formed a Residual Functional Capacity (“RFC”) assessment,
concluding that Stepp could perform light work—that is, she

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6 No. 14-3163
could lift twenty pounds occasionally and ten pounds fre-
quently, and could stand or walk for up to six hours during
an eight-hour workday. He further concluded that she could
only occasionally climb stairs, balance, kneel, or crouch, and
that she could not climb ladders, ropes, or scaffolds. Dr.
Dobson also determined that the record did not indicate any
manipulative, visual, or communicative limitations.
By July 2010, Dr. Ritter had cleared Stepp to resume
work. Stepp reported to Dr. McCormick that her back pain
was “much, much better.” In addition, Stepp stopped taking
oxycodone, though she continued to take less potent pain
medications. On July 26, 2010, Dr. McCormick—who at that
point had treated Stepp for over a year—completed a ques-
tionnaire evaluating Stepp’s RFC. Contrary to Dr. Ritter’s
assessment, Dr. McCormick concluded that Stepp could sit,
stand, and walk for less than two hours during an eight-
hour workday—thereby entirely precluding the possibility
of work. However, Dr. McCormick made clear that she antic-
ipated Stepp’s condition would improve after she under-
went scheduled changes to her medication. Dr. McCormick
noted in her questionnaire: “I fill this out based on how
[Stepp] is now. Anticipate improvement with hospitalization
by pain [doctor] for med changes. Unclear how [Stepp] will
progress [with] regards to pain. This is her main limitation.
Hope hospitalization will improve function significantly.”
Dr. McCormick further stated that she did not feel comforta-
ble opining as to Stepp’s potential pain-related limitations
following her impending hospitalization.
Treatment notes prepared by pain specialist Dr. Bruce
Durell indicate that Stepp reported sleeping well after her
medication changes and that her pain control was generally

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No. 14-3163 7
good, particularly with the aid of a transcutaneous electrical
nerve stimulation (“TENS”) unit. Nevertheless, Stepp con-
tinued to experience major depression. In October 2010, Dr.
Durell started Stepp on a regimen of Cymbalta and Flexeril.
On November 1, after renewed complaints of sharp spinal
pain that worsened while sitting and standing, Dr. Durell
diagnosed Stepp with chronic lower back and neuropathic
pain and determined that she should remain off work. Over
the course of several follow-up visits, however, Dr. Durell
observed that Stepp experienced “improvement” in her pain
level and that she was “responding well to therapy.”
In June 2011, Stepp—who had begun to experience pain
and numbness in her left hand—visited a new primary care
physician, Dr. Meredith Lulich. Dr. Lulich diagnosed Stepp
with moderate left carpal tunnel syndrome with slightly di-
minished grip strength.
On August 24, 2011, Stepp testified at a hearing before
Administrative Law Judge JoAnn L. Anderson. Stepp ex-
plained that her impairments developed gradually and that
she had been unable to work since November 2009. She de-
scribed her pain management regimen—which included
several medications, icing, daily use of a TENS unit, and
stretching—and noted that while no treatment completely
eliminated her pain, her medication was “excellent.” She ex-
plained that her physical abilities varied depending on the
day: for instance, some days she was unable to walk at all,
but on “good days,” she could often walk six blocks. She
could also assist with some household chores (e.g., washing
the dishes) on good days, though could not complete any
tasks that required her to raise her upper arms far from her
body. She further mentioned that she dropped things “all

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8 No. 14-3163
the time,” and explained that each “good day” was typically
followed by a bad one. A vocational expert also testified. The
expert concluded that Stepp had the capacity to perform
“sedentary work” with only occasional climbing, balancing,
kneeling, crouching, crawling, and overhead reaching, and
no climbing of ladders or scaffolds. The expert conceded that
these limitations would preclude Stepp from returning to the
jobs she had held in the past; however, he determined that
Stepp could perform a variety of other jobs, including sur-
veillance system monitor, circuit board assembler, and doc-
ument preparer.
On November 21, 2011, the ALJ issued a decision deny-
ing Stepp’s request for benefits and concluding that Stepp
had failed to demonstrate the inability to “engage in any
substantial gainful activity by reason of [a] medically deter-
minable physical or mental impairment which … has lasted
or can be expected to last for a continuous period of not less
than 12 months.” 42 U.S.C. § 423(d)(1)(A). Applying the So-
cial Security Administration’s requisite five-step analysis for
disability claims, see 20 C.F.R. § 416.920(a)(4), the ALJ found
in Stepp’s favor as to steps one and two, concluding first that
Stepp had not engaged in “substantial gainful activity” since
her alleged disability onset date, and second, that Stepp suf-
fered from multiple “severe” impairments—namely multi-
level degenerative changes and status post cervical and tho-
racic surgical procedures. (The ALJ also concluded that
Stepp’s other alleged impairments—hypertension, diabetes,
carpal tunnel syndrome, and depression—were not severe as
they resulted in only minimal limitations on her ability to
perform basic work activities.) At step three, however, the
ALJ determined that Stepp’s impairments did not medically
“meet[] or equal[]” the severity of any impairment consid-

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No. 14-3163 9
ered by the agency to be “conclusively disabling.” Craft v.
Astrue, 539 F.3d 668, 674 (7th Cir. 2008). As a result, the ALJ
proceeded to step four, where she assessed Stepp’s Residual
Functional Capacity in an effort to determine Stepp’s ability
to engage in past relevant work.
The ALJ adopted the vocational expert’s conclusion that
Stepp retained the ability to perform sedentary work, with
certain additional limitations (e.g., no use of ladders). The
ALJ recognized that Stepp’s impairments prevented her
from walking more than one to two blocks before stopping
to rest, and noted further that Stepp experienced constant
aching pain along her entire spine. The ALJ also discussed
various conflicting medical opinions contained in the record.
She noted, for instance, that Dr. Ritter had cleared Stepp to
return to work in July 2010 (four months after her back sur-
gery) while Dr. McCormick issued a work-preclusive opin-
ion around the same time; however, the ALJ assigned that
opinion “little weight” as Dr. McCormick expressly qualified
her assessment by stating that she anticipated that Stepp’s
condition would improve. The ALJ also cited an October 26,
2010 note from Dr. McCormick, indicating that Stepp’s
symptoms had indeed improved, particularly with the use
of a TENS unit. The ALJ determined that Stepp had re-
sponded positively to pain management therapy and cited a
June 22, 2011 medical note in which Stepp reported feeling
“well with minor complaints.” The ALJ concluded that,
through medication, surgery, and therapy, Stepp had been
successfully treated for degenerative changes and had expe-
rienced improvement throughout the adjudicative period—
that is, the period between Stepp’s alleged disability onset
date (November 18, 2009) and the date on which the ALJ is-
sued her decision (November 21, 2011).

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10 No. 14-3163
The ALJ acknowledged that Stepp would be unable to re-
turn to her past work given her physical limitations; howev-
er, based on the vocational expert’s testimony, the ALJ con-
cluded under step five of the disability analysis that there
existed a significant number of alternative jobs in the nation-
al economy that Stepp could perform. In light of this analy-
sis, the ALJ determined that Stepp was not disabled.
On November 21, 2011—the same day the ALJ issued her
decision denying Stepp’s claim—Stepp submitted additional
evidence to the agency’s Appeals Council. Among that evi-
dence was a series of treatment notes, dated between Sep-
tember 20 and October 25, 2011, from pain management spe-
cialist Dr. Allan MacKay. His notes reveal that Stepp contin-
ued to experience severe back and neck pain during this pe-
riod and that in both September and October, Dr. MacKay
administered nerve block injections to Stepp’s lumbar spine
and sacroiliac joint. The notes also discuss the results of sev-
eral recent MRIs, which demonstrated additional degenera-
tive changes throughout Stepp’s thoracic spine, degenerative
disc disease throughout her lumbar spine, and several disc
protrusions. In addition, Dr. MacKay’s notes mention that a
cervical fusion had been scheduled for December 1, 2011.
Several months later, Stepp again submitted additional evi-
dence to the Appeals Council; however, much of this evi-
dence relates to Stepp’s symptoms in the months following
the issuance of the ALJ’s decision and is therefore largely ir-
relevant to this appeal.
On March 19, 2013, the Appeals Council issued a notice
summarily denying Stepp’s request for review. Stating that
it had “considered the reasons [Stepp] disagree[d] with the
decision and the additional evidence listed on the enclosed

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No. 14-3163 11
Order of Appeals Council,” the Council reached the conclu-
sion that “this information d[id] not provide a basis for
changing the [ALJ]’s decision.” The Council listed Dr. Mac-
Kay’s treatment notes as Exhibit 26F on the accompanying
order; however, the body of the Appeals Council notice does
not reference these notes.
Stepp filed a civil action in the United States District
Court for the Southern District of Indiana, raising various
objections to both the ALJ’s decision and the Appeals Coun-
cil’s denial of her request for review. The district court re-
jected her challenge to the ALJ’s reasoning and concluded,
pursuant to 42 U.S.C. § 405(g), that the ALJ’s findings were
supported by substantial evidence. However, the district
court determined that a remand was necessary under sen-
tence six of § 405(g) to allow for examination of Dr. Mac-
Kay’s medical records. The court concluded that the Appeals
Council did not address these records, which the court
found to contain new evidence material to Stepp’s disability
claim. The district court explained that Dr. MacKay’s notes
elucidated the degree of Stepp’s pain toward the end of the
adjudicative period and indicated that her condition had not
improved over time, as her other treating physicians had an-
ticipated it would. The court therefore remanded the case to
permit the ALJ to review Dr. MacKay’s notes.
In response, the Commissioner of Social Security filed a
motion to alter or amend the judgment pursuant to Federal
Rule of Civil Procedure 59(e), arguing that the Appeals
Council had, in fact, evaluated Dr. MacKay’s treatment rec-
ords and had adequately explained its reasons for conclud-
ing that Stepp had not established a basis for changing the
ALJ’s decision. The district court reluctantly accepted the

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12 No. 14-3163
Commissioner’s argument that because Dr. MacKay’s rec-
ords were listed as exhibits to the Council’s order, the Coun-
cil must have reviewed them. And, because there is no re-
quirement in this circuit that the Council articulate its rea-
sons for denying plenary review of ALJ decisions, the dis-
trict court determined that the Council’s cursory explanation
of its determination was adequate. The court criticized the
Council’s “woefully deficient” decision, noting that the
Council “announced it’s [sic] conclusion in a single, unex-
plained sentence,” and that such an “unsupported statement
makes it nearly impossible for a reviewing judge to evaluate
th[at] conclusion.” Stepp v. Colvin, No. 2:13-cv-179, slip op. at
6–7 (S.D. Ind. Aug. 1, 2014). The court nevertheless entered
an amended judgment affirming the ALJ’s decision. Stepp
now appeals.
II. Discussion
Stepp raises two claims on appeal: first, she argues that
the ALJ’s unfavorable decision was not supported by sub-
stantial evidence; second, she contends that the evidence
submitted to the Appeals Council following the ALJ’s deci-
sion—specifically, Dr. MacKay’s treatment notes—merits
remand for additional consideration.
A. Review of the ALJ’s Decision for Substantial Evidence
In reviewing the ALJ’s denial of Stepp’s disability claim,
we inquire whether the ALJ’s decision was supported by
substantial evidence. 42 U.S.C. § 405(g). We have defined
“substantial evidence” as “such relevant evidence as a rea-
sonable mind might accept as adequate to support a conclu-
sion.” Elder v. Astrue, 529 F.3d 408, 413 (7th Cir. 2008) (cita-
tion and internal quotation marks omitted). As such, our re-

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No. 14-3163 13
view is “extremely limited.” Id. “We are not allowed to dis-
place the ALJ’s judgment by reconsidering facts or evidence,
or by making independent credibility determinations. In
fact, even if reasonable minds could differ concerning
whether [the claimant] is disabled, we must nevertheless af-
firm the ALJ’s decision denying her claims if the decision is
adequately supported.” Id. (citations and internal quotation
marks omitted).
Stepp challenges several aspects of the ALJ’s assessment
of her Residual Functional Capacity. Specifically, she com-
plains that the ALJ: (1) improperly declined to give control-
ling weight to Dr. McCormick’s medical opinion; (2) failed to
discuss Dr. Ritter’s opinions regarding Stepp’s short-term
inability to work; (3) ignored crucial evidence relating to
Stepp’s alleged manipulative impairment; (4) neglected to
address her obesity; and (5) reached a patently wrong credi-
bility determination regarding her testimony. We address
each contention in turn.
Stepp first takes issue with the fact that the ALJ did not
give Dr. McCormick’s work-preclusive assessment control-
ling weight. We uphold “all but the most patently erroneous
reasons for discounting a treating physician’s assessment.”
Luster v. Astrue, 358 F. App’x 738, 740 (7th Cir. 2010) (citing
Dixon v. Massanari, 270 F.3d 1171, 1177 (7th Cir. 2001)). The
ALJ expressly assigned “little weight” to Dr. McCormick’s
July 26, 2010 evaluation because, by its own terms, the eval-
uation “[a]nticipate[d] improvement” in Stepp’s condition.
Dr. McCormick explained that although at that point in
time—shortly after Stepp had undergone surgery—Stepp’s
pain prevented her from sitting, standing, or walking for
even two hours per day, Stepp was scheduled to undergo

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14 No. 14-3163
significant changes to her pain medication just days later.
Although Dr. McCormick did not express certainty, she stat-
ed that she “[h]ope[d] hospitalization w[ould] improve func-
tion significantly.” Dr. McCormick also explicitly declined to
opine as to Stepp’s potential pain-related limitations follow-
ing her medication changes.
Under 20 C.F.R. § 404.1527(c)(2), a treating source’s opin-
ion should receive controlling weight if it is well supported
by medically acceptable clinical techniques and not incon-
sistent with other substantial evidence in the record. Here,
not only is Dr. McCormick’s entirely work-preclusive opin-
ion inconsistent with the opinions of other physicians (in-
cluding Dr. Dobson and Dr. Ritter), but the opinion is also
internally inconsistent given its express statement that Dr.
McCormick expected Stepp’s condition to improve. We
therefore conclude that the ALJ articulated sufficiently com-
pelling reasons for electing to give Dr. McCormick’s work-
preclusive evaluation little weight.
Stepp also argues that the ALJ erroneously omitted dis-
cussion of Dr. Ritter’s assessment, on two separate occasions,
that Stepp suffered from a short-term inability to work. The
first assessment occurred in June 2009, when Dr. Ritter de-
termined that, in light of recent surgery, Stepp should re-
frain from working until she was “fairly far along” in the
healing process; Dr. Ritter predicted, however, that Stepp
would be able to return to work “without restrictions” by
mid-September. Because this assessment and the anticipated
date of Stepp’s return to work both predated the alleged on-
set of Stepp’s disability (November 18, 2009), we do not find
the assessment particularly probative of Stepp’s condition
during the adjudicative period. Moreover, Stepp did return

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No. 14-3163 15
to work—albeit briefly—in early November 2009, thereby
indicating that Dr. Ritter’s June 2009 work-preclusive as-
sessment had expired. As a result, the ALJ did not err in de-
clining to discuss this first assessment.
Stepp also complains that the ALJ did not cite Dr. Ritter’s
January 2010 statement that, in light of additional treatment,
Stepp needed to “hold off on work for another few weeks.”
While this assessment occurred during the adjudicative pe-
riod, and is therefore more relevant to Stepp’s disability
analysis than Dr. Ritter’s previous assessment, any error on
the ALJ’s part in failing to discuss this evidence was harm-
less. See Spiva v. Astrue, 628 F.3d 346, 353 (7th Cir. 2010) (re-
affirming that harmless error applies to Social Security cas-
es). Under 42 U.S.C. § 423(d)(1)(A), Stepp is required to
demonstrate that she suffers from a long-term disability,
which must last or be expected to last at least twelve months.
Dr. Ritter’s assessment, however, was—by its own terms—
temporally limited and suggested that Stepp would be una-
ble to work for only a few weeks. And even though Stepp’s
inability to work appears to have lasted longer than Dr. Rit-
ter anticipated, he effectively withdrew his work-preclusive
opinion when he cleared Stepp to return to work in July
2010—less than a year after her disability onset date.
Stepp next contends that the ALJ ignored “entire lines of
evidence” relating to Stepp’s alleged manipulative impair-
ment, as demonstrated by her moderate left carpal tunnel
syndrome. We disagree. The ALJ acknowledged Stepp’s car-
pal tunnel and determined at step two of the five-step analy-
sis that the impairment was not severe. She further ex-
plained that Stepp had introduced “no evidence of limita-
tions related to this impairment that have lasted or can be

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16 No. 14-3163
expected to last for twelve consecutive months.” To support
her finding that Stepp did not suffer from a significant im-
pairment, the ALJ referenced opinions from several physi-
cians indicating that Stepp’s manipulative abilities were sat-
isfactory: Dr. Ritter and Dr. Mokadem observed normal grip
strength at various points throughout the adjudicative peri-
od, while Dr. Lulich noted only slightly diminished strength.
Moreover, although the ALJ did not find Stepp’s alleged
manipulative impairment to be severe, she did place some
manipulative limitations on Stepp’s ability to perform seden-
tary work. These limitations credited Dr. Ritter’s findings
that Stepp experienced weakness in her upper extremities
and slightly reduced deltoid strength; they also highlight the
ALJ’s efforts to give appropriate weight to conflicting medi-
cal opinions. We therefore believe that the ALJ’s conclusion
that Stepp did not suffer from any significant manipulative
impairment was supported by substantial evidence.
At 5’6” tall and 237 pounds, Stepp has a body mass index
of 38.2, which qualifies her as obese. As Stepp correctly
notes, the ALJ’s decision makes no mention of her obesity.
We have determined, however, that “an ALJ’s failure to ex-
plicitly consider an applicant’s obesity is harmless if the ap-
plicant did not explain how her obesity hampers her ability
to work.” Dornseif v. Astrue, 499 F. App’x 598, 600 (7th Cir.
2013) (citing Skarbek v. Barnhart, 390 F.3d 500, 504 (7th Cir.
2004)). Stepp has made no attempt at such an explanation
here and, unlike other cases in which we have criticized an
ALJ’s failure to reference a claimant’s obesity, the record
does not suggest that Stepp’s treating physicians discussed
her weight in any detail. Cf. Arnett v. Astrue, 676 F.3d 586,
593 (7th Cir. 2012) (noting that “[s]everal other physicians
specifically discussed Arnett’s obesity,” and rebuking the

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No. 14-3163 17
ALJ’s failure to mention those opinions). As a result, any er-
ror on the part of the ALJ in neglecting to discuss Stepp’s
obesity was harmless.
Finally, Stepp alleges that the ALJ erroneously deter-
mined that Stepp’s testimony was not credible. We have ex-
plained that, “[b]ecause the ALJ is in the best position to de-
termine a witness’s truthfulness and forthrightness,” we will
overturn an ALJ’s credibility determination only if it is “pa-
tently wrong.” Shideler v. Astrue, 688 F.3d 306, 310–11 (7th
Cir. 2012) (citation and internal quotation marks omitted).
We have also established that an ALJ is “free to discount the
applicant’s testimony on the basis of the other evidence in
the case” as “[a]pplicants for disability benefits have an in-
centive to exaggerate their symptoms.” Johnson v. Barnhart,
449 F.3d 804, 805 (7th Cir. 2006).
Here, the ALJ made only a partially adverse credibility
finding. Although she determined that Stepp’s testimony
was not fully supported by the record, she also discounted
opinions from other physicians that seemed to understate
Stepp’s condition. For instance, the ALJ assigned “little
weight” to state agency medical consultant Dr. Dobson’s de-
termination that Stepp could perform “light work” (i.e., that
she could lift twenty pounds occasionally and ten pounds
frequently, and that she could stand and/or walk for up to
six hours in an eight-hour workday), concluding that the
record demonstrated that Stepp was “more limited” than Dr.
Dobson determined. The ALJ ultimately found that Stepp
could perform sedentary work—which is less taxing than
“light work”—with a few additional limitations. Cf. Schmidt
v. Astrue, 496 F.3d 833, 844 (7th Cir. 2007) (noting, with ap-
proval, that the ALJ “did not totally discount [claimant’s]

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18 No. 14-3163
testimony regarding how her pain affected her ability to per-
form certain activities, as evinced by the ALJ’s decision to
limit [claimant’s] range of work to sedentary when assessing
her residual functional capacity”). The ALJ acknowledged
that Stepp continued to report chronic pain throughout the
adjudicative period but concluded that the record demon-
strated improvement in Stepp’s condition following surgery,
medication changes, and therapy. While the ALJ credited
Stepp’s assertion that she still experienced residual pain, the
ALJ determined that such pain “does not equate to disabil-
ity.” In light of all of the evidence before her, we believe that
the ALJ’s finding that Stepp’s testimony was only partially
credible was not patently wrong.
Stepp’s case is a close one. Her condition appears to have
been in constant flux as a result of several surgical proce-
dures and medication changes throughout the adjudicative
period. Further, the many medical opinions issued by vari-
ous physicians and evaluators vary dramatically in their as-
sessment of Stepp’s impairments and abilities. Ultimately,
we believe that the ALJ competently grappled with compet-
ing evidence and provided legitimate reasons for favoring
certain pieces of evidence over others. We therefore con-
clude that the ALJ’s denial of Stepp’s request for benefits
was supported by substantial evidence.
B. Additional Evidence Before the Appeals Council
Stepp’s next contention is that her case should be re-
manded for consideration of “new and material” evidence
that the Appeals Council allegedly declined to review. After
the ALJ determined that Stepp did not suffer from a disabil-
ity because her medical impairments appeared to improve
over the course of the adjudicative period to the point where

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No. 14-3163 19
she was capable of performing sedentary work, Stepp sub-
mitted to the Appeals Council additional treatment notes
from various physicians, including pain management spe-
cialist Dr. Allan MacKay, which Stepp argues tend to show
that her back and neck pain did not, in fact, improve. The
Appeals Council summarily denied Stepp’s application for
review, explaining that the “additional evidence” she pre-
sented “d[id] not provide a basis for changing the [ALJ]’s
decision.”
Under 20 C.F.R. § 404.970(b), additional evidence submit-
ted to the Appeals Council will be evaluated only if it is
“new and material”2 and “relates to the period on or before
the date of the [ALJ] hearing decision.” If the newly submit-
ted evidence satisfies these conditions, the Appeals Council
shall incorporate that evidence into the administrative rec-
ord and shall then evaluate that record, “including the new
and material evidence.” Id. However, the Council will only
grant de novo review of the ALJ’s decision if it determines,
based on the supplemented record, that the ALJ’s conclu-
sions are “contrary to the weight of the evidence.” Id.
Our ability to review the Appeals Council’s decision in
the instant case is dependent on the grounds on which the
Council declined to grant plenary review. If the Council de-
termined Stepp’s newly submitted evidence was, for what-
2 We discuss this terminology in greater detail below. However, by way
of introduction, evidence is considered “new” if it was “not in existence
or available to the claimant at the time of the administrative proceeding,”
and it is considered “material” if there is a “reasonable probability that
the Commissioner would have reached a different conclusion had the
evidence been considered” in the first instance. Perkins v. Chater, 107 F.3d
1290, 1296 (7th Cir. 1997) (citation and internal quotation marks omitted).

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20 No. 14-3163
ever reason, not new and material, and therefore deemed the
evidence “non-qualifying under the regulation,” we retain
jurisdiction to review that conclusion for legal error. Farrell
v. Astrue, 692 F.3d 767, 771 (7th Cir. 2012); see also Eads v.
Sec’y of the Dep’t of Health & Human Servs., 983 F.2d 815, 817
(7th Cir. 1993) (explaining that if the Council’s decision not
to review a case “rests on a mistake of law, such as the de-
termination … that the evidence newly submitted to the Ap-
peals Council was not material to the disability determina-
tion, the court can reverse”). However, if the Appeals Coun-
cil deemed the evidence new, material, and time-relevant
but denied plenary review of the ALJ’s decision based on its
conclusion that the record—as supplemented—does not
demonstrate that the ALJ’s decision was “contrary to the
weight of the evidence”—the Council’s decision not to en-
gage in plenary review is “discretionary and unreviewable.”
Perkins v. Chater, 107 F.3d 1290, 1294 (7th Cir. 1997).3
3 The effect of this dichotomy is mitigated in some of our sister circuits,
which have held that when the Appeals Council finds evidence to be
“new and material” (but nevertheless insufficient to require reversal of
the ALJ’s decision), “that evidence becomes part of the administrative
record, which the district court must consider when reviewing the
[ALJ]’s final decision for substantial evidence” under 42 U.S.C. § 405(g).
Brewes v. Comm’r of Soc. Sec. Admin., 682 F.3d 1157, 1163 (9th Cir. 2012);
see also Higginbotham v. Barnhart, 405 F.3d 332, 337 (5th Cir. 2005); Perez v.
Chater, 77 F.3d 41, 45 (2d Cir. 1996); O’Dell v. Shalala, 44 F.3d 855, 859
(10th Cir. 1994); Keeton v. Dep’t of Health & Human Servs., 21 F.3d 1064,
1067 (11th Cir. 1994); Nelson v. Sullivan, 966 F.2d 363, 366 (8th Cir. 1992);
Wilkins v. Sec’y, Dep’t of Health & Human Servs., 953 F.2d 93, 96 (4th Cir.
1991). By incorporating that evidence into the record before the district
court, these circuits offer claimants an additional opportunity for review
of that pertinent information.

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No. 14-3163 21
Stepp contends that the Appeals Council rejected her
newly submitted evidence—specifically, Dr. MacKay’s
treatment notes—as non-qualifying. She points out that, in
the body of its denial notice, the Council made no mention
whatsoever of Dr. MacKay’s notes. For a variety of reasons
that we address in some detail below, the Commissioner in-
sists that the Appeals Council accepted this evidence as new
and material but, upon reviewing the supplemented record,
determined that the evidence was insufficient to trigger ple-
nary review of the ALJ’s unfavorable decision. The district
court grudgingly sided with the Commissioner on this issue,
concluding that the information included in the denial notice
and accompanying order “suggests—however thinly—that
the Council reviewed [Dr. MacKay’s notes.]” Stepp, No. 2:13-
cv-179, slip op. at 4.
We have decided numerous cases in which claimants
have argued—with varying degrees of success—that the
Appeals Council rejected their newly proffered evidence as
non-qualifying. In Perkins v. Chater, 107 F.3d 1290, the claim-
ant sought review of an unfavorable ALJ decision and sub-
mitted to the Appeals Council additional medical evidence
Claimants in our circuit, however, enjoy no such benefit. We have es-
tablished that evidence that the Appeals Council has deemed new and
material but inadequate to require reversal must be excluded from the
record before the district court in its review of the ALJ’s decision. See
Eads, 983 F.2d at 817–18 (noting that the ALJ “cannot be faulted for hav-
ing failed to weigh evidence never presented to him”); accord Mills v. Ap-
fel, 244 F.3d 1, 4 (1st Cir. 2001); Cotton v. Sullivan, 2 F.3d 692, 695–96 (6th
Cir. 1993); see also Matthews v. Apfel, 239 F.3d 589, 594 (3d Cir. 2001). We
therefore proceed with particular caution in analyzing whether the Ap-
peals Council deemed Dr. MacKay’s records “new and material” as
Stepp’s ability to obtain review of this crucial evidence hinges solely on
that distinction.

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22 No. 14-3163
prepared by psychologist Dr. William Reich. Id. at 1292. As
here, the Council “decided that neither [Perkins’s] conten-
tions nor the additional evidence provide[d] a basis for
changing the [ALJ’s] decision.” Id. Importantly, however, the
Council in Perkins expressly evaluated the additional evi-
dence submitted by the claimant; in fact, “[i]ts letter de-
vote[d] a paragraph to Dr. Reich’s review of [Perkins’s] file,”
id. at 1294, before denying Perkins’s request for plenary re-
view. See Perkins v. Chater, No. 94-C-4370, 1995 WL 579540, at
*2 (N.D. Ill. Sept. 28, 1995) (quoting the Appeals Council’s
denial notice, which addresses Dr. Reich’s notes in some de-
tail), aff’d, 107 F.3d 1290. We concluded that, by specifically
addressing the content and persuasiveness of Dr. Reich’s
records, the Council must have accepted that evidence as
“new and material” under the regulation; the Council’s un-
favorable decision was therefore “discretionary and unre-
viewable.” Perkins, 107 F.3d at 1294.
In Farrell v. Astrue, 692 F.3d 767, however, we reached the
opposite conclusion. There, an ALJ had denied Farrell’s
claim for benefits, in part because the record did not contain
evidence confirming that Farrell had been diagnosed with
fibromyalgia—her asserted severe impairment. Id. at 771. In
response to the ALJ’s unfavorable decision, Farrell submit-
ted to the Appeals Council test results from Dr. Ryan Loyd,
which reflected a firm diagnosis of fibromyalgia. Id. at 770.
In spite of this additional evidence, the Appeals Council
summarily denied Farrell’s petition for review. Id. The
Council’s decision explained that it had “considered … the
additional evidence … [and] found that this information
d[id] not provide a basis for changing the [ALJ’s] decision,”
id. at 771—standard boilerplate language identical to the

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No. 14-3163 23
language of Stepp’s denial notice. Analyzing that language,
we explained:
this text, which often appears in orders of the
Appeals Council rejecting plenary review, is
not as clear as it might be. On the one hand, it
might indicate that the Appeals Council found
the proffered new evidence to be immaterial,
but on the other hand it might indicate that the
Council accepted the evidence as material but
found it insufficient to require a different re-
sult.
Id. Without more specific language from the Council, we in-
terpreted the denial notice to imply the former conclusion—
i.e., that the Council “rejected Farrell’s new evidence as non-
qualifying under the regulation.” Id. We then proceeded to
review the “limited question” of whether the Council had
erroneously concluded that the newly submitted evidence
was not new and material. Id.
The Appeals Council’s order and denial notice in the in-
stant case are similar to those that were at issue in Farrell.
Crucially, neither denial notice references the relevant medi-
cal records—those of Dr. MacKay and Dr. Loyd, respective-
ly—by name. It is true that Stepp’s denial notice expressly
mentions two other pieces of newly submitted evidence—
medical records from Centerstone (dated December 28, 2011)
and medical records from IU Health Bloomington (dated
March 12, 2012)—which the Council declined to consider,
but these records were rejected because they pertained to
Stepp’s condition subsequent to the date of the ALJ’s decision
(November 21, 2011) and were therefore not time-relevant.
The requirement that newly submitted evidence “relate[] to

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24 No. 14-3163
the period on or before the date of the [ALJ] hearing deci-
sion,” 20 C.F.R. § 404.970(b), is distinct from the mandate
that it also be “new and material”;4 therefore, the fact that
the Council noted that these records were not time-relevant
says nothing about whether they were otherwise found to be
new and material, and says even less about whether those
records that were not mentioned—including Dr. MacKay’s
notes—were deemed new and material. The most that we
can infer from the denial notice’s express designation of two
sets of records as not time-relevant is that Dr. MacKay’s
notes were found to be time-relevant (a correct finding, given
that the notes were created between September 20 and Octo-
ber 25, 2011—prior to the issuance of the ALJ’s decision).
Whether they were also found to be new and material re-
mains unclear.
The Commissioner next points out that Stepp’s denial no-
tice explains, “In looking at your case, [the Council] consid-
ered … the additional evidence listed on the enclosed Order
of Appeals Council,” and that the order does, in fact, list
“Medical record from Dr. Allan MacKay” as Exhibit 26F. The
Commissioner argues that the inclusion of Dr. MacKay’s
notes in the list of exhibits conclusively establishes that the
Council deemed those notes new and material. But the new-
ly proffered evidence in Farrell was also listed—albeit in less
4 Although the time-relevance requirement and the newness require-
ment may appear mutually exclusive at first glance, evidence may satisfy
both conditions if, for instance, it was created just prior to the issuance of
the ALJ’s decision, or if it had long been in existence but for some reason
was previously unavailable to the claimant.

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No. 14-3163 25
specific terms—on the Order of Appeals Council there.5 And
just as the inclusion of that evidence on the exhibit list was
insufficient to persuade us that the Farrell Appeals Council
had accepted the newly submitted evidence as new and ma-
terial, it is similarly insufficient to persuade us here.6
Finally, the Commissioner makes much of the fact that
Stepp’s denial notice states that the Council “considered
5 The order in Farrell lists as its sole exhibit “[m]edical evidence submit-
ted by the claimaint’s representative in conjunction with the request for
review.” While Dr. Ryan Loyd—whose fibromyalgia diagnosis was pre-
sented to the Appeals Council as new evidence—is not mentioned by
name on the exhibit list (as Dr. MacKay is identified in the exhibit list
here), the pleadings in Farrell do not suggest that Farrell submitted any
other purportedly “new” evidence to the Council. We therefore see no
material difference between the exhibit lists in each case.
6 In support of her argument that the Council accepted Dr. MacKay’s
notes as new and material, the Commissioner also relies heavily on the
Social Security Administration’s internal operating procedures, as articu-
lated in its Hearings, Appeals, and Litigation Law (“HALLEX”) manual.
According to the Commissioner, HALLEX requires that the Appeals
Council list evidence that is “new, material, and relates to the period at
issue” as an exhibit on the order accompanying a denial notice. HALLEX
I-3-5-20, available at http://ssa.gov/OP_Home/hallex/I-03/I-3-5-20.html
(last visited July 27, 2015). Because Dr. MacKay’s notes were included in
the exhibit list here, the Commissioner argues that the Council must
therefore have accepted that evidence as qualifying. But subsection I-3-5-
20 also demands that, when evidence is found to be new and material,
“language in the denial notice specifically identify[] the evidence (by
source, date range, and number of pages).” Here, however, the denial
notice makes vague reference only to “additional evidence listed on the
enclosed Order” and does not itself mention source, date range, or page
numbers. As a result, the denial notice does not appear to strictly comply
with the applicable HALLEX procedures for evidence that is deemed
new and material, and we are unpersuaded by the Commissioner’s invo-
cation of these procedures as support for the agency’s position.

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26 No. 14-3163
whether the [ALJ’s] action, findings, or conclusion is contra-
ry to the weight of evidence of record.” The Commissioner
insists that this language—which was absent from the Farrell
denial notice—makes clear that the Appeals Council found
Stepp’s newly submitted evidence to be qualifying and pro-
ceeded to evaluate whether it was sufficient to require de
novo review of the ALJ’s unfavorable decision. We disagree.
To us, this boilerplate language is little more informative
than the similarly standardized language employed by the
Council in Farrell, which explained that the “information
[submitted to the Appeals Council] d[id] not provide a basis
for changing the [ALJ]’s decision.” In Farrell, we rejected the
contention that this language was sufficiently specific to con-
firm that the Council had accepted and reviewed the newly
submitted evidence, and we likewise reject the Commission-
er’s argument here.
In sum, while Stepp’s case clearly falls somewhere on the
spectrum between Perkins and Farrell, we believe it is closer
to Farrell. The minimal information provided by the Appeals
Council in its denial of Stepp’s request for review is insuffi-
cient to allow us to determine with any confidence that the
Council accepted Dr. MacKay’s notes as new and material
evidence. While the Commissioner has pointed to a handful
of ambiguous references in the order and denial notice that
suggest that the Appeals Council may have deemed this ev-
idence qualifying, these references fall considerably short of
the Council’s express analysis of the newly submitted evi-
dence at issue in Perkins. We therefore cannot conclude that
these abstruse signals, without more, demonstrate that the

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No. 14-3163 27
Council considered Dr. MacKay’s treatment notes.7 As we
did in Farrell, “[w]e thus interpret the Appeals Council deci-
sion as stating that it has rejected [Stepp’s] new evidence as
non-qualifying under the regulation.” 692 F.3d at 771.
Given this conclusion, we review de novo the Appeals
Council’s determination that Dr. MacKay’s notes did not
qualify as “new and material” under 20 C.F.R. § 404.970(b),
Farrell, 692 F.3d at 771, and conclude that this determination
amounted to legal error. These records are “new” because
they were “not in existence or available to the claimant at the
time of the administrative proceeding.” Perkins, 107 F.3d at
1296 (citation and internal quotation marks omitted). Dr.
MacKay’s treatment notes—dated September 20 through Oc-
tober 25, 2011—were created subsequent to Stepp’s August
24, 2011 hearing and only shortly before the ALJ issued her
unfavorable benefits decision on November 21 (also the date
on which Stepp submitted Dr. MacKay’s records to the Ap-
peals Council). Although the Commissioner criticizes Stepp
for failing to submit these records earlier, Stepp’s relatively
7 While we have held that the Appeals Council may deny review with-
out articulating its reasoning, e.g., Damato v. Sullivan, 945 F.2d 982, 988–
89 (7th Cir. 1991), that holding in no way contradicts the requirement we
enforce today that the Council must identify in a sufficiently clear man-
ner which evidence (if any) it evaluated in reaching its decision to de-
cline plenary review. We once again emphasize, however, that “we nei-
ther encourage denying requests for review without articulating the rea-
soning nor approve of the same,” and remind the Commissioner that, “in
all fairness to the party appealing the ALJ’s decision, the Appeals Coun-
cil should articulate its reasoning.” Id. at 989 n.6. Perhaps even more im-
portant than fairness to claimants, if the Council were to explain its rea-
soning—if only briefly—much of the confusion that we grapple with in
this appeal relating to the identification of evidence that the Council con-
sidered might be avoided.

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28 No. 14-3163
minor delay was reasonable. Medical records are not instan-
taneously transmitted from a treating physician to the Social
Security Administration upon their creation; rather, a claim-
ant’s representative must learn that specific treatment has
been provided, request the relevant treatment notes, obtain
them from the physician, and deliver them to the agency. As
a result, the four-week time lag at issue here does not alter
our conclusion that Dr. MacKay’s notes are indeed “new”
within the meaning of § 404.970(b).
Dr. MacKay’s treatment notes are also “material.” We
have found evidence to be “material” under § 404.970(b) if it
creates a “reasonable probability that the Commissioner
would have reached a different conclusion had the evidence
been considered.” Perkins, 107 F.3d at 1296 (citation and in-
ternal quotation marks omitted). Here, the ALJ’s decision
rested—in large part—on the conclusion that Stepp’s condi-
tion had improved over the course of the adjudicative peri-
od. Dr. MacKay’s files, however, undermine that position.
See Farrell, 692 F.3d at 771 (concluding that the newly sub-
mitted evidence was material because “the ALJ’s [unfavora-
ble] decision unequivocally rest[ed] in part on the determi-
nation that there [wa]s no evidence that [a fibromyalgia] di-
agnosis ha[d] been confirmed[, but] Farrell’s new evidence
fill[ed] in that evidentiary gap by providing exactly that con-
firmation”). Dr. MacKay’s notes reveal not only that Stepp
continued to complain of severe back and neck pain (as well
as burning and numbness) as late as October 2011, but also
that Dr. MacKay believed that Stepp’s condition required
additional invasive treatment—including multiple nerve
block injections and a cervical fusion. Dr. MacKay’s notes
also summarize the results of an October 2011 MRI: degen-
erative changes throughout Stepp’s thoracic spine, degenera-

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No. 14-3163 29
tive disc disease throughout her lumbar spine, and several
disc protrusions all indicate a gradually worsening condi-
tion. Given this persuasive evidence that Stepp was not, in
fact, on an upward trajectory at the end of the adjudicative
period, we remand the case to the ALJ to re-evaluate Stepp’s
RFC in light of the information presented in Dr. MacKay’s
notes.8
III. Conclusion
The decision of the district court is A FFIRMED in part and
R EVERSED in part, and the case is R EMANDED to the Social Se-
curity Administration for further proceedings consistent
with this opinion.
8 Stepp also argues, in the alternative, that we may remand the case for
further consideration under sentence six of 42 U.S.C. § 405(g), which
permits remand in situations where “there is new evidence which is ma-
terial and … there is good cause for the failure to incorporate such evi-
dence into the record in a prior proceeding.” However, as we explained
in Farrell, evidence that has been submitted to and rejected by the Ap-
peals Council does not qualify as “new” within the meaning of § 405(g).
See 692 F.3d at 770; see also DeGrazio v. Colvin, 558 F. App’x 649, 652 (7th
Cir. 2014) (“The evidence that the Commissioner characterized as ‘new’
in her motion—the audiometric report that confirmed DeGrazio’s hear-
ing loss—was not new for purposes of sentence six because it already
had been presented to the Appeals Council.”).

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