Federal Bar Association, Social Security Section
Washington DC 20037
May 16, 2002
The Honorable Clay Shaw, Jr.
Chairman
Subcommittee on Social Security
U.S. House of Representatives
B-316 Rayburn House Office Building
Washington, D.C. 20015
Re: Challenges Facing the New Commissioner of Social Security
Dear Chairman Shaw:
Thank you for holding the hearing on May 2, 2002 on the challenges facing the new Commissioner of Social Security. Those challenges are of considerable interest to the membership of the Social Security Section of the Federal Bar Association (FBA), and we request that this correspondence be entered into the hearing record. The comments presented herein are exclusively those of the Social Security Section of the FBA and do not represent the official views of the Social Security Administration, in whose employment we serve as Administrative Law Judges.
As you know, the Federal Bar Association is the foremost professional association for attorneys engaged in the practice of law before federal administrative agencies and the federal courts. Fifteen thousand members of the legal profession belong to the Federal Bar Association. They are affiliated with over 100 FBA chapters across the nation. There are also over a dozen sections organized by substantive areas of practice such as the Social Security Section, of which I am the Chair.
Unlike other organizations associated with Social Security disability practice that tend to represent the narrow interests of one specific group, the Federal Bar Association's Social Security Section encompasses all attorneys involved in Social Security disability adjudication. Our members include:
The primary interest of the FBA's Social Security Section is in the effectiveness of the adjudicatory processes associated with hearings in the Office of Hearings and Appeals (OHA), the appeal process at the Appeals Council, and judicial review in the federal courts. It is the Section’s collective view that the Social Security disability program is under considerable strain. Current delays in the processing of claims are unacceptable and the quality of decisions at all levels is less than ideal. The Commissioner is faced with a daunting task. It is with that in mind that we offer the following comments.
1. Fully Implement Process Unification at All Levels of Adjudication
Process unification is essential to an efficient, timely and accurate disability adjudication system that ensures disabled claimants will be paid as early in the process as possible.
In the mid-1990’s the Social Security Administration (SSA) acknowledged the inconsistency created by the Disability Determination Services (DDS) applying one set of rules for determining eligibility through the Program Operations Manual (POMS), and its Administrative Law Judges, Appeals Council, and the federal courts applying another through statute, regulations, rulings and case law. Consequently, in 1996 SSA initiated Process Unification Training for all DDSs, ALJs, and the Appeals Council. The training was based on a set of rulings -- the “Process Unification Rulings” -- that were designed to guide all adjudicators at every level. It was anticipated that the DDSs would no longer rely exclusively on POMs, and that they would begin to write an analysis of their decision-making. This rationalized determination, in turn, would be granted some deference by reviewing ALJs and Appeals Council.
This plan for a unified process never came about, however. Unfortunately, the DDSs did not follow through and continued to apply the narrow standards of POMs, giving mere lip service to claimants’ subjective complaints. Today they continue to fail to provide any meaningful analysis of their decisions, leaving unclear what standard(s) they are applying to their review of disability claims.
We submit that SSA had it right the first time when it recognized the need for process unification. Fairness requires that all adjudicators assess a disability claim using the same legal standards and requirements.
A fundamental premise of the SSA process unification effort was that disability benefits should be awarded to claimants as soon as their disability has been determined under the law. The burden of long delays to claimants before the statute, regulations, rulings, and case law are applied is unacceptable and does not serve the interests of justice. Quite simply, it can wreak havoc in the lives of claimants.
The Commissioner recently announced that in an effort to deal with the backlog and delays at OHA, ALJs would begin to review raw, unpulled files as they arrived from DDS. The purpose of the review is twofold: to allow those claims that can be allowed on the record without a hearing, and to undertake immediate development of cases requiring additional development.
On its face, this initiative attests to the failure of process unification. If such an initiative can be productive and result in a significant number of dispositions or significant additional development, then the cases were either: (1) not decided correctly under the law at the DDS; or (2) not adequately developed at the DDS.
2. Preservation of the Due Process Hearing Before an Administrative Law Judge
It is our understanding that various proposals are being made that would eliminate a hearing before an Administrative Law Judge. The FBA strongly opposes any such effort for the following reasons.
In 1983, a Senate Subcommittee on Oversight of Government Management of the Committee on Governmental Affairs conducted a hearing that inquired into the role of the ALJ in disability hearings. The report provided in part:
The principal finding of the Subcommittee is that the SSA is pressuring its ALJs to reduce the rate at which they allow disabled persons to participate in the Social Security Disability Program…. [The Subcommittee found that the SSA was limiting the decisional independence of ALJs through its Rulings, its non-acquiescence to federal court decisions, and its increasing of case quotas that reduced the time an ALJ could spend on each case to develop additional evidence that may support an allowance decision, among other things.] The APA mandates that the ALJ be an independent, impartial adjudicator in the administrative process and in so doing separates the adjudicative and prosecutorial functions of an agency. The ALJ is the only impartial, independent adjudicator available to the claimant in the administrative process, and the only person who stands between the claimant and the whim of agency bias and policy. If the ALJ is subordinated to the role of a mere employee, an instrument and mouthpiece for the SSA, then we will have returned to the days when the agency was both prosecutor and judge.
Sen. Rep. No. 98-111 (September 16, 1983).
The Administrative Procedure Act requires that independent administrative law judges be selected on a merit basis and insulated from agency bias and pressure in performing the adjudicative function. See Butz v. Economu, 458 U.S. 478, 513 (1978). Regretfully, as noted in the Senate Report, SSA has in the past attempted to subvert the statutory independence of its administrative law judges. It has sought overtly and at other times more subtly to influence the decisions of its ALJs to achieve some predetermined acceptable allowance rate or altogether cease payment of benefits to a particular class of disabled beneficiaries. In one well-publicized episode in 1982, SSA attempted to terminate benefits to thousands of Americans with mental disabilities, triggering the reversal in many cases of that policy decision by SSA ALJs who applied the law and restored the benefits. The American Bar Association in fact honored the SSA ALJ corps for their outstanding efforts during the period from 1982-84 to protect the administrative adjudication within their agency, to preserve the public confidence in the fairness of governmental institutions and to uphold the rule of law.
A due process hearing conducted by an ALJ is a protection against potential agency bias and policy that may at times run contrary to the law as mandated by Congress. Disability claimants should not be deprived of this step in the disability process. That being said, there remains the critical issue of unacceptably long delays at OHA. The causes of these delays are many, but most obvious is the abject failure of the Hearing Process Improvement (HPI) initiative. Prior to HPI, in FY 1998, ALJs issued 618,578 decisions. In FY 2001, with full implementation of HPI, that figure plummeted to 465,228.
The defects in HPI, both in design and implementation, are legion and need not be enumerated here. Suffice it to say, a fundamental problem was the de-legalization of the adjudicative process, which included the removal of judges from the case development function. Over 350 employees, primarily from the clerical ranks, were promoted to the position of “paralegal”. Their promotion left OHA bereft of employees trained in “pulling cases” in preparation for adjudication by administrative law judges. This created fewer cases ready for judges to hear and decide. The employees who have been promoted to the “paralegal” position, in almost all cases, have had no legal training whatsoever and in their promotion were not even required to demonstrate an ability to write; yet, they are tasked with writing draft decisions for the judges -- decisions that are subject to judicial review in U. S. District Court. Attorneys could have filled the positions encumbered by these “paralegals” as the two positions are at the same grade level. Instead, SSA made the conscious choice to fill these slots with clerical workers rather than trained lawyers. It goes without saying that under this new arrangement the review time required for judges to edit and revise their decisions has increased exponentially further delaying disposition of claimants’ cases.
OHA performs an adjudicative function and its procedures and support systems need to be designed and implemented to facilitate that function. Clearly, with proper and adequate support, ALJs are capable of expediently adjudicating the cases before them while providing claimants with due process. In addition, OHA should be under the direction of a Chief Administrative Law Judge who is provided appropriate administrative assistance in carrying out the adjudicative function. The administrative and support system should not be dictating to the judges how the adjudicative function should be accomplished.
3. Extension of Fee Withholding to Supplemental Security Income (SSI) Cases
Attorneys who practice Social Security disability law overwhelmingly endorse the extension of withholding attorney fees in SSI cases, due to the high risk of nonpayment for services rendered. This is reflected in SSA’s FY 2000 statistics at the OHA level, which show that 74.9% of Title II claimants were represented while only 45.9% of title XVI claimants were represented. Many attorneys simply decline to handle SSI cases, and this appears to be a growing trend. Those who do accept such cases tend to do so out of a sense of obligation and often in the spirit of pro bono work. SSI claimants should not have to rely upon the collective good conscience of a few attorneys for representation.
While Administrative Law Judges are charged with protecting the interests of pro se claimants and do their best to meet that obligation, it is done in the context of a very heavy caseload. ALJs carry hundreds of cases on their dockets. The reality is that a represented claimant, by virtue of the time, attention and expertise that a representative can provide, has a better chance of prevailing in his appeal. This is recognized by the Consortium for Citizens with Disabilities (CCD), as reflected in Marty Ford’s testimony at the May, 2001 hearing of your Subcommittee. While resources such as legal services and pro bono attorney work are invaluable, they are limited in their availability. As the CCD pointed out, the potential denial of benefits for SSI claimants, due to lack of experienced legal representation, far outweighs the burden of having reasonable attorney fees withheld from their back benefits.
It is our understanding that SSA now supports this provision and we applaud that decision. We believe attorney fee withholding in SSI cases will benefit SSA by increasing attorney representation which will, in turn, serve to screen cases, educate claimants regarding the eligibility criteria, aid in the production of evidence, and further the goal of insuring that the proper decision is made as soon as possible.
4. Establishment of a Comprehensive Quality Assurance Program Throughout the Disability Program
The General Accounting office has repeatedly reported that SSA needs to implement a comprehensive and meaningful quality assurance system. SSA announced a plan to revamp its existing quality assurance system in 1994. Yet, in 2001 SSA acknowledged that its quality assurance system needed to more effectively promote uniform and consistent disability decisions across all geographic and adjudicative levels. GAO has made specific recommendations as to the content of such a plan.
The Commissioner has appointed a Regional Commissioner to lead an effort to establish a quality assurance program. We commend this action and encourage the development of a comprehensive quality assurance program that establishes quality standards at all levels of the claims process. The disability program is a nationwide program and it is not acceptable to have allowance rates at the DDS level on Title II disability claims in FY 2000 ranging from a low of 31% in one state to a high of 65% in another state.
A quality assurance plan should, for example, set the standard for the collection of evidence at all levels of review, including DDS. Much of the delay in the life of a disability claim is due to the time needed to collect relevant evidence. For example, if a claimant alleges disability due to severe injuries in an automobile accident and DDS only obtains the primary care physician records of general care and fails to obtain the records of the trauma surgeon and hospital, it will not have the relevant evidence needed to make an accurate determination. While a denial based on the primary care physician records may be technically correct, given the record as developed, that record is wholly inadequate. The claimant is then forced to appeal the denial until someone develops the complete and relevant record. If the correct record were obtained at the DDS level, the accuracy of the DDS decision could be realistically measured. It is a meaningless statistic to say the DDS made the right decision, when it was rendered on an inadequate record.
Similarly, delays at the ALJ level occur while the relevant evidence is obtained and the file is assembled. One of SSA’s redesign initiatives, the Adjudication Officer (AO), sought to accomplish the generation of evidence and file assembly at the DDS level. The AO developed the record and granted eligible claims, forwarding the ineligible claims to an ALJ for further review. In those cases that were denied, the AO prepared a summary of the evidence, and certified that the record was complete. The case was then heard by an ALJ generally within 60 to 90 days of its receipt and little or no further development of the record was required. Concerns were raised about the AO project because a higher percentage of claims was being paid at the DDS level, and administrative costs for assembling a complete record and providing a summary were high. The project, however, resulted in correct decisions earlier in the process and savings of administrative costs and time at OHA.
A Quality Assurance Program should measure the adequacy of the file, the quality of the analysis, and the correctness of decisions at all levels. It should also undertake to measure the accuracy of both allowances and denials of claims. At the DDS level, quality review work currently performed by SSA’s Disability Quality Branch focuses on allowances of claims rather than denials. This creates systemic pressure on the DDS examiner to avoid erroneous allowances, but not necessarily erroneous denials. Since an erroneous denial is much less likely to be scrutinized by quality control, a denial represents a far more attractive and safer decision option for the DDS examiner. At the ALJ level, the opposite is true. To be effective, without subtly influencing the outcome of decision-making, a quality assurance program should be neutral and refrain from pushing the process toward allowing or disallowing claims. The QA program must measure the accuracy of both allowances and denials.
5. Electronic Folders (E-DIB) Must be Adequately Funded, Closely Monitored, and Not Viewed as the Complete Answer to Disability Adjudication Problems
The Commissioner has announced that the entire record at all levels will be contained in an electronic folder (E-DIB) by January, 2004. The E-DIB initiative has the potential to provide significant improvement in the speed of claims adjudication. However, given SSA’s track record in the conceptualization and implementation of HPI and other redesign initiatives, we strongly encourage the application of significant care and attention to the testing and introduction of E-DIB.
Very few details concerning the plan have been announced, and there are innumerable questions relating to the implementation of this initiative. We urge extensive testing at the pilot stage and vigilant monitoring of its rollout. Given the shortage of personnel within DDS and OHA to handle the current caseload, careful attention also should be devoted to staffing plans for those who will maintain the systems and scan the documents included in the electronic folder. Attention should also be devoted to whether E-DIB coverage will extend to claims pending at the time of conversion or whether this will include only claims filed after January, 2004. The Social Security Administration needs to work with the representative community to insure the confidentiality of the claimant’s record, while also assuring safety and security of the internet system itself. Access to the claimant’s record by those on the other side of the digital divide, who lack compatible equipment, also should be considered.
6. Elimination of Reconsideration and Reorganization of the Appeals Council
The FBA seriously questions whether the current processes of DDS level reconsideration and Appeals Council review are serving their intended purposes. Thoughtful scrutiny should be devoted to whether the time spent on these two review processes contributes to the effective adjudication of disability claims and the interests of justice.
A claimant who is initially denied benefits may request DDS reconsideration of the denial decision. Reconsideration is widely – and correctly -- viewed as little more than a rubber stamp of the initial denial. During FY 2001, of an average 100 claims processed by DDS, 40 were approved at the initial level and 4 at the reconsideration level. Time spent at the reconsideration level was 69 days. Given the few requests for reconsideration that ultimately are successful, concerns can be deservedly raised whether reconsideration represents a meaningful step in the disability process.
Similar attention should be devoted to the role and effectiveness of Appeals Council review. Upon receipt of an adverse claims decision by an ALJ, a claimant may appeal to the Appeals Council, which then undertakes a review on the record. While the Appeals Council serves a valuable purpose in screening out many cases that should not reach federal court due to deficiencies in the ALJ decisions, the Appeals Council is overwhelmed by its staggering workload. It has taken steps to shorten its appeal time, and according to the General Accounting Office, reduced the amount of time to process an appeal from 458 days in FY 1999 to 447 days in FY 1999. This is still an unduly long period of time.
The substantive legal correctness of the decisions of the Appeals Council has also been frequently challenged. In a mounting number of cases appealed to U.S. District Court after denial of review by the Appeals Council, the Office of General Counsel and U.S. Attorneys have asked the Appeals Council to agree to a “voluntary remand.” These requests are prompted by concerns over the ability to defend the underlying ALJ decision—the decision that had already been affirmed by the Appeals Council. The frequency of such “voluntary remands” indicates that in its rush to process appeals, the Appeals Council is not getting it right the first time. The record the Appeals Council agrees to take back in a voluntary remand is usually identical to the record it initially reviewed. If the ALJ decision is indefensible, it should have been caught by the Appeals Council before the case proceeded to federal court. That after all is the role of the Appeals Council in the request for review process.
Therefore, we believe that the Commissioner should review and study the role and responsibility of the Appeals Council, with special attention devoted to: the usefulness and necessity for the request for review function; the merits of redesign of the Appeals Council mission to focus on quality review; and the establishment of a time-limit for the processing of requests for review, permitting cases not reached within the allowable time to go directly to court.
In closing, we thank the Subcommittee for taking favorable action on fee withholding for SSI cases and for holding this important hearing on the challenges facing the new Commissioner. The Social Security Section of the Federal Bar Association looks forward to working with you on this and future issues relating to Social Security disability case adjudication. Please contact Bruce Moyer, our government relations counsel (301- 270-8115) if you have any questions. Thank you for your consideration.
Sincerely,
Kathleen McGraw
Chair
Frederick R. Waitsman
Chair, Legislative Committee