Committee on Ways and Means, Subcommittee on Social Security, 5-2-02, Statement for the Record

Statement of James A. Hill, President, Chapter 224, National Treasury Employees Union

Chairman Shaw and Members of the Subcommittee:

My name is James A. Hill. I have been employed by the Office of Hearings and Appeals (OHA) of the Social Security Administration (SSA) for more than 19 years as an Attorney-Advisor. I am also the President of National Treasury Employees Union (NTEU) Chapter 224 that represents Attorney-Advisors and other staff members in approximately 110 Hearing Offices and OHA Regional Offices across the United States. I wish to thank the Subcommittee for inviting me to testify regarding the challenges and opportunities facing Social Security disability programs today.

The crisis in disability adjudication at the hearing level of the mid-1990’s has returned. Case backlogs and average processing time have increased at an alarming rate severely diminishing the quality of service provided to the American public. The current situation is even more disturbing because the anticipated workload will significantly increase with the aging of the “baby boomers”. SSA must immediately address the current backlog problem and devise a system that will adequately serve the needs of the future.

NTEU makes the following recommendations for action necessary to ensure that the Office of Hearings and Appeals delivers the quality of service demanded by the American people currently and in the future:

1. All qualified OHA Attorney Advisers should be converted to Senior Attorney decision makers and given the authority to issue fully favorable on-the-record decisions. These Senior Attorney decision makers would review all cases coming into the hearing office.

2. SSA should establish a workgroup to examine the implementation of additional attorney decision makers in the OHA hearing offices to work in conjunction with the ALJs in processing the ever-growing workload that faces SSA.

3. SSA should establish a workgroup to examine the issue of introducing an Agency representation into the adjudication process.

Since the mid-1990’s SSA’s disability program has been in crisis. In the mid-1990s the disability backlog rose to over 550,000 cases and processing time climbed to nearly 400 days at the hearing office level. In 1995 SSA introduced the Senior Attorney Program that was instrumental in reducing the disability backlog to approximately 311,000 cases by September 1999 and reducing processing time to approximately 270 days at the end of fiscal year 2000. Since the termination of the Senior Attorney Program the disability case backlog has risen to approximately 460,000 and SSA projects by the end of FY 2002 the backlog will rise to 546,000 cases.

Additionally, since the mid-1990s SSA has been concerned that its disability program would be unable to meet the needs of the future, particularly in view of the inevitable increase in disability applications caused by the aging of the “baby boomers”. That concern was, and remains, well-founded, because it is clear that both the system prior to 1995 and the current system are unable to meet the needs of today’s workloads to say nothing of the projected workloads of the future. In order to address this problem the Social Security Administration established the Disability Process Redesign Program (DPR) in 1995. Despite the expenditure of millions of dollars, test after test revealed failure in initiative after initiative. SSA recently announced the demise of the Disability Claims Manager and Prototype programs. They join the Adjudication Officer and Redesigned Disability Systems Programs as failed major initiatives. Additionally, DPR failed to produce an acceptable quality assurance program.

The failure of DPR did not discourage SSA from resurrecting many of its basic concepts under the guise of the Hearings Process Improvement Plan (HPI). One lesson learned from DPR was that testing often disclosed problems. SSA took no chance that testing would reveal problems with the HPI concept and implemented the program without testing. Everyone concedes that like DPR, HPI has failed.

While both programs have failed, the failure of DPR had little direct effect on claimants. The failure of HPI has severely damaged the quality of service delivered to the public. During the time DPR was failing, the disability backlog at OHA fell from approximately 570,000 cases in 1995 to approximately 311,000 cases in September 1999, but since the inception of HPI, the backlog at the hearings level has risen to more than 460,000 cases. This change of circumstances can be attributed to the fact that during the unsuccessful DPR effort, OHA’s Senior Attorneys were issuing over 220,000 fully favorable decisions, while the elimination of the Senior Attorney Program and the decisions it produced was one of the “improvements” of HPI.

Under HPI, the Senior Attorney Program was replaced by a triage system in which Attorney Advisers would screen profiled cases (the same profiles used by the Senior Attorney Program) and recommend cases to ALJs that could be paid on the record. This still requires a significant commitment of ALJ resources. However, this process has resulted in a considerable decline in on-the-record decisions emanating from this profiled workload leading to fewer overall dispositions. The rate of ALJ dispositions has not increased, in fact it has declined, leading to a substantial decrease in total dispositions. Workload growth is not the problem. In spite of the small increase in receipts (5.7%), the case backlog has increased by nearly 40%. At the hearings office level we have returned to the crisis situation of 1995, but the expected flood of ‘baby boomers’ is seven years closer. The service delivery problems have both long-term and short-term ramifications, and the time to address them is rapidly shrinking.

We are in the midst of an emerging disaster precipitated by the demise of the Senior Attorney decision maker and fueled by HPI. The situation continues to deteriorate. Any hope of significant improvement without bold and decisive action is unreasonable. OHA has traditionally maintained a roster of 1000-1100 ALJs. Hiring substantial numbers of additional ALJs to meet future needs is fiscally irresponsible. SSA recently hired approximately 130 new Administrative Law Judges (returning to the norm) but readily admits that this addition will not solve today’s problems.

The loss of efficiency caused by HPI, the elimination of the Senior Attorney Program, the precipitous decline in the number of on-the-record decisions, the staggering increase in “unpulled” cases, the expected increase in disability receipts, and the imposition of a new and increased Medicare workload spell disaster. The Social Security Administration must act quickly to deal with the current disability backlog. It must also realistically assess its future workloads and devise processes sufficient to meet the decision-making needs of the future.

SSA Must Re-introduce of the Senior Attorney Program

The fundamental problem at OHA is that the number of decision makers is insufficient to meet the workload. There is widespread agreement that it is unreasonable to expect an Administrative Law Judge to produce more than 500 dispositions in a year if an acceptable level of quality is to be maintained. If ALJs are the only decision-makers, and unless the Agency is prepared to accept a much greater number of ALJs than currently are employed, the simple arithmetic mandates an ever increasing backlog and skyrocketing processing times. The solution is more decision makers.

In 1995 the Social Security Administration faced a disability caseload backlog and processing time crisis very similar to that existing today. In order to reduce the backlog and decrease processing time, SSA instituted the Short Term Disability Program. The primary element of that program, designed to reduce both the backlog and processing time, was the Senior Attorney Program.

That program began in 1995 and continued until the advent of the HPI Program. The authority to make and issue fully favorable decisions on the evidence of record was delegated to the Agency's experienced Attorney Advisors. The Senior Attorney decisions combined with ALJ decisions resulted in a substantially higher level of total dispositions than would have occurred if ALJs had been the sole decision-makers. In addition to performing the “Senior Attorney work”, the Senior Attorneys also continued to draft ALJ decisions. This arrangement utilized the knowledge, skills, and abilities of these attorneys to issue fully favorable decisions to those claimants whose case did not require a hearing, and to continue to draft the more difficult ALJ decisions. This afforded, on an individual hearing office basis, the flexibility to direct decision making and decision writing resources as necessary to achieve maximum productivity.

Senior Attorneys issued approximately 220,000 decisions during the course of the Program. The average processing time for Senior Attorney decisions was approximately 105 days. During its pendency the OHA backlog fell from over 550,000 to as low as 311,000 at the end of FY 1999. The correlation is obvious. During the same time period there was also an increase in ALJ productivity demonstrating that dual decision makers was a viable concept. It is readily apparent that processing a large number of cases in such an expeditious manner materially reduced the average processing time for all disability cases at the hearings level in OHA.

While the Senior Attorney Program resulted in a substantial increase in on-the-record decisions, there was not a corresponding increase in the OHA payment rate. In fact the overall payment rate at OHA declined during the course of the Senior Attorney Program. The absence of a significant increase in ALJ on-the-record decisions as the number of Senior Attorney on-the-record decisions declined (because of the downsizing and eventual elimination of the Program) is difficult to explain, particularly in view of the recent significant increase in the ALJ payment rate.

As the Senior Attorney Program was marginalized, OHA dispositions declined.

Finally, the size of the backlog reflects the success and demise of the Senior Attorney Program.

In July 1998 the Senior Attorney Program was significantly downsized with approximately one-half of the senior attorneys returned to the GS-12 attorney adviser position. The remaining Senior Attorneys spent 100 percent of their time doing “Senior Attorney work”. This lack of flexibility doomed this arrangement to a very short lifetime. In fact it lasted only four months before the remaining Senior Attorneys were also assigned ALJ decisions drafting duties. Unfortunately, the number of Senior Attorneys was not increased which led to a significant decline in the Program's productivity. This decrease in productivity led to the rise in unpulled cases and the beginning of the increase in the backlog and average processing time.

The Senior Attorney Program benefited more than just those claimants who received their disability payments far earlier than would otherwise have been the case. Because Senior Attorneys adjudicated the fully favorable on the record cases, staff and ALJ time was not spent needlessly on cases that could be paid without a hearing. They could more timely attend to the other cases, thereby reducing processing time for those cases as well. Another benefit, less appreciated at the time, was that cases paid by a Senior Attorney were not pulled (prepared for hearing). Had the Senior Attorney Program had not been downsized and then eliminated, I believe that there would currently be 90,000 fewer cases waiting to be pulled.

The processing of Senior Attorney cases involved a very limited amount of hearing office staff time. This resulted in the expenditure of far fewer work years devoted to processing Senior Attorney cases than would have been the case had ALJ adjudication been required. This resulted in a significant reduction of administrative costs for those cases that did not require ALJ adjudication. The former Chief Administrative Law Judge stated that OHA may receive as many as 100,000 cases a year that with minimum development could be paid without a hearing before an Administrative Law Judge. The savings in administrative costs arising from the reinstitution of the Senior Attorney Program would be substantial.

During the pendency of the Senior Attorney Program, the payment rate at the hearings level significantly declined. Since its demise, the payment rate has returned to near record levels. The Senior Attorney Program was at least in part responsible for this decrease in the payment rate, a key factor in determining program costs.

One of the criticisms of the Senior Attorney Program involved decisional accuracy. Of course that is also one of the chief complaints regarding ALJ decisions. The Appeals Council review of Senior Attorney and ALJ on-the-record decisions found no difference in quality. I am convinced that the formulation and implementation of an effective quality assurance program at the hearing level should be of the highest priority. Quite simply, the time for such a program has come.

Of course the success of the Senior Attorney Program ultimately rests on the competence of the highly trained legal professionals who can serve as adjudicators. These individuals are experienced OHA Attorney Advisors who have many years experience dealing with the intricacies of the legal-medical aspects of the Social Security disability program. They are attorneys well versed in the law, and they are experienced disability practitioners with a wealth of adjudicatory experience in the Social Security disability system.

The immediate conversion of OHA Attorney Advisers to Senior Attorney decision makers as described above will result in an immediate and substantial improvement in OHA service to the public with minimal disruption of current OHA structure and operations and at minimal additional cost. Based upon the Agency’s experience with the original Senior Attorney Program, and with the full cooperation of hearing office management (lacking during the original Senior Attorney Program), this measure could produce as many as 75,000-100,000 decisions a year without diminishing ALJ productivity. Based upon previous experience, the average processing time for these cases would be approximately 100 days. Additionally, the minimal staff and complete lack of ALJ time spent on these cases frees the staff and ALJs to spend more time on processing those cases requiring a hearing.

The original Senior Attorney Program was a resounding success. It materially improved the quality of service provided to the public, especially for those individuals who were disabled and entitled to receive their disability decision and benefits on a timely basis. In addition, it resulted in administrative and program cost savings. Senior Attorney decision makers have proven by their performance that pre-ALJ decision making in the OHA hearing office significantly improves the quality of service provided to the public.

SSA has long been concerned that the disability adjudication system will be unable to meet the expected increase of applicants for disability benefits caused by the aging of the “baby boomers”. Based upon the performance of the disability system, that concern is justified. However, the basic problem that affects adjudication at OHA today, the lack of a sufficient number of decision makers, will remain unless OHA either greatly expands its ALJ Corps and support staff, creates a magistrate position, develops additional decision-making positions with the authority to grant and deny disability benefits, and/or fundamentally alters the adjudication process.

However, the number of dispositions is not the only chronic problem faced by the adjudication system at the hearings level in OHA. The maintenance of quality assurance has been a long-standing problem at OHA. Managerial oversight of the quality of ALJ decisions unavoidably impacts on the decisional independence guaranteed by the Administrative Procedures Act. As a consequence, very few effective quality assurance activities have occurred at the hearings level.

NTEU believes that it is time for the Social Security Administration to seriously consider fundamentally altering the nature of ALJ hearings by introducing an Agency representative, the Social Security Counsel, who will be responsible for presenting the Agency’s case to the Administrative Law Judge. The Counsel would be responsible for developing the record and presenting it at the hearing. This would relieve the ALJ of the primary responsibility for developing the record.

It is the responsibility of the Counsel to present the adjudicator with a balanced and complete record upon which a fair and just decision can be based. It is not the Social Security Counsel’s responsibility to obtain a denial in as many cases as possible. The Counsel is also responsible for facilitating the adjudicatory process to ensure that those entitled to benefits receive them as soon as practicable. The Counsel, in concert with the claimant’s representative, will resolve issues and propose settlement agreements that would be presented to the adjudicator for approval.

The role of the adjudicator would be reduced to oversight of the pre-hearing process, conducting hearings, and preparation of written decisions based on evidence presented at hearing. The Administrative Law Judge would be relieved of the responsibility of representing the agency and the represented claimant, and would act as a trier of fact. The change to a system that allows ALJs to decide cases based on the merits of the arguments presented by both sides, the facts of the case, the credibility of the claimant and the rules, regulations and law could greatly increase ALJ satisfaction with the process. The ALJ will still be supported in the decision writing and effectuation process. If case preparation by the Counsel’s staff replaces much of the case preparation currently performed by the ALJ’s staff, the net impact on administrative cost could be quite small.

NTEU is not alone in advocating the consideration of a process in which an Agency representative plays a vital role. Both the Lewin Group, Inc. and the Social Security Advisory Board have advanced similar recommendations.

In its report dated January 2001, Charting the Future of the Social Security’s Disability Programs: The Need for Fundamental Change, the Social Security Advisory Board also noted that Administrative Law Judges have been required to balance three roles. They are obligated to protect the interests of both the claimant and the government, and to serve as an objective adjudicator. The Board further noted that approximately 80 percent of disability insurance claimants are now represented by an attorney. The Board also noted that because of the massive increase in the disability appellate workload, SSA has periodically made efforts to increase ALJ productivity which many in OHA believe has impacted adversely on the quality of decision-making. To correct a variety of current problems, the Social Security Advisory Board recommended that the agency be represented at hearings. The Board stated that having a representative present at the hearing to defend the Agency’s position would help clarify the issues and introduce greater consistency and accountability into the adjudicatory system. The Board also indicated that consideration be given to allowing the Agency to file an appeal of ALJ decisions.

The extent of the quality assurance problems in the current system is underlined in the report of The Lewin Group, Inc, which stated that the adjudication process at OHA is almost unique. The Lewin Group reported, “We have not encountered good examples of non-adversarial processes.” The Lewin Group suggested that one way to improve the non-adversial system is to make it more adversarial. It suggested that the mechanism for such a change would be to introduce a representative from the Social Security Administration into the adjudication process. This would relieve the Administrative Law Judge of the responsibility of representing the agency, and if the claimant were represented by outside counsel, the responsibility for representing the claimant. The Lewin Group stated that the political issues could be greatly mitigated by appropriate definition of the representative’s job and appropriate training of the representatives. They stated that the representative’s job is not to obtain a denial in as many cases as possible, and in fact, the representative could be given the authority to allow cases that meet the medical eligibility criteria, perhaps subject to the approval of the ALJ.

The Lewin Group also felt that administrative savings are generated by elimination of a separate quality assurance process that would not be required in an adversarial system, because of the normal appellate process. They concluded that if the system also reduced the allowance rate, as they expected, program savings would be generated.

In conclusion, NTEU makes the following recommendations of action necessary to ensure that the Office of Hearings and Appeals delivers the quality of service demanded by the American people currently and in the future:

3. SSA should establish a workgroup to examine the issue of introducing an Agency representation into the adjudication process.