Statement of the Hon. Ronald G. Bernoski, Administrative Law Judge,
Office of Hearings and Appeals, Social Security Administration, Milwaukee, Wisconsin, and
President, Association of Administrative Law Judges, Milwaukee, Wisconsin

Before the Subcommittee on Social Security,
House Committee on Ways and Means

Hearing on Social Security Disability Programs' Challenges and Opportunities

June 20, 2002

Mr. Chairman and Members of the Subcommittee:

I.                   INTRODUCTION

            Thank you for the opportunity to testify before you today.  My name is Ronald G. Bernoski.  I am an Administrative Law Judge (“ALJ”) who has been hearing Social Security disability cases at the Office of Hearings and Appeals (“OHA”) of the Social Security Administration (“SSA”) in Milwaukee, Wisconsin, for over 20 years.  

            This statement is presented in my capacity as the President of the Association of Administrative Law Judges (“AALJ”), which represents the ALJs employed in the SSA OHA and the Department of Health and Human Services (“DHHS”).  One of the stated purposes of the AALJ is to promote and preserve full due process hearings in compliance with the Administrative Procedure Act for those individuals who seek adjudication of program entitlement disputes within the SSA.

            I will address the challenges and opportunities for the Social Security Disability Programs in improving the disability determination appellate process at the ALJ hearing and Appeals Council administrative review levels.  First, I will list the challenges at the DDS agencies that affect the appellate levels and at each of the appellate levels.  Then I will offer short and long term solutions that may be implemented to resolve these challenges.  The table of contents is an outline of the challenges and proposed solutions that I present for the Social Security Disability Programs.  This discussion presumes familiarity with the structure of the SSA OHA and the initiatives by the SSA management to change or improve the functioning of OHA, including the Process Unification Training (“PUT”), the Hearing Process Improvement Plan (“HPI”), and the Appeals Council Improvement Plan (“ACPI”).

II.            CHALLENGES FOR THE SOCIAL SECURITY DISABILITY PROGRAMS

A.                 Challenges at the DDS Level:  

1.            The Need to Reduce the Number of Cases that Require an ALJ Hearing by Getting the Claimants a Correct Final Administrative Result Sooner:  The reversal rate of the DDS decisionmakers’ determinations by the ALJs remains high.  In order to reduce the number of ALJ reversals of DDS determinations, in 1996, the SSA conducted the PUT training to have the DDS decisionmakers use the same rules to decide cases as the ALJs.  This has not resulted in fewer cases requiring an ALJ hearing because DDS decisionmakers are required to apply a medical standard set forth in the SSA POMS manuals when determining disability, which is not the standard used by the ALJs.  ALJs use a legal standard when determining disability that is based upon the Social Security Act, the SSA regulations and rulings, and the federal case law that interpret them. 

            Although Congress has expressed concern about the different benefits allowance rates between the DDS agencies and OHA, there also is a concern about the wide discrepancy in the benefits allowance rates among the different states’ DDS agencies.  The latter discrepancy cannot be explained by the use of a different standard for decisionmaking, since all of the DDS agencies use the same medical standard.

2.            The Need to Reduce Processing Time for the Initial and Reconsidered Determinations Levels:  Rather than carefully develop and examine the claimants’ cases once, DDS often is making its initial determinations based on incomplete records, and, upon reconsideration, rarely obtains significant additional medical evidence or changes the outcome of the case.  SSA recently reported that only about three percent of initial determinations are changed at the reconsideration level.  

There are steps that SSA can take that do not require legislation to (1) improve the quality of DDS decisionmaking, which will reduce the number of ALJ hearings, and (2) reduce the DDS case processing time.  They are enumerated in Section III below.

B.            Challenges at the ALJ Hearing Level:  In brief, the Social Security Disability Programs’ challenges at this level is to have a large and growing volume of cases heard and decided by SSA’s ALJs in a timely and high quality manner that preserves the claimant’s due process rights under the Social Security Act and Administrative Procedure Act (“APA”).  Several specific challenges that now confront the new Commissioner are as follows:

1.            The Need to Reduce the Number of Cases that Require an ALJ Hearing by Getting the Claimants a Correct Final Administrative Result Sooner:  The burgeoning caseload at the ALJ hearing level has been growing unabated in recent years.  Prior to HPI, the SSA OHA heard and decided over 500,000 cases annually, and surpassed 600,000 in one recent year.  SSA is projecting that the annual caseload will climb to about 726,000 by 2005.  This has strained the current structure of OHA to timely handle the volume with quality because nothing effective has been done to either reduce the number of cases that require an ALJ hearing or change the structure of OHA to better address the huge caseload:  

(a)            OHA’s structure and process for hearing cases has not changed significantly to adjust to the large scale of the operation since the APA went into effect in 1947.  There is no mechanism for settling cases without a hearing, other than granting a claim on the record, because SSA has no representative to assert its interests at the hearing level.  

(b)            Cases endlessly are remanded back to the ALJ level for rehearing because the record remains open without limits, new issues may be raised at all levels of appeal, and the quality of the Appeals Council review is poor.

There are several steps that SSA can take that do not require legislation to reduce the number of ALJ hearings.  They are enumerated in Section III below.

2.            Challenges from the ALJ Level HPI Reorganization of OHA:  There is a consensus that HPI, which SSA implemented in 2000, has both exacerbated the case disposition time problems that it was intended to solve and created new problems that have caused work flow bottlenecks, reduced the quality of decision drafts by some decision writers, and increased the case backlog.  The several HPI challenges are as follows:

(a)            One purpose of HPI was to reduce the amount of processing time it takes to obtain the evidence for the record by doing it more completely before the ALJ hearing, so that fewer cases would need post-hearing development.  The practice of HPI did not result in a reduction of cases that require post-hearing development.

(b)            HPI also was expected to reduce overall case processing time, ostensibly by reducing the need for post-hearing development.  Instead, case processing time steadily has lengthened under HPI beyond what was considered to be unacceptable at the time that HPI was implemented.  The creation of teams to handle cases was intended to decrease the number of people who have to work on each case and increase individual responsibility for the quality of work within the group, which were expected to reduce case processing time and increase work quality.  Instead, HPI process has resulted in an increase of the “hand offs” of the files and the sense of individual responsibility for work quality has vanished.  The cases are assigned to judges later in the process and the responsibility for early pre-hearing case development has been transferred to the staff.

(c)            The quality of decision drafts has declined because, as part of the HPI plan, SSA has promoted to Paralegal Specialist positions as ALJ decision writers clerical staff members, many who do not have the skills to perform the job adequately.  HPI created promotion opportunities for the clerical staff, which boosted the morale of those receiving the promotions.  However, the implementation of HPI resulted in the promotion of clerical staff to approximately 350 writer positions without the need to show that they have the skills to do the job.  This promotion process resulted in positions being filled by clerical staff, some of whom who have not been successful in performing the job.

(d)            A huge backlog of case files that need to be prepared for hearing has accumulated as a result of the SSA promoting about 350 clerks to writer positions and about 300 clerks to case technician positions as part of the HPI plan without replacing the vacated clerical positions.  (The process of organizing and marking exhibits to prepare a case for hearing is called “pulling,” which is a clerical task.)   As a result, the backlog of unpulled cases has ballooned from about 34,000 to 216,000 since HPI has been implemented.  The shortfall in “pulled” cases has resulted in an insufficient number of cases being scheduled for ALJs to hear in many offices and adds to the case processing time.

(e)            The lack of acceptance of the failure of HPI by the SSA administrators is a challenge that the new Commissioner confronts.  At a hearing before the House Subcommittee on Social Security in June 2001, Mr. Stanford Ross, Chair of the SSAB, testified that the HPI did not improve the hearing process and in some circumstances it had made the situation worse.  Without acknowledgment of the failure of HPI, new strategies will not be considered seriously and implemented by SSA administrators.

3.                  The Challenge of Preserving Due Process While Achieving Greater Efficiency: 

I have a strong concern with recent information that AALJ has received relating to three proposals to transfer the SSA administrative law judge hearing and final adjudication of Social Security Act claims to non-ALJ claims personnel within the District Offices, non-ALJ claims personnel within the District Offices the Departments of Disability Services, and/or non-ALJ hearing officers within OHA.  A brief summary of the facts about these proposals that are known to AALJ are as follows:

Transfer of SSA Hearings to non-ALJ Technical Personnel in the District Offices:  Recently, AALJ learned that the SSA is creating a “Special Title II Disability Workload cadre” (“ST2DW”) to make final determinations of Title II Social Security Act claims.  The jobs are a for a detail of one year that may be extended in upstate New York (Buffalo, Schenectady, Albany) that will consist exclusively of GS-12 level claims personnel employed in the District Offices in that local area, whose title is “Technical Expert (“TE”).”  No OHA personnel reportedly will be considered for this position.  The SSA New York Region Personnel Operations already has issued solicitations for Technical Experts to apply for the position that was to close on May 1.  There reportedly will be a two month training period for this one year detail.  The training was to begin in New York City on May 13.  The solicitation provided as follows:

TEs will perform a pre-interview assessment of each ST2DW case and complete a development sheet.  This sheet will be used to conduct interviews with the claimant and to obtain complete development of the case. TEs will be responsible for final adjudication of developed cases, and/or pre-effectuation reviews of cases developed by others.  TEs will use all available tools and controls associated with the ST2DW.

The position reportedly will be at the GS-12 level and no position description has been prepared.  This is a proposal that already is being translated into action.  The use of the words “final adjudication” of cases in this job announcement is telling, since only ALJ and Appeals Council decisions may become final decisions of the SSA Commissioner pursuant to the Social Security Act and APA. 

Transfer of SSA Hearings To DDS:  Since February, information has surfaced that report that the Agency may attempt to change the Social Security hearing process and move the administrative law judge hearing to the reconsideration level at the DDS.  The National Association of Disability Examiners (“NADE”) has published its detailed proposal for such a change and the fact that its executive officers met with the SSA Commissioner in February 2002 to discuss the proposal.  NADE also has submitted its proposal in a written statement that is part of the record of this Subcommittee’s May 2, 2002, hearing on the Challenges Facing the New Commissioner of Social Security.  The DDS proposal would restrict appeals to the administrative law judge to questions of law, rather than the de novo review of the claim that is mandated by the Social Security Act and the APA.

In mid-January, the New York DDS director sent a letter to the Commissioner that includes suggested reforms of the Social Security disability system that is like the NADE proposal.  The letter contains the recommendations that the administrative law judge hearing be abandoned and that the hearing be changed to a "fair hearing" conducted at the state level by the DDS.   At the end of January, the Commissioner attended a meeting of DDS personnel at which the attendees agreed to continue to investigate this change.

AALJ has learned that a small committee had been appointed by the SSA Commissioner to look at alternative hearing methods.  There also is an existing SSA Commissioner's Committee on Disability that is looking at various aspects of the disability program.  AALJ learned that the Committee soon will send a report to the Commissioner that contains a recommendation to conduct the de novo Social Security hearing at the Reconsideration level of the DDS.  Under this proposal, administrative law judges would have jurisdiction only to review cases for errors of law.  If error is found, the case would be remanded to the DDS for hearing.  The Commissioner apparently has not made a policy decision on the transfer of the due process hearing to a lesser DDS hearing, but this issue clearly is on the table for consideration.

Any such change would have a profound effect on the rights of the American people and would deny them a constitutional due process hearing and decision of their claims as now is protected by the APA.  The DDS proposal also would markedly restrict the claimants’ access to judicial review, since few cases would reach ALJs and thus be subject to the Appeals Council review that is a necessary predicate to judicial review.

Transfer of SSA Hearings to Non-ALJ Hearing Officers:  AALJ has learned from a reliable, well-placed source that SSA is planning to budget for hiring of hearing officers at the GS-14 and GS-15 level.  However, AALJ does not have information on the timing or implementation of the plan.  This information is consistent with a proposed hearing officer job description for a position to handle “small claims” that the National Executive Board became aware of at the time of its October 2002 meeting.  This news is of considerable concern because it is a natural "spin off" from the discussions to transfer the hearings to the DDS.  This type assault on the hearings system goes to the very heart of the purpose and function of administrative law judges.

Any plan to deny Social Security claimants the right to a full due process hearing under the APA before an administrative law judge will result in a denial of basic constitutional rights to the American people.  The preservation of APA due process for the claimants, including the hearing and decision of their claims by ALJs who are appointed pursuant to the APA, is essential as the new Commissioner devises ways to more efficiently address the agency’s large and growing caseload.

The APA was adopted by Congress in 1946 to ensure that the American people were provided hearings that are not prejudiced by undue agency influence.  The securing of fair and competent hearing adjudicators was viewed as the heart of the Administrative Procedure Act.  

The APA was enacted primarily to achieve reasonable uniformity and fairness of the administrative process in the federal government for members of the American public with claims pending before Federal agencies.  The APA sets forth a due process administrative procedure for the hearing and decision by administrative law judges of cases brought before the Federal agencies to which the APA applies.  The APA provides the minimum standards for federal administrative due process in the Executive Branch, and delineates procedures for adjudicative administrative proceedings, namely individual case decisions about rights or liabilities as an agency’s judicial function.  This includes uniform standards for the conduct of adjudicatory proceedings, including the merit appointment of administrative law judges.  U.S. Justice Dept., Attorney General’s Manual on the Administrative Procedure Act 9 (1947) (the “Manual”).  The APA, Pub. L. No. 79-404, 60 Stat. 237 (1946), as amended, is codified at 5 U.S.C. §§ 551-559, 701-706, 1305, 3105, 3344, 4301(2)(E), 5335(a)(B), 5372, and 7521.

By APA mandate, the administrative law judge is an independent, impartial adjudicator in the administrative process and there is a separation of the adjudicative and prosecutorial functions of an agency.  The administrative law judge 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 SSA returns to using subordinated employees who would be an instrument and mouthpiece for the SSA, we will have returned to the days when the agency was both prosecutor and judge.  

There is a close relationship between the APA and the Social Security Act.  In the case of Richardson v. Perales, 420 U.S. 389 (1971), the U.S. Supreme stated that the APA was modeled upon the Social Security Act.

It is clear that Congress intended the APA to apply to hearings conducted under the Social Security Act.  The Attorney General’s Manual on the Administrative Procedure Act, which is recognized by the U.S. Supreme Court to be part of the legislative history of the APA, states that “the residual definition of “adjudication” in section 2(d) was intended to include....[t]he determination of...claims under Title II (Old Age and Survivor’s Insurance) of the Social Security Act....”  Manual at 14-15 (emphasis added), citing, Senate Judiciary Committee Hearings on the APA (1941) at 657, 1298, 1451 and S. Rep. No. 752 at 39; 92 Cong. Rec. 5648.  (The other programs did not then exist.)

The U.S. Supreme Court defined the role of a federal Administrative Law Judge in Butz v. Economou, 438 U.S. 478, 513-514 (1978), as follows:

There can be little doubt that the role of the modern hearing examiner or administrative law judge within this framework is “functionally comparable’ to that of a judge.  His powers are often, if not generally, comparable to those of a trial judge.  He may issue subpoenas, rule on proffers of evidence, regulate the course of the hearing, and make or recommend decisions….More importantly, the process of agency adjudications is currently structured so as to assure that the hearing examiner exercises his independent judgment on the evidence before him, free from pressures by the parties or other officials within the agency.  Prior to the Administrative Procedure Act, there was considerable concern that persons hearing administrative cases at the trial level could not exercise independent judgment because they were required to perform prosecutorial and investigative functions as well as their judicial work…and because they were often subordinate to executive officials within the agency….Since the securing of fair and competent hearing personnel was viewed as “the heart of formal administrative adjudication,”…the Administrative Procedure Act contains a number of provisions designed to guarantee the independence of hearing examiners.  They may not perform duties inconsistent with their duties as hearing examiners….When conducting a hearing under the APA, a hearing examiner is not responsible to or subject to the supervision or direction of employees or agents engaged in the performance of investigative or prosecution functions for the agency….Nor may a hearing examiner consult any person or party, including other agency officials, concerning a fact at issue in the hearing, unless on notice and opportunity for all parties to participate….Hearing examiners must be assigned to cases in rotation so far as practicable….They may be removed only for good cause established and determined by the Civil Service Commission after a hearing on the record….Their pay is also controlled by the Civil Service Commission.

The Supreme Court recently reaffirmed its holdings in Butz that a federal ALJ’s role is similar to that of a trial judge and that administrative adjudications are similar to judicial proceedings when it held that state sovereign immunity bars the Federal Maritime Commission from adjudicating a private party’s complaint against a non-consenting state.  Federal Maritime Commission v. South Carolina State Ports Authority, ___ U.S. ___, slip op. 1, 10-14 (2002).

The Congress has reviewed the function of the administrative law judge in the Social Security Administration.  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 administrative law judge in the Title II Social Security Disability Insurance Program.  S. PRT. 98-111.  The Committee issued its findings on September 16, 1983, which provided in part as follows:

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, and instrument and mouthpiece for the SSA, then we will have returned to the days when the agency was both prosecutor and judge.

The decisionmaking independence provided by the APA is not for the benefit of the judge, but instead is provided for the protection of the American people.  The protections are intended to ensure that the American people receive a full and fair due process hearing with a decision based on the evidence in the hearing record.  This is a right protected by the constitution.   “The APA creates a comprehensive bulwark to protect ALJs from agency interference.  The independence granted to ALJs is designed to maintain public confidence in the essential fairness of the process through which Social Security benefits are allocated by ensuring impartial decisionmaking.”  Nash v. Califano, 613 F.2d 10, 20 (2nd Cir. 1980).   Despite these protections, the Social Security Administration has a history of attempting to assert undue influence on the decisionmaking of its administrative law judges.  This abuse occurred in the 1980’s after the agency had implemented the Bellmon Review Program.  The Senate Subcommittee on Oversight of Government Management (referred to above) issued findings on September 16, 1983, on this improper agency conduct that provided in part as follows:

The principal findings of the subcommittee is that the SSA is pressuring its ALJs to reduce the rate at which they allow disabled persons to participate in or continue to participate in the Social Security Disability Program. 

The Bellmon Review Program also was challenged in the courts in Association of Administrative Law Judges v. Heckler, 594 F.Supp. 1132 (1984).  In that case, a Federal district court judge found in part as follows:

In sum, the Court concludes, that defendant’s unremitting focus on allowance rates in the individual ALJ portion of the Bellmon Review Program created an untenable atmosphere of tension and unfairness which violated the spirit of the APA, if no specific provision thereof.  Defendants’ insensitivity to that degree of decisional independence the APA affords to administrative law judges and the injudicious use of phrases such as “targeting”, goals and “behavior modification” could have tended to corrupt the ability of administrative law judges to exercise that independence in the vital cases that they decide.  

The efforts of the administrative law judges of the Social Security Administration  to protect the Social Security hearing process and the rights of Social Security claimants was recognized in an award presented to the judges of the agency by the President of the American Bar Association in August 1986.  The award acknowledged the efforts of the Social Security administrative law judges in protecting the integrity of the hearing system.  The award specifically stated:

That the American Bar Association hereby commends the Social Security Administrative Law Judge Corps for its outstanding efforts during the period from 1982-1984 to protect the integrity of administrative adjudication within their agency, to preserve the public confidence in the fairness of governmental institutions and uphold the rule of law.

On January 9, 2001 Commissioner Kenneth S. Apfel affirmed the relationship between the Administrative Procedure Act and the Social Security Act for Social Security hearings.  He stated as follows:

The Social Security Administration (SSA) has a long tradition, since the beginning of the Social Security programs during the 1930s, of providing the full measure of due process for people who apply for or who receive Social Security benefits.  An individual who is dissatisfied with the determination that SSA has made with respect to his or her claim for benefits has a right to request a hearing before an Administrative Law Judge, an independent decisionmaker who makes a de novo decision with respect to the individual’s claim for benefits.  As the Supreme Court has recognized, SSA’s procedures for handling claims in which a hearing has been requested served as a model for the Administrative Procedure Act (APA).  Congress passed the APA in 1946 in part to establish uniform standards for certain adjudicatory proceedings in Federal agencies, in order to ensure that individuals receive a fair hearing on their claims before an independent decisionmaker.  SSA always has supported the APA and is proud that the SSA hearing process has become the model under which all Federal agencies that hold hearings subject to the APA operate.  SSA’s hearing process provides the protections set forth in the APA, and SSA’s Administrative Law Judges are appointed in compliance with the provisions of the APA.

In a recent study prepared for the Social Security Advisory Board by Professors Paul Verkuil and Jeffrey Lubbers, entitled Alternative Approaches to Judicial Review of Social Security Disability Cases, the authors recommended the establishment of an Article I court for Social Security cases.  The report favorably refers to the over 1000 administrative law judges in the Social Security Administration as an objective source of decisionmaking that can be effectively integrated into an article I court review structure.  This recommendation seeks to improve and strengthen the Social Security disability process, not to diminish the system as would result from abandoning the administrative law judge hearing.  In fact, articles recently have been published that recommend that the Veterans disability appeals system be improved by modeling it after the Social Security administrative law judge hearing process.  James T. O’Reilly, Burying Caesar: Replacement of the Veterans Appeals Process Is Needed to Provide Fairness to Claimants, 53 Admin. L. R. 223 (2001); William F. Fox, Jr., A Proposal to Reform the VA Claims Adjudication Bureaucracy: One Law Professor’s View, FBA Veterans Law Sec., Tommy: A Lawyer’s Guide to Veterans Affairs, 1 (Issue 3, 2001).

Any retreat from this long and proud tradition of the Social Security Administration with regard to the manner in which it conducts hearings will have a substantial adverse effect on Social Security claimants and will deny them basic constitutional rights.  American citizens will have less rights than they had prior to the enactment of the APA.  

We urge Congress to protect the constitutional rights of the American people and to continue to provide the Social Security claimants the full range of due process rights for a Social Security hearing under both the APA and the Social Security Act.

C.            Challenges at the Appeals Council Level: Several specific challenges that now confront the new Commissioner are as follows:

1.            Long Case Processing Time:  The long case processing time at the Appeals Council often is measured in years, rather than months.

2.            Poor Decision Quality:  The chronically poor quality of the Appeals Council decisions has declined further in recent years.  The decisions rarely have legal citations of authority or rationales for the positions taken, and often are factually inaccurate regarding what the record shows.  The informality of the decisions does not give the impression of the careful deliberation to which the claimants are entitled.

3.            Excessive Number of Lost Hearing Record Tapes and Files:  The chronic loss of hearing record tapes and files by the Appeals Council requires a lengthy rehearing process for the claimants.  Anecdotal evidence suggests that thousands of hearing tapes and files have been lost.  SSA recently reported that there are about 5,000 remands per year for lost or inaudible hearing tapes, most of which are for lost tapes.  The loss of tapes and files reportedly is caused by three problems: (a) the repeated crashing of the Appeals Council’s antiquated computer case tracking system and loss of case names from the database that are not recoverable, (b) a large backlog of cases that have not been entered into the case tracking system but instead are stored on shelves without being alphabetized, numbered or coded, and (c) separating hearing tapes from the hearing file to save storage space and prevent jamming paper shredder machines when the files ultimately are destroyed.

4.            Achieving Acceptance of the Failure of the Appeals Council Level ACPI Reorganization of OHA:  Acceptance by SSA administrators of the failure of the ACPI that was implemented in 2000 to correct these three chronic challenges of the Appeals Council operation also is a challenge that the new Commissioner confronts.  Without acceptance of the failure of ACPI, new strategies will not be considered seriously and implemented by SSA administrators.

III.       PROPOSED ACTIONS TO MEET THE CHALLENGES FOR THE SOCIAL SECURITY DISABILITY PROGRAMS

A.            Overview of Needed Reforms for the SSA Hearing Process

1.            Reorganize the Hearing Office Process:  Because of the failure of HPI, SSA should reorganize the hearing office process.  The reorganization should correct the defects in HPI.  We propose that the recommendations of the Commissioner’s HPI Steering Committee be used as a guide for the reorganization.  The reorganization should consist of both short term and long term changes.  The short term changes should be structured in a manner that permits easy transition to the long term reforms.  The objective should be to immediately return to the efficiency and level of case production that existed in the hearing offices immediately before the introduction of HPI (over 500,000 cases a year).  The long term reform should then build on that base.  There is no single change that will accomplish this objective.  It instead must be accomplished by a series of coordinated changes in several different areas.  The changes will allow the agency to improve the service provided to the American public. 

We recommend that the short term changes should include the following elements:

(a)            The process must be simple, and administrative law judges should be assigned to cases from master docket according to law.

(b)            Each administrative law judge should have adequate and properly trained support staff.  The support staff should include a clerical worker, paralegal and attorney/writer.

(c)            The support staff should be assigned to perform the work product of a particular administrative law judge according to the instructions and guidance of the judge.

(d)        The administrative law judge should have control of all case development.

(e)            The administrative law judge should have the responsibility to determine when a case decision is legally sufficient and the judge should have the authority to return the decision for rewrite to achieve the same.

(f)            Case files of each administrative law judge should be maintained separately.

(g)            The assigned support staff of each administrative law judge should be under the supervision of the hearing office management staff for personnel actions.

(h)            Staff members should be accountable for their work product.  Case work should be assigned on an individual basis to support staff to provide for accountability and enhance the employees’ sense of ownership.

We recommend that the long term changes should include the following elements:

(a)            Close the hearing record after the administrative law judge hearing as of the date of the ALJ’s decision.

(b)            Assignment of Social Security Administration representatives to represent the agency at administrative hearings.  Such representatives would be responsible to defend the position of the agency at the hearing, recommend favorable cases, exercise settlement authority, and assist unrepresented claimants.  When most claimants were unrepresented, having a non-adversarial process made sense to keep the benefits process simple and not intimidating.  However, now, approximately 82% of the claimants who have an ALJ hearing are represented, according to recent statistics assembled by the SSA OHA Office of the Chief ALJ.

(c)            Create a case manager and law clerk position for the support staff of each administrative law judge (as recommended by the Commissioner’s HPI Steering Committee).

(d)            Allow administrative law judges to issue bench decisions and short form decisions.

(e)            Adopt regulations for issue exhaustion as suggested by the United States Supreme Court in the case of Sims v. Apfel, 530 U.S. 103 (2000), if SSA representatives are available to assist the unrepresented claimants.

(f)            Reform the Appeals Council to issue decisions in some cases, limit the scope of appeal for claimants who have received the requested relief from the administrative law judge, and support the administrative law judge in “no-show” dismissals.

(g)            Implement a sustainable agency policy on the issue of pain and the treating physician rule and defend the same if challenged.

(h)            Require the DDS to follow the same legal standard as the ALJs when determining disability, which is based upon the Social Security Act, the SSA regulations and rulings, and the federal case law that interpret them. 

(i)            Improve the use of technology in the hearing process (i.e. an improved case processing and management system, and electronic file, voice to print software, improved equipment for recording hearings, etc., most of which already is in the planning and pilot stages). 

(j)            Adopt rules of procedure for the hearing process.

(k)            Reorganize the Office of Hearings and Appeals.

B.        Strategies to Reduce the Number of Cases Heard at the ALJ Hearing Level that May Be Effected in the Short Term by Regulation Changes and Preserve Due Process

1.            Require DDS Decisionmakers to Follow the Same Legal Standard as the ALJs, not a Medical Standard:  SSA should issue regulations that require DDS decisionmakers to adjudicate cases pursuant to the Social Security Act, the SSA regulations and rulings, and the federal case law that interpret them.  This can be implemented on a short term basis and immediately would serve to reduce the number of cases appealed to the ALJs.

2.            Have the DDS Do One Thorough Case Development and Determination to Increase the Accuracy and Quality of the DDS Determinations:   If the DDS were enabled to do one thorough development of the medical record and carefully considered determination, rather than two incomplete reviews of incomplete files, the accuracy and quality of the determinations would rise and result in fewer appeals to the ALJ level.  Either eliminate the reconsideration level to save processing time at the DDS level or make it into a meaningful decision level in which evidence is further developed and a meaningful second look is taken at the claimants’ files that has a realistic chance of a more accurate outcome for the claimants than at the initial level. 

3.            Close Record as of the Administrative Law Judge decision date:  The amendment of SSA’s regulations to close the record after the ALJ hearing and as of the date of the ALJ decision would reduce the number of cases that ALJs must hear upon remand from the Appeals Council and courts based upon new evidence.  New evidence is one of the most common reasons for remand of cases.  This adds to the ALJ caseload and greatly delays a final administrative decision for the claimants.  This change will place the responsibility upon the claimants’ representatives for producing all relevant and material evidence at the hearing. 

By SSA regulation, the hearing record in the Social Security disability system is not closed at any stage in the appeals process.  This system precludes administrative finality and allows the claimant to introduce new evidence at each step of the process, including the Appeals Council level.  20 C.F.R. §§ 404.900(b), 404.976(b).  This is true even when the evidence was in existence and available during the prior stage of the appeal.  The reason the SSA keeps the record open at the administrative levels is that the Social Security Act authorizes the courts to remand a case to SSA when a claimant shows that there is material new evidence and there is good cause for not including it in the record earlier.  42 U.S.C. § 405(g).

In a recent report, the Social Security Advisory Board (“SSAB”) stated that “Congress and SSA should review again the issue of whether the record should be fully closed after the ALJ decision.”  Charting the Future of Social Security’s Disability Programs: The Need for Fundamental Change, January 2001, p. 20.  This change will bring administrative finality to the Social Security disability case and will encourage all known relevant and material evidence to be produced at the hearing. 

New documentary medical evidence of disability based upon treatment that occurred before the date on which the ALJ hearing closed should be admitted into evidence by the Appeals Council only upon a showing that the new evidence is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding.  This standard is in keeping with the standard that the Social Security Act allows for the courts.  Unrepresented claimants should be excepted from the requirement to show good cause.

4.            The SSA Should Have a Representative at the ALJ Hearings:  After conducting a pilot program to work out the details in practice, the SSA should amend its regulations to provide for a government representative at the ALJ hearing.  This change would permit SSA to complete the documentary record faster, enter into settlements without the need for a hearing in some cases, and present the government’s position on each case.  SSA representation will allow the SSA to present its evidence, present the type of expert witnesses it deems necessary, and advance its legal theories in the case.  The government representative also should provide assistance and advice to claimants in unrepresented cases.

In order to meet the requirements of due process, the APA provides that “[a] party is entitled to appear in person or by or with counsel or other duly qualified representative in an agency proceeding.”  5 U.S.C. § 555(b).  Therefore, the SSA, as a party, has the right to appear on its own behalf at the proceedings before the OHA.  However, the Social Security Administration is not represented at the disability hearing before an administrative law judge.  SSA regulations long have stated that it “conducts the administrative review process in an informal, nonadversary manner,” 20 C.F.R. § 404.900(b), so SSA thus has waived its right to appear at the ALJ hearings.  The present system worked well when most claimants in Social Security cases were not represented at the hearing.  However, there has been a dramatic rise in the number of claimants who are represented at the hearing.  Presently, well over 80% of the claimants are represented at the hearing.  The Social Security Advisory Board has noted that “[t]he percentage . . . of claimants represented by attorneys at ALJ hearings has nearly doubled [between] 1997 [and 2000].”   SSAB, Disability Decision Making: Data and Materials, Chart 56 – Attorney and Non-attorney Representatives at ALJ Hearings Fiscal Years 1997-2000, p. 73 (January 2001).

In its recent report, the SSAB recommended that the SSA have representation at the Social Security disability hearing:  “We think that having an individual present at the hearing to defend the agency’s position would help to clarify the issues and introduce greater consistency and accountability into the adjudicative system.”  Charting the Future of Social Security’s Disability Programs: The need for Fundamental Change, January 2001, p. 19. 

The SSA had a pilot program for its representation at the hearing in 1982.  This pilot program was discontinued after an unfavorable court decision on the project.  Salling v. Bowen, 641 F. Supp. 1046 (W.D.Va. 1986).  The past pilot program on the government representative project was not an adequate test of this system.  The SSA should implement a new test program for agency representation at the hearing.  This pilot project should be implemented in coordination with the claimants’ bar, SSA employee organizations, our Association, and other interested groups.  The pilot program should address the issues raised by the court in Salling.  The objective is to establish a hearing process that provides a full and fair hearing for all parties who have an interest in the case.

In addition, in the current non-adversarial setting, the SSA ALJ has the legal responsibility to “wear three hats” in each case.  The ALJ legally is bound to ensure that all of the claimant’s relevant and material evidence is made part of the record and the claimant’s interests are protected, to protect the interests of the government in the hearing, and to make a fair decision which is based on the evidence in the record.  Additionally, the judge must take care to not become overly protective of the interests of the government for fear that the case will be reversed on appeal on a claim of bias against the claimant.  The inherent conflict in all of these roles is patent and would be resolved by having the government represented at the hearing.

5.            If the SSA Provides for a Government Representative at the Hearing, Require Issue Exhaustion at the Appeals Council Level for Represented Claimants:  As the Supreme Court stated in Sims  v. Apfel, 530 U.S. 103, 120 S.Ct. 2080, 147 L. Ed. 2d 80 (2000), there is no statute or regulation that requires that a claimant must list the specific issues to be considered on appeal on the request for review by the Appeals Council of an ALJ’s decision, in order to preserve those issues for judicial review.  Although agencies often issue “regulations to require issue exhaustion in administrative appeals,” which are enforced by the courts by not considering unexhausted issues, “…SSA regulations do not require issue exhaustion.”  Id. at  2084.  The Supreme Court refused to impose a judicially inferred issue exhaustion requirement in order to preserve judicial review of the issues upon a claimant for Title II and Title XVI Social Security Act benefits because the issues in SSA hearings are not developed in an adversarial administrative proceeding and the “[Appeals] Council, not the claimant, has primary responsibility for identifying and developing the issues.”  Id. at  2086.  However, the Court, deferring to the agency, noted that “…we think it likely that the Commissioner could adopt a regulation that did require issue exhaustion.” Id at 2084.  The Supreme Court thus explicitly invited SSA to draft new regulations.

Unrepresented claimants should be excepted from the requirement to show good cause.  Expecting unrepresented claimants to bear the burden of preserving specific legal issues for judicial review does not comport with a sense of fair play and keeping the claims process claimant-friendly. 

Issue exhaustion would bring finality to the administrative process and it is consistent with the general principles of administrative law and the procedure of other agencies in the Federal government.

C.         Strategies to Reduce Case Processing Time and Increase Quality of Service at OHA While Preserving Due Process

1.            Administratively Reform the HPI Process:  SSA should change the HPI process by assigning cases to ALJs at an earlier point in the process, such as when the cases are entered into the computerized master docket.  This would return the control of pre-hearing case development to the ALJs, leave the ALJ in control of the hearing, and support the ALJ’s responsibility for determining when a draft decision is legally sufficient.  SSA also should return individual accountability for work product to the employees by assigning staff employees to work with each ALJ, which should consist of a clerical person, paralegal, and staff attorney.  This will enhance morale through a sense of ownership by employees working on particular cases for an individual judge.  These changes are needed to permit the ALJs to provide full and fair hearings for the American public in an efficient and timely manner.  SSA may effect these changes administratively on a short term basis.

2.            Redefine Paralegal Specialist Job To Include Clerical Duties:  SSA OHA may redefine the GS-0950 Paralegal Specialist ALJ decision writer job across a broad band of General Schedule levels to permit the assignment of appropriate clerical duties to the people promoted to this position who have not performed the ALJ decision writing function well.  The clerical work could include the case pulling and other clerical work that has been accumulating.  This permits the necessary clerical work of the agency to get done while permitting the promoted staff to stay at their new grade levels and experience satisfaction from a job well done.

3.            Enhance the Appeals Council Case Tracking System by Including it in the First Phase of the Accelerated e-DIB Project:  SSA should install a modern computerized case tracking system with bar coding for the Appeals Council as expeditiously as possible to prevent loss of files and tapes by the Appeals Council.  SSA is in the process of developing a new Case Processing and Management System (“CPMS”) for OHA that is part of the Accelerated e-DIB project, the first phase of which will be implemented in January 2004.  Although both the ALJ-level offices and the Appeals Council are expected to have the capacity to read an electronic file by January 2004, senior SSA management reportedly is including only the ALJ-level offices in the implementation of the CPMS by January 2004.  Implementation of the CPMS for the Appeals Council reportedly is being deferred to a later phase of the Accelerated e-DIB project, despite the chaos in its case tracking system.  If 140 OHA offices can be brought into the CPMS by January 2004, the Appeals Council, with its one location, also can be included in the first phase of implementation.

4.            Reorganize the Office of Hearings and Appeals

(a)            Proposed Legislation to Reform the Office of the Chief ALJ  and Create an Office of Administrative Law Judges within SSA: 

Current Status:  

The adjudication of administrative claims by the SSA currently is done by administrative law judges who are part of the OHA.   The function for both administrative law judge hearings and the appellate process for the review of administrative law judge decisions by the Appeals Council are located in the OHA.  The OHA is under the dual leadership of a Chief Administrative Law Judge and an Associate Commissioner.  The position description of the Chief Administrative Law Judge places the Chief Judge in charge of the hearings function and hearings field operation of the agency.  The Associate Commissioner is placed in charge of the Appeals Council and major policy-making and policy-implementation responsibilities of the OHAs.  The Chief Judge reports to the Associate Commissioner, who in turn reports to the Deputy Commissioner for Disability and Income Security Programs (“ODISP”), who in turn reports to the Commissioner.

Problems with Current System:  

In the current organization of SSA, the Office of Hearings and Appeals is buried in the bureaucracy and is far removed from the Commissioner.  This structure prevents the Commissioner from having effective oversight of the agency hearing process.  The administrative law judge adjudication function should not be treated as a staff responsibility in the agency.  The administrative law judge adjudication function is a major program of the agency with every individual in this nation being a potential claimant within the system.  The SSA Administrative Law Judge hearing system protects a constitutional right of our citizens and provides a constitutionally protected due process hearing to the American public.  This vital process should have direct oversight from the Commissioner and the Chief Judge should have direct interaction with the Commissioner.  

Another major defect in OHA is created by the dual leadership responsibilities of the Chief Judge and the Associate Commissioner.  Frequently these two leaders are competing for power to control the administrative and/or policy decisions for this component of SSA that has deprived OHA of strong effective leadership.  The lack of effective leadership and direction of the Office of Hearings and Appeals has resulted in an organization that has been deteriorating.  During the past 10 plus years several reforms have been imposed on the SSA hearing process.  Each attempt has resulted in failure.  Subsequent to a recent change in the hearing office process that was implemented in January 2000 (HPI), the number of case depositions have dropped while the case processing time and the case backlog have increased.  The result has been poorer service for the American public.  Within the past several years, the Associate Commissioner attempted to reorganize the responsibilities of the Chief Judge and divest the Chief Judge of most of the powers of that office leaving the Chief Judge with some minor duties relating to judicial education and staff support for the Associate Commissioner.  This scheme was thwarted by the efforts of interested individuals and organizations together with the oversight action of the Congress.  

The problem has now returned with the present Associate Commissioner of the Office of Hearings and Appeals.  He has striped most of the power from the Office of the Chief Judge.  He treats the Chief Judge as a staff person instead of a vital policy maker who is in charge of the field operations for the hearings function of the agency as provided for in the Chief Judge’s position description.  This action of the Associate Commissioner has led to a crisis within the Office of Hearings and Appeals with the last Acting Chief Judge leaving the position last March after having served for only a few weeks in office.  The Chief Judge position was vacant until June 3, when a new Acting Chief Judge was appointed.  This position has not been filled permanently since the last Chief Judge left over a year ago.

            Proposed Reform:

This system requires basic reform that places an established Chief Judge in charge of the agency hearing process with reporting responsibility directly to the Commissioner.   We propose legislation that separates the agency hearings function from the Appeals Council and places the hearing component in an Office of Administrative Law Judges under the control of a Chief Judge who reports directly to the Commissioner.  Our bill to effect this reform imminently will be introduced in the House.

The following improvements in service to the American public will result from the proposed legislation:

a.       The Commissioner will have direct oversight of the hearing component of the agency that is necessary to effectively administer this important program which provides constitutional due process hearings for the American public.

b.      Improved leadership and efficiency in the hearings component will permit the SSA to provide better service for the American public by increasing case dispositions, reducing processing times and reducing case backlogs.

c.       The change will improve the SSA hearing process and will continue to ensure that the American public receives a fair constitutional due process hearing. 

d.      The proposed legislation creates an Office of Administrative Law Judges (“Office”) in the SSA.  The national ALJ hearings function and hearings field operation that presently is within the OHA would be transferred to the Office by the proposed legislation.

e.       The Chief Judge would be in charge of the Office, would report directly to the Commissioner, be appointed by the Commissioner for a term of six years that is renewable once, and be subject to removal only upon a showing of an enumerated cause.

f.        The administrative law judge hearing component of SSA is regarded as an organization that is responsible for administering a major agency program which reports directly to the Commissioner.   It will be no longer organized as a staff function within the agency.

g.       The Office of Administrative Law Judges will have one individual, the Chief Judge, responsible for administrative operations and policy making.  This will result in effective leadership of the administrative law judge function.

h.       The Associate Commissioner of OHA will continue to head the Appeals Council.

i.    The change is a reorganization within the agency and will not result in any additional costs to the agency. 

This change is endorsed by the SSAB.  The SSAB recently prepared a report on the Social Security disability system that states that “[m]any believe that the Office of Hearings and Appeals is buried too low in the agency and should be elevated so that the head of the office would report directly to the agency leadership.  Others believe that there should be independent status for an administrative law judge organization.”  Charting the Future of Social Security’s Disability Programs: The need for Fundamental Change, January 2001, p. 19.

(b)            In the Alternative, Reorganize OHA to Have the Chief ALJ Report Directly to the Commissioner and Replace the Appeals Council with a Right of Appeal to Appellate Panels Staffed by ALJs that Would Be Administered by the Chief ALJ:  This proposal is identical to AALJ’s proposal for an independent adjudication agency that would provide a hearing before an ALJ with a right of appeal from the individual ALJ’s decision to an appellate panel staffed by ALJs, which is explained in suggestion 6(b) below, except that the Chief ALJ would report to the Commissioner rather than be the head of an independent agency.  Such a reorganization may be effected by the SSA without legislation.

(c)            As an Alternative to Reorganizing OHA, Create A New Independent Agency within SSA to Issue the Final Administrative Decisions of Social Security Act Claims, Including Medicare Claims:  A consensus has formed that the SSA’s administration of OHA and its efforts to bring DDS decisionmaking into accord with ALJ decisionmaking have failed and that fundamental change is needed.  Management initiatives such as process redesign, process unification, prototype, and, most recently, the Hearing Process Improvement Plan (“HPI”) and Appeals Council Process Improvement Plan (“ACPI”), have not achieved their goals.  The Appeals Council, which originally was intended as a policy making body, is universally recognized as a failure in its function as the final step in the administrative review of Social Security claims.  

OHA performs an adjudicatory function in an executive agency that was created by Congress, and handles the largest appellate administrative caseload of any agency in the world.  SSA’s many misguided efforts to implement policy through OHA’s adjudication function, some of which are described in this statement and AALJ’s Statement that is published in the Report for the June 28, 2001, First Hearing in the Series on Social Security Disability Programs’ Challenges and Opportunities, House Subcommittee on Social Security, No. 107-35, 107th Cong., 1st Sess., pp. 80-93, reveal the nature of the change in the Social Security claims process the American public needs:  Separation of OHA’s appellate administrative adjudication function into an entity that is independent of the political policy making and implementation portions of SSA.  An independent adjudication agency would provide members of the American public who file claims for Social Security Act entitlement program benefits that have been denied by the SSA timely adjudications that give due process, including a timely and fair hearing free of policy implementation and political pressure.

The rationales that have justified Congressional separation of the appellate administrative adjudication function from Executive Branch agencies include an efficient and low cost process for the claimants, high case volumes, expertise,  and decisional independence of adjudicators.  The maintenance of a reasonably efficient, orderly and low cost adjudication system in the traditional domain of public rights is in the public’s interest, especially for programs that distribute benefits on a large scale.  Specialized tribunals are more likely to make correct decisions in subject areas that are legally complex or have technical facts.  The large increase in the administrative case volume also supports the use of specialized adjudication agencies. The most important rationale is the experience that effective protection of individual rights before agencies through independent decisionmaking cannot take place unless adjudications are separated from the agency’s rulemaking/policy, prosecutorial/enforcement and investigatory functions. 

These rationales, particularly the need to separate the adjudicatory function from other conflicting agency functions, led Congress to create the Occupational Safety and Health Review Commission (“OSHRC”) in 1970, 29 U.S.C. § 661, and the Federal Mine Safety and Health Review Commission (“FMSHRC”) in 1977, 30 U.S.C. § 823, as independent Executive Branch agencies outside the Department of Labor with only adjudicative authority.  The OSHRC determines whether regulations promulgated and enforced by the Occupational Safety and Health Administration have been violated.  The FMSHRC adjudicates violations of standards promulgated and enforced by the Mine Safety and Health Administration.

Therefore, when an agency, such as SSA, exclusively uses rulemaking proceedings to set policy, rather than also using adjudications to set policy, there no longer is any rationale for keeping the adjudicatory function within the agency.  The Congressional interest in providing a check on SSA’s enforcement powers, i.e., to withhold disability and other program benefits, is best served by having entitlement determinations decided by an independent adjudicatory agency based on the benefits entitlement standards set by SSA.  Hence our proposal that the independent agency be an adjudicatory body that is self-administered by the ALJs with a right of appeal from an individual ALJ’s decision to an appellate panel staffed by ALJs. 

There are additional reasons why an independent adjudication agency administered by ALJs would provide a more efficient and higher quality of due process for Social Security benefits claimants than the current SSA Appeals Council or an independent but politically appointed Commission or Board structure.  First, a small body, such as the current Appeals Council, or a Commission or Board, cannot be of sufficient size to do meaningful administrative review of appeals from the ALJ decisions, which now number near 100,000 per year.  The SSA ALJs are a large group of highly qualified judicial professionals who are capable of administering themselves and the appellate administrative process in a competent and effective manner.  Second, creating an independent agency would eliminate political oversight by appointees (ie., Commissioners or Board members) who do not have due process and adjudicative independence as their foremost goal in agency administration.  Finally, if the SSA ALJs administer themselves, they will draft and issue the procedural regulations and rules of the new agency based upon their experience and needs of the process, rather than expediency and other policy concerns as they are now.  There now is no coherent set of procedural regulations and rules for the SSA appellate administrative process.

For all of these reasons, the Social Security Act hearing process should be reformed by the transfer of the authority to make final administrative adjudications of Social Security Act claims, which currently are made at the ALJ and SSA Appeals Council levels, from the Social Security Administration to a new ALJ-administered independent adjudication agency within SSA.  This agency may be called the United States Office of Hearings and Appeals (“USOHA”).   

The USOHA would have the exclusive jurisdiction to make the final administrative decisions of Social Security Act Title II and XVI claims.  The USOHA would have permissive jurisdiction over other classes of cases, including Medicare cases under Social Security Act Title XVIII.  [On December 4, 2001, the House passed the Medicare Regulatory and Contracting Reform Act of 2001, H.R. 3391, section 401 of which authorizes the transfer of the ALJ function from SSA to the Department of Health and Human Services by October 1, 2003, to hear and decide Medicare cases pursuant to Title XVIII of the Social Security Act.  AALJ’s proposal advocates placing all of the ALJs hearing Social Security Act cases into one independent agency, including Medicare cases.]

AALJ recommends the creation of a new ALJ-administered independent adjudication agency for Social Security Act claims that would provide a hearing before an ALJ with a right of appeal from the individual ALJ’s decision to an appellate panel staffed by ALJs.  The panels would consist of three ALJs who would review the cases locally.  This Social Security Appellate Panel Service within the USOHA would replace the Appeals Council, a failed appellate review step that already exists and is funded.

The ALJ appellate panels would be akin to the Bankruptcy Court appellate panels and is one of the key features that makes the ALJ self-administration model superior to the current SSA Appeals Council model, which is a small body that cannot timely and effectively handle a heavy caseload.    Based upon the Bankruptcy Court experience, the appellate panel model (1) is an appellate system that can handle a large caseload, (2) results in a shorter disposition time because the large pool of about 1,000 ALJs throughout the United States permits the timely determination of appeals that cannot take place with a small body such as the Appeals Council or a Commission or Board, (3) results in higher quality decisions because of expertise, (4) results in substantially fewer appeals to the courts and a substantially lower reversal rate by the courts because of the confidence in the high quality of the decisions, which reflects a higher degree of decision accuracy, (5) results in a substantially reduced federal court caseload, and (6) affords the claimants access to a local administrative appellate process.

This proposal would provide the claimants with timely, high quality, impartial and fair decisions of their claims pursuant to the Social Security Act and APA by adjudicators who are in an agency independent of, but within, the SSA.  

The USOHA would be located within the SSA for logistical reasons, but its officers and employees will not be supervised by any other part of SSA.  The USOHA will be accountable only to Congress and the President.  Placing the USOHA within SSA results in no new costs for office space and information systems and is a practical necessity, given the USOHA’s substantial space needs that currently are in place at SSA, the need to share the SSA’s information services and data bases, and the need to use the same case files.

 A Chief ALJ appointed by the President for a term of years would administer the agency. 

The final decisions of the USOHA that are made by its appellate panels would be appealed only to the federal courts, with the District Courts as the first step in the judicial review.   A District Court appeal step is essential for several reasons: (1) The huge size of the Social Security appellate caseload would overwhelm the Circuit Courts if the District Court step is removed.  An Article I court as a substitute for the District Courts would suffer from the same problems of being too small to effectively handle the case load that the Appeals Council does.  (2) Retaining District Court judicial review keeps local decisional generalists in the appeals chain who are sensitive to due process concerns, including adherence to the Administrative Procedure Act.  (3) Social Security claimants have come to rely on the availability of the District Courts as a part of the judicial review due process.  (4) Congress has a demonstrated preference for local control and decisionmaking with Social Security programs.  (5) It is desirable to retain local access to the judicial review process for the often indigent Social Security claimants.

The appeals from the District Courts will remain with the regional Circuit Courts of Appeal, as they do now, rather than go only to the D.C. Circuit or the Federal Circuit.  Even with District Court review, placing all of the Social Security Circuit-level appeals in either of these courts would increase their workload by over 50%.  The SSAB’s recent suggestion of a specialized Social Security Court of Appeals superficially may sound attractive as a device to have one national interpretation of the Social Security Act.  However, the SSAB does not demonstrate a strong need for such a specialized court.  First, as SSAB points out, the Supreme Court already serves the function of providing a national interpretation of the Social Security Act, and having the regional circuits address the issues allows for legal debate that would otherwise not occur.  Second, continuing to have the appeals go to the regional Circuits allows somewhat local access to the claimants.  This is the same procedure as for appeals from both Bankruptcy Court decisions after District Court review and Tax Court decisions, which are appealed to the regional Circuits, which makes sense since they also serve individual claimants throughout the country who often have limited means.  (Although the Tax Court is based in Washington, D.C., it sits throughout the country.)  Regional circuit review has worked for tax and bankruptcy cases, despite the obviously strong argument that a single standard for construing the tax and bankruptcy laws is desirable so that they are applied the same to everyone.  Finally, the regional circuits are not being overrun with Social Security cases.  During the years that ended on September 30, 1999, and September 30, 2000, only 891 and 845 Social Security cases respectively were filed with the regional Circuit Courts of Appeals.  Judicial Business, 1999 and 2000 Reports, Table B-1A.  This is less than two percent of the 54,693 cases that were filed in 1999 and 54,697 cases filed in 2000 in the regional Circuit Courts.  Judicial Business, 1999and 2000 Reports, Table B.

Thus, no substantive changes in the process of judicial review after the final administrative decision are recommended by AALJ, other than to amend the Social Security Act to reflect that judicial review will be from the final decisions of the new agency, not the SSA.  Our recommendations pertain only to the appellate administrative adjudication process that results in a final administrative decision of the claimants’ entitlement to Social Security benefits, since that is where the problems lie.

This proposal requires legislation that would amend the Social Security Act.

A detailed version of the features of the proposed new agency and the rationales for such a new agency is presented in the AALJ’s Statement that is published in the Report for the June 28, 2001, First Hearing in the Series on Social Security Disability Programs’ Challenges and Opportunities, House Subcommittee on Social Security, No. 107-35, 107th Cong., 1st Sess., pp. 80-93.  A very detailed version of the features of the proposed new agency and the rationales for such a new agency, including legislative language, is presented in the AALJ’s “Report and Recommendations for the Transfer of the Authority to Make Final Administrative Adjudications of the Social Security Act Claims from the Social Security Administration to a New Independent Regulatory Agency,” which is available upon request or on the AALJ website, www.aalj.org.

The AALJ proposal for a new adjudication agency is a detailed and practical blueprint to improve the Social Security disability process.  The AALJ proposal would improve the timeliness and quality of ALJ and final administrative review decisions that, at the same time, likely will reduce the claimant’s need to resort to federal court review and thus reduce the federal court Social Security caseload.  The process AALJ is proposing is realistic in terms of handling the large caseload, which I respectfully submit is not the case for the other proposals in this area.  All of the agencies and academicians who comment on the disability process correctly recognize the need for change, but rely on the creation of small bodies, such as a Review Board or Social Security Court, that would suffer from the same problems of low decision quality and untimely action as the SSA Appeals Council, another small body, has had for years. 

d)            As an Alternative to Reorganizing OHA, Create A New Independent Agency outside SSA to Issue the Final Administrative Decisions of Social Security Act Claims, Including Medicare Claims:  Another alternative is to create a separate adjudication agency to hear Social Security Act claims, including Medicare claims.  This agency would have the same organization structure as is described in section 4(c) immediately above, but it would be a separate agency outside the SSA.

e)            As an Alternative to Reorganizing OHA at the ALJ Level, Create a Unified Corps of ALJs outside SSA:  A more comprehensive reform of the ALJ hearing process may be achieved through the House Judiciary Committee by creating a unified corps of ALJs outside SSA and other agencies that includes SSA ALJs and ALJs from other agencies in any one of the following three configurations:

1. a unified corps of all ALJs from the agencies that hear benefits cases, including SSA,
2. a unified corps of all ALJs from SSA and the Cabinet-level Executive Branch agencies, and
3. a unified corps of all ALJs in the Executive Branch, including all of the independent agencies.