Statement of the Hon. Kathleen McGraw, Administrative Law
Judge,
Office of Hearings and Appeals, Social Security Administration, Atlanta,
Georgia,
and Chair, Social Security Section, Federal Bar Association,
Before the Subcommittee on Social Security,
House Committee on Ways and Means
Hearing on Social Security Disability Programs' Challenges and Opportunities
June 20, 2002
INTRODUCTION
Chairman Shaw and Members of the Subcommittee:
I am Kathleen McGraw, Chair of the Social Security Section of the Federal Bar Association. I am an administrative law judge in the Office of Hearings and Appeals of the Social Security Administration in its Atlanta North office. As an Administrative Judge for the U.S. Merit Systems Protection Board for 13 years and as an Administrative Law Judge for Social Security for the past seven years, I have heard and decided well over 2,500 appeals. I am very pleased to be here today representing the Social Security Section of the Federal Bar Association (FBA). My remarks today are exclusively those of the Social Security Section of the Federal Bar Association, not the FBA as a whole. Moreover, they in no way reflect the official views of the Social Security Administration.
Thank you for convening this hearing this afternoon on a matter of critical importance to the Federal government’s delivery of effective services to the American people. As you know, the Federal Bar Association is the foremost professional association for attorneys engaged in the practice of law before federal administrative agencies and the federal courts. Fifteen thousand members of the legal profession belong to the Federal Bar Association. They are affiliated with over 100 FBA chapters in many of your districts. There are also over a dozen sections organized by substantive areas of practice, such as the Social Security Section, of which I am the Chair.
Unlike other organizations associated with Social Security disability practice that tend to represent the narrow interests of one specific group, the Federal Bar Association's Social Security Section encompasses all attorneys involved in Social Security disability adjudication. Our members include:
The greatest interest of the FBA's Social Security Section is in the effectiveness of the adjudicatory process associated with hearings in the Office of Hearings and Appeals (OHA), the appeal process at the Appeals Council and judicial review in the federal courts. Our highest priority is to assure the integrity, independence, fairness, and effectiveness of the Social Security disability hearing process for those it serves -- both Social Security claimants themselves and all American taxpayers who have an interest in assuring that only those who are truly disabled receive benefits.
It is the Section’s collective view that the Social Security disability program is under considerable strain. Current delays in the processing of claims are unacceptable and the quality of decisions at all levels is less than ideal. The Commissioner is faced with a daunting task. It is with that in mind that we offer the following comments.
Process unification is essential to an efficient, timely and accurate disability adjudication system that ensures disabled claimants will be paid as early in the process as possible.
In the mid-1990’s the Social Security Administration (SSA) acknowledged the inconsistency created by the Disability Determination Services (DDS) applying one set of rules for determining eligibility through the Program Operations Manual (POMS), and its Administrative Law Judges, Appeals Council, and the federal courts applying another through statute, regulations, rulings and case law. Consequently, in 1996 SSA initiated Process Unification Training for all DDSs, ALJs, and the Appeals Council. The training was based on a set of rulings -- the “Process Unification Rulings” -- that were designed to guide all adjudicators at every level. It was anticipated that the DDSs would no longer rely exclusively on POMs, and that they would begin to write an analysis of their decision-making. This rationalized determination, in turn, would be granted some deference by reviewing ALJs and Appeals Council.
As a facilitator for this training, I traveled across the country and interacted with all components being trained. It became clear to me during this training that State Agency examiners, although hardworking and well-trained in the medical area, were not assessing a claimant's subjective allegations. Moreover, they were overwhelmed by the prospect of having to do so. They were confounded by the task of assessing a claimant's credibility and subjective allegations and articulating a reasoned basis for their conclusion. Notwithstanding the clear message from the Process Unification Training that State Agency Examiners were expected to perform individualized assessments and rationalize their determinations, they have failed to do so. State agencies have balked at this requirement, and examiners' determinations continue to be devoid of rationale and are driven almost exclusively by objective medical findings. It is the only way they can maintain the production expected of them.
These observations were confirmed by Sue Heflin, President of the National Association of Disability Examiners, who testified before this Subcommittee on June 28, 2001. In her answer to the Subcommittee’s question on the prototype initiative, she confirmed that it is only in the 10 prototype states that Process Unification initiatives have been really implemented. In those states, while the implementation of Process Unification enabled examiners working as Single Decision-Makers to allow claims they might have otherwise denied -- something they found to be a positive and fulfilling professional experience -- examiners also learned that it takes longer to process a claim and costs more to do the additional development required to comply with Process Unification requirements. Ms. Heflin astutely observed that evaluating subjective factors such as pain, fatigue, credibility and treating source opinions is more time consuming for examiners and therefore more costly.
The evaluation of the claimant’s subjective complaints is an everyday occurrence for ALJs deciding Social Security disability cases. Under Process Unification, it should have been an everyday occurrence at the DDS level as well. The failure to fully implement Process Unification at the DDS level implicates the due process rights of the claimant because the evaluation of subjective complaints is an integral part of the process that is due the claimant. The evaluation of subjective complaints should not be postponed until the case reaches OHA. Postponement in the review of subjective complaints represents one of the core problems that Process Unification was intended to address.
Social Security regulations and rulings mandate an individual assessment of each and every claimant’s subjective complaints and their impact upon that claimant’s ability to function. Yet, as candidly acknowledged by Ms. Heflin, the DDS examiners do not consider subjective complaints. We have all heard the stories about people walking around with herniated discs, documented by MRI, who suffer few or no symptoms, while others with the same MRI findings suffer from debilitating pain. At the DDS, both would receive the same decision based on the objective findings—the individual level of pain alleged would not matter. That certainly makes for consistency, but unfortunately does not make for accuracy in decision-making. One can only imagine how the claimant who suffers with a subjective condition such as fibromyalgia or chronic fatigue syndrome will fair at the DDS level. Only at OHA, will the claimant’s subjective complaints be fully evaluated.
The failure to implement Process Unification has led to a new agency initiative to identify cases shortly after arriving at OHA offices from the DDS. The new initiative would have been wholly unnecessary had Process Unification been implemented at the DDS. The Commissioner recently announced that, in an effort to deal with the backlog and delays at OHA, ALJs will begin to review raw, unpulled files as they arrive from DDS. The purpose of the review is twofold: to grant those claims that can be allowed on the record without a hearing; and to undertake immediate development of cases requiring additional expansion of the record. While this initiative is commendable from the viewpoint of claimants who should have been paid earlier in the process, it attests to the failure of process unification. If such an initiative yields significant results and productivity, then the cases were either: (1) not decided correctly under the law at the DDS; or (2) not adequately developed at the DDS.
We submit that SSA had it right the first time when it recognized the need for process unification. Fairness requires that all adjudicators assess a disability claim using the same legal standards and requirements. A fundamental premise of the SSA process unification effort was that disability benefits should be awarded to claimants as soon as their disability has been determined under the law. The burden of long delays to claimants before the statute, regulations, rulings, and case law are applied is unacceptable and does not serve the interests of justice. Quite simply, it can wreak havoc in the lives of deserving claimants.
It is our understanding that various proposals are being made that would eliminate a hearing before an Administrative Law Judge. The Social Security Section of the FBA strongly opposes any such effort.
In 1983, the Senate Governmental Affairs Subcommittee on Oversight of Government Management conducted a hearing on the role of the ALJ in disability hearings. The report provided in part:
The principal finding of the Subcommittee is that the SSA is pressuring its ALJs to reduce the rate at which they allow disabled persons to participate in the Social Security Disability Program…. [The Subcommittee found that the SSA was limiting the decisional independence of ALJs through its Rulings, its non-acquiescence to federal court decisions, and its increasing of case quotas that reduced the time an ALJ could spend on each case to develop additional evidence that may support an allowance decision, among other things.] The APA mandates that the ALJ be an independent, impartial adjudicator in the administrative process and in so doing separates the adjudicative and prosecutorial functions of an agency. The ALJ is the only impartial, independent adjudicator available to the claimant in the administrative process, and the only person who stands between the claimant and the whim of agency bias and policy. If the ALJ is subordinated to the role of a mere employee, an instrument and mouthpiece for the SSA, then we will have returned to the days when the agency was both prosecutor and judge.
Sen. Rep. No. 98-111 (September 16, 1983).
The Administrative Procedure Act requires that independent administrative law judges be selected on a merit basis and insulated from agency bias and pressure in performing the adjudicative function. See Butz v. Economu, 458 U.S. 478, 513 (1978). Regretfully, as noted in the Senate Report, SSA in the past has attempted to subvert the statutory independence of its administrative law judges. It has sought overtly, and at other times more subtly, to influence the decisions of its ALJs to achieve some predetermined acceptable allowance rate or altogether cease payment of benefits to a particular class of disabled beneficiaries. In one well-publicized episode in 1982, SSA attempted to terminate benefits to thousands of Americans with mental disabilities, triggering the reversal in many cases of that policy decision by SSA ALJs who applied the law and restored the benefits. The American Bar Association in fact honored the SSA ALJ corps for their outstanding efforts during the period from 1982-84 to protect the administrative adjudication within their agency, to preserve the public confidence in the fairness of governmental institutions and to uphold the rule of law.
A due process hearing conducted by an ALJ is a protection against potential agency bias and policy that may at times run contrary to the law as mandated by Congress. Disability claimants should not be deprived of this step in the disability process. Moreover, as noted earlier, given the constraints on DDS’s, it is the first opportunity for claimants to have their subjective complaints meaningfully considered as mandated by the law. That being said, there remains the critical issue of unacceptably long delays at OHA. The causes of these delays are many, but most obvious is the abject failure of the Hearing Process Improvement (HPI) initiative. Prior to HPI, in FY 1998, ALJs issued 618,578 decisions. In FY 2001, with full implementation of HPI, that figure plummeted to 465,228.
The defects in HPI, both in design and implementation, are legion and need not be enumerated here. Suffice it to say, a fundamental problem was the de-legalization of the adjudicative process, which included the removal of judges from the case development function. Over 350 employees, primarily from the clerical ranks, were promoted to the position of “paralegal”. Their promotion left OHA bereft of employees trained in “pulling cases” in preparation for adjudication by administrative law judges. This created fewer cases ready for judges to hear and fewer cases for judges to decide -- a crisis induced by an ill-advised management decision. To make matters worse, the employees who have been promoted to the “paralegal” position, in almost all cases, have had no legal training whatsoever and in their promotion were not even required to demonstrate an ability to write; yet, they were and remain tasked with writing draft decisions for the judges -- decisions that are subject to judicial review in U. S. District Court. Attorneys could have filled the positions encumbered by these “paralegals” as the two positions are at the same grade and pay level. Instead, SSA made the conscious choice to fill these slots with clerical workers rather than trained lawyers. It goes without saying that under this new arrangement the review time required for judges to edit and revise their decisions has increased exponentially further delaying disposition of claimants’ cases.
OHA performs an adjudicative function and its procedures and support systems need to be designed and implemented to facilitate that function. Clearly, with proper and adequate support, ALJs are capable of timely adjudicating the cases before them while providing claimants with due process.
OHA Adjudicative Support Functions Should be Reorganized
OHA fundamentally is a judicial operation. Therefore, it should be under the direction of a Chief Administrative Law Judge, who is provided appropriate administrative assistance in carrying out the adjudicative function. Contrary to the current situation, the administrative and support system should not dictate to OHA’s judges how the adjudicative function should be accomplished.
The foremost problem within the Office of Hearings and Appeals is that the judges have no managerial authority over the staff who work for them. It may come as a surprise to members of this Subcommittee, particularly those who may have practiced in federal or state courts, how different the delivery of judicial “services” is in Social Security cases. In federal district courts, as well as in most state courts, judges have secretaries and law clerks whose work they direct on a day-to-day basis. Theses employees are ultimately responsible to the judge and practitioners can readily identify them as the employees who support the work of the judge.
This is decidedly not how the Social Security Administration has chosen to deliver its judicial services. A pooled staff is available to assist judges, but without direction or supervision by the judges themselves. Judges, as well as claimants’ representatives, are often at a loss to know what staff member to talk to about specific case problems. Miscommunication abounds, leading to processing and scheduling problems that impede the timely adjudication of cases. The situation is further compounded by staff working at home -- a complicating factor that in some cases further diminishes the effectiveness of the office. On a daily basis, evidence that needs to be associated in a timely manner is not. In fact, the evidence may even be lost. Messages do not reach the right person to avert scheduling problems. Ultimately claimants’ cases are delayed as a result of this administrative chaos.
Added to these problems, and probably chief among them, is the fact that within OHA there are no quantifiable standards by which employee performance is measured. Appraisals are done on a pass/fail basis, and no one ever fails. Employees can nominate themselves for awards and too often the worst of employees reap the same rewards as their hardworking coworkers who are picking up the slack for their shoddy performance. Morale is understandably low. Other components of SSA have employee performance standards and it is difficult to see why a component such as OHA would not utilize a system of individual employee accountability.
Like it or not, OHA is drawn into a numbers game. Yet, the only persons in OHA for whom there is a stated numerical expectation are the judges who are supposed to produce a certain number of cases per day. There is no comparable expectation for the employees upon whom the judges must rely for support, such as the case technicians who “pull” cases or the attorneys and paralegals who draft decisions. Competitive and excepted service employees in other federal agencies are subject to objective performance standards both for quality and quantity of work. For some unexplained reason, that is not the case at OHA. As a result, substandard performance is routinely tolerated and claimants suffer as a result. There could be no more single effective improvement at OHA than the imposition of quantifiable performance standards and the willingness on the part of management to enforce those standards.
Establishment of a Comprehensive Quality Assurance Program Throughout the Disability Program
The General Accounting Office has repeatedly reported that SSA needs to implement a comprehensive and meaningful quality assurance system. SSA announced a plan to revamp its existing quality assurance system in 1994. Yet, in 2001 SSA acknowledged that its quality assurance system needed to more effectively promote uniform and consistent disability decisions across all geographic and adjudicative levels. GAO has made specific recommendations as to the content of such a plan.
The Commissioner has appointed a Regional Commissioner to lead an effort to establish a quality assurance program. We commend the Commission for undertaking this action, and we encourage the development of a comprehensive quality assurance program that establishes quality standards at all levels of the claims process. The disability program is a nationwide program, and it is not acceptable to have disparate allowance rates at the initial DDS level on disability claims in FY 2001 ranging from a low of 27% in one state to a high of 65% in another state.
A quality assurance plan should, for example, set the standard for the collection of evidence at all levels of review, including DDS. Much of the delay in the life of a disability claim is due to the time needed to collect relevant evidence. For example, if a claimant alleges disability due to severe injuries in an automobile accident and DDS obtains the primary care physician records of general care, but fails to obtain the records of the trauma surgeon and hospital, DDS will not have the relevant evidence needed to make an accurate determination. While a denial based on the primary care physician records may be technically correct, given the record as developed, that record is wholly inadequate. The claimant is then forced to appeal the denial until someone develops the complete and relevant record. If the correct record were obtained at the DDS level, the accuracy of the DDS decision could be realistically measured. It is a meaningless statistic to say the DDS made the right decision, when it was rendered on an inadequate record.
Similarly, delays at the ALJ level occur while the relevant evidence is obtained and the file is assembled. One of SSA’s redesign initiatives, the Adjudication Officer (AO), sought to accomplish the generation of evidence and file assembly at the DDS level. The AO developed the record and granted eligible claims, forwarding the ineligible claims to an ALJ for further review. In those cases that were denied, the AO prepared a summary of the evidence, and certified that the record was complete. The case was then heard by an ALJ generally within 60 to 90 days of its receipt and little or no further development of the record was required. Concerns were raised about the AO project because a higher percentage of claims was paid at the DDS level, and administrative costs for assembling a complete record and providing a summary were high. The project, however, resulted in correct decisions earlier in the process and savings of administrative costs and time at OHA.
A Quality Assurance Program should measure the adequacy of the file, the quality of the analysis, and the correctness of decisions at all levels. It should also undertake to measure the accuracy of both allowances and denials of claims. At the DDS level, quality review work currently performed by SSA’s Disability Quality Branch focuses on allowances of claims rather than denials. This creates systemic pressure on the DDS examiner to avoid erroneous allowances, but not necessarily erroneous denials. Since an erroneous denial is much less likely to be scrutinized by quality control, a denial represents a far more attractive and safer decision option for the DDS examiner. At the ALJ level, the opposite is true. To be effective, without subtly influencing the outcome of decision-making, a quality assurance program should be neutral and refrain from pushing the process toward allowing or disallowing claims. The QA program must measure the accuracy of both allowances and denials.
The Electronic Folders Initiative (E-DIB) Must be Adequately Funded, Closely Monitored, and Not Viewed as the Complete Answer to Disability Adjudication Problems
The Commissioner has announced that the entire record at all levels will be contained in an electronic folder (E-DIB) by January, 2004. The E-DIB initiative has the potential to provide significant improvement in the speed of claims adjudication. However, given SSA’s track record in the conceptualization and implementation of HPI and other redesign initiatives, we strongly encourage the application of significant care and attention to the testing and introduction of E-DIB.
Very few details concerning the plan have been announced, and there are innumerable questions relating to the implementation of this initiative. We urge extensive testing at the pilot stage and vigilant monitoring of its rollout. Given the shortage of personnel within DDS and OHA to handle the current caseload, careful attention also should be devoted to staffing plans for those who will maintain the systems and scan the documents included in the electronic folder. Attention should also be devoted to whether E-DIB coverage will extend to claims pending at the time of conversion or whether this will include only claims filed after January, 2004. The Social Security Administration needs to work with the representative community to insure the confidentiality of the claimant’s record, while also assuring safety and security of the internet system itself. Access to the claimant’s record by those on the other side of the digital divide, who lack compatible equipment, also should be considered.
The Social Security Section of the FBA seriously questions whether the current processes of DDS level reconsideration and Appeals Council review are serving their intended purposes. Thoughtful scrutiny should be devoted to whether the time spent on these two review processes contributes to the effective adjudication of disability claims and the interests of justice.
A claimant who is initially denied benefits may request DDS reconsideration of the denial decision. Reconsideration is widely -- and correctly -- viewed as little more than a rubber stamp of the initial denial. During FY 2001, of an average 100 claims processed by DDS, 40 were approved at the initial level and 4 at the reconsideration level. Time spent at the reconsideration level was 69 days. Given the few requests for reconsideration that ultimately are successful, concerns can be deservedly raised whether reconsideration represents a meaningful step in the disability process. The Social Security Section of the FBA supports the elimination of reconsideration and redirection of that portion of DDS budgets into the initial level of decision-making.
Attention should also be devoted to the role and effectiveness of Appeals Council review. Upon receipt of an adverse claims decision by an ALJ, a claimant may appeal to the Appeals Council, which then undertakes a review on the record. While the Appeals Council serves a valuable purpose in screening out many cases that should not reach federal court due to deficiencies in the ALJ decisions, the Appeals Council is overwhelmed by its staggering workload. It has taken steps to shorten its appeal time, and according to the General Accounting Office, reduced the amount of time to process an appeal from 458 days in FY 1999 to 447 days in FY 2000. This is still an unduly long period of time. There can also be no excuse for the number of cases in which a remand occurs for no reason other than a lost or defective hearing tape. Technology needs to be improved to eliminate this needless delay for claimants.
The substantive legal correctness of the decisions of the Appeals Council has also been frequently challenged. In a mounting number of cases appealed to U.S. District Court after denial of review by the Appeals Council, the Office of General Counsel and U.S. Attorneys have asked the Appeals Council to agree to a “voluntary remand.” These requests are prompted by concerns over the ability to defend the underlying ALJ decision -- the decision that had already been affirmed by the Appeals Council. The frequency of such “voluntary remands” indicates that in its rush to process appeals, the Appeals Council may not be getting it right the first time. The record the Appeals Council agrees to take back in a voluntary remand is usually identical to the record it initially reviewed. If the ALJ decision is indefensible, it should have been caught before the case proceeded to federal court. That, after all, is the role of the Appeals Council in the request for review process.
Therefore, we believe that the Commissioner should review and study the role and responsibility of the Appeals Council, with special attention devoted to: the usefulness and necessity for the request for review function; the merits of redesign of the Appeals Council mission to focus on quality review; and the establishment of a time-limit for the processing of requests for review, permitting cases not reached within the allowable time to go directly to court.
Conclusion
This concludes my prepared remarks. Thank you once again for the opportunity to appear before you today. The Social Security Section of the Federal Bar Association looks forward to working with you and the Social Security Administration in improving disability process. I would be happy to answer any questions you may have.