Statement of Nancy G. Shor, Executive Director, 
National Organization of Social Security Claimants' Representatives, Midland Park, New Jersey

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

Hearing on Social Security Disability Programs' Challenges and Opportunities

June 20, 2002

Chairman Shaw, Representative Matsui, and Members of the Subcommittee:

Thank you for inviting me to testify about challenges and opportunities in the Social Security disability programs.  I commend you for holding this hearing since millions of people with disabilities depend on these programs. 

For the past twenty years, I have been the Executive Director of the National Organization of Social Security Claimants’ Representatives (NOSSCR).  NOSSCR’s current membership is approximately 3,450 attorneys and others from across the country who represent claimants for Social Security and Supplemental Security Income (SSI) benefits. Collectively, we have many years of experience in representing claimants at every level of the disability determination process and welcome this opportunity to share some observations and recommendations with you.

During my tenure as the NOSSCR Executive Director, SSA Commissioners and other officials at the Social Security Administration have been willing to meet with us and other groups to discuss issues important to our membership and to claimants.  This has proven to be an effective way of addressing our concerns before they become serious problems requiring other types of intervention and we look forward to continuing this dialogue with Commissioner Barnhart and her staff regarding the disability programs. 

Today’s hearing focuses on the challenges facing the Social Security and Supplemental Security Income disability programs.  Two extremely important criteria for such a review are efficiency and timeliness. But these are not the only criteria. Today’s hearing should be directed to ensure the fairness of the process for determining whether or not a claimant is entitled to benefits.  We share SSA’s goal of providing accurate decisions for claimants as early in the process as possible.  Further, changes at the “front end” can have a significant beneficial impact on improving the backlogs and delays throughout the hearings and appeals process.

The vast majority of cases handled by NOSSCR members are claims for Social Security and SSI disability benefits.  NOSSCR strongly supports efforts to reduce unnecessary delays for claimants and to make the process more efficient, so long as these efforts do not impair the fairness of the process to determine a claimant’s entitlement to benefits. 

Provide SSA With Adequate Resources To Meet Current And Future Needs

 NOSSCR is concerned about SSA’s readiness to deal with the impending increase in its workload as the “baby boom” generation approaches the peak age for onset of disability and, subsequently, retirement.  At hearings held by this Subcommittee in 2000, testimony painted a bleak picture regarding SSA’s ability to deal with the increased work, at the same time that its own workforce will reach peak retirement numbers.  To exacerbate this problem, SSA’s budget continues to be cut from levels that would allow it to adequately address current and future service delivery needs.

Most cases handled by NOSSCR members are at the ALJ hearing and Appeals Council levels, where current processing times are unacceptably high.  A claimant cannot proceed with an appeal in federal district court until the Appeals Council has acted.  Thus, while their medical and financial situations are deteriorating, claimants are forced to wait for many months, if not years, before receiving a decision.

To improve delays, better develop cases and implement technological advances, SSA requires adequate staffing and resources.  NOSSCR supports removing SSA’s administrative budget, like its program budget, from the discretionary domestic spending caps.  Legislation such as H.R. 5447, a bipartisan bill introduced in 2000 by Chairman Shaw and Representative Cardin, would accomplish this by allowing Congress to approve funding for SSA to address current service delivery needs and planning for the future.

Improve Full Development Of The Record Earlier In The Process

Developing the record so that relevant evidence from all sources can be considered is fundamental to full and fair adjudication of claims.  The decisionmaker needs to review a wide variety of evidence in a typical case, including the medical records of treatment; opinions from medical sources and other treating sources, such as social workers and therapists; records of prescribed medications; statements from former employers; and vocational assessments. The decisionmaker needs these types of information to determine the claimant’s residual functional capacity, ability to return to former work, and ability to engage in other work which exists in the national economy in significant numbers.  Once an impairment is medically established, SSA’s regulations envision that all types of relevant information, both medical and nonmedical, will be considered to determine the extent of the limitations imposed by the impairment(s).

The key to a successful disability determination process is having an adequate documentation base and properly evaluating the documentation that is obtained.  Unless claims are better developed at earlier levels, the procedural changes will not improve the disability determination process. Unfortunately, very often the files that denied claimants bring to our members show that inadequate development was done at the initial and reconsideration levels.  Until this lack of evidentiary development is addressed, the correct decision on the claim cannot be made.  Claimants are denied not because the evidence establishes that the person is not disabled, but because the limited evidence gathered cannot establish that the person is disabled. 

A properly developed file is usually before the ALJ because the claimant’s representative has obtained evidence or because the ALJ has developed it.  Not surprisingly, these different evidentiary records can easily produce different results on the issue of disability. To address this, the agency needs to emphasize the full development of the record at the beginning of the claim. The benefit is obvious: the earlier a claim is adequately developed, the earlier it can be correctly decided.

NOSSCR supports full development of the record at the beginning of the claim so that the correct decision can be made at the earliest point possible.  Claimants should be encouraged to submit evidence as early as possible.  However, the fact that early submission of evidence does not occur more frequently is usually due to reasons beyond the claimant’s control. 

Our recommendations to improve the development process include the following: 

The Disability Determination Process:  How to Streamline Without Impairing the Claimant’s Right to a Full and Fair Hearing

I. Initial And Reconsideration Levels

In ten “prototype states” [AL, AK, CA, CO, LA, MI, MO, NH, NY, PA], SSA currently is testing two significant changes at the pre-hearing levels of the process:  elimination of the reconsideration level and adding a predecision interview, also known as a “claimant conference.”  Originally scheduled to be implemented in 2002, SSA published proposed regulations in January 2001.  66 Fed. Reg. 5494 (Jan. 19, 2001).  However, SSA announced in mid-2001 that the nationwide rollout would be deferred pending further analysis.   In April 2002, the Commissioner announced that the claimant conference would be eliminated after notice is published in the Federal Register.

NOSSCR has supported elimination of reconsideration and adding the predecision claimant conference.  We have had concerns about the conduct of the claimant conference based on reports from NOSSCR members such as:  brief and pro forma conferences held by telephone; variations in content of the conference, depending on the particular DDS adjudicator involved; claimants not being informed of their right to be represented at the claimant conference; and claimants possibly being discouraged from pursuing an appeal if the decision is denied.

We have long advocated the value of providing claimants with a face-to-face meeting with the decisionmaker and hope that the Commissioner will find a way to incorporate the most beneficial features of the original objectives of the claimant conference.  When she announced that the conference would be eliminated, the Commissioner stated that SSA would encourage early and ongoing contacts with claimants during the development process.  As discussed above, these are goals that NOSSCR strongly endorses.  Many NOSSCR members would like to participate earlier in the process since they are able to assist the disability examiners in obtaining medical evidence and focusing the issues. 

II. The Hearings And Appeals Levels

Current processing times at the ALJ and Appeals Council levels are unacceptably high.  We agree with the Commissioner that reducing the backlog and processing time must be a high priority.  We urge commitment of resources and personnel necessary to reduce delays and make the process work better for the public.

Recently, a number of proposals to change the disability determination process have been put forward.  However, these proposals contain some recommendations that we believe would undermine a claimant’s right to a fair adjudication process.  We believe that features of a full and fair process include the following: 

A claimant’s right to a hearing before an Administrative Law Judge (ALJ) is central to the fairness of the adjudication process. This is the right to a full and fair administrative hearing by an independent decisionmaker who provides impartial fact-finding and adjudication, free from any agency coercion or influence. The ALJ asks questions of and takes testimony from the claimant, may develop evidence when necessary, and considers and weighs the evidence, all in accordance with relevant law and agency policy.  For claimants, a fundamental principle of this right is the opportunity to present new evidence in person to the ALJ, and to receive a decision from the ALJ that is based on all available evidence.

Many recent proposals to change the disability determination process recommend that the record be closed to new evidence either after the DDS or, at least, after the ALJ level.  In the past, both Congress and SSA have recognized that such proposals are neither beneficial to claimants nor administratively efficient for the agency.

Under current law, an ALJ hears a disability claim de novo. Thus, new evidence can be submitted and will be considered by the ALJ in reaching a decision.  However, the ability to submit new evidence and have it considered becomes more limited at later levels of appeal.  At the Appeals Council level, new evidence will be considered, but only if it relates to the period before the ALJ decision and is “new and material.”[1]  At the federal district court level, the record is closed and the court will not consider new evidence.  However, the court may remand the case to allow SSA to consider new evidence, but only if it is “new and material” and there is “good cause” for the failure to submit it in the prior administrative proceedings.[2] 

As noted earlier, NOSSCR strongly supports the submission of evidence as early as possible.  Full development of the record at the beginning of the claim means that the correct decision can be made at the earliest point possible.  The benefit is obvious:  the earlier a claim is adequately developed, the sooner it can be approved and the sooner payment can begin.  However, there are many legitimate reasons why evidence is not submitted earlier and thus why closing the record is not beneficial to claimants including:  (1) worsening of the medical condition which forms the basis of the claim; (2) the fact that the ability to submit evidence is not always in the claimant’s or representative’s control, e.g., providers delay sending evidence; and (3) the need to keep the process informal. 

Proponents of closing the record note that claimants could file a new application.  This does not improve the process and may in fact severely jeopardize, if not permanently foreclose, eligibility for benefits.  By reapplying rather than appealing: (1) benefits could be lost from the effective date of the first application; (2) in SSDI cases, there is the risk that the person will lose insured status and not be eligible for benefits at all when a new application is filed; and (3) if the issue to be decided in the new claim is the same as in the first, SSA will find that the doctrine of res judicata bars consideration of the second application. 

In the past, SSA’s notices misled claimants regarding the consequences of reapplying for benefits in lieu of appealing an adverse decision.  Congress addressed this serious problem and, in legislation enacted in 1990, required SSA to include clear and specific language in its notices describing the adverse effect on possible eligibility to receive payments by choosing to reapply in lieu of requesting review.[3]

Apart from these harsh penalties, which have been recognized and addressed by Congress, a claimant should not be required to file a new application merely to have new evidence considered where it is relevant to the prior claim.  If such a rule were established, SSA would need to handle more applications, unnecessarily clogging the front end of the process.  Further, there would be more administrative costs for SSA by creating and then developing a new application.

We do not support proposals to have SSA represented at the ALJ hearing.  In the 1980’s, SSA tested, and abandoned, a pilot project to have the agency represented, the Government Representation Project (GRP).  First proposed by SSA in 1980, the plan encountered a hostile reception at public hearings and from Members of Congress and was withdrawn.  The plan was revived in 1982 with no public hearings and was instituted as a one-year “experiment” at five hearing sites.  The one-year experiment was terminated more than four years later following congressional criticism and judicial intervention.[4] 

Based on the stated goals of the experiment, i.e., assisting in better decisionmaking and reducing delays, it was an utter failure.  The GRP caused extensive delays in a system that was overburdened, even then, and injected an inappropriate level of adversity, formality and technicality into a system meant to be informal and nonadversarial.  In the end, the GRP experiment did nothing to enhance the integrity of the administrative process. 

In the ten prototype states, SSA also is testing the elimination of a claimant’s right to request review of a hearing decision by the Appeals Council.  We oppose the elimination of a claimant’s right to request review by the Appeals Council.  The Appeals Council currently provides relief to nearly one-fourth of the claimants who request review of ALJ denials, either through outright reversal or remand back to the ALJ.  As the Commissioner noted in her testimony at this Subcommittee’s hearing on May 2, the Appeals Council has made significant improvements in reducing processing times and its backlog.  Based on this progress, she stated that by the end of the year, the Appeals Council pending caseload could be at a workable level.

The Appeals Council, when it is able to operate properly and in a timely manner, provides claimants with effective review of ALJ decisions and acts as a screen between the ALJ and federal court levels.  In addition, elimination of Appeals Council review could have a serious negative impact on the federal courts.  As long ago as 1994, the Judicial Conference of the United States opposed elimination of the claimant’s request for review by the Appeals Council prior to seeking judicial review in the district courts, stating that such a proposal was “likely to be inefficient and counter-productive.”[5] Since most ALJ denials did not then result in federal judicial review, as is currently the case, the Judicial Conference stated:  “Claimants largely accept the outcome of Appeals Council review.”  Further, the Conference expressed concern that allowing direct appeal from the ALJ denial to federal district court could result in a significant increase in the courts’ caseloads.  As a result, the Judicial Conference concluded:

From the perspective of both unsuccessful litigants and the federal courts, the present system of Appeals Council review as a precondition to judicial review is sound.  The right of judicial review by Article III courts for all claimants remains intact under the present system.  To the extent that the process of Appeals Council review is thought to be too time-consuming, despite the high degree of finality that results, it would be wiser to seek to streamline and expedite the process of review rather than to bypass it as a precondition to federal judicial review.[6]

We agree with the conclusion of the Judicial Conference of the United States.  Access to review in the federal courts is the last and very important component of the hearings and appeals structure.  Court review is not de novo, but rather, is based on the substantial evidence test.  We believe that both individual claimants and the system as a whole benefit from federal court review.  The district courts are not equipped, given their many other responsibilities, to act as the initial screen for ALJ denials. 

NOSSCR supports the current system of judicial review.  Proposals to create either a Social Security Court to replace the federal district courts or a Social Security Court of Appeals to provide appeal of all Social Security cases from district courts have been considered, and rejected, by Congress and SSA over the past twenty years. 

We believe that both individual claimants and the system as a whole benefit from the federal courts deciding Social Security cases.  Over the years, the federal courts have played a critical role in protecting the rights of claimants.  The system is well-served by regular, and not specialized, federal judges who hear a wide variety of federal cases and have a broad background against which to measure the reasonableness of SSA’s practices.

Creation of either a single Social Security Court or Social Security Court of Appeals would limit the access of poor disabled and elderly persons to judicial review.  Under the current system, the courts are more geographically accessible to all individuals and give them an equal opportunity to be heard by judges of high caliber.

Rather than creating different policies, the courts, and in particular the circuit courts, have contributed to national uniformity, e.g., termination of disability benefits, denial of benefits to persons with mental impairments, rules for the weight to give medical evidence, evaluation of pain.  The courts have played an important role in determining the final direction of important national standards, providing a more thorough and thoughtful consideration of the issues than if a single court had passed on each.  As a result, both Congress and SSA have been able to rely upon the court precedent to produce a reasoned final product.

Finally, the financial and administrative costs of creating these new courts must be weighed against their questionable effectiveness to achieve the stated objectives.  The courts, if created, would involve new expenditures. We believe that limited resources should be committed to the front end of the process.  Further, from an administrative perspective, the focus should not be on the end of the appeals process but, rather, on the front end.  Requiring claimants to pursue an appeal to obtain the justice they are due from the beginning will only add to the cumulative delay they currently endure.

Other Hearing Level Improvements

Recently, the Commissioner decided that the Hearings Process Improvement plan (HPI) would be discontinued as a nationwide initiative and that she would move forward, based on what was learned from that initiative.  We support her decision. 

From the inception of HPI, NOSSCR members raised numerous, critical concerns about the current state of affairs in hearing offices around the country.  These concerns were shared last year with the Executive Task Force established by former Acting Commissioner Massanari to evaluate HPI.  The main problems included:  processing times after the Request for Hearing is filed; development; lack of on-the-record decisions; conduct of hearings; and processing times after the hearing.  Specific concerns included duplicate requests for medical evidence; inability to speak to a “point” person on the case; mail not being associated with the file prior to the hearing; organization of files; preparing cases for hearing; and confusion over when a case was ready for hearing.

Some of the recommendations NOSSCR presented to the Task Force included:  (1) creating the same claims folder earlier in the process; (2) reinstating senior attorney authority to issue decisions in certain cases; (3) identifying a “point” person who is available to ensure that the case is ready for hearing; (4) a better mechanism for review of requests for on-the-record decisions; (5) single requests for information; and (6) advance notice of hearings so that submission of evidence can be targeted.  We hope that the Commissioner will consider these recommendations as she determines the future organization of the hearings process.

In addition, the Commissioner and the Associate Commissioner for Hearings and Appeals recently announced an initial series of initiatives to improve the hearings and appeals process which include:

We are generally supportive of these initiatives so long as they do not impair the claimant’s right to a full and fair hearing.  The technological improvements are discussed below.

Technological Improvements 

At the Subcommittee hearing on May 2, 2002, Commissioner Barnhart expressed her strong support for moving forward to improve the technology used in the disability determination process.  NOSSCR fully supports the Commissioner in this effort, as we believe that much of the delay in the system could be rectified with improved technology. 

For example, the Commissioner has committed herself to development of the electronic disability folder, “eDIB,” as soon as practicable in light of available resources.  This would reduce delay caused by moving and handing off folders, allowing for immediate access by whichever component of SSA or DDS is working on the claim.  Further, this would allow adjudicators to organize files to suit their preference. 

In terms of preparing a record for the district court, it would allow for electronic filing of the administrative record, which is consistent with the Judicial Conference of the United States’ policy and initiative to move towards electronic filing of documents and pleadings.  The Appeals Council has had difficulty reproducing copies of the record, whether needed by the claimant or for federal court filing.  Files are too often lost or difficult to locate, leading to delays at the Appeals Council and district court levels.  Our members report increasing delays and government requests for extension while cases are pending in court, in order to locate files and prepare transcripts.  In many cases, after more lengthy delays, the files cannot be found and the court must remand the case for a new hearing.  The electronic folder would certainly ease the workload in this regard and consequently, reduce delays.  However, we urge the Commissioner to ensure that the eDIB folder contains complete copies of the paper records, rather than summaries or otherwise reduced copies,  and that claimants would be able to submit evidence in any format, including paper records.

Another important component of technological improvement is digital recording of ALJ hearings.  Currently, hearings are taped on obsolete tape recorders, which are no longer even manufactured.  If copies are needed, they must be transferred to cassette tapes, which is time-consuming.  Tapes are frequently lost because they are stored separately from the paper folder.  Given the age of the taping equipment, the quality of tapes is often quite poor, which also results in remands from the Appeals Council or the district court.  A digitally recorded hearing would not only be of high audio quality but would be easy to copy or transfer to the district court as part of the administrative record.

The Commissioner also has announced an initiative to expand the use of video teleconference ALJ hearings.  This allows ALJs to conduct hearings without being at the same geographical site as the claimant and representative and has the potential to reduce processing times and increase productivity.  NOSSCR members have participated in pilots conducted by SSA and have reported a mixed experience, depending on the travel benefit for claimants, the quality of the equipment used, and the hearing room set-up. 

In 2001, SSA published proposed rules on video teleconference hearings before ALJs.  66 Fed. Reg. 1059 (Jan. 5, 2001).  In general, we support the proposed rules and the use of video teleconference hearings so long as the right to a full and fair hearing is adequately protected and the quality of video teleconference hearings is assured.

Conclusion

 We commend the Subcommittee for holding this hearing today to look at the challenges and opportunities for the Social Security disability programs.  NOSSCR is committed to working with Commissioner Barnhart to improve these programs which are so vital to millions of people in this country.  I would be glad to answer any questions that you have. 

[1] 20 C.F.R. §§ 404.970(b) and 416.1470(b).
[2] 42 U.S.C. § 405(g).
[3]42 U.S.C. §§ 405(b)(3) and 1383(c)(1).
[4]In Sallings v. Bowen, 641 F. Supp. 1046 (W.D.Va. 1986), the federal district court held that the Project was unconstitutional and violated the Social Security Act.  In July 1986, it issued an injunction prohibiting SSA from holding further proceedings under the Project.
[5]Comments dated May 26, 1994,of Chief Judge John F. Gerry, Chairman of the Judicial Conference of the United States, in response to SSA’s April 1, 1994 “Disability Reengineering Project Proposal.”
[6] Id.