My name is James A. Hill. I have been employed by the Office of Hearings and Appeals (OHA) of the Social Security Administration (SSA) for more than 18 years as an Attorney-Advisor. I am also the President of National Treasury Employees Union (NTEU) Chapter 224 that represents Attorney-Advisors and other staff members in approximately 110 Hearing Offices and OHA Regional Offices across the United States. I wish to thank the Subcommittee for inviting me to testify regarding the challenges and opportunities facing Social Security disability programs today.

The challenges facing the SSA disability program are well known and need little amplification by NTEU. The aging of the "baby-boomers" is projected to push disability applications to record heights. The Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) imposes additional workloads and time constraints upon OHA. Exacerbating the situation even more is the prospect that during the next several years the Agency will lose a substantial segment of its current workforce to retirement; another result of the aging of the "baby-boomers". Nonetheless, it is the responsibility of SSA to maintain the level of service expected by the American people despite the ever-increasing workload. While the service delivery situation has both long-term and short-term ramifications, I will limit my testimony to the service provided currently and in the immediate future by the Office of Hearings and Appeals.

We are in the midst of an emerging disaster surrounding the disability workload at OHA precipitated by the demise of the Senior Attorney decision maker and fueled by HPI. The backlog at OHA has increased from approximately 311,000 cases in September 1999 to over 405,000 cases in May 2001. The backlog has increased by over 10,000 a month in two of the last three months, a situation recalling 1994-1995. Processing times have increased from approximately 260 days in January 2000 to approximately 319 days in May 2001. The situation continues to deteriorate, so that any hope of significant improvement without bold and decisive action is unreasonable. Heretofore, SSA has failed to recognize the extent of the impending disaster, choosing to believe that somehow the passage of time would solve the problem. Belatedly, there has been some recognition of "failure", but SSA continues to believe that with some "tweaking" the process can be fixed. The loss of efficiency caused by HPI, the precipitous decline in the number of on-the-record decisions, the impending increase in disability receipts, and the imposition of a new and increased Medicare workload spells disaster. Something more than "tweaking" must be done now.

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

1. All experienced OHA Attorney Advisers should immediately be converted to Senior Attorney decision makers and given the authority to issue fully favorable on-the-record decisions. These Senior Attorney decision makers would review all cases coming into the hearing office. The Senior Attorney will identify, develop as necessary, and issue on-the-record fully favorable decisions; The Senior Attorney would also evaluate which cases are subject to dismissal and which cases need further development before a hearing can be scheduled. The Senior Attorney would also select those cases that need no further development, but cannot be paid on the record, and forward those cases to the staff for appropriate action including assignment to an ALJ for immediate scheduling. The Senior Attorney would continue to provide legal advise to the ALJs and staff, and as a secondary duty, draft ALJ decisions.

2. SSA should establish a workgroup empowered to conduct a detailed review of the HPI process to identify and evaluate inefficient and counter productive practices, to evaluate the validity of the fundamental assumptions upon which HPI is predicated in light of actual experience, and to suggest changes necessary to produce the high level of public service expected of SSA.

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

Mr. Chairman, the disability system has experienced one crisis after another since the early 1990’s when the Social Security Administration failed to timely react to a significant increase in disability receipts leading to a disastrous increase in the number of cases pending, the disability backlog. In 1994 and 1995 a considerable number of claimants were waiting over a year for hearing decisions. By the time SSA decided to respond, the situation was entirely out of control with the OHA backlog increasing by as many as 10,000 cases a month. SSA’s response was the overly ambitious and very expensive Disability Process Redesign (DPR) that was intended to introduce radical changes to the adjudication process over an extended period of time. Unfortunately, the individuals charged with the task of dealing with the disability backlog used the opportunity to forward their philosophical agenda to de-legalize the Office of Hearings and Appeals.

Little needs to be said about the DPR. It was a massive and expensive program designed to fundamentally change the Social Security Disability adjudication process. Unfortunately, the DPR was fundamentally flawed, its scope was too large, and the project was poorly planned and executed. Cynthia M. Fagnoni, Director of Education, Workforce, and Income Security Issues; Health, Education, and Human Resources Division of the General Accounting Office, testified before the Subcommittees on Social Security and Human Resources on October 21, 1999 that,

"The agency’s first ambitious redesign plan in 1994 yielded little. When the agency scaled back its plan in 1997, progress was slow, in part because even the scaled-back plan proved to be too large to be kept on track."

The "scaled back" plan had eight major initiatives; none have been completed and several (the Adjudication Officer and Redesigned Disability System) have been terminated. The GAO was being overly kind; the Disability Process Redesign has been a monumental and expensive failure.

While the DPR did little to reduce the OHA backlog, the Short Term Disability Plan (STDP) and its Senior Attorney Program, which continued after most of the other STDP initiatives were terminated, was instrumental in substantially reducing the OHA backlog. During its pendency, the Senior Attorney Program produced more than 200,000 decisions. During the operation of the Senior Attorney Program, ALJ productivity achieved record levels. The backlog, which peaked at approximately 570,000 cases in 1995, was reduced to just over 311,000 cases at the end of September 1999. Indeed, the backlog decreased every single month from February 1997 to September 1999.

Given the fact that the disability adjudication program had made giant strides in reducing the number of cases pending despite less than optimum support for the Senior Attorney Program, it is difficult to justify why SSA chose to introduce the massive changes in operations entitled the Hearings Process Improvement Plan without continuing the Senior Attorney Program. The answer is quite simple: Despite the failure of the DPR and particularly the failure of the Adjudication Officer Program, SSA has never abandoned the underlying premises of these programs including the "de-legalization" of OHA. One element of the DPR, the Adjudication Officer (AO) Program, was extensively piloted for a substantial period of time, and at an enormous expense to the taxpayers, under the pretense that full-scale implementation of the Program would significantly reduce the backlog. The pilot failed, but SSA did not give up on the concept. One lesson that SSA learned from the Adjudication Officer Program Pilot was that if they do not pilot a program, they can do exactly what they want.

The result of that peculiar line of thinking is Hearings Process Improvement. In many ways HPI is an extension of the AO concept to the hearing office. The shortcomings of the piloted AO Program did not adversely affect OHA operations. Since HPI was implemented on a widespread, real world basis without adequate testing or piloting, its shortcomings are dramatic and impact directly on public service. Interestingly enough, the one aspect of the AO Program that was not included in HPI was non-ALJ decisional authority to issue fully favorable On-the-Record decisions.

That HPI has been a failure is incontestable. Then Commissioner Apfel’s written statement provided in conjunction with the March 16, 2000 hearing of this Subcommittee stated that processing time was just over 260 days. In May 2001 processing time climbed to 319 days, a 22% increase. Average age of pending has also increased at an alarming rate. Since September 1999, the backlog at OHA has increased every single month. In fact, the backlog has increased by more than 10,000 cases per month in two of the last three months, recalling the dismal performance of 1994 and 1995 that led to the implementation of the Senior Attorney Program. While a learning curve was expected, it certainly is a strange learning curve, the most severe increases have occurred in the last three months. The longer HPI is in effect, the worse OHA’s performance becomes. The following chart documents the increase in backlog at OHA during the past year.

While the Agency may point to a number of factors such as longer than estimated learning curves, the impact of time lost for training, the effect of the Prototype Programs and the inability to hire new ALJs, nearly all these factors were clearly foreseeable. While it is readily apparent that there has been a plethora of poor managerial decisions regarding implementation of HPI, poor management is not the root cause of the failure of HPI. The root cause of that failure is the plan itself. Despite the uncontested success of the Senior Attorney Program that produced over 200,000 decisions in addition to the record number of decisions produced by ALJs, SSA determined that ALJs should be the only decision makers in OHA hearing offices. Indeed, even prior to HPI, the Agency’s commitment to the concept that the ALJ should be the only decision maker at the hearings level, which resulted in downsizing the Senior Attorney Program, began the inexorable deterioration in the level of service provided by OHA. HPI accelerated the process.

The former Chief Administrative Law Judge of OHA recently stated that OHA may receive as many as 100,000 cases a year that with minimum development could be paid without a hearing before an Administrative Law Judge. Prior to the implementation of HPI, Senior Attorneys could quickly, efficiently, and in a cost effective manner issue fully favorable OTR decisions for obviously disabled claimants. The average processing time for Senior Attorney decisions was just over 100 days. This was at a time when processing time at the OHA hearing level was 386 days – more than 1 whole year. As a result of the Senior Attorney Program, disabled claimants received their benefits nearly 9 months earlier than otherwise would have been the case.

Of course the success of the Senior Attorney Program, like the success of the ALJ due process hearings, ultimately rests on the competence of the highly trained legal professionals who serve as adjudicators. These individuals are experienced OHA Staff Attorneys who have many years experience advising ALJs and composing ALJ decisions. They are attorneys well versed in the law, and they are experienced disability practitioners. Senior Attorney decision makers have proven by their performance that pre-ALJ decision making in the OHA hearing office significantly improves the quality of service provided to the public.

The Senior Attorney Program was a resounding success. It materially improved the quality of service provided to the public, especially those individuals who were disabled and entitled to receive their disability decision and benefits on a timely basis. Despite its success, the Senior Attorney as an independent adjudicator was eliminated as part of the HPI Plan. Ironically, the Senior Attorney Program is ideally suited for inclusion in the HPI process. Indeed, under HPI a new permanent position called the Senior Attorney Adviser has been created whose prime responsibility is to review cases for possible on the record decisions. The Senior Attorney position under HPI does not have independent decisional authority.

Prior to HPI, a Senior Attorney could review, develop, decide, draft and issue a fully favorable on-the-record decision with no interim handoffs. Under HPI if a Senior Attorney believes that a case he/she has reviewed may result in a fully favorable on-the-record decision, the case is forwarded to a Senior Case Technician to obtain any needed development; the case must then be returned to the Senior Attorney after the development has been obtained to determine if the case remains appropriate for a fully favorable on-the-record decision; the Senior Attorney must then draft a memorandum to the ALJ proposing that the ALJ issue an on-the-record decision; the ALJ must review the memorandum and the case file and make an independent determination that an on-the-record fully favorable decision is appropriate; the ALJ must convey his/her decision and the case file back to the Senior Attorney; the Senior Attorney must then draft the written decision based upon the instructions from the ALJ and forward the draft decision and the case file back to the ALJ, who reviews the draft, makes changes he/she deems necessary, and signs and issues the decision. This involves many more hand-offs, requires that an ALJ duplicate the effort of the Senior Attorney, and reduces the number of other cases an ALJ can adjudicate. This is not an administratively efficient process, but it is typical of the increased complexity of the HPI process. Restoring the decisional authority to a Senior Attorney decision maker would provide the HPI process with a tested mechanism for efficiently dealing with claimants who are entitled to disability benefits at virtually no additional cost to the Agency.

SSA’s Office of Workforce Analysis after site visits to eleven OHA offices stated:

"Restore the signature authority for favorable decisions that offices enjoyed under the Senior Attorney initiative so that OTRs can be moved out of the office quickly without ALJ intervention." NTEU concurs.

NTEU recommends that:

All experienced OHA Attorney Advisers should be converted to Senior Attorney decision makers and given the authority to issue fully favorable on-the-record decisions. These Senior Attorney decision makers would review all cases coming into the hearing office. The Senior Attorney will identify, develop as necessary, and issue on-the-record fully favorable decisions; The Senior Attorney would also evaluate which cases are subject to dismissal and which cases need further development before a hearing can be scheduled. The Senior Attorney would also select those cases that need no further development but cannot be paid on the record and forward those cases to the staff for appropriate action including assignment to an ALJ for immediate scheduling. The Senior Attorney would continue to provide legal advise to the ALJs and staff, and as a secondary duty, draft ALJ decisions.

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

The installation of the Senior Attorney decision maker will result in an immediate improvement in service to the public and permit SSA to deal with the other significant flaws in the HPI process. Given the glacial pace of the SSA bureaucracy in effecting significant beneficial change, without the Senior Attorney decision maker the OHA backlog will rise above 500,000 cases with processing times in excess of 1 year before SSA can adequately effect significant improvement in hearing office work processes.

On its surface HPI appeared to be tailored to enhance ALJ productivity. However, fundamental misconceptions regarding hearing office work processes have resulted in developing a process that degrades rather than enhances hearing office operations.

A fundamental misconception of HPI was that the process could adequately replace the on-the-record decisions lost as a result of the demise of the Senior Attorney Program. Experience shows that a vast majority of on-the-record fully favorable decisions were made by Senior Attorneys rather than ALJs. In fact, ALJ on-the-record fully favorable decisions as recorded in OHA’s Monthly Activity Report actually declined with the passage of time despite the fewer number of Senior Attorney decisions made as a result of the downsizing of the Program. This is particularly noteworthy after the implementation of HPI which has failed to produce the expected number of on-the-record decisions. The failure of the process to produce a reasonable number of on-the-record decisions at a time when ALJs are paying overly 60% of the cases heard is unconscionable.

The misconceptions upon which HPI is predicated include the fallacy that ALJs were extensively involved in pre-hearing development, and that HPI would free ALJs of that activity permitting them to devote more time to hold hearings and make decisions. The fact is that few ALJs spent any appreciable amount of time developing and pulling cases; that job was primarily accomplished by GS-8 Legal Assistants who understood how each ALJ wanted his/her cases developed. The work product was tailored to a particular ALJ. Under HPI, development occurs before assignment to an ALJ so that the individual requirements of a particular ALJ cannot be applied. Nonetheless, upon receipt of the case, each ALJ’s requirements must be met. Therefore, in some instances too much time is spent developing a case; in others too little time is spent developing a case prior to submission to an ALJ, requiring more work be performed after the case has been assigned.

Under HPI the group is accountable for productivity rather than an individual. This concept of group responsibility rather then individual responsibility erodes individual commitment and initiative leading to a lack of accountability and decreased productivity. After the case has been processed by the Senior Attorney and determined to be inappropriate for an on-the-record decision, it will be immediately assigned to an ALJ who has the responsibility of ensuring that the case is properly developed. This also avoids the unworkable concept of group accountability. This ensures that either a Senior Attorney or an ALJ is accountable for the proper processing of the case file.

Because of the lack of detailed knowledge of actual hearing office processes, a less than knowledgeable "ivory tower" bureaucracy developed an absolutely byzantine plan that involved an incredible number of hand-offs and "make-work" tasks that would complicate and slow down case processing. The plan and the flow charts in the glossy publications were impressive, but as events soon showed, were not based in reality. As a result of the nearly complete lack of credibility of the Plan, prior to implementation of HPI nearly every employee in hearing offices had serious doubts over the viability of HPI. It is not surprising that it has failed.

Other key misconceptions include the belief: That the tasks and duties performed by the remaining hearing office staff were so generic that any individual with minimal training could perform nearly every task required in the processing of a case; that massive disruptions in work processes, job duties, interpersonal relationships, and self-confidence would have little or no impact upon the workplace environment; that rotating staff members into master docket and scheduling positions that require extensive training would not seriously disrupt hearing office operations; that certification by someone other than the ALJ that a case is ready to schedule would add value to the process; that the impact of the culture change was minimal; and that the lack of respect for the knowledge and talents of each individual employee, including the ALJs and attorneys, would not be keenly felt by employees and would not negatively impact on morale.

The Bush Administration has indicated that it expects executive agencies to consider the cost of its business processes in preparing their FY 2003 budgets. NTEU is convinced that reliance upon ALJs as the only decision maker at the hearings level not only results in degraded service to the public, but also raises the cost of that service. Currently, OHA does not have a sufficient number of decision makers in its hearing offices to adequately meet its mission goals. One obvious solution is to hire many, many new ALJs. The problem is that ALJs and the staff necessary to support them are expensive. Currently, more than 60% of the decisions made by OHA are favorable to the claimant. Management has estimated that as many as 100,000 receipts per year could be properly adjudicated as OTR fully favorable decisions. Approximately 200 ALJs and 800 other employees would be required to adjudicate these cases which could be adjudicated by approximately 600 Senior Attorneys. The cost of ALJ adjudication is not justified in these cases. The Senior Attorney adjudicator is a much more cost-effective alternative. Likewise there are other types of cases handled by OHA including Medicare, SSI, non-disability SSA cases, and even some disability cases which could be decided more efficiently in terms of service and cost by alternative decision makers such as hearing officers or magistrates. NTEU is not suggesting replacing ALJs, but adding different decision makers to perform adjudication of specific kinds of cases supporting the adjudication work of the ALJs. NTEU is suggesting that SSA tailor the decision maker to the specific task, utilizing a range of decision makers who are appropriate to the specific situation.

NTEU recommends that:

A workgroup be established to carefully examine the implementation of alternative attorney decision makers in the OHA hearing offices to work in conjunction with the ALJs in processing the ever-growing workload that faces SSA.