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Hearing on the Challenges of Achieving Fair and Consistent Disability Decisions

March 20, 2013

Hearing on the Challenges of Achieving Fair and Consistent Disability Decisions










March 20, 2013


Printed for the use of the Committee on Ways and Means


DAVE CAMP, Michigan,Chairman

PAUL RYAN, Wisconsin
DEVIN NUNES, California
JIM GERLACH, Pennsylvania
TOM PRICE, Georgia
DIANE BLACK, Tennessee
TOM REED, New York
MIKE KELLY, Pennsylvania

RICHARD E. NEAL, Massachusetts
JOHN B. LARSON, Connecticut
RON KIND, Wisconsin

JENNIFER M. SAFAVIAN, Staff Director and General Counsel
JANICE MAYS, Minority Chief Counsel



SAM JOHNSON, Texas, Chairman

MIKE KELLY, Pennsylvania






Advisory of March 20, 2013 announcing the hearing


Patrick P. O’Carroll, Jr.
Inspector General, Social Security Administration, accompanied by Heather Hermann, National Coordinator, Cooperative Disability Investigations Program, Office of the Inspector General, Social Security Administration

Arthur R. Spencer
Associate Commissioner, Office of Disability Programs, Social Security Administration

Kathy Ruffing
Senior Fellow, Center on Budget and Policy Priorities
(Truth in Testimony)

Trudy Lyon-Hart
Director, Office of Disability Determination Services, Vermont Agency of Human Services, on behalf of the National Council of Disability Determination Directors
(Truth in Testimony)

David Hatfield
Administrative Law Judge (Retired), Wexford, Pennsylvania
(Truth in Testimony)


Hearing on the Challenges of Achieving Fair and Consistent Disability Decisions

Wednesday, March 20, 2013
U.S. House of Representatives, 
Committee on Ways and Means, 
Washington, D.C. 


      The subcommittee met, pursuant to notice, at 10:07 a.m., in Room B‑318, Rayburn House Office Building, Hon. Sam Johnson [chairman of the subcommittee] presiding.

 [The advisory of the hearing follows:]



     *Chairman Johnson.  We are waiting on my compatriot from the other side of the aisle, but I am going to go ahead and get us started, because we are past time.  I will call the meeting to order.  And I want to say good morning, and happy first day of spring.  We can all smile, can’t we, because it has quit snowing, right?  Wrong.


     *Chairman Johnson.  Fairness and consistency are essential to ensuring America’s confidence in Social Security’s disability insurance program.  Their importance has been consistently recognized since the disability program was created in 1956.

     As we know, Social Security’s definition of who is disabled is a strict one.  Whether someone is disabled depends on medical evidence, and whether a severe physical or mental condition, referred to in the program as “impairment,” prevents someone from working.  But for some conditions, there are also subjective criteria based in statute that affect the way the definition is applied.  In these cases, making the final decision on whether an individual is disabled is as much an art as a science.

     In the early 1980s, there was a growing public concern about the increasing number of statutorily‑required continuing disability reviews that removed thousands of people from the rolls.  In response, federal courts all over the country began to step in to stem the tide of benefit terminations by requiring the use of a medical improvement standard in making the decision to terminate benefits.  The courts also issued orders requiring the Secretary to apply a particular standard for evaluating disability on a statewide or a circuit‑wide basis.

     Soon after, Congress passed the Disability Benefit Reform Act of 1984, which added several new criteria that increased the importance of subjective evaluations in deciding whether someone was disabled, and codified the medical improvement standard against which medical reviews would be conducted.  According to the Congressional Budget Office, the ’84 Act shifted the criteria for disability insurance eligibility from a list of specific impairments to a more general consideration of a person’s medical condition and ability to work.

     The amendments allowed applicants to qualify for benefits on the basis of the combined effect of the medical condition, each of which alone might not have resulted in a decision that the individual was disabled.  The amendments also allowed symptoms of mental illness and pain to be considered, even in the absence of a clear‑cut medical diagnosis, and revise mental impairment criteria in the listing of impairments.

     It is very clear that our colleagues in the 98th Congress were anxious about Social Security’s actions, and the increasing inconsistencies caused by so many different circuit court decisions.  Their concern, clearly stated in conference, was to preserve the consistency and uniformity of this national program in the way it served those who were truly disabled.  What our colleagues did not foresee was that easing the criteria would contribute to growing the disability insurance rolls, including increasing the number of younger workers on the rolls.

     Today, those with mental and musculoskeletal disorders have grown to 60 percent of the rolls, and those assessments are usually based on the more subjective steps of the evaluation process.

     The other result of the ’84 Act, and one our colleagues clearly did not intend, is the substantial variation among decision‑makers in the same offices, the same regions, and at different decision levels.  That means two decision‑makers can review the case and make a different decision, and yet still be right.

     So, I might look at a claimant’s file and decide that the person is entitled to benefits.  My colleague, Mr. Becerra, could look at the same file and decide the person is not entitled to benefits.  And as you will hear today, we could both be right under the Agency’s complex policies.  If that sounds as though an award of benefits may come down to who is making the decision, you are right.  Got to remember, this is the United States Government.

     It shouldn’t surprise anyone that claimant representatives, those who represent individuals applying for disability have figured this out.  The Supreme Court said this system for deciding disability was meant to be simple enough for the average person to understand.  Yet, over the last 20 years, individuals applying for disability have gone from being represented 10 percent of the time to over 80 percent of the time.

     Most claimant representatives are well‑intentioned, and want to do their best.  But they are quick to take advantage of confusing and complex policies to try to ensure an award.  Their behavior underscores how far this process has moved away from a national program with uniform rules to one that is about who makes the decision.  And they have been very successful at it.  Last year the representative industry pulled in over $1 billion from back payments of those who need these funds the most.

     Another indicator that the rules aren’t as hard and fast and consistent as a national program should be is the fact that we have folks who are trying to cheat the system.  Close to half the state disability determination services have access to cooperative disability investigating units, who investigate suspicious applications and, as a result of their efforts, stop crooks from getting on the rolls.  That leaves examiners in half the country with no way of proving whether their suspicions are right or not.  Our Inspector General has been doing a good job with that, by the way.

     Social Security can’t know the number of people who are receiving benefits who don’t deserve them.  Yet increasingly, our constituents tell us they know someone who is receiving benefits but shouldn’t.  That undermines the public’s confidence in the program, the Agency, and this body.  Further, the bipartisan, independent Social Security Advisory Board has been shining a bright light on these issues since 1998.  Since then, they have issued seven reports and several data updates, repeatedly raising concerns about how the program operates and the fairness and consistency of the process.

     In a February 2012 report update to aspects of the disability decision‑making data and materials, the board states that updated data continue to highlight significant questions about Social Security’s disability decision‑making process, and about the disability program, listing ongoing inconsistencies in decision‑making.  The large gap between policy and administrative feasibility, continued use of the outdated dictionary of occupational titles, the definition of disability, and the need for an in‑depth assessment of the disability decision‑making process among its concerns.

     My number one priority in holding these hearings is to make sure we keep this program strong for those who really need it.  And that means taking a good and hard look at what may not be working, assessing the options for changes, and taking action.

     I want to thank our witnesses for being here today, and I look forward to hearing your testimony later.

     Mr. Becerra, you are recognized for five minutes.

     *Mr. Becerra.  Thank you, Mr. Chairman.  The Social Security disability trust fund belongs to the workers who paid into it.  So decisions about whether applicants meet the strict criteria for benefits need to be made very carefully and as consistently as possible.  This is not always easy.  Work‑ending disability or illness comes in many different forms, from terminal illness to an accumulation of many physical and mental limitations that worsen with age.

     That said, some applicants will always involve close calls:  people who are just barely able or just barely unable to work.  The challenge is to decide cases as fairly and consistently as possible, but not at the cost of denying earned benefits, simply because certain disabilities, by their nature, are more difficult to assess.

     Because of the diversity of applicants, and the challenge of drawing a line between can’t work and can work, SSA needs to have the tools and resources necessary to make decisions that are as fair and accurate as possible.  This means SSA needs to have clear, specific, and updated policies for disability examiners and ALJs that they can follow in evaluating those who apply for benefits.  They need effective training for adjudicators at all levels, so that they can correctly and consistently perform the complex analysis required to make the right decision.  Quality control to correct and prevent errors, identify training needs, and useful policy clarifications are also important.

     SSA needs the resources necessary to keep its policies up to date, to train its staff, and to ensure quality control.  At the same time, because of the inherent challenges of determining whether a worker’s impairments are severe enough to render him or her unable to work, we must ensure due process protections for those who are navigating the DI program while sick and unable to work.

     As we examine the challenges SSA faces in determining who is eligible, especially in those close‑call situations, we should keep in mind that most people who apply to Social Security for these disability benefits are turned down.  The eligibility standard is very strict.  It doesn’t allow for benefits for partial disability or any disability that isn’t expected to last for at least a year, or lead to death.

     Medical evidence must show that the condition prevents the individual from working at any job in the national economy, not just their previous type of work.  As a result, the majority of people who apply for benefits do not qualify.  Even after appeals, only about 4 in 10 applicants ever qualify for benefits.  It is worth noting that even rejected applicants who don’t get disability benefits are very limited in their ability to work.

     We take our responsibility to safeguard the Social Security Trust Fund for workers very seriously.  We are very concerned about the decision by the House Republican Majority to block the investment in the program integrity system.  This is the initiative within SSA that helps weed out the fraud and make sure unnecessary payments are not made to people who really should be working.

     By failing to fully fund these Social Security case reviews at the level agreed to in the Budget Control Act of 2011, this House is being penny wise and pound foolish.  If the agreed‑upon number of reviews had been funded for 2013, it would have saved the taxpayers and the trust fund between $1.6 to $2.4 billion over the next decade.

     Mr. Chairman, I want to thank you for calling this hearing.  It is a complicated, but important question.  In the end, our most important goal must be to ensure Americans receive the Social Security benefits they have earned, and that they need to make ends meet.  I look forward to learning more about today’s issue from today’s witnesses, and I look forward to hearing the best way that we can move forward.

     So, I thank our witnesses in advance for having come, and we look forward to hearing from you.

     Mr. Chairman, with that ‑‑

     *Chairman Johnson.  Thank you.

     *Mr. Becerra.  ‑‑ I yield back the balance of my time.

     *Chairman Johnson.  We do need to get rid of fraud in the system.

     Thank you all for being here.  As is customary, any Member is welcome to submit a statement for the hearing record.

     Before we move on to our testimony, I want to remind our witnesses to please limit your oral remarks to five minutes.  However, without objection, all of the written testimony will be made part of the written record.

     We have one witness panel today.  And seated at the table are Patrick O’Carroll, Jr., Inspector General, Social Security Administration, accompanied by Heather Hermann, National Coordinator, Cooperative Disability Investigations Program, Office of the Inspector General, Social Security Administration.  Glad you all made it down here before the snow.


     *Chairman Johnson.  Arthur Spencer, Associate Commissioner, Office of Disability Programs, Social Security Administration.  Kathy Ruffing, Senior Fellow, Center on Budget and Policy Priorities.  Trudy Lyon‑Hart, Director, Office of Disability Determination Services, Vermont Agency of Human Services, on behalf of the National Council of Disability Determination Directors.  David Hatfield, Administrative Law Judge ‑‑ it says retired, but I had a conversation with him, he is still a judge ‑‑


     *Chairman Johnson.  ‑‑ Wexford, Pennsylvania.  Welcome.  Thanks for being here ‑‑

     *Mr. Becerra.  And Judge, when the Chairman says you are still a judge, you are still a judge, so ‑‑


     *Chairman Johnson.  Welcome and thanks for being here.  Mr. O’Carroll, good to see you again.  Please go ahead.


     *Mr. O’Carroll.  Good morning, Chairman Johnson, Ranking Member Becerra, and members of the subcommittee.  I am joined by Heather Hermann, national coordinator for our CDI program.

     In fiscal year 2012, SSA received about 3.2 million disability insurance claims, and paid more than $135 billion in disability benefits.  This is a critical time to focus on the future of the disability program and avoiding improper payments.

     In my written statement I discuss a number of systemic and policy issues that could save millions in dollars, including revising the Agency’s policy on administrative finality, terminating payments timely once beneficiaries are deemed ineligible, and addressing the concept of medical improvement.  However, I would like to take a few minutes to discuss two of the greatest integrity tools we have available, the CDI program and continuing disability reviews, or CDRs.

     Medical CDRs determine whether a beneficiary remains disabled and eligible, and are critical in reducing overpayments in the disability program.  SSA has a goal of conducting 435,000 medical CDRs this year.  However, the current backlog is about 1.2 million.  Our audit work has found that the Agency would have avoided paying hundreds of millions of dollars to ineligible beneficiaries if CDRs were conducted when they were due.

     Sometimes DDS has even asked CDI units to investigate a beneficiary during a CDR.  That combines the value of our two most effective integrity tools, which is one of the many reasons we believe DDSs in all 50 states should have access to a CDI unit.

     In one recent example, a CDI unit investigated a man who had received disability for almost 18 years, and was undergoing a CDR.  He alleged severe back problems and other ailments.  When investigators interviewed the man, he showed no signs of the back pain or discomfort he alleged.  And when the investigators looked into the man’s social media presence, they found he was something of a YouTube star, which we would like to show you.

     [Video shown.]

     *Mr. O’Carroll.  As you can see, his video suggests that his back problems might have been exaggerated.  With this information, the DDS terminated the man’s benefits.

     Special Agent Hermann will now tell you a little bit more about CDI.



     *Ms. Hermann.  Thank you, and good morning.  Since 1998, CDI has been successful in detecting abuse in SSA’s disability programs and preventing payment on disability cases involving potential fraud.

     Since the program was established, CDI work nationwide has resulted in projected SSA savings of $2.2 billion.  The process typically begins with a referral from a state DDS or SSA, or from administrative law judges during the appeals process.  They refer benefit claims or reviews that have been identified as suspicious.  When the CDI investigation is complete, they send a report detailing their findings to the DDS, which determines whether the person is eligible for benefits.

     In this case, the man with the cane was on disability, alleging brain and pelvis injuries.  But he bought the cane on his way to a consultative exam.  Here we see him using the new cane for support.  But after the exam, we see him walking freely and carrying the cane in his left hand.  And later that same day, we see him back at the pharmacy, returning the cane for a refund.  With this information, the Missouri DDS terminated the man’s benefits, and found he was overpaid $11,000.  This is typical of the work that our 24 CDI units  ‑‑ soon to be 25, as we open a unit in Puerto Rico ‑‑ do every day.

     The National Association of Disability Examiners and the Government Accountability Office support CDI expansion.  And the program has received great support from your subcommittee, as well.  We look forward to continuing to assist SSA in this vitally important and growing initiative.

     *Mr. O’Carroll.  In conclusion, to improve the DI program we support CDI program expansion, investing in integrity reviews like CDRs, establishing a self‑supporting program for stewardship activities, and policy or legislative changes that could reduce the program complexity.

     Thank you again for the invitation to testify today, and we will be more than happy to answer questions.

     [The statement of Mr. O’Carroll follows:]

     *Chairman Johnson.  Thank you, sir.  You know, those are just a few of the incidents that occur.  We were in Dallas, listening to some of this, and watched a guy take a wheelchair out of the hearing, fold it up, put it in the truck, walk around the car, and get in and drive away.  People are making a mess of our disability program.  And thanks to our IG, we are getting some good information on it, and hopefully stopping some of it.  By far, not all of it, though.

     Mr. Spencer, welcome.  Please proceed, sir.


     *Mr. Spencer.  Chairman Johnson, Ranking Member Becerra, members of the subcommittee, thank you for inviting me to discuss the Social Security Disability Insurance program.  I am Art Spencer, Social Security’s Associate Commissioner for Disability Programs, and responsible for disability policy.

     A lot has been said and written about the DI program in recent years, some true.  Much, though, that is half true or even incorrect.  I hope that I can help you today with the right information you need to make the best decisions about the program’s future.

     The DI program provides benefits to disabled workers and their dependents.  Workers become insured under the program based on their contributions to the Social Security Trust Fund.  For this reason, the DI benefit is rightfully described as an earned benefit.

     When we decide whether a person qualifies for DI benefits, we are required to follow the definition of “disability” that Congress included in the Social Security Act.  The Act generally defines “disability” as the inability to engage in any work, substantial gainful activity, due to a medically‑determinable physical or mental impairment that has lasted or will last for at least 12 months, or result in death.  This is a very strict standard, and most people don’t meet it.

     While some have attributed DI program growth to loosening of the rules, that is simply not the case.  As our Chief Actuary explained to the subcommittee last week, the aging of the population and expansion of the workforce are the main drivers of program growth.

     To apply the statutory definition of “disability,” we do a rigorous and structured analysis of each case, using five steps called the sequential analysis process, or sequential evaluation process.

     At step one, we determine whether a person is working and engaging in SGA, substantial gainful activity.  If so, we deny the claim.

     At step two, we assess the existence and severity of a person’s impairment using objective medical evidence.  If we do not find a severe impairment, we deny the claim.

     At step three, we determine whether the severe impairment meets or equals the criteria of one of our medical listing of impairments found in our regs.  The listings describe for each major body system the impairments that can be considered so debilitating that they could reasonably prevent someone from working.  We use a process to regularly update the listings following advances in medical science.  We have updated 10 of the 14 systems, and are working hard on the final 4.

     If a person has a listings‑level impairment, we allow the claim.  If not, we proceed to step four.  At step four, we consider whether a person’s residual functional capacity allows him or her to do any work that they have successfully done.  If they can do any work that they have done, we deny the claim.

     At step five, we determine whether the claimant, given his or her residual functional capacity, age, education, and past work experience can do other work that exists in the national economy.  If they cannot do any work that exists in significant numbers in the national economy, we do allow the claim.  But if they can do any work that exists in the economy, we deny the claim.

     Our partners at state agencies call disability determination services, make initial disability decisions.  They also reconsider the decisions of denied claimants who appeal.  For those claims that the DDSs allow, we perform an independent and comprehensive review of at least 50 percent of the cases before any payment is made.  These pre‑effectuation reviews allow us to correct errors before we issue a final decision.

     People denied benefits by the DDSs can request a hearing before an administrative law judge.  And thereafter they can appeal to our appeals council or to federal district court.

     Throughout all levels of our administrative process, program experts review the quality of the decisions, re‑target our feedback and our training to those areas where our experts find the most frequent errors.

     We have also developed technology to help adjudicators make accurate decisions.  For example, our electronic claims analysis tool is a web‑based application that guides DDS adjudicators through the sequential evaluation process.  We are piloting a similar tool in our hearings offices called the Electronic Bench Book.  Our hearings offices also use How MI Doing to improve their quality.  It explains the reasons for appeals council remands, and allows adjudicators to view their performance in relationship to other offices, regions, and the nation’s.

     As we continue to improve the DI program, we need congressional support.  Thank you for the opportunity to appear before you today, and I am happy to answer any questions that you might have.

     [The statement of Mr. Spencer follows:]

     *Chairman Johnson.  Thank you, sir.  I appreciate your testimony.

     Ms. Ruffing, welcome.  Please go ahead.


     *Ms. Ruffing.  Mr. Chairman, Ranking Minority Member Becerra, and members of the committee, I appreciate the invitation to testify today about this program that is so very important to over 8 million people who, because of a severe medical impairment, can no longer work substantially; to members of their families; and to 150 million workers who have earned protection from the program, if such a misfortune should happen to them.

     The DI program has grown rapidly over the last several decades, and that has led some critics to charge that the program is somehow out of control or in crisis.  That is not correct.  We have shown, like the Social Security actuaries, that the overwhelming bulk of the growth in the program can be traced to three very straightforward demographic factors:  the aging of the baby boomers into the fifties and sixties, the years of greatest risk for disability; the growing labor force participation of women who can now qualify for benefits on their own work; and the rise in the full retirement age in the Social Security program.  Over five percent of people who are now on DI would have been called retired workers a decade ago, not disabled workers.

     It turns out that when you properly age and sex‑adjust the rates of disability, the rate has, in fact, grown only very modestly.  It has not doubled or tripled, as some critics claim.  Yet program participation has grown.  We can’t always quantify the reasons, but we can name some of them.  And, of course, one of them is legislation, the Disability Benefits Reform Act of 1984, which Chairman Johnson, I think, very accurately summed up.

     I would like to add an historical note here, which is that DBRA of 1984 came as a reaction to the overzealous actions of the Reagan Administration, and that is passed both Houses of Congress unanimously.  People who criticize it as somehow subjective or liberal are sometimes forgetting that history.

     Another factor that was, in fact, recognized in DBRA of 1984 is the competitive nature of today’s workplace.  It is true that work is generally less physical than in the past.  But that is a two‑edged sword.  For older workers with limited education, and for workers of any age with cognitive impairments, a technologically advanced and a fast‑paced workplace is a very harsh environment.

     Other factors that have probably buoyed participation in the program include the rise in cost and declining availability of private health insurance, the indirect effect of the rise in the retirement age, and the economic downturn which, at minimum, has boosted applications and, to a lesser extend, awards.

     I would like to note briefly that these pressures have not affected the SSI program equally.  That program has been quite stable since the mid‑1990s.

     As we know, it is difficult to qualify for disability benefits.  The substantial gainful activity criterion is only a little over $1,000 a month.  That is less than 40 percent of the median wage of a high‑school graduate with no college.  The program does permit and even encourage work.  And yet statistics show that most DI beneficiaries never work again after the onset of disability, although they are permitted to do so.

     Studies of rejected applicants, studies of so‑called parking behavior, and studies of beneficiaries who are converted to retirement benefits all point to the same conclusion:  DI beneficiaries are unable to perform substantial work.

     We at the Center on Budget strongly advise that disability be addressed in the context of overall solvency for the Social Security program, which is a formidable but achievable goal.  I would like briefly, though, to focus on something Congress can do right now, which is focus on ‑‑ which is fund continuing disability reviews.  Congress left money on the table in both 2012 and 2013.  We believe that Congress can still act in time to fund those reviews properly.

     We look forward to working with you to safeguard and strengthen this vital program.

     [The statement of Ms. Ruffing follows:]

     *Chairman Johnson.  Thank you, ma’am.  I guess I got to push my button, too.  Thank you, ma’am.

     Ms. Lyon‑Hart, welcome again.  Please proceed.


     *Ms. Lyon‑Hart.  Chairman Johnson, Ranking Member Becerra, and members of the subcommittee, thank you for this opportunity to testify on the challenges of disability determination.  I speak on behalf of the National Council of Disability Determination Directors, representing the management of the disability determination services.  We process nearly 4.8 million cases a year, working with Social Security to provide consistent, fair, accurate, timely, and cost‑efficient decisions to disability applicants, and to ensure program integrity.

     The disability criteria are very strict by design.  DDSs allow roughly a third of initial claims, about 70 percent of all favorable decisions, with better than 97 percent accuracy.  DDSs also process medical continuing disability reviews, CDRs, resulting in $9 of program savings for each administrative dollar spent.

     DDSs face serious challenges.  Backlogs keep rising, now nearly 190,000 cases waiting many months to be assigned to an adjudicator while a hiring freeze continues for a third year.  When we hire, it takes two years training to recover lost capacity.

     Budgets are challenging all across government.  With tight oversight, DDSs keep expenditures mission‑critical and cost‑effective.  We ask Congress for the funding to serve disability applicants and bring CDRs up to date in a carefully planned, strategic way.

     We also recommend considering policy changes to improve consistency and preserve integrity of this important program.  My testimony today will speak to three highly complex policies that have the most potential for inconsistency in decision‑making.  I will also touch on the medical improvement standard for CDRs.

     The first policy is evaluation of symptoms.  A medical impairment that could cause the symptom is required.  But objective findings are often not sufficient to determine resulting limitations.  The same diagnosis affects different people differently.  Policy requires assessing credibility, evaluating the consistency and degree of support for the statements throughout the record, not a gut feeling about the person’s truthfulness.

     Second is medical source opinion.  Treating source opinions are controlling only if well‑supported by objective medical evidence and consistent with other substantial evidence.  If not controlling, opinions must still receive appropriate weight, considering all facts of the case.

     Third is residual functional capacity, an administrative assessment of what the person can do on a sustained basis, requiring difficult judgements about function, given fluctuating symptoms and differing medical opinions.

     Adjudicators may interpret these policies differently in individual cases.  The information itself is subjective.  Policy defines the factors we must consider, but does not direct any specific decision.

     SSA and DDS work together to improve quality and consistency:  intensive training, mentoring, performance management, technology to support case analysis, nationalized quality review, and centralized program consultation.  All are helpful, but more work is needed.

     We should think carefully about changing policy.  It would not be right or fair to many truly disabled people not to consider their symptoms and the opinions of the doctors that know them best.  However, we should look for ways to decide disability with fewer resources and more consistency.

     A few words about CDRs and the medical improvement standard.  This policy was developed in the mid‑eighties in response to public outcry over the way people were being taken off the rolls.  With few exceptions, the policy requires significant work‑related medical improvement for benefit cessation, whether or not the prior allowance established a truly disabling impairment.  Adjudicators may not substitute their judgement for that used in the prior allowance.

     In practice, medical cessations are not common.  We recommend a review of statute and policy to advance program integrity, while doing no harm to people who continue to qualify.  Due process and the real effects of aging, chronic impairment, and time out of the workforce are important.  Even under current policy, medical CDRs provide substantial savings.  Unfortunately, funding has not been sufficient for timely processing of either CDRs or new applications.  And both are critical.

     In conclusion, DDSs have long provided high‑quality service and program stewardship.  Together with SSA, we have made strides in consistency, despite the challenge inherent in deciding who can and cannot work.  Sufficient resources are critical for continuing this work.  With our knowledge of front‑line adjudication, we recommend careful policy revision to improve the program.

     Thank you again for the opportunity to provide this testimony, and I would be glad to answer any further questions.

     [The statement of Ms. Lyon‑Hart follows:]

     *Chairman Johnson.  Thank you, ma’am.

     Judge Hatfield, welcome.  Please go ahead.


     *Judge Hatfield.  Thank you, sir.  Chairman Johnson, Ranking Member Becerra, and members of the subcommittee, thank you for this tremendous opportunity to speak to you today. I am extremely pleased to see you are focusing on policy, and I encourage continuing congressional oversight of the disability program.

     My name is David Hatfield, I am a retired administrative law judge.  I worked for 36 years in the Social Security Administration, participating in the disability process at almost every level, both in policy and adjudication.  I am not here today representing an organization or a constituency group.  I am not here to say there should be fewer or more people on disability.  I am here as an informed, concerned citizen to speak plainly about disability policy, which I believe is the primary cause of inconsistent adjudication.

     The last large‑scale reform of the program was in 1984.  It shifted a program of reliance on objective medical evidence to an assessment of an individual’s ability to function.  SSA has since issued extensive regulations and numerous clarifying rulings on pain and opinion evidence, many of which are restatements of court interpretations of the 1984 changes.

     The result is, frankly, a recipe for decision‑making that no cook would dare touch.  The policies have allowed too much subjectivity and have become overly complicated, confusing, and outdated.  The policy has emphasized subjective factors to the point that, at the ALJ level, just about any case could be allowed or denied, and either decision can be written in a way that is consistent with existing Agency policy.  Is that a fair process?

     Policy has also become overly complicated.  Evaluation of pain was a short paragraph before 1988.  It is now several pages, with more pages of rulings mandating considerations of all kinds of factors.  The handling of opinion evidence has also been expanded.  And these are not merely guidelines for evaluating evidence, but are specific requirements that need to be addressed in every unfavorable decision.  If I don’t evaluate a neighbor’s written statement saying the claimant is disabled, yet there are four medical opinions in file saying he isn’t disabled, the case comes back.

     Lost in all these gotcha requirements is the question of whether the claimant is truly disabled, and whether there is substantial evidence in the record.  This high burden adversely affects timeliness and, in my opinion, alters decision‑making.

     We must stop the tail wagging the dog.  The standard of review needs to be amended to include a harmless error component, or alternatively, change to a more deferential standard.  We must put an end to redoing thousands of decisions that are already supported by substantial evidence.

     Confusing policy should also be eliminated, including the often misused controlling weight standard for treating source opinions, another concoction of the courts.  It trumps all other evidence, but only if it is “well supported and not inconsistent with the other substantial evidence.”  But what does “other substantial evidence” mean?  The trump card is often misapplied.

     Finally, many policies are simply outdated, such as the medical vocational guidelines.  They were established in 1979.  It is now 34 years later, and they remain untouched.  They must be updated to reflect the current economy and workforce.

     Second, regulations regarding representatives.  There are none.  More than 80 percent of the claimants at the hearing level are now represented, yet there are no rules and no burdens placed on representatives.  Evidence can be submitted at any time; it is essentially a free‑for‑all.  This hurts claimants, as they are being cheated out of their due process hearings.

     Third, permanent disability.  It is time to re‑examine the permanence in disability.  With the advances in medical science, we know there are many impairments that, with medical treatment, should not only improve but disappear.  I had cases where the claimant met the duration requirement and was certainly disabled at the time of my hearing, but I knew he would be better in six months.  I couldn’t do anything about it, as my jurisdiction ended at my decision.

     So let’s consider specified term disabilities, and let those folks even return to work within their time‑specified period of disability with no penalty.  After all, helping people to get back to work should be our number one priority.

     Ten years ago, the chair of the Social Security Advisory Board told this Committee that a full‑scale review of disability policy had not been done in twenty years.  Ladies and gentlemen, it has now been 30 years.

     Thank you again for this opportunity to express my views and thoughts.

     [The statement of Judge Hatfield follows:]

     *Chairman Johnson.  Thank you, sir.  Thirty years, huh?  As is customary, for each round of questions I will limit my time to five minutes and ask my colleagues to also limit their questioning to five minutes, as well.

     Members should always speak clearly into the microphone, but it is especially important to try to help Ms. Ruffing hear us today.

     One half of the country is disadvantaged because they do not have access to a Cooperative Disability Investigative unit, a CDI.  Ms. Hermann, those state disability determination services that have access to local Cooperative Disability Investigative units have the advantage of being able to refer any suspected fraud cases to that unit for surveillance or other government database or social media.  These units operate in 21 states.  What happens in the other states?  Does fraud remain undetected?  And what cost to the taxpayers?

     *Ms. Hermann.  In the other states who don’t have access to a CDI unit, they can refer those allegations to their local Office of the Inspector General.  The Office of the Inspector General will review them.  However, you know, the decision to investigate or not is based on local priorities and their local caseload.

     So, often times, the DDS must make whatever decision, based on the information they have available to them.

     *Chairman Johnson.  Or they ignore them.

     *Ms. Hermann.  We hope they don’t ignore them.  We hope that they still refer them to the OIG.

     *Chairman Johnson.  I hope you are right.  Judge Hatfield, you know representing Social Security claimants is a thriving industry.  In fact, persons representing claimants pulled in over $1 billion in fees last year, all of which was skimmed right off the top of back benefits that were awarded those who were found disabled.  I know most of those representatives want to do their best for claimants, but it seems to me they are quick to take advantage of confusing and complex policies to try to ensure an award.

     Is there any standard on what someone who is representing a claimant is required to submit to the ALJ before the hearing?

     *Judge Hatfield.  No, Mr. Chairman, there really isn’t.  It is really up to the ALJ to enforce that.  Some reps are good at submitting evidence, others are not.  But the ‑‑ ultimately, it is the judge’s responsibility to ultimately ensure the record is fully developed.

     There are really essentially no rules of practice in the Social Security regulations.  So what happens is that evidence trickles in, it can come in at the day of the hearing.  I am here to ensure claimants get a good, due‑process hearing.  That is what the regulations require.  And so I need to read that record.  It is non‑adversarial, by the way.  So I need to read that record and be sure I can ask the kinds of questions to the claimant to make sure I make a proper decision.  I can’t do that if evidence comes in at the day of the hearing, for instance, talking about a new impairment, for instance.

     So, what happens?  I can delay the hearing, which is not fair to the claimant.  I can let the representative sit, at the end of the day, and I have done that.  Time is money.  But ultimately, what I do is I have to read the evidence before the hearing, delaying all the other cases that I have for that day, so that I can ensure the claimant is having a due‑process hearing.

     So, my feeling is that the record should be closed before the hearing.  And it is not for the judges, it is not for ‑‑ you know, to be a judge.  It is for the claimant.  It is for a due‑process hearing, so that I can ask the right questions at the hearing.

     *Chairman Johnson.  Yes, that sounds like some of the people are cherry‑picking the evidence and delaying giving it to you so they are going to get a favorable decision, probably.  It might even slow down the decision.  Is that true?

     *Judge Hatfield.  That is true.  And in terms of that, we rely on the representatives to send in the evidence.  If the evidence is adverse to the claimant, there is nothing in the regulations at this point that requires a representative to submit that evidence unless I ‑‑ you know, I know about it and I ask for it.  There is no sanctions against a representative if they don’t submit that evidence.  So ‑‑

     *Chairman Johnson.  In your experience, did you find people hiding evidence from you?

     *Judge Hatfield.  A couple of times.  Generally ‑‑ and this is in Pittsburgh, where the representatives are, by and large, very good, and they are very honorable people.  But when I was the acting chief judge, I knew of other instances across the country where this happened, yes.

     *Chairman Johnson.  Thank you.  Mr. Spencer, is it true that a person can receive both unemployment and disability at the same time?

     *Mr. Spencer.  Yes, sir, it is true.  There is no prohibition that would restrict someone getting both unemployment and Social Security disability insurance.

     *Chairman Johnson.  Okay.  Do you believe that is a good idea or not?

     *Mr. Spencer.  It has never been put into our rules before.  It has always been totally separate.

     We are ‑‑ we have looked at this, and would certainly be willing to continue to work with your staff and your subcommittee ‑‑

     *Chairman Johnson.  Thank you.

     *Mr. Spencer.  ‑‑ if you would like to move in that direction.

     *Chairman Johnson.  I appreciate that.  Mr. Becerra, you are recognized.

     *Mr. Becerra.  Thank you all for your testimony and for helping us on this issue.

     I think we should make one thing clear.  None of us wants to see the bad apples.  They ruin it for everyone else.  As I think you have all indicated, these are earned benefits.  And so, any American who has truly lost the ability to work should be able to turn to a program that was established as a result of his or her taxes that he or she paid into the system for this very reason.

     But when you see a video of someone who is trying to take advantage of the system, it gets you very angry.  And we have to kill that, because if we don’t, then it not only makes it difficult for us to have confidence that we are giving out these taxpayer benefits that have been earned when they are rightfully earned, but it also, I think, undermines the confidence that the public has to have in the system.

     And so, I want to make sure we make a point here.  Mr. O’Carroll, you pointed out some cases — I have got some numbers here.  Tell me if I am wrong.  There were some ‑‑ in 2012 some 13 people who were subject to criminal prosecution as a result of some of your work, the CDI work, right?

     *Mr. O’Carroll.  Yes, sir.

     *Mr. Becerra.  I have a number that 19 other cases were subject to civil monetary penalties.  So 19 other people were subject to civil monetary penalty, as a result of all your CDI work.

     *Mr. O’Carroll.  That is correct.

     *Mr. Becerra.  That is 32 people.  The number of people that you investigated is somewhere around 3,300.

     *Mr. O’Carroll.  Yes, sir.

     *Mr. Becerra.  So of the 3,300, about 32 you found cause to go after them civilly or criminally.  That number is based on 3.2 million people who apply for disability insurance benefits.  And so I want to make something very clear.  We have to beef up your units so you all can find these folks.  But there were 32 that you found out of 3.2 million who applied for disability insurance benefits.  And so it is not rampant, but it sure makes you mad when you find it.  And so we have to go after those bad apples.

     I think the judge made it very clear, as well.  If you can’t have a system that is working well, if you start to go towards an adversarial system, which is not what we have right now, where people are going at it like attorneys will when you have got a case in court, most of these folks are going to get trampled, because most of these folks can’t afford to get a high‑priced attorney.  They are out of work, they are disabled, or they are very modest‑income, to begin with.  And so, I hope we never lose the non‑adversarial character of these hearings, where the ALJ is extremely important.  The judge is essentially, as you said, the gatherer of all the information.

     I do agree with you on one thing, Judge.  We can’t expect you to make the best decisions if you are getting information at the end of the hearing.  You should be getting as much as you can before the hearing.  And so, when you are at the hearing you can really probe that applicant or his or her representative and find out, “Is there anything else I am missing in this file so I can make a decision?”  And so I hope you will continue to give us some guidance on how we can get there.  And I think all of you can provide that, as well.

     I want to finish by asking a little bit about these CDRs, the continuing disability reviews.  And I just whispered to the chairman a little while ago that I think this is something we can handle bipartisanly.  I am not here to try to go after my colleagues on the Republican side because they are trying to reduce the size of government and, as a result, one of the casualties is funding for these CDRs, which we agreed would be in the budget after the Budget Control Act passed in 2011.  But when you save nine taxpayer dollars for every dollar invested in a CDR to make sure that someone who has got benefits really should continue to get it, and if we find through this review, the CDR review, that they no longer are disabled, and should be getting back to work, we should go after that with a vengeance.  Because, once again, we provide integrity in the system.

     So, Ms. Ruffing, quick question.  Is it your sense that if we had the investment in CDRs, that we could truly make sure that those who have become disabled are the ones ‑‑ only the ones who are receiving the disability insurance benefit?

     *Ms. Ruffing.  I think that is a fair statement.  Cumulatively, over 2012 and 2013, Congress is on track to under‑fund CDRs by about 400 million below the Budget Control Act allowance.  And a back‑of‑the‑envelop estimate suggests to me that that, over the long run, will cost us between 2.5 and 3.5 billion.  As you say, that is penny wise and pound foolish.

     *Mr. Becerra.  So, not only is it costing us, but we are going to have more videos of people who shouldn’t have remained on disability insurance, which is going to make it a caustic program, because people are going to have real ambivalence about whether we should support it.

     I hope, Mr. Chairman, this is something that we should do bipartisanly, to try to make sure that we go after the fraud, those who are receiving the benefit when they don’t qualify.  That way we can leave it for all those who really do deserve to have the benefit they paid for.

     With that I will yield back the balance of my time, and I thank you all for your testimony.

     *Chairman Johnson.  I think Mr. O’Carroll feels the same way, and he is working that program pretty hard.

     Mr. Tiberi, you are recognized.

     *Mr. Tiberi.  Thank you, Mr. Chairman.  I am not sure anybody here would be in line to answer this question, but maybe Judge Hatfield can.

     From my limited experience in dealing with folks I know who have had a disability, I want to just follow up on something Mr. Becerra said about claimants not being able to afford an attorney.  My experience has been that most lawyers in this line of work actually get paid contingent on benefits being received from a claim.  Is that your experience, Judge?

     *Judge Hatfield.  Yes, that is.  Almost all of the attorneys work under that type of arrangement.  And you can see them on nightly television every night.

     *Mr. Tiberi.  I wasn’t going to mention that.  But the point being if my little sister, who makes $40,000 a year, gets injured, she can get an attorney, a very good attorney, based upon the contingency of her claim and winning her claim.

     *Judge Hatfield.  Yes, that is true.

     *Mr. Tiberi.  I thought so.

     *Judge Hatfield.  That is true.

     *Mr. Tiberi.  Just wanted to clear that up.  In your testimony on page seven you say it is time to re‑examine ‑‑ your words, not mine ‑‑ “the permanence of disability.”  Tell us more of what you mean in terms of time for a change in that.

     *Judge Hatfield.  It ‑‑ as the chairman had described the statutory act, it is ‑‑ a person has to be disabled at least one year, or it could result in death.  It is ‑‑ but in my experience, there have been many, many cases where the person is disabled, they meet that one‑year requirement, they have been waiting, say a year, to get before me, but it has been a ‑‑ say an accident, a trauma, something like that, where they are undergoing medical treatment, they are going to get better.  It is clear they are going to get better.  I can’t do anything about that.  I can only decide the case at the time of my decision and find them “permanently disabled.”

     And my thought is to be able to, with the advances of medical science ‑‑ I mean 1957 is when the disability program started.  Things have changed much in medicine since then.  It seems to me we should be able to get together a group of people who could identify certain impairments that should improve with medical treatment, or perhaps even disappear within a certain period of time.

     And as I suggested, those persons would get a term disability, based on their impairments and age, or maybe some factors involved, and then they could go to work during that time.  Let them go to work.  We expect those folks would go to work.  Instead, we put them on permanent disability, and then do a CDR, say, 12 years later, or 10 years later.  That person is out of the workforce.  They are never, probably, going to go back.

     So, you know, the whole point here is try to get folks back to work.  It seems to me if we do that quickly at the front end, give them this sweetener of no penalty to work ‑‑ and, of course, if they are still disabled and they didn’t go back to work, they can always re‑file after the expiration of their term.

     *Mr. Tiberi.  Thank you.  You have been a judge for a long time before you retired.  We had CBO here last week.  We had the Chief Actuary here last week.  Mr. Spencer, in your testimony you mention the growth of the program being demographics as the main driver of the DI program.  But both Mr. Goss and the CBO have been clear in their testimony, the written testimony, that the 1984 change in the law, which Ms. Ruffing mentioned again today, that was passed unanimously ‑‑ but that that change in the federal policy is another contributing pattern to the growth of the program.

     And in fact ‑‑ again, CBO’s words, not mine, that the change in federal policy has contributed ‑‑ the ’94 Act ‑‑ the ’84 Act, excuse me, contributed to the growth of the disability insurance program, since it led to a larger number of disability insurance beneficiaries with musculoskeletal or mental impairments, many entering the rolls at younger ages and staying in the program longer than the average beneficiary.

     Anecdotally, from your seat on the bench that you served, did you see an increase over the years?

     *Judge Hatfield.  Well, actually, I wasn’t an ALJ prior to 1984, so I probably ‑‑

     *Mr. Tiberi.  Hard for you to compare.

     *Judge Hatfield.  ‑‑ couldn’t comment on that.  But yes ‑‑

     *Mr. Tiberi.  In terms of those number of cases?

     *Judge Hatfield.  I think there were quite a few of those cases that came before me, mental impairments, musculoskeletal, absolutely.  And I think there was a rise in those, and I think that the statistics show that there was a rise in those over the years.  The percentage of people being paid based on those two impairments rose significantly during that time.

     *Mr. Tiberi.  Thank you.  So you think that should warrant a look at the ’84 law to see if we can tweak it?

     *Judge Hatfield.  That is ‑‑ that would be my suggestion, yes.  I think that what ‑‑ what I am suggesting is after 1984 the reaction of the courts imposed certain requirements that the Agency decided to adopt through ruling and regulation.  And so I think it is time to sort of reflect as to whether that really was the intent of Congress, or whether it was just court interpretation.

     *Mr. Tiberi.  Thank you.  I yield back.

     *Chairman Johnson.  The gentleman’s time has expired.  Mr. Renacci, you are recognized.

     *Mr. Renacci.  Thank you, Mr. Chairman.  I want to thank the witnesses today for testifying.  You know, I have only been in Congress a couple years, but I always like to relate back to my history as a private citizen and a businessman.  And I know that, over the years, I ran into three different individuals that were collecting disability.

     And as you were talking, I was thinking of those three.  One clearly deserved disability and was not able to work any more.  The second definitely had some impairments, but probably could work at a desk, at a computer, and do some work.  The third used to golf with me every week.  And I always used to wonder how that third individual was collecting disability as he came to golf in a golf league every week.  So, you know, it is kind of interesting when you look back over these situations, and then you hear the testimony.

     But with those things, I guess I would like to know what is ‑‑ Mr. Spencer, what is the definition of “severe” impairment?

     *Mr. Spencer.  In the first place, let me start by agreeing with Judge Hatfield, that we don’t look at each individual impairment separately, we must combine the impairments to find that severe level.  But severity, to have a severe impairment or impairments means it has significant impact on your ability to stand, walk, sit, lift, carry, get along with people, understand instructions cognitively, those type of basic functions that you need to work.  Having a severe impairment does not mean that you are going to be granted disability benefits, it is just the first bar you must get over.  If you don’t have a severe impairment, we stop and you do not get awarded benefits.

     *Mr. Renacci.  And then what would be the definition of, “any work that exists in the economy?”  And I use that as someone who might be severely impaired, but can maybe work at a computer and do work from that standpoint.

     *Mr. Spencer.  That is a great question.  Any work in the national economy means that there are jobs in the region or contiguous regions in sufficient numbers that you can do, given what you have left.  So I mentioned sitting, standing, lifting, carrying.  If we determine, based on all your medical evidence, including the subjective medical evidence, that you can sit 6 to 8 hours a day, that you can lift 10 to 20 pounds frequently, that you don’t need super‑frequent breaks, that you have a regular job, we can look for sedentary work for you.  And if that work exists in the economy, we will deny benefits.

     It is not based on whether they are hiring, it is not ‑‑ these jobs.  It is not based on whether you want to apply.  It is based on whether you have the mental or physical capacity to do work that exists.  Does that help?

     *Mr. Renacci.  Yes.  Mr. O’Carroll, I know my colleague brought up, and I thought it was a good point, the 3.2 million claims and 32 cases that you found.  Do you believe there is an opportunity to find more?  What would be the way to find more?  I mean that is a small number, but clearly it appears there might be a bigger number.

     *Mr. O’Carroll.  Thanks, Mr. Renacci, for that question, because one of the things I had written with my notes here, when we are talking about the 32 prosecutions that we were doing of the millions that are ‑‑ claims are out there, when ‑‑ those are the ones that were in pay, and that is part of our CDI program that we identified.  Obviously, with our other disability fraud investigations, we are prosecuting hundreds of other people.

     However, the other part of the philosophy behind the CDI program was pre‑effectuation, was to be able to identify people, provide the information to the decision‑makers up front, before people get on to the benefits.  And since we are preventing it in advance, there is ‑‑ that ‑‑ none of the government money is lost that way.

     So, what we are finding with the success of the CDI program is that judges are asking us to do more inquiries with the CDI program, we are being asked by the disability examiners to do more.  And, as a result of it, we are looking at more people in pay.  But at the moment, of people in pay compared to people on the pre‑effectuation, it is about ‑‑ I would say about 84 percent are pre‑effectuation, so we are talking about 16 percent is where that number of 32 comes from.

     And then, in completion of your question on it, what we have been saying from the beginning is that the purpose of the CDIs is to provide the decision‑makers with information that can be used on this thing.  And what we have been saying all along, and this Committee has been very supportive on, is expanding the CDI units so that when the DDSs or the judges or any of the decision‑makers have questions on it, we can be providing the information and, again, showing the videos like we are doing here, when the public sees them, much like the person playing golf with you.  Hopefully we have a camera following that person around on other times that they are doing what could be considered, you know, occupational‑type things.

     *Mr. Renacci.  Thank you.  I yield back, Mr. Chairman.

     *Chairman Johnson.  Thank you.  My friend from Texas, Mr. Doggett, you are recognized.

     *Mr. Doggett.  Mr. Chairman.  Judge Hatfield, you suggested a number of forms that I want to explore.  But just at the outset, I believe you responded previously to Chairman Johnson that most of the representatives that came in front of you during your time serving as a judge were honorable people who were doing their job effectively.

     *Judge Hatfield.  Yes, that is correct.

     *Mr. Doggett.  And I just have to say that I do find a little troubling the use of this term, “skimmed off the benefits,” and the size for the whole country.  It has been a long time since I practiced law, but I knew few lawyers then and know few now who would take a Social Security disability case.  There is no recovery unless there are benefits, which means, often in complex cases, there is no recovery.  And I believe that, from the people that I have seen in more recent years in my district office, over the last couple of decades people who had no representation, who had limited education, or, even if they had some education, had difficulty with the complexities of this system, that many folks would not be able to access the insurance benefits that they have paid over their working life to get, unless they had honorable representation to participate.

     It is reasonable that across this country, with the number of people who make application for benefits, that there is some compensation.  And absolutely, somebody who is out of work, who is disabled, unless they can find someone to take their case on a contingency, they won’t have any representation at all.

     When we describe ‑‑ though the term may be applicable ‑‑ when we describe corporations who have a legal department or other department to deal with the government, we don’t refer to those individuals as having skimmed off the corporate earnings; we refer to it as part of the normal operating process.  And I think that that is true here.

     I think every Member, regardless of party, on this Committee is strongly against fraud.  I am as outraged as anyone else to see the program jeopardized by somebody dancing on the Internet, just as we should be outraged when a pharmaceutical company steals millions of dollars from the Medicaid program, or a health care provider steals from Medicare.  So, fraud, and how we ferret it out, is very important.  But not denying benefits and not disparaging those who represent people who have paid into this system to get the benefits to which they are entitled, I think is equally important.

     Now, Mr. Spencer, you mentioned that the standard is not a low one to get Social Security benefits.  Don’t most people who apply for Social Security disability benefits get denied?

     *Mr. Spencer.  Trudy is right.  At the DDS level it is about 33 percent are allowed.  But the important thing to really remember with that number is that, while the hearings allowance is higher ‑‑ it is about 50 percent now, it has dropped ‑‑ they have a much smaller set of cases.  So, in fact, about 70 percent of all the allowances in the program are made by the DDSs, and 85 percent of DDS decisions end up being the final decision of the Social Security Administration.  So, yes, only about 40 percent of folks who apply are awarded benefits.

     *Mr. Doggett.  And you reiterated the testimony we heard not from a representative for the disabled or an advocate, but from the chief actuary here in this very committee room recently, that, despite all the alarmist articles that the sky is falling and the disability program is about to crash, that, in fact, we have a very sound disability program, there is not a crisis, there is not an excess of claims, though there certainly may be some fraudulent claims, and there may be some fraudulent representatives out there that need to be ferreted out.  But, in fact, with the same kind of transfer among the funds as has occurred in previous decades, this fund will be on firm footing going for decades ahead, and that we can continue to provide benefits to an aging workforce, and to a workforce that involves more women in the workplace than occurred in prior generations.

     *Mr. Spencer.  Yes, you summarized Mr. Goss’s testimony.

     If I might, when we think about Judge Hatfield’s approach to maybe temporary disability, while you are doing that let me remind you that there are three levels of CDR diaries:  one year for people that we know should improve; three years for people that we are not sure if they will improve; and seven years for people with terminal illnesses, or with impairments that will not improve, like intellectual disability.

     So, while you are planning, we could deal with a lot of these lengthy folks on the rolls that haven’t been reviewed by funding the CDR program.

     *Mr. Doggett.  My time is up.  I would just like if any of the witnesses or if Judge Hatfield would like to expand on it, I wanted to go into the medical vocational standards and permanence of disability.  You can forward further written comments if you have recommendations for how we can improve this system, make it work more effectively, and see that the disabled individual, as well as the taxpayer, is adequately protected here.  Thank you very much.  Thank you, Mr. Chairman.

     *Chairman Johnson.  Thank you, sir.  Mr. Kelly, you are recognized.

     *Mr. Kelly.  Thank you, Chairman.  And thank you all for being here.

     I think one of the concerns I have is the sustainability of these programs.  And I don’t think there is anybody here that would ever say that somebody who is deserving of these benefits doesn’t get them.  But, by the same token, it must be very difficult, Judge, sitting where you have sat all those years, to look at what is happening.  I was reading in your testimony, and on page four you talk about some of the things.  A bias has been set in the system at the hearing level in favor of allowance.  And this is under the complicated section you had, section two.

     But I worry about it, because I will tell you.  I read also in the notes that deciding disability is also a complex and expensive process.  Administering the DI and Supplemental Security Income programs consumes two‑thirds of SSA’s approximately $11.5 billion operating budget this fiscal year.  So again, it is the sustainability of these programs.  And that seems to me that the dollars just keep growing and growing.

     But for you to come up with a decision based on somebody sitting in front of you is very difficult.  Because I am trying to figure out these definitions of if you are fully disabled or your definition of pain.  Pain is pretty much subjective.  There are some people who have a very low threshold of pain, other people have a high threshold of pain.  I am like Mr. Renacci.  I have friends who are on disability, but are not incapacitated.  And I understand that.  I understand that.

     But I read in your testimony, and I think it is incredibly important.  We have seen a lot of technological advances in medicine.  And I know in our job market, in the private sector, things that would have been hard to do several years ago are no longer hard to do.  I have friends who have had to go from one form of employment to another because one went away.  It had nothing to do with a disability, it had to do with a loss of a job.  And they transform very quickly into another phase.

     But when you are sitting there, and you are looking at all this information, it is difficult.  And it looks to me like it is very subjective.  How do you balance those programs out, or how do you work with that?

     *Judge Hatfield.  It is difficult.  It is a difficult job.  And I want to say that the administrative law judge court does a really terrific job of trying to sort that out.  I mean that is what they are doing every day, and they are trying to achieve 500 to 700 of these decisions every year, which is the expectation, which is a lot of cases.

     And so, we are moving cases along, and we have to consider everything.  We have to consider sometimes 500, 1,000 pages of medical evidence, the claimant’s testimony, of course, and all those sort of amorphous factors in the file, as well, what kinds of medications they take, what is their daily activities.

     So ‑‑ and this is where I go back to the due process hearing ‑‑ that is really the centerpiece to try and get ‑‑ ferret out, based on what the claimant is saying.  Is it consistent or inconsistent with the record?  And that is why it is so important to have a full record before me, because it is non‑adversarial.  I have to ask the questions, I have to know what to ask in advance.  In short, it is a tough job.

     *Mr. Kelly.  The whole process.  In your closing, you said in your conclusion today there is a serious gap between disability policy and the administrative capacity required to carry out that policy.

     Now, going back to what Stanford Ross said in 2001 ‑‑ and I think that this has been taking too long to get to where we need to be on this review.  It just seems to me that you are kind of left hanging out there without having substantive information or an update in these policies to be able to make decisions that are in the best interest of those people who are coming before you.

     And as you say in here, the case load is so big, that there is a lot of other people that need to get there and can’t get there because it is so backed up.

     So, what would it take to get this review?  I mean is there something that I don’t understand coming from the private sector?  We would have to ‑‑ we don’t have years to wait on things.  I mean here we kind of measure everything in 10‑year periods, the way we spend money, the way we are going to cut spending, everything else.  But I would say this is a program that needs to be looked at sooner rather than later.

     *Judge Hatfield.  I agree, and I ‑‑ one of the suggestions I make is to have some sort of board or some body that would involve adjudicators, as well as policy experts inside and outside of SSA that would sit down and really work this out.

     I think it is very important to get the adjudicators’ perspective on this policy, as well, because we see how a policy where there may be some shalls and musts turns into these requirements that I have to put in every decision, when the bottom line is really is this claimant disabled or not disabled.

     *Mr. Kelly.  Well, listen.  Again, I appreciate you all being here.  Because I think one of the things is, as we lose ‑‑ or these programs lose credibility with the American public, that is where we start to have a real problem.  And I have got a lot of friends that really are very deserving, and we need to get to them quicker.  But there has to be a way to speed this process up.  So, thank you for being here.

     Mr. Chairman, I yield back.

     *Chairman Johnson.  Thank you.  Ms. Black, do you want to question?

     *Mrs. Black.  I certainly do, Mr. Chairman, and thank you for allowing me to ask a question.  Not being a member of the subcommittee, it is an honor to sit in on the subcommittee.

     I want to go to the Social Security Advisory Board, and the fact that they have, on a number of occasions, done reports.  And in those reports ‑‑ and I want to turn here to my notes ‑‑ the first one in 1998 that was done, entitled, “How Social Security Disability Programs Can Be Improved,” that was done in 1998.  And in that particular report it did say ‑‑ it discusses the complexity of the administrative structure, and as well, the eligibility as fundamentally a judgement process is what they said in that report.

     And then again in 2001, there was another report done by the board, and it was entitled, “Disability Decisions‑Making Data and Materials,” and there was a companion report:  “Charting the Future of Social Security Disability Programs:  the Need for Fundamental Change.”  And again, in this report, they noted that there was a question of fairness and consistency of the process, noting wide and unexplained variations in the outcomes between the different regions of the country and different levels of adjudication, and major changes on how disability is determined, based on court decisions that have never been reviewed by Congress.  So Congress has some responsibility in this, as well.

     And then, more recently, in March of 2011 there was another report, “A Vision for the Future:  Social Security Administration.”  And in here, once again, they talked about the complexity of the program.  And this is a quote out of the report.  “After 75 years, many of the policies governing the SSA’s programs have become overly complex and, in some cases, unintentionally conflicting, thereby impeding the Agency’s ability to administer its programs effectively.”

     And once again ‑‑ and this is the last one ‑‑ in February of 2012 the board had another updated report entitled, “Aspects of Disability Decision‑Making Data and the Materials,” and I quote here, “Long‑standing” ‑‑ noting the, “Long‑standing lack of consistency in disability determination process that may award benefits to individuals who do not meet the SSA disability criteria, and deny benefit to individuals who do meet the criteria.”

     One of the things that I continue to hear from my constituency is this complexity, is that it is such a weave of complexity that they have a hard time working through the process.  And most of my constituents end up getting a lawyer.  Very few of the cases that, at least I am aware of  ‑‑ and I am sure there are a lot of them I am not aware of, to be fair ‑‑ do come to me, and even when I was at the state level, to say, “Look, this is so complex, can you help me?”

     And what I would like to know from those who may know of this report, these reports, if you have ‑‑ and I guess, Mr. Spencer, maybe that first one is for you ‑‑ if you are aware of these reports, if you have taken any of the suggestions in trying to help with that complexity.

     And, in addition to that, are there some recommendations out of these reports that you think that we could still apply at some point in time?

     And third, is there anything that we in Congress can do to help you to make sure it is less complex, and to help those who are applying to get through the process?

     *Mr. Spencer.  I will certainly address the first.  And if you could remind me of the second and third ‑‑


     *Mrs. Black.  Okay, sure.

     *Mr. Spencer.  Absolutely I am familiar with the reports.  We work very closely with the Social Security Board, both the board and the staff.  They have got great ideas.  They ask us for data, we share data.  We meet with them very regularly.

     I think that I want to emphasize that our first goal in disability policy is consistency, to make sure that this very complicated program ‑‑ and it is ‑‑ that there is a modicum of complexity.  And yet, to find as much simplification as you can.

     Let me just emphasize that, from my analysis over time  ‑‑ and I have been with the program a very long time ‑‑ I think that it is very complicated primarily to serve as a protection for each individual, that it is very difficult to put an individual into certain impairment categories and have it always work.  A good example of that right now is ‑‑ is it Valerie Harper, the woman who played Rhoda on TV?  She is dying.  She has months to live.  She looks pretty good.  She looks fine, and she is on TV and talking about it.  So it is really hard to see an individual and know that, well, this person meets the requirements of disability or not.

     What we emphasize in the policy shop is getting guidance out, and case‑by‑case guidance.  Yes, we write regulations and rulings and we write instructions.  But at the same time, we also build electronic tools that walk a person through the complexity in the DDS side, at the eCAT, on the hearing side we are moving forward on Electronic Bench Book, so that if you have got a question as you are looking at this document, this tool, you can actually have the policy come down and guide you.

     We build fake cases for adjudicators to show allowances and denials, and we gather data.  We have something called the residual functional ‑‑ I am sorry, the Request for Program Consultation Process, where people disagree on cases, and we have over 6,000 very difficult cases ‑‑

     *Mrs. Black.  Mr. Spencer?

     *Mr. Spencer.  Yes, I am ‑‑

     *Mrs. Black.  I don’t mean to interrupt you.

     *Mr. Spencer.  Okay.

     *Mrs. Black.  But I am reclaiming my time, which I actually don’t have, because I see I have a red light.

     *Chairman Johnson.  That is correct.

     *Mrs. Black.  But, Mr. Chairman, if I may ask, I think this is a really important question, given that there are advisory board recommendations.  And I would like each of the panelists if they do have an opinion on how those recommendations could be implemented, whether it is something that we can work with them, if they can give us, in written form back to this Committee, their recommendations on where they think that this could occur, and how we might be able to help, given we are Congress and looking at this thing.

     *Chairman Johnson.  I know the IG can.  So thank you, we appreciate it.  Your time has expired.  Mr. Renacci, you are recognized.

     *Mr. Renacci.  Thank you, Mr. Chairman.  Mr. Spencer, I did have one follow‑up, and I know my time had expired.  And it gets back to your organization.  And I know the American people were always concerned about fraud and abuse, and you were really the gatekeeper in your organization at the starting point.  And I heard your five‑step approach to evaluate claimants, and I think those are very good approaches.

     I ask you about a sixth approach, and that is what happens ‑‑ does your organization ever look to those that have gotten through, the golfer, the guy with the cane, and all these, and then bring those back and decide how they got through, what caused them to get passed?  Even though you have this five‑step approach, and it is a good approach, and you are really ‑‑ looks like you are really attempting to do the best you can, what do you have in the process that says, “Let’s pull these back in and see what happened”?

     *Mr. Spencer.  That is a super question.  The DDSs and the decision‑makers, especially at the CDR level, that is the first line of defense, to send referrals over to our OIG partners.

     But whenever we find fraud cases, we absolutely like to see them and figure out what went wrong.  We do that not only on OIG cases, but on pre‑effectuation, before decisions are made, where someone might recommend an allowance.  And part of our review, because before allowance is paid, we look at at least 50 percent of all those allowance proposed decisions.  And if we find that something looks funny, the case is held up, the case is referred, we investigate it for either fraud or similar fault.

     So, yes, the five‑step process is a very broad process.  But whenever we suspect fraud, the decision‑makers and the policy folks go into that in some detail.

     *Mr. Renacci.  So do you ‑‑ when you re‑evaluate, do you put new processes in place to make sure that some of these items are caught?

     *Mr. Spencer.  Yes, we have given guidance on what to do when you suspect fraud, that is true.  But we fully support the work of our OIG.  I was a Disability Determination Services Director in New Jersey, when we started one of the very first CDI units in New Jersey, for example.  But yes, we pay a great deal of attention, and learn as much as we can from every case.

     *Mr. Renacci.  All right.  Thank you, Mr. Spencer.  Thank you, Mr. Chairman.

     *Chairman Johnson.  Thank you.  Mr. Kelly, do you have a follow‑up?

     *Mr. Kelly.  I do, Chairman.  I wanted to go back to the administrative ‑‑ and Ms. Black and I were just talking about this, and I am trying to understand.  If two‑thirds of an $11.5 billion budget is being funded into the administration of it, there has to be something basically or fundamentally wrong with the way it is set up.  I mean does anybody ‑‑ this doesn’t pass a smell test if we are saying, oh, it is a little bit ‑‑ yes, a little bit complicated?  Two‑thirds of 11.5 billion?  A little over $7 billion is going to the administrative costs?

     I mean to me there have to be bells going off somewhere, lights flashing somewhere.  Who is looking at this?  And how does that compare to other agencies and their breakdown?  Because I am getting the feeling that  ‑‑ I know we got a big government, I know we got a lot to cover.  But I am really concerned when administrative costs are eating up that amount.  And anybody can tell me.  Anybody have a feel for that?

     [No response.]

     *Chairman Johnson.  Don’t everybody speak at once.

     *Ms. Ruffing.  I will venture an opinion here, and it is the fact that disability determination and continuing program integrity activities are inherently complicated.  There are approximately 45 million people on the old age and survivors program, and approximately 10 million on the disability insurance program.  Please correct me, but those are in the ballpark.  But the retirement program really only requires you to verify that somebody is 62 years old or over, or that they were married to a deceased worker.  That is pretty simple to do.  There is nothing ‑‑

     *Mr. Kelly.  Well, excuse me.  I mean ‑‑ not to interrupt you, but I have to.  I mean I understand the scope of it.  But there is no way in the private sector you could look at a program where two‑thirds of it is being eaten up by administrative costs and think that this is a program that is effective and efficient.  It just doesn’t make sense.

     But, of course, I am coming from an area where you actually have to pay for it out of your own pocket, you don’t have these deep wells that you can reach into to grab revenue all the time.

     I am really concerned about this.  I mean I understand the complexity of it, but there is something wrong.  The administrative process takes up two‑thirds of an $11.5 billion budget?  That is almost 8 billion ‑‑ Jim, you are a CPA.  It comes out to, what, 7.5, 7.6?  It is a lot of money.

     *Mr. Spencer.  Our administrative costs, as a factor of our program costs, is 1.5 percent.  So ‑‑

     *Mr. Kelly.  Wait a minute, wait.  Your administrative cost is 1.5 percent?

     *Mr. Spencer.  Of the money we pay out, the program costs.

     *Mr. Kelly.  The money you pay out.

     *Mr. Spencer.  So ‑‑

     *Mr. Kelly.  What is your total budget, though?  I mean it is not 1.5 percent of your total budget.

     *Mr. Spencer.  Oh, no.

     *Mr. Kelly.  No.

     *Mr. Spencer.  I don’t have that.

     *Mr. Kelly.  Okay.

     *Mr. Spencer.  I can get that for you.

Transcript Insert

     *Mr. Kelly.  Well, let’s compare apples to apples and oranges to oranges.

     *Mr. Spencer.  Yes.

     *Mr. Kelly.  I understand what you paid out ‑‑

     *Mr. Spencer.  I think a lot of private disability insurance will run between a four and a five percent cost.  We have significantly less ‑‑

     *Mr. Kelly.  Of what they pay out.

     *Mr. Spencer.  Of what they pay out.

     *Mr. Kelly.  Okay.  But that is not the entire budget.

     *Mr. Spencer.  No, no, no, sir.

     *Mr. Kelly.  Okay.  Because there is nothing ‑‑ there is not a model out there that works on a 1.5 or 4 percent administrative cost.  I mean I worked in a lot of charities back home.  If you can keep it somewhere under 15 percent, you are walking in rarified air.

     So this is alarming, though.  This amount of money we are spending for administrative costs really is alarming, which goes back to Judge Hatfield.  This has become so complicated and so complex and so willy‑nilly, I mean what do you want the pain to be?  Pain is what I may think what pain is, you may think what pain is.  But permanent disability versus ‑‑ maybe there is some other way to do it.  I don’t want to take anything away from anybody, but the sustainability of these programs is in great jeopardy because of the structure.

     So, Mr. Chairman, thank you.

     *Chairman Johnson.  The gentleman’s time has expired.  Thank you for your questions.

     Ms. Hermann, what are the most common types of disability fraud that CDI units investigate?

     *Ms. Hermann.  We investigate all types of disability fraud.  But the most common things we see are people ‑‑ it really runs the spectrum ‑‑ people outright faking their disabilities to people who are mildly exaggerating some of their ‑‑ the things they are able to do.  And it, again, runs the spectrum from pain, generalized back pain, migraines, all the way to, you know, mental disorders, personality disorders ‑‑

     *Chairman Johnson.  When you find somebody that is fraudulently trying to take money from the system, how fast does the money stop?  Or is it immediate?

     *Ms. Hermann.  That is actually a good question for some of the SSA counterparts here.  Our investigations, we try to do as quickly as possible, but still as thoroughly as possible, so ‑‑

     *Chairman Johnson.  Well, then you give them to him.  And do you stop the payments?

     *Mr. Spencer.  We do.  As soon as fraud is suspected, payments can be suspended.  And we re‑evaluate the case, ignoring all the suspect evidence.

     *Chairman Johnson.  Mr. O’Carroll, what percentage of CDI investigations focus on initial claims?

     *Mr. O’Carroll.  Chairman, that is about, I would say, 84 percent is initial claims.  So about 16 percent are in pay.

     *Chairman Johnson.  And why is the program more focused on applicants, rather than those already receiving benefits?  And you got any more videos that you want to show us?


     *Mr. O’Carroll.  I just happened to bring some extra videos with me.

     But to tee it up again, just as you had said, Chairman, on it, what we wanted to do with the CDI program at the beginning of it, was stop the money from going out the door.  And that is why our focus, from the beginning of it, was to get the information to the decision‑makers before the benefits go out.  Because it is so hard to recoup the money once it is lost.  It is better to get it on the front end.

     However, because of the success, and doing the videos that I will be showing you in a minute, it has become so good a tool for providing judges with the information, for finding the DDS people with the information, that we are getting more and more referrals, so we are doing more and more in pay.  And those are the ones that ‑‑ as came up earlier, those are the ones, when they are in pay, that are more likely to be prosecuted.

     But with this, we did bring a couple of other examples, and I will show them to you now.

     [Video shown.]

     *Mr. O’Carroll.  In this first video, we have ‑‑ this first woman, she is the lead singer in a musical group, and she claims she was disabled and isolated herself from others.  CDI investigators located this tube [sic] on YouTube and then shared it with the DDS.

     The next woman we see is jogging at a softball game, and she claims she suffered from chronic back pain.  And she talked about the softball game, as well as other workouts and activities, on her Facebook page.

     And finally, this is the case of the drummer girl who was featured ‑‑ she was featured on Fox News.  The case became, as a result of a CDR on the woman, who was receiving benefits for back pain and other disorders.  We discovered she was actually a very talented drummer in an all‑female band.  And the investigators located some videos on YouTube, and then they went to the concert and filmed the whole thing, which is what we used, and then we turned it over to the DDS and she didn’t get her benefits.

     *Chairman Johnson.  Thank you.  I appreciate that.

     I think that is all I want to do at this point.  Mr. Becerra, you are recognized.

     *Mr. Becerra.  Thank you, Mr. Chairman.  Thanks for letting us ask a second series of questions.  And actually, to Mr. Kelly’s point, that is why there is an expense to the Administration of the DI program, because we have to pay your salary, and Ms. Hermann’s salary, and all the folks who are going to go out there to make sure we do this right.  Then we have to make sure we pay Judge Hatfield to conduct the hearing, we have to pay Mr. Spencer and Ms. Lyon‑Hart, to make sure that the process is done properly.

     When you think about it, in terms of the actual amount spent administering the program, one or two percent, that is great, in terms of the benefits that are doled out.  And I actually think, given that you have to deal with tens of millions of Americans who are either getting survivor’s benefits, retirement benefits, or disability benefits, that, for the cost, I just want to say to each and every one of you who are working, because I don’t know if we said this to you, but each and every one of you who work in this field, thank you.

     Thank you for what you have done in helping make determinations, and helping process the folks, and helping make sure that Americans can have confidence in the system.  I don’t think, often times, we recognize how much work you do.  And so, when you find that person who is trying to take advantage, it is important.  Because there is going to be someone who does come through the door of the judge who really can’t afford an attorney, who really has a case, but doesn’t know how to prosecute it for himself or herself.  And that is where the judge comes in and all the folks who make sure that those Americans who paid into the system for years and years and years have a chance to make it happen.

     So, quite honestly, I think, Mr. Kelly, if we look into this, we will find that, for the money, you can’t find a better‑administered program than what you have with the Social Security ‑‑

     *Mr. Kelly.  Would the gentleman yield?

     *Mr. Becerra.  Absolutely.

     *Mr. Kelly.  There is a huge difference between the percentage of what is paid out and the total percentage of the budget that is allotted.  Administrative costs that eat up two‑thirds?  I can tell you, Mr. Becerra, coming from the private sector, there is nobody operating any business today in the private sector that looks at two‑thirds of the administrative ‑‑ going to the administrative costs of what they are spending, and thinking they are running a successful business.  It can only be done inside Washington, and that is because we got other people that fund it for us.

     *Mr. Becerra.  And, Mr. Kelly, name me another company that has to deal with millions of people who claim that they are disabled after paying benefits and have to go through the process.

     *Mr. Kelly.  We are comparing apples and oranges.

     *Mr. Becerra.  Comcast doesn’t have to do that.  AT&T doesn’t have to do that.  Northrop Grumman doesn’t have to do that.  This is tough.

     It ain’t easy, nor should it be easy to get those benefits.  But Americans are entitled to get those benefits, if they worked hard and they can prove that they are now qualified.

     And so, I honestly think, if we look into this, no one does it better.  And I guarantee you Northrop Grumman, AT&T, Comcast pay a lot more for attorneys than the Social Security Administration pays their ALJ judges and everybody else who tries to put these cases together.  I guarantee you AT&T has a far bigger budget to do its investigations and so forth than does the SSA to have Mr. O’Carroll do that great work that he and Ms. Hermann are doing.

     And so, I think that we could put all that out there transparently.  And I guarantee you that many of us would be willing to dive on the sword to say that SSA is working very hard to make sure that the system is working for Americans who paid into it.

     Let me ask a couple of quick questions.  So ‑‑ by the way, thank you.  By the way, can I also, Mr. Chairman, say thank you to Kim and the staff on this Subcommittee?  Because we have had a couple of great hearings, where I think we are digging deep into what we can do to make the program work better.  And I want to thank the cooperation that we have seen from our staff, both Majority and Minority staff, in helping us really have what I think are solid hearings, where people want ‑‑ Members of Congress want to stay and actually ask a second round of questions of the witnesses.  So I want to say thank you to Kim and all the staff on our side, as well, Kathryn and staff.

     Judge Hatfield mentioned something that caused me some cause for concern, until I thought about this a little bit.  Mr. Spencer, isn’t it the case that, with regard to those people who have a severe but not a permanent disability, that those are the types of cases that SSA most likely is going to send Mr. O’Carroll to go look at first?

     *Mr. Spencer.  Well, yes but.  And the reason I say, “yes but,” there are impairments that last a year, but we expect them to get better.  So our first line of defense is, in fact, the CDR.  At any time, if we suspect that something is not right in a claim, we refer that over to the OIG, because they are the experts in these type of ‑‑

     *Mr. Becerra.  And the CDRs, which we have been told save us nine bucks for every buck invested in that investigation, is what this congress chose to under‑fund.  And so, Mr. Chairman, there again, I hope we do something more about trying to make sure those reviews can be done.

     And final question, Mr. Spencer, lots of variation in the rate at which people are awarded disability benefits, because there are a lot of differences among those folks who apply.  What are the things that SSA does to make sure that a person with the same type of limitation in one part of the country gets the same answer, no matter where he or she files, compared to someone else in another part of the country?

     *Mr. Spencer.  We have a comprehensive quality assurance process.  The states have an internal QA.  As I said, 50 percent of all allowances are reviewed by a federal component before benefits are awarded.  We take the information we gain from that, we feed it back as training.  We gather data, we have something called a policy feedback system, where folks look for good case examples, and then we build training modules around those good cases, cases that should be allowed or denied.

     As I mentioned, the RPC process takes complex cases and gives feedback to the decision‑makers, so that they know what the policy guidance is.  Those are just some examples, sir.

     *Mr. Becerra.  Thank you.  Mr. Chairman, thank you very much.

     *Chairman Johnson.  Thank you.  Ms. Black, will you close us out?  Do you have another question?

     *Mrs. Black.  Thank you, Mr. Chairman.  My last question was for the judge.

     Judge Hatfield, so the ALJ’s get specific training on hearing these cases?

     *Judge Hatfield.  Yes, they do.  In fact, I was the lead instructor for many, many years in the Agency.  They get initial training, which is about four weeks.  And then, after a year, they come back and have supplemental training for a week, where, after they have heard some cases, they are able to discuss the issues in more depth.

     *Mrs. Black.  And is there a review of their cases to just see how many cases are being approved, related to just looking at, geographically, the whole country?  Because I know in some of the studies that I have done, it seems that certain areas of the country have judges that are approving more cases than others.  And again, that is just looking at it cursorily, not looking deeply to find out why that is.

     But is there any sort of review to make sure that what they are hearing and in the cases that they are reviewing, especially if they are unusually high numbers, that they are reviewed?

     *Judge Hatfield.  The Appeals Council, which is the administrative body above the judges, chiefly looks at cases based on denials of review, a claimant’s initiated appeals.  And that has been their largest workload for years and years.  They have expanded lately ‑‑ tremendously, actually ‑‑ to look at allowances, as well.  And I think they are looking at more allowances at this point.

     But in terms of looking at a particular judge, there has been a history in the agency, sort of a bloody history, honestly, of looking at targeting particular judges and their allowance and denial rates.  So it is a little tricky in that area.  I will say, though, and I said this before in my testimony, is there is somewhat of a bias at the ALJ level to pay a case, because the allowances aren’t looked at at deeply as the denials.  Denials are on appeal.  Whereas, in the DDS, as Art said, they look at about 50 percent of the allowances.  But in terms of the denials ‑‑ so there may be a bias in that particular part of the process to deny a case, as opposed to pay.

     So, I believe there isn’t quite the balance here between allowances and denials at each level that there should be.

     *Mrs. Black.  I think that is another area, when you look at the disparity geographically, that we might want to look at a little deeper to find out what the justifications are there, and why it seems that some areas the judges find in favor much, much more than other areas.

     So thank you for your testimony.

     *Chairman Johnson.  That has been a problem.  As a matter of fact, especially in Puerto Rico.  I won’t say any more than that.  You know what I am talking about.

     Thank you, witnesses, for your testimony.  I thank you also to the Members that are here.  Understanding the challenges of achieving fair and consistent disability decisions is critical to making sure that the Disability Insurance program can keep serving the people it needs to serve the most.

     And, with that, this Committee is adjourned.  Thank you.

     [Whereupon, at 11:47 a.m., the subcommittee was adjourned.]

Questions For The Record

Arthur Spencer
David Hatfield
Trudy Lyon Hart

Public Submissions For The Record

Jim Grennan
Kathleen McGraw
Kathryn Evans
Scott Morris
Verrell Dethloff