Statement of James Hill, President, Chapter 224, National Treasury Employees Union, Cleveland, Ohio

Testimony Before the Subcommittee on Social Security
of the House Committee on Ways and Means

June 15, 2006

Good morning Chairman McCrery, Ranking Member Levin and members of the Subcommittee on Social Security.  My name is James Hill.  I have worked as an Attorney-Adviser in the Office of Disability Adjudication and Review (formerly the Office of Hearings and Appeals) for over 23 years.  I am also the President of Chapter 224 of the National Treasury Employees Union (NTEU) that represents Attorney-Advisers and other staff members in approximately 110 Office of Disability Adjudication and Review (ODAR) Hearing and Regional Offices across the United States.  I thank the Subcommittee for inviting me to testify regarding Commissioner Barnhart’s proposal now known as the Disability Service Improvement Initiative (DSI) to reform the disability determination process.  My testimony today represents the views of NTEU.

Since the early 1990’s SSA hearing offices have been under severe stress caused by an adjudication process woefully inadequate to process the massive numbers of appeals of State Agency determinations.  Cases pending at OHA hearing offices rose from approximately 180,000 in 1991 to approximately 550,000 cases nationwide by mid-1995.   At that time SSA began the Senior Attorney Program which during its pendency from 1995 to early 2000 produced over 220,000 fully favorable on-the-record decisions.  The number of cases pending at hearing offices was reduced to approximately 311,000 in September 1999.  However, since 1999, a number of factors including the termination of the Senior Attorney Program, increased receipts, and the implementation of the disastrous Hearings Process Improvement Plan (HPI) have resulted in a record number of cases pending.  Currently, there are approximately 727,000 cases pending at ODAR hearing offices with an average processing time of nearly 480 days.  In some hearing offices processing time is approaching two years.   All agree that this is not an acceptable level of service.

The current backlog was accumulated over the course of several years.  Elimination of the backlog will take several years; there are no practical “quick fixes”.  Commissioner Barnhart recognized this fact and after a comprehensive and lengthy review of the current adjudication process, she proposed a number of fundamental changes.  The changes in the disability process were codified in the final regulations published on March 31, 2006.   The process by which these regulations were promulgated was lengthy and involved substantial interaction with entities internal and external to SSA that are interested in the disability process. 

The final regulations significantly alter the disability adjudication process.  They create a “quick decision process” to adjudicate those claimants who are obviously disabled.  They eliminate the reconsideration determination and create an entirely new level of decision maker; the Federal Reviewing Official.  The final regulations replace the Appeals Council with a Decision Review Board and indicate that an entirely new quality assurance system will be created that will function at each level of the process.  The final regulations introduce a limited number of changes in the Administrative Law Judge hearing process but do not alter the essential nature of that process. 

To facilitate the new disability adjudication process, Commissioner Barnhart has instituted organizational changes designed to facilitate the implementation of DSI.  These changes include the creation of Quick Decision Units at the state agencies, the creation of the Office of Disability Adjudication and Review, and the creation of Medical and Vocational Expert Units.  The components of the Office of Disability Adjudication and Review include the Office of the Chief Administrative Law Judge that oversees the operations of the Agency’s hearing offices, the Office of the Chief Federal Reviewing Official that oversees the operations involving the Federal Reviewing Officials (FedRO), the Office of Appellate Operations (the Appeals Council) and the Office of the Decision Review Board.

Implementation of DSI will commence in the Boston Region on August 1, 2006.  The Commissioner has wisely selected the Boston Region as the first to implement DSI for a number of reasons including its small size (currently the Boston Region has about 3% of the hearing office caseload) and state agencies that are efficiently processing their workloads.   Notably, the Boston Region hearing offices are not troubled by the huge backlogs that afflict so many hearing offices across the United States.  The Commissioner also has decided that DSI will not be expanded to other regions for at least a year.  This permits the fine tuning that will certainly be necessary in order to achieve maximum efficiency.  Only after DSI has proven its viability will it be expanded and even then, to other small regions initially. 

Quick Decisions

In order to provide timely benefits to those who are “obviously disabled”, the new regulations contain provisions for a “Quick Decision Process”.  This will significantly improve the disability adjudication process for those claimants with specified medical conditions that normally result in a finding of disability.  The Commissioner projects that approximately 10% of initial claims can be handled through this process.  While originally scheduled to be attached to various regional offices, the final regulation places these units in the various state agencies.   This is an example of the flexibility shown by the Commissioner during the course of the comment period.

The Role of the Federal Reviewing Official (FedRO)

Perhaps the most innovative initiative contained in the regulations is the elimination of the reconsideration determination and the creation of the Federal Reviewing Official (FedRO) position, a federal attorney with complete adjudicatory authority that is placed between the State Agency and the Administrative Law Judge.  It is absolutely essential that the FedRO process be more than a replacement for the current reconsideration determination which has very little credibility with the public or with ALJs. 

If DSI is to fully succeed, the FedRO must introduce an element of credibility in disability adjudications prior to the ALJ hearing that is presently lacking.  Currently, the State Agencies provide almost no rationale for their unfavorable determinations which seriously undermines their credibility.  It is essential that the decisions made by the FedRO be recognized as independent decisions by an individual who has the discretion to award or deny benefits as justified by the record.  The importance of attaining this credibility cannot be overstated.  The final regulations removed some, but not all, of the ambiguity in the proposed regulations that led many to question whether the FedRO is an independent decision maker.  If the FedRO turns out to be “just a federal reconsideration determination” DSI will fail.

To enhance the credibility of the FedRO decision, it must be a well reasoned, comprehensive and literate explanation of why a claimant is, or is not, entitled to disability benefits.  To be effective the FedRO process must establish its credibility with claimants, the State Agencies, Administrative Law Judges and most importantly with the American public.  This requires the legal expertise of an attorney to apply the rules, regulations and law to the evidence and to make and issue a legally defensible written decision.  It also demands extensive knowledge and experience in evaluating the functional effects of medical impairments. The FedRO must have extensive legal and disability program knowledge and experience.  Fortunately, SSA already employs personnel with the education, training, and experience to decide and draft disability decisions necessary to assure the success of the FedRO process -- ODAR Attorney Advisers. 

The expertise of each individual FedRO is vital to the success of DSI.  It is essential that the Agency secure the best available applicants.  The first 70 FedROs will be located in the Washington metropolitan area, close to or at ODAR headquarters.  Given the number of unknown factors associated with the “start-up” of this new process, it is prudent that it be located centrally.  However, there is a significant downside to such a centralized location in that many of the best qualified potential applicants will not compete for the positions simply because of the location and the general unattractiveness of the proposed working conditions.  It is essential for the success of DSI that the key position in DSI, the FedRO, is accessable to those most qualified to successfully perform the requirement of the position.  That entails locations convenient to those highly qualified individuals as well as working conditions conducive to enticing the best to apply and accept the appointment.  Hopefully, SSA will recognize that acquiring the best possible applicants requires that the position must be made attractive, and in the future, it will adjust its hiring strategies to facilitate acquiring the best possible personnel.

There is a larger issue involved in the eventual placement of FedRO personnel.  When citizens think about the Social Security Administration, they do not perceive it as a far off governmental bureaucracy located in Baltimore.  Most do not even know that SSA headquarters is in Baltimore.  When most citizens think of SSA, they do so in terms of their local SSA office where they can deal face to face with SSA employees who are their neighbors.  This is an invaluable asset not only to SSA but to the public we serve.  Is it likely that SSA would have delivered such spectacular service to the people of hurricane damaged Louisiana, Mississippi, Alabama, and Texas if it had been a faceless bureaucracy located somewhere inside the “Beltway”?  SSA is what it is in part because it is neighbors serving their neighbors.  The rationale that applies to the wisdom of maintaining local field and hearing offices should also apply to the FedRO.  Citizens are much more comfortable dealing with their government on a local basis with people who are their neighbors, not strangers half a country away.

An important objective of DSI is to facilitate consistency at all decisional levels.  The inconsistency of decision-making between the state agencies themselves, state agencies and ALJs, and even among ALJs themselves has been a constant source of criticism.  However, it must be understood and accepted, that the complexity of disability determinations and the difference in the effects of medical conditions on each individual leads to some perceived inconsistency in the decisional results.  Nonetheless, the final regulations do facilitate decisional consistency without interfering with the decisional independence of adjudicators at all three levels through several modalities including the FedRO process itself and a comprehensive quality assurance program. 

The requirement that the FedRO produce a well reasoned legally defensible decision using the same rulings, regulations, court decisions, and statutes as are used by the ALJ should greatly enhance decisional consistency.  DSI initiates feedback loops among the various levels of adjudication that will provide each level with insight into the thought processes of the other decision makers.  If the FedRO decision is different from that of the State Agency, the FedRO’s written decision will explain to the State Agency why a different decision was reached.  This level of communication, both formal and informal, between the FedRO and State Agency will result in improved decision making by both entities and promote decisional consistency without adversely affecting the claimants. 

The increased level of decisional consistency promoted by the regulations will result in the reality and the perception that the proper decision is being made at the earliest possible time.  The FedRO decision will present the ALJ and the claimant with a comprehensive explanation of why the Agency denied the claim.  While it imposes no limitation on the ALJ, it does help focus the issues in controversy leading to a more efficient hearing process.  By providing the claimant with a detailed explanation of why his/her application was denied, the FedRO assists the claimant and his/her representative in marshalling evidence needed to establish disability.

The ALJ Hearing

The final regulations wisely retain the Administrative Law Judge hearing process essentially unchanged.  Hearing offices will continue to prepare cases for hearing, Administrative Law Judges will continue to conduct due process hearings, and the decisional independence of the ALJ continues to be protected by the APA.  However, concern had been expressed about the relationship between the FedRO and the ALJ.  The final regulations make it clear that the FedRO decision is not entitled to any deference on the part of the ALJ.  The Commissioner’s Plan recognizes that the reality of the de novo hearing must be maintained and the freedom of the ALJ to decide cases based upon his/her evaluation of the evidence and the appropriate law and regulations must be preserved.   

Elimination of the Appeals Council

Another bold initiative of DSI is the elimination of the Appeals Council and the claimant’s right to make an administrative appeal of the ALJ decision.  While on its surface the elimination of the Appeals Council appears to be detrimental to claimants, that is not the case.   The effect of the elimination of the Appeals Council must not be viewed in isolation, but in the context of the entire adjudicatory process.  Improvements in the decision making process at the State Agency level, the introduction of the RO, and the quality assurance program proposed by the Commissioner render the administrative review of ALJ decisions unnecessary.  We believe that considering the Commissioner’s New Approach in its totality, an additional administrative appeal of the ALJ decision is unnecessary.

As currently constituted the Appeals Council serves two distinct purposes.  It serves as an appellate body and as a quality assurance entity, but performs neither with distinction.  This is not intended to disparage the hard-working employees at the Appeals Council, but rather its basic concept and design.  The final regulations replace the Appeals Council with an end-of-line review by a centralized quality control unit known as the Decision Review Board.  The Agency, in its effort to improve quality assurance at the ALJ level of adjudication, should take care not to repeat its mistakes of the early 1980s when it attempted to interfere with ALJ decisional independence.  The final regulations recognize that in order to avoid the appearance of interference with ALJ decisional independence, it is essential that ALJs be intimately involved in any quality assurance program. 

There is concern that the lack of a right of administrative appeal of the decisions of Administrative Law Judges will result in a substantial increase in the caseload of the District Courts.  We agree that any action that significantly increases the caseload of the district courts is unacceptable.  However, we believe that the assumption that eliminating the Appeals Council will significantly increase District Court caseload is unwarranted.  While such an assumption is sustainable if one considers the elimination of the Appeals Council in isolation, it is far less sustainable when one considers the whole breadth of the Commissioner’s plan.  In that light, we expect that after a period of adjustment, the increased quality of the adjudication system will actually decrease the number of cases filed at the District Court.  It will certainly significantly decrease the number of voluntary remands.  In any event, the measured implementation process that limits DSI to the Boston Region for at least one year will permit an opportunity to observe the impact of the elimination of the Appeals Council on the number of court filings.

While appealing unfavorable ALJ decisions directly to the District Court is appropriate, claimants should not have to file an action in the District Court to contest a dismissal of a Request for Hearing. The final regulations permit claimants to appeal dismissals to the Disability Review Board. 

AeDIB

The Commissioner has made it clear that inauguration of her new approach is predicated upon the successful implementation of AeDIB.  SSA has had sufficient experience with implementing substantial process changes without ensuring the necessary system improvements are in place to know the dangers of premature implementation.  Fortunately, AeDIB is progressing as well as can be expected.   Components of AeDIB such as digital recording of hearings, video teleconferencing for conducting hearings, and a new case management system (CPMS) have been successfully accomplished.  Decision writing templates that significantly improve the quality of written ALJ decisions have been enthusiastically received and continue to be made even more user friendly.  The Agency has determined that dual monitors are necessary to maximize the utility of the electronic folder and in fact has commenced the purchase and distribution of a second monitor to those employees who duties require the use of two monitors.  Of course the most important and most complex component of AeDIB is the electronic folder itself.  

The savings, both in time and money, that will be realized by converting from paper folders to electronic folders are substantial and will result in improved service to the public.  The electronic folder will significantly increase the Agency’s flexibility in managing its workload and permit cases to be processed more expeditiously.   Implementing electronic folders is a massive undertaking and the consequences of failure are catastrophic.  However, the realistic attitude and the competency of Agency personnel charged with the responsibility of implementing the electronic folder has resulted in a process that is proceeding as well as can be expected.  They have demonstrated a capacity to listen to the comments from end users and introduce improvements on a nearly continual basis.  There is every reason to expect the electronic folder to be a technical success.  However, the Agency should recognize that the fundamental differences in the interface between employees and the electronic folder and the current interface between employees and paper folders may render some tasks more time consuming than is presently the case.

The Backlog at Hearing Offices

The disability backlog problem at ODAR is neither recent nor entirely intractable, but it is persistent. 

As of the end of April 2006 there were 727,629 cases pending at ODAR hearing offices.  The optimal level of cases for efficient ODAR HO operations is 350,000 cases.  While DSI will significantly improve the adjudication process, it will have little impact on the current backlog.  In fact, if the backlog problem is not addressed it will strangle the Commissioner’s DSI initiative.  Unless the backlog at ODAR hearing offices is eliminated, DSI will be no more effective in providing timely service they we are now.  Fortunately, history provides the vehicle for the resolution of the backlog problem – the Senior Attorney Program begun in 1995.   The solution is to use current staff to perform the adjudication needed to deal with this problem.

It is not a coincidence that during the time the Senior Attorney Program was in operation (1995-2000) the number of cases pending at OHA hearing offices declined, nor is it a coincidence that the number of cases pending increased after the Senior Attorney Program was terminated as part of the Hearings Process Improvement Plan (HPI).  Over its five year history, the Senior Attorney Program produced 220,000 decisions which when combined with record ALJ productivity reduced the number of cases pending at hearing offices from 550,000 to 311,000 cases.  This was accomplished with a relatively modest expenditure of resources.  HPI eliminated the Senior Attorney Program because it was believed that the Senior Attorney Program was no longer necessary.  The termination of the Senior Attorney Program, the implementation of the disastrous HPI initiative and increased receipts have resulted in a record number of cases pending.  ODAR has a serious backlog problem, and there is no reason to expect a significant improvement in the foreseeable future. 

As discouraging as the increase of cases pending may be, it does not fully reflect the harmful effect of the backlog on the public.  Average processing time at the hearing office level was approximately 270 days at the beginning of FY 2000; now it is nearly 480 days.  In some locales, claimants have to wait nearly two years for a hearing.  This is an unconscionably long wait for a disability decision, and it is causing untold harm to some of the most vulnerable members of society.  None will dispute that the public deserves far better service than SSA is presently providing. 

The backlog has risen despite system and process improvements and record ALJ productivity levels.  Current initiatives have not materially affected the backlog because they fail to deal with the underlying causes of the backlog.  The root causes of the hearing office backlog are the number of receipts, too few adjudicators for the size of the caseload, and an inefficient adjudicatory process.   Little can be done about the number of receipts.  Fiscal considerations preclude acquiring the massive number of ALJs that would be required to effectively reduce the backlog.  ODAR must look elsewhere for the additional adjudicators temporarily needed to deal with the backlog problem. 

Consistent with my testimony at previous hearings, we recommend implementing an improved Senior Attorney Adjudicator Program.  If implemented this programwould produce approximately 370,000 high quality favorable decisions over the next four fiscal years, effectively eliminating the backlog by the end of FY 2010, with a minimal increase in resources.  Additionally, none of those cases would need to be worked up (pulled) as Senior Attorney Adjudicators would review and decide unpulled cases.  This will significantly reduce the backlog of cases to be pulled.

A Senior Attorney Adjudicator Programwould invest the authority to issue fully favorable on-the-record (OTR) decisions in all hearing level attorneys with at least 3 years experience.  All qualified ODAR attorneys with at least three years’ experience would assume decision making as well as ALJ decision drafting duties.  The addition of decision making duties necessarily reduces decision writing capacity.  However, because most ALJ decision writing will continue to be done by attorneys, replacing lost decision writing capacity can be accomplished by redirecting current assets.  The original Senior Attorney Program demonstrated the validity of this concept.  To further ensure quality, all Senior Attorney decisions would be drafted in the new decisional templates, formatted for Senior Attorney signature, and a Lead Senior Attorney position would be created.  This individual would review hearing office (HO) decision drafts, including those drafted by Senior Attorneys, and provide feedback on quality to management, the writers and the Senior Attorneys. 

The large number of Senior Attorneys who would perform both the function of decision maker and decision writer ensures that each hearing office would have maximum flexibility in managing its workload.  Requiring that Senior Attorneys still draft ALJ decisions ensures that ALJs continue to have access to the most skilled and experienced decision writers.  No DSI cases would be subject to adjudication by a Senior Attorney.

In addition to making a positive, immediate, and effective impact on the backlog, a Senior Attorney Adjudicator Programwould act as a training program for the Federal Reviewing Official (FedRO) position.  Over the next five years, SSA will hire or promote over 2000 attorneys for the FedRO position that the Commissioner has repeatedly declared to be the linchpin of DSI.  Hiring new attorneys in ODAR hearing offices will permit them to learn the SSA disability adjudication process under the mentorship of Senior Attorneys and Administrative Law Judges. Eventually, those successful as Attorney Advisers would become Senior Attorneys.  Those successful as Senior Attorneys would be prime candidates for the FedRO position.  The selection of FedROs would be based on demonstrated performance and not the vagaries of a merit selection system.

The conversion of a large number of ODAR Attorney Advisers to part time decision making Senior Attorneys will result in an immediate and substantial improvement in ODAR service to the public at minimal additional cost.  Based upon the Agency’s experience with the original Senior Attorney Program, and with the full cooperation of hearing office management (lacking during the original Senior Attorney Program), this initiative could produce as many as 100,000 quality decisions a year without diminishing ALJ productivity or changing the overall payment rate.  Based upon previous experience, the average processing time for these cases would be approximately 100 days.  Additionally, the minimal staff time and complete lack of ALJ time spent on these cases frees the staff and ALJs to spend more time on processing those cases requiring a hearing.  The staff will benefit greatly from the significant reduction in the pulling workload caused by the Senior Attorney Adjudicator Program.  The reduction of the backlog will significantly enhance the ability of hearing offices to more efficiently transition from paper to electronic files and will enable hearing offices to effectively fulfill their role in the DSI process.

The savings in administrative costs to the Agency and human costs to the claimants by eliminating unnecessary hearings would be substantial.  Adjudicating cases that should have been paid without the need for ALJ involvement will not only provide much more timely service to those disabled claimants, but it will free ALJs to hear only those cases requiring a hearing thereby shortening the time those claimants must wait for a disability decision.  The savings and improved service that would result from the implementation of a Senior Attorney Adjudicator Program based upon the original Senior Attorney Program would be substantial.  This program would greatly facilitate the transition from the current system to DSI.

Mr. Chairman, again, I appreciate the opportunity to testify before this committee and would be happy to answer any questions members of the committee may have.  Thank you.