Statement of Gary Flack, Chairman, Social Security Section, Federal Bar Association, Atlanta,
Georgia Testimony Before the Subcommittee on Social Security of the House Committee on Ways and Means June 15, 2006 Chairman McCrery,
Representative Levin and Members of the Subcommittee:
The Social Security
Section of the Federal Bar Association (FBA) welcomes this opportunity to share
our thoughts about the new final regulations changing the disability claims
process, the “Disability Service Improvement” (DSI) initiative. This testimony
is submitted on behalf of the Social Security Section of the FBA. I am the
chair of the Social Security Section of the Federal Bar Association, and this
testimony does not necessarily represent the views of the national
organization.
As you know, the FBA is the
foremost national association of private and government lawyers engaged in
practice before the federal courts and federal agencies. Sixteen thousand
members of the legal profession belong to the FBA. There are also within the
FBA over a dozen sections organized by substantive areas of practice, including
the Social Security Section. The FBA’s Social Security Section is unlike other
organizations of lawyers associated with a particular constituency of Social
Security disability lawyers. Our members include attorneys involved in all
aspects of Social Security disability adjudication, including attorney
representatives of claimants, administrative law judges, Appeals Council
judges, staff attorneys in the SSA Office of Hearings and Appeals and Office of
General Counsel, U.S. Attorneys and U.S. Magistrate Judges, District Court
Judges and Circuit Court Judges.
Social Security
Administration Commissioner Jo Anne B. Barnhart issued a final rule
establishing a new disability determination process on March 31, 2006. 71 Fed.
Reg. 16424 (Mar. 31, 2006). This rule is the culmination of much analysis,
thought, and hard work. The Commissioner is to be congratulated for
recognizing that the administrative process she inherited failed to efficiently
and accurately identify many disabled claimants. She conferred with
representatives of many groups, including our Section, that are interested and
involved in the agency’s disability determination process. The final rule
reflects the input from almost 900 individuals and groups; their comments were
made in response to the Commissioner’s proposed rule.
This Subcommittee is also to
be congratulated for its oversight role in conducting hearings on the problem
and now the solution. Today, we focus our testimony on four aspects of the final
rule:
- Will the
reviewing official delay proceedings or become an institutional hurdle
claimants must overcome?
- How
should the success of DSI be measured?
- Will
Region I predict how well DSI will function elsewhere?
- Will the
Decision Review Board undermine the independence of ALJs?
WILL THE REVIEWING OFFICIAL
DELAY PROCEEDINGS OR BECOME AN INSTITUTIONAL
HURDLE CLAIMANTS MUST OVERCOME?
The Reviewing Official (RO)
replaces the Reconsideration level of review. It appears to be a more
informal, but federally-controlled decision maker. The FBA is concerned that
the RO will be quickly overburdened and delay the process of developing
accurate decisions. The RO is likely to need updated information, outside
consultative examinations, and (if the RO contemplates paying benefits) the
opinion of the new medical and vocational expert system. Unless there are as
many ROs as there are Administrative Law Judges (ALJs), the caseload of each RO
will soon equal or exceed the average ALJ caseload. Too large a caseload will
not only delay decisionmaking, but also interfere with accurate
decisionmaking. The RO may become a bottleneck, particularly since the RO must
write his own detailed decision. Accordingly, we believe there should be more
ROs than ALJs to move cases expeditiously.
There also may be undue
delays associated with consultative examinations and permitting claimants to
share these consults with their treating physicians. This process may work
well with represented claimants. However, it is unclear how pro se
claimants who are illiterate or computer-illiterate will handle electronic
files or view the new consults. DSI does not specifically address these
claimants in its new rules.
In addition, there may be a
tendency for the RO decision to become an institutional standard in disability
determinations. Some ALJs may utilize it to deny benefits. Other ALJs may
regard it as a hurdle to overcome. If an ALJ reverses the RO’s decision, the
Decision Review Board (DRB) may question that decision based on the RO
decision. The DSI must provide procedural guarantees to assure the
independence of ALJs decisionmaking. It is the fair hearing that is the
centerpiece of the disability adjudication process, not the RO.
Finally, we understand that
initially all the ROs will be located in Falls Church, Virginia. This might
make sense with the participation of one small region as a pilot project.
However, as the DSI expands and the RO workforce grows to a size of at least
1100 ROs, we believe RO dispersal throughout the country should be considered.
They could still review claims nationwide. There is likely to be a better pool
of qualified applicants available if the Commissioner were to place them at
regional locations. There are also less expensive places to live than Falls
Church. In short, whatever the advantages of initially housing ROs in one
location, we believe that decentralization of the RO workforce around the
country should be pursued after the completion of the pilot project phase.
HOW SHOULD THE SUCCESS OF DSI
BE MEASURED?
There are two primary
measures of the success of DSI, involving the payment of claims by the
Reviewing Official and the dynamics of judicial review.
Payment of Claims by the
Reviewing Official
The purpose of the RO is to
make the correct decision sooner. Accordingly, more claimants cases should be
approved at the initial and RO levels than are currently approved through the
reconsideration level. Fewer cases should appear for adjudication at the ALJ
level. DSI can be regarded as a success if relatively more claims are paid
initially at the RO level.
Dynamics of Judicial Review
After the DRB approves an ALJ
decision, there are several other measures of the success of DSI.
- Do
voluntary remands of federal complaints decrease after the abolition of the
Appeals Council?
- Are there
fewer technical errors? (For example, lost files, blank CDs etc.)
- Are there
fewer obvious substantive mistakes than before? (For example, failures to
follow the treating physician rule, improper uses of vocational experts, etc.)
- Is there
a reduced percentage of substantive court decisions in favor of plaintiffs?
- Are there
fewer “sentence 6" remands because "new and material evidence” is
appropriately added to the record via the discretion of the ALJ?
Even with a faster
administrative processing time, it is likely to take at least a year for cases
to work their way to a final administrative denial. It will probably take
another year for the first cases to proceed through federal District Court
review. Thus, it is likely to take an additional two years to get one full
year’s worth of substantive decisions from the district courts of Region I. If
the DSI process starts in August 2006, it will be approximately August 2009
before we have a year’s worth of substantive judicial decisions. We wonder
whether the Commissioner will delay extending the new regulations to other
regions for three years, i.e. until there is one year’s worth of substantive
decisions from Region I.
WILL REGION I PREDICT HOW
WELL DSI WILL WORK ELSEWHERE?
Region I of the Social
Security Administration is comprised of the States of Maine, New Hampshire,
Vermont, Massachusetts, Rhode Island and Connecticut. We are concerned that
Region I may not be typical of how Social Security disability claims are
processed in the rest of the country. We believe, based on anecdotal and
empirical evidence, that: more Region I claims are favorably decided at the
initial and reconsideration levels; the ALJs are efficient and more likely to
make accurate decisions; relatively few cases are appealed to federal court.
Thus, we conclude that the pilot project may work well in Region I, but poorly
elsewhere.
Region I is one of the
smaller regions in the country in the number of ALJs (approximately 50) and in
the number of new cases ALJs receive. In a recent quarter, Region I ALJs
disposed of almost 1300 more cases than it received. Only Region III, a much
larger Region, disposed of a greater number of cases than it received. Region
III handles many more cases, absolutely, and presumably with more ALJs. Most
of the other Regions disposed of fewer cases than each received, i.e., the ALJ
caseload of most Regions increased.
Region I handles
approximately 3% of the total number of new applications filed throughout the
country. While we applaud the concept of DSI, very few claimants will obtain
any benefit from the new rules so long as they are applied only in Region I,
despite the increasing numbers of claimants in the system with claims awaiting
evaluation.
We have attached the
state-by-state allowance rate for initial and reconsidered claims (See Appendix
1). New Hampshire has initial allowance rates in excess of 60%.
Massachusetts and Rhode Island initially allows about 46% of initial claims
and 54% of reconsidered claims; Vermont allows about 45% of initial claims.
Maine and Connecticut are somewhat lower at 38% and 19% respectively for
initial and reconsidered claims. However, the favorable initial and
reconsidered decision rates for Connecticut and Maine (the lowest of the Region
I States) appear to be higher than national average. Region I is a small,
efficient region that approves a higher than average percentage of claims both
initially and at the reconsideration level. ALJs in Maine ruled in favor of
claimants in 77% of their decisions in the year ending September 26, 2003.
Rhode Island had the lowest ALJ allowance rate in Region I. Its ALJs ruled in
favor of 60% of the claimants. Region I has one of the highest ALJ allowance
rates in the nation. (See Appendix 2)
Perhaps for these reasons,
relatively few cases in Region I historically have gone to federal court: only
322 in the entire Region I. (See Appendix 3, statistics from the
Administrative Office of the U.S. Courts regarding Social Security law from the
Region I States in the most recent 12-month period, ending March 2005). The
District Court outcomes in Region I may not be statistically significant
because of the small caseload. It is not self-evident that this is the most
typical region to try out the DSI reforms.
We have no information about
whether Region I adjudicates an “average” range of cases including sickle cell,
mental impairments, mental retardation, illiteracy? SSA will need to track
this.
WILL THE DECISION REVIEW
BOARD UNDERMINE THE INDEPENDENCE OF ALJs?
The Commissioner intends the
DSI to provide quality assurance throughout the Social Security disability
adjudication process. The DSI is to be neutral in that the same number of
applicants will be entitled to benefits at the end of the new DSI reforms as
under the current system. The means to assure that the number of new claims
granted remains the same must be the quality controls and the Disability Review
Board (DRB).
The precise mechanism for
quality assurance of the DRB is the “computer-based predictive model.” We
understand the Commissioner will soon sign a contract to hire outside help to
devise this model. After initially evaluating 100% of all ALJ decisions, the
computer-based predictive model will tell the DRB which cases to more closely
evaluate. Even at the beginning, we understand that not all cases will be
evaluated equally closely.
We fear that the DRB will
intrude on the traditional independence of ALJs and undermine the benefits of a
fair hearing. ALJs worry that the benefits of a fair hearing will be
overturned by a review board that did not see the claimant or attend the
hearing. Private practitioners worry that the computer program, not the
individual ALJ, will become the de facto decision maker. The
computer-based predictive model probably will not be as blunt as the
discredited Bellmon review[1],
but will
shape ALJ decisions.
The computer-based predictive
model must be a screening tool. It must be merit-based, not budget-based. It
cannot be utilized to deny claims so that DSI is budget neutral. DSI may result
in some increase in costs. (If claimants are paid earlier, some of the denied
would die or not appeal their denial even though actually disabled. This
especially applies to those with mental impairments.)
The computer-based predictive
model must also be transparent. ALJs and attorneys of claimants alike are
entitled to know which cases will be more closely reviewed. Presumably the
case of an elderly person with lung cancer, whom an ALJ finds disabled, need
not be reviewed as thoroughly as a younger individual with a bad back.
However, the independent decision of the ALJ as to each must stand. Quality
assurance is an admirable goal, but not at the cost of ALJ independence.
Some of our members are
concerned that the predictions of a computer model will replace the judicious
weighing of evidence. Others worry that this computer review will be utilized
to discipline ALJs whose decisions are too different from the norm. The
computer-based predictive model must not be utilized to assure that the same
number of people will be entitled to benefits at the end of the new DSI reforms
as under the current system. This would be a gross misuse of a quality
assurance program.
Finally, at the Subcommittee’s
hearing on the SSA’s proposed regulations last September, the Honorable Judge
Howard D. McKibben, chairman of the Judicial Conference Committee on
Federal-State Jurisdiction, testified about the potential increase in the
number of complaints filed in federal court due to the abolishment of the
Appeals Council. It is not assured that the DRB will eliminate unfortunate ALJ
errors. The Commissioner has not really addressed Judge McKibben’s comments.
CONCLUSION
Thank you once again for the
opportunity to appear before you today. The Social Security Section of the
Federal Bar Association looks forward to continuing to work with you and the
Social Security Administration in improving the disability hearing process. I
would be happy to answer any questions you may have.
[1]"[T]he agency [SSA] instituted the
‘Bellmon review,’ a surveillance program of judges thought to be granting too
many disability claims. The effect of the Bellmon review on judicial
independence was chilling." Christine M. Moore, SSA Disability
Adjudication in Crisis! 33 Judges' J. (No. 3) 2, 9 (1994). It should be
emphasized that this Social Security Administration process of "own-motion
review" of ALJ decisions resulted from stated Congressional concern
[expressed in the 1980 Social Security Disability Amendments, Pub. L. No.
96-265, known as the "Bellmon Amendment" after Senator Henry Bellmon
(D-Okla.). See Association of Admin. Law Judges v. Heckler, 594
F. Supp. 1132 (D.D.C. 1984) for an explanation of the legislation] at the high
rate of ALJ reversal of state-level denials of claims and the variance of rates
among ALJs. http://review.law.mercer.edu/old/46201ft.htm
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