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Chairman Johnson and Members of the Committee:
I am pleased to testify before the Subcommittee at today's hearing--the fourth in a series on "Securing the Future of the Social Security Disability Program."
I am Professor of Practice in Administrative Law at
I. Growth of the SSA Adjudication System
The growth of the SSA disability adjudication program has been phenomenal. In 1973, the President of the
A few years later, in 1978, a team of scholars led by
Today those numbers seem miniscule. The SSA Commissioner has said that he expects the caseload to reach 832,000 in fiscal year 2012 with about 1400 ALJs. n4 One obvious by-product of this huge influx of cases is that the per-judge disposition rate has more than quadrupled from 114 per year in 1969, to 288 per year in 1976, to 594 in 2012.
This rise in the caseload will likely continue as higher number of "baby boomers" retire, n5 (2) the economic downturn drives unemployed workers to seek other sources of income, n6 and (3) private insurance companies increasingly require, as a condition of payments, that claimants pursue offsetting SSA disability benefits. n7
II. The Legal Context
A. The Constitutional dimension
But it is not so clear, based on
Perales relies heavily on the Court's holding and statements in Goldberg v. Kelly, . . . particularly the comment that due process requires notice "and an effective opportunity to defend by confronting any adverse witnesses * * *." 397 U.S., at 267-268. Kelly, however, had to do with termination of AFDC benefits without prior notice. It also concerned a situation, the Court said, "where credibility and veracity are at issue, as they must be in many termination proceedings.". . . The Perales proceeding is not the same. We are not concerned with termination of disability benefits once granted. Neither are we concerned with a change of status without notice.
B. Applicability of the Administrative Procedure Act (APA)
One often debated issue is whether the formal adjudication provisions of the APA are applicable to SSA disability adjudications. Twelve years ago I was asked to facilitate a session of the
This issue arose in Richardson v. Perales because the claimant also claimed "that the Administrative Procedure Act, rather than the Social Security Act, governs the processing of claims and specifically provides for cross-examination." n11The Court's response was, "We need not decide whether the APA has general application to social security disability claims, for the social security administrative procedure does not vary from that prescribed by the APA. Indeed, the latter is modeled upon the Social Security Act." n12
The SSA Act, 42 U.S.C. [Sec.] 405(b), sets forth the hearing provision applicable to disability cases:
The Commissioner of
Under prevailing administrative law doctrine, unless
Originally, when SSA requested the authority to hire additional ALJs to hear these cases, the
This legislative history does seem to indicate that
III. SSA DI Adjudication Reform Proposals
As this committee well knows, there are four levels of administrative decisionmaking for
Over the years, I have supported a number of program-specific improvements to the SSA adjudication process. n19 These are most fully set forth in the study that
We were originally asked by the
We also recommended that the Counselors be given the resources and authority necessary to move claims quickly, especially those where benefits can be granted without a full administrative hearing. Consistent with the concept of nonadversarial representation, we noted that SSA Counselors need not--and perhaps should not--be lawyers. Most importantly, they should be qualified and trained to assure that they understand the relevant medical, vocational, and legal issues involved in
Another central recommendation was that "SSA should revise its regulations to close the evidentiary record after the ALJ hearing," with a proviso that ALJs may extend the time to submit evidence after the hearing and before deciding the claim, and that claimants be allowed to request a reopening to submit new and material evidence (within a certain time period) if they can demonstrate good cause. n21
We also made a number of other specific recommendations; I have appended to this testimony the full set of our proposed recommendations.
In 2005, SSA proposed, and in 2006 finalized, a revised set of procedures for disability adjudication known as the Disability Service Improvement (DSI) process. n22 We were pleased to see that a number of our recommendations were incorporated into the DSI process, including the introduction of a Quick Disability Determination (QDD) process for certain types of claims where an initial finding of disability can be made within twenty days; the creation of a Medical and Vocational Expert System (MVES), designed to improve the quality and availability of medical and vocational expertise throughout the administrative process; the addition of a Federal Reviewing Official (FRO) (somewhat similar to our proposed Counselor), who would review appealed initial decisions before such decisions are scheduled for an administrative hearing; and rules implementing the closing of the record at the ALJ stage that were consistent with our recommendation. n23 In addition, the DSI also eliminated the reconsideration level of review following an initial denial of disability benefits; and replaced the
In our review of the new program, we lauded Commissioner Barnhart for having "undertaken a much-needed, comprehensive reform of the SSA disability adjudication process." n24 We did, however, disagree with aspects of the DSI, most significantly the rule's authorizing the FRO to issue decisions to deny benefits. Our concern was that this would "excessively formalize this stage of the process, canceling out the streamlining provided by eliminating the reconsideration stage." n25
Since the establishment, in 2006, of the DSI program in the
Our experience over the last year in the
When this proposed suspension was finalized, in
The staffing levels for these organizations have been approximately 50% of the levels we believed would be needed to handle the
A month after he proposed to end the FRO/MVES program, in
No further action has been taken on this rulemaking; in fact the agency reversed course in
It seems from this history that only the QDD and the closing-of-the-record provisions of the DSI have survived. The rest of the changes, even in terms of the pilot process in the
IV. Current Pressing Problems
Turning to the pressing problems that have at least partially led to today's hearings--the crushing caseload pressure, persistent backlogs, and strikingly inconsistent decisional rates among ALJs, I will first outline the problems:
Although there has been some significant recent progress in reducing the pending caseload and concomitant processing delays, the problem is persistent. In
The press release mentioned that
The agency hired 147 Administrative Law Judges (ALJs) and over 1,000 support staff in FY 2009, and has plans to hire an additional 226 ALJs this year. The agency now has four National Hearing Centers to help process hearings by video conference for the most hard-hit areas of the country. The agency also has aggressive plans to open 14 new hearing offices and three satellite offices by the end of the year. n38
B. Inconsistent decisions and high grant rates
There have been widely reported decisional inconsistencies in the SSA disability adjudication system. n40 As the SSA Inspector General reported in a letter to Chairman Johnson of this Committee in February of this year, among the 1,256 ALJs with 200 or more dispositions in FY 2010, the average decisional allowance rate was about 67 percent, but the 12 ALJs with the highest allowance rates averaged between 96.3 and 99.7 percent, and the 12 ALJs with the lowest allowance rates averaged between 8.55 and 25.1 percent. n41 The disuniformity is troubling, but lost in those headlines is the fact that the two-thirds overall national average allowance rate is strikingly high given that in granting claims, ALJs are in effect reversing prior decisions by the decisionmakers at both the DDS and reconsideration levels.
SSA is aware of the inconsistency problem and has commissioned ACUS to study the fairness, efficiency, and accountability issues raised by these inconsistencies; the study is ongoing and I hope that it will ultimately be useful to both SSA and this Committee when it is completed later this year. I am not going to prejudge the ACUS study, but I will note that in today's testimony Professor Pierce makes a good point when he points to perverse incentives that make it easier and less of a "hassle" for ALJs to grant cases than to deny them. But even so, that doesn't account for the rather extreme tails of the bell curve among individual decisionmakers, some of which, at first blush at least, appear to be based on the location of the hearing office. That latter point may be related to a desire for popularity in the community by being known as a "generous" judge. Moreover, claimants' representatives may also have an unfortunate incentive to drag out cases, since their fees are tied to a percentage of the backpay provided to successful applicants in order to cover the time between their claim and the decision. As a
"This gives the lawyers a potent incentive to drag the process out, to the detriment of everyone but themselves." n42
V. Possible New Approaches
As mentioned above, I would like to see aspects of the DSI program revived. But since the reason for abandoning many of them was that the apparently longterm and growing caseload problem makes it impossible to devote enough resources to test them properly, it would seem that this fundamental caseload problem needs to be addressed with some new approaches.
1. Doing more rulemaking
While not a new initiative, one that I would at least like to see explored more is the use of rulemaking by SSA to reduce the number of issues that must be heard in individual adjudications.
The simple question I have is whether there might be other general factual issues that could be resolved as fairly and more efficiently through rulemaking as through case-by-case adjudication.
2. Expanding and enhancing video teleconferencing technology
Another existing initiative that might bear more fruit is the use of video teleconferencing technology ("VTC") to conduct hearings. As reported in the
This shows the potential magnitude of savings of time and money in such a huge program. Of course, it is necessary to remain vigilant in maintaining the fairness and acceptability of such hearings and to continue to improve the technology. Moreover, there is at least a hypothesis-- worthy of examination--that use of VTC (in the sense of "distance judging") may help eliminate some of the decisional variations among ALJs--especially if an ALJ might otherwise be thinking about his or her popularity within a particular community.
3. Modifying the role of the
Not surprisingly, the caseload of the
The DSI process as promulgated in 1996 (only implemented in the
The DRB would have substituted for the appeal process used by the
The DRB was also to be charged with selecting claims for review after the ALJ's decision was effectuated for purposes of studying the decisionmaking process, but in such cases the DRB would not change the ALJ's decision except in limited circumstances.
If the DRB did not complete its action within the 90-day time frame, the ALJ's decision would become final, subject to judicial review. The DRB was to apply a substantial evidence standard to questions of fact and to consider only the record that was closed at the time that the ALJ issued the decision (subject to a good cause exception).
The DRB was to be composed of experienced and highly knowledgeable ALJs and administrative appeals judges, serving on a rotational basis, with staggered terms, and supported by a highly qualified staff. To enhance accountability and to provide feedback in the decisionmaking process, DRB decisions that were in disagreement with ALJ hearing decisions were to be sent to the ALJ who issued the decision.
SSA explained that it had decided to have the DRB rely on own-motion review and not to allow claimants to initiate appeals to the DRB (unless the ALJ had dismissed the claim entirely) because claimants already "have two levels of Federal administrative review after the initial determination, and the [ALJ] level of review allows the claimant the opportunity for a face-to-face hearing. Neither the Social Security Act nor due process requires further opportunities for administrative review." n49
It also said in response to public comments on its proposal that it did not believe the new process would be more complicated for the claimant, because the claimant would simultaneously receive notice of the ALJ's decision and whether the DRB would be reviewing the case. The claimant would not have to take any further action until such time as the DRB issued its decision, although the claimant could submit a written statement to the DRB. SSA concluded that the new process would benefit the claimant by providing an opportunity for further administrative review in problematic cases or, otherwise, with a quicker final decision so that the claimant can proceed judicial review if so desired.
A key to the success of this process, obviously, is appropriate selection of cases for review by the DRB. Although SSA declined in its rule to include "a specific statement regarding the method and range of sample sizes," because "our methods of selecting cases for review will change over time as we gain experience and knowledge in the use of our computer-based tools," it said that it would select cases in different ways so as to "efficiently identify problematic cases without unfairly targeting any specific category of claimant." SSA also pledged not "to review claims based on the identity of the administrative law judge who decided the claim." But it did say that "the claims that the DRB will review may include claims where there is an increased likelihood of error, or claims that involve new policies, rules, or procedures in order to ensure that they are being interpreted and used as intended." n50
In 2011, when SSA abandoned the DRB in the
The DRB has not functioned as we originally intended; its workload has grown quickly and become overwhelming. We had intended to use an automated predictive model to select the most error-prone cases for DRB review. However, because we were unable to implement this predictive model, the DRB processed 100% of the unfavorable and partially favorable decisions, requiring significantly more resources than we had anticipated. n51
I think it is unfortunate that the DRB experiment foundered because SSA was unable to implement an appropriate predictive model, though it is understandable that nationwide caseload pressures on the
I hope, however, that if the
This is consistent with ACUS's 1987 recommendation, where ACUS recommended an enhanced role for the
a. Focus on System Improvements. SSA should make clear that the primary function of the
(1) Conducting independent studies of the agency's cases and procedures, and providing appropriate advice and recommendations to SSA policymakers; and
(2) Providing appropriate guidance to agency adjudicators (primarily ALJs, but conceivably DDS hearing officers in some cases) by: (a) Issuing, after coordination with other SSA policymakers, interpretive "minutes" on questions of adjudicatory principles and procedures, and (b) articulating the proper handling of specific issues in case review opinions to be given precedential significance. The minutes and opinions should be consistent with the Commissioner's Social Security Rulings. Such guidance papers should be distributed throughout the system, made publicly available, and indexed.
ACUS closed its recommendation by saying: "If the reconstituted
That statement retains its force and, with the demise of the DRB experiment, it is up to SSA and the
4. Considering the Establishment of a Social Security Court
When SSA proposed the DRB, one of the prominent commenters was the
This is not a new concern; various federal court study commissions have noted the high proportion of SSA cases in the high proportion and burdensome nature of SSA cases in the federal district courts. n55 Not surprisingly, appeals of SSA decisions to the district courts continue to be at high levels in 2011 with 15,705 appeals to the district court (many of which are first handled by Federal Magistrate Judges), and 577 to the courts of appeals. n56
Another problem is that there is also a lack of uniformity among the district court decisions. A study I worked on found that in FY 2000, there was a wide range of outright allowances (not including the numerous remands) among the n48 district courts that had over 100 appeals, with a high of about 28% and a low of zero. n57
These problems, along with the seeming ineffectuality of the
We concluded that a Social Security Court would not only reduce the burdens on the federal district courts, but would also produce more uniformity in the decisions, thus providing more guidance to the agency decisionmakers as well. It would also have the potential benefit of being a vehicle for potentially consolidating judicial review of other benefit program decisions into a single court.59
5. Introduce Government attorneys/adversarial hearings
SSA cases have traditionally been non-adversary in nature--with no government representative and with the ALJ often having to wear "three hats"--making a decision on the record while also ensuring that the record reflects the best arguments for unrepresented claimants and protecting the overall public interest (the public fisc). This can make the ALJ's job more difficult and there have been some well-intentioned suggestions to institute government representation, especially as claimant representation has increased now to levels of about 80%. SSA experimented with a government representation project from 1982-1986, but it was shut down prematurely after a district court judge issued an injunction against continuation of the program, which for some reason was not appealed by SSA. n60
Allowing government representation might make sense in some cases. For example, a former President of the
For those reasons I continue to prefer the deployment of government "Counselors" to help the ALJ and the parties develop the record instead of assigning government litigators to these cases.
6. Options Regarding ALJs and Specially Designated AJs
As discussed above, in the 1970's,
In the case of the NRC adjudicators,
Perhaps the biggest frustration for agencies with the ALJ program is the inflexibility in hiring ALJs. While designed as a merit selection program, the OPM process for assembling the register of eligible applicants and the statutory restrictions on how agencies can hire judges off the register, has led most agencies to hire existing ALJs laterally from other agencies, most often SSA, which employs over 85% of the overall ALJ corps. SSA, for its part, has also experienced frustrations in hiring the large number of ALJs it needs. n66 I have supported some government-wide changes in the ALJ selection program, but given the predominance of SSA in the overall program, I would also support tailoring a special selection process for SSA ALJs. This could be done in two ways--either by ordering OPM to provide for specialized hiring of SSA ALJs, or by specially designating them as "Social Security Judges" and allowing SSA to fashion its own hiring process that uses the OPM process as a model. This latter suggestion is essentially what has happened with the NRC panel members. For example when NRC hires a lawyer member for its panel, it posts a notice of an opening and conducts an OPM-like hiring process. n67 I understand that the two Boards of Contract Appeals also conduct a tailored OPM-like hiring process as well when they hire Administrative Judges. n68
Creating a specially designated category of Social Security Judges would not require, but could allow for, adding some other specially tailored attributed for these judges as well. For example, given the high degree of importance of caseload management in this huge program,
I think it is worth quoting in detail the ACUS Recommendation on this point:
Chief ALJs should be given the authority to:
1. Develop and oversee a training and counseling program for ALJs designed to enhance professional capabilities and to remedy individual performance deficiencies.
2. Coordinate the development of case processing guidelines, with the participation of other agency ALJs, agency managers and, where available, competent advisory groups.
3. Conduct regular ALJ performance reviews based on relevant factors, including case processing guidelines, judicial comportment and demeanor, and the existence, if any, of a clear disregard of or pattern of non-adherence to properly articulated and disseminated rules, procedures, precedents, and other agency policy.
4. Individually, or through involvement of an ALJ peer review group established for this purpose, provide appropriate professional guidance, including oral or written reprimands, and, where good cause appears to exist, recommend disciplinary action against ALJs be brought by the employing agency at the Merit Systems Protection Board (MSPB) based on such performance reviews. n71
In the SSA context, it would be appropriate for the Chief ALJ and the Hearing Office Chief ALJs to undertake this role. I would also suggest that once such appraisals are permitted, then probationary status for new ALJs could also be considered as well as bonuses for high-performers--both of which are barred in the overall ALJ program.
Finally, and perhaps even more controversially, I think that it might be possible to establish specialized standards for what constitutes the sort of "good cause" that is necessary for SSA to show before the MSPB can discipline or remove a
My overall point here is that the SSA ALJ program's size and perhaps the charceter of its cases requires some special treatment, and given the informality and lack of adversarial nature of it, there is ample reason to rethink the role and attributes of these ALJs--at least going forward. n72
There have been many studies of the disability adjudication process, from the initial claim stage to the judicial review stage and every stage in between. But the dramatic caseload pressures on the process has seemingly overwhelmed the ability or willingness of the
I would like to see a renewed effort to implement these process reforms. However,
Therefore, I have suggested some possible approaches to dealing with these caseload pressures-- some incremental, such as increasing the use of rulemaking and video communications technology--and some more fundamental such as modifying the role of the
By providing this menu, with some commentary along the way, I hope I can assist this Committee in performing its historical role of protecting the viability of this historic program.
n1 Statement of
n2 U.S. CIVIL SERVICE COMMISSION, REPORT OF THE COMMITTEE ON THE STUDY OF THE UTILIZATION OF ADMINISTRATIVE LAW JUDGES 58 (
n4 Statement of
n5 Baby Boomers began to reach the age of 65 in 2011 and will finish reaching 65 in 2030. When they begin to retire in 2011, there will be 40.4 million seniors (or 13% of the population) and will grow to 70.3 million (20% of the population) by 2030. See Press Release,
n6 It is well known that while the disability program is not an employment scheme, applications rise when the economy falters. In
n8 See id. at 332: "The Secretary does not contend that procedural due process is inapplicable to terminations of
n9 AM. BAR. ASS'N, A GUIDE TO FEDERAL AGENCY ADJUDICATION, 2D ED. 25-27 (
n10 The session was held on
n11 402 U.S. at 408.
n12 Id. at 409.
n13 See AM. BAR. ASS'N, A GUIDE TO FEDERAL AGENCY ADJUDICATION, 2D ED. 41-45 (
n14 The following recounting is drawn from Comm. Staff Report on the Disability Program, House Comm. on Ways and Means, 93d Cong., 1st Sess. (1974)
n16 Pub. L. No. 95-216, tit. III, [Sec.] 371, 91
n17 See, e.g., Johnson v. Shalala, 2 F.3d 918, 920 (9th Cir. 1993) (Social Security Act, 42 U.S.C. [Sec.] 405(g), "requires each
n18 See http://www.socialsecurity.gov/appeals/about_ac.html. These judges are not ALJs and lack the statutory independence and APA protection enjoyed by ALJs.
n20 See id.
n22 Administrative Review Process for Adjudicating Initial Disability Claims, 70 Fed. Reg. 43,590 (proposed
n24 Id. at 236.
n25 Id. at 243.
n26 72 Fed. Reg. 51,173.
n27 See, e.g.,
n29 Id. at 45,702.
n31 Id. at 2412.
n33 Id. at 62,218 (summary).
n36 Id. at 24,804.
n39 See "SSA Disability Cases Continue to Climb--Rise in Backlog as of
n40 See e.g.,
n41 Congressional Response Report, Oversight of Administrative Law Judge Workload Trends, at 4-5, No. A-12-11-01138 (
n44 Id. at 470 n.14.
n45 ACUS Recommendation 2011-4, "Agency Use of Video Hearings: Best Practices and Possibilities for Expansion" (
n46 SSA, General Appeals Council Statistics, http://www.ssa.gov/appeals/ac_statistics.html.
n48 Administrative Review Process for Adjudicating Initial Disability Claims, 71 Fed. Reg. 16,424, 16,437-39 (
n49 71 Fed. Reg. at 16,438.
n50 Id. at 16,437.
n51 76 Fed. Reg. at 24,803.
n52 ACUS Recommendation 87-7, "A New Role for the
n53 Id. at S 2.
n54 71 Fed. Reg. at 16,439.
n56 ADMIN. OFFICE OF THE U.S. COURTS, JUDICIAL BUSINESS OF THE U.S. COURTS, 2011 ANN. REPORT OF THE DIRECTOR, tbls. B-IA, C-10, available at http://www.uscourts.gov/uscourts/Statistics/JudicialBusiness/2011/JudicialBusine ss2011.pdf. These reflect all appeals, but the vast majority are most are disability cases.
n57 Verkuil & Lubbers, supra note 55, at 783-84 (Appendix A).
n58 See 28 U.S.C. 158(b), discussed, id. at 747-48.
n59 For an expansion of this argument and a comparison with the
n60 Salling v. Brown, 641 F. Supp. 1946 (
n61 Statement of
n62 5 U.S.C. [Sec.] 504(b)(1)(C). This issue is discussed at Bloch, Lubbers, & Verkuil at 38-42 (estimating a potential additional annual cost of
n63 42 U.S.C. [Sec.] 2241: Notwithstanding the provisions of sections 556(b) and 557(b) of Title 5, the Commission is authorized to establish one or more atomic safety and licensing boards, each comprised of three members, one of whom shall be qualified in the conduct of administrative proceedings and two of whom shall have such technical or other qualifications as the Commission deems appropriate to the issues to be decided, to conduct such hearings as the Commission may direct and make such intermediate or final decisions as the Commission may authorize with respect to the granting, suspending, revoking or amending of any license or authorization under the provisions of this chapter, any other provision of law, or any regulation of the Commission issued thereunder. The Commission may delegate to a board such other regulatory functions as the Commission deems appropriate. The Commission may appoint a panel of qualified persons from which board members may be selected.
n65 See e.g., ACUS Recommendation 89-10, "Improved Use of Medical Personnel in Social Security Disability Determinations" (
n66 See the position paper of
n67 See, e.g., the extensive requirements detailed in this job opening notice for a lawyer panel member, http://www.usajobs.gov/GetJob/ViewDetails/2284269#.
n68 See 42 U.S.C. [Sec.] 7105, providing that the members of the Armed Services and Civilian Boards of Contract Appeals are to be appointed by
n71 ACUS Recommendation 92-7, "The Federal Administrative Judiciary" S III(B) (
n72 This would not be unprecedented. Until the early 1980s, OPM maintained a distinction between GS-15 and GS-16 ALJs with two separate hiring registers. SSA ALJs were in the GS-15 category. See Jeffrey S. Lubbers Federal Administrative Law Judges: A Focus on Our Invisible Judiciary, 33 ADMIN. L. REV. 109, 112-15 (1981). I note here that a member of the
Read this original document at: http://waysandmeans.house.gov/UploadedFiles/Lubbers_Testimony.pdf
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