oversight

Social Security: Review of Disability Representatives

Published by the Government Accountability Office on 1999-03-04.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Health, Education, and
      Human Services Division


      B-281291


      March 4, 1999


      !t’he Honorable E. Clay Shaw, Jr.
      Chairman, Subcommittee on Social Security
      Committee on Ways and Means
      House of Representatives

      The Honorable Mac Collins
      House of Representatives


      Subject: Social Securitv: Review of Disabilitv Renresentatives

      The Social Security Administration (SSA) operates the nation’s two largest
      programs providing cash benefits to people with severe long-term disabilities: the
      Disability Insurance @I) program and the Supplemental Security Income (SSI)
      program. DI provides monthly benefits to insured workers who become
      disabled, while the means-tested SSI program provides monthly benefits to needy
      people who are aged, blind, or disabled. Jn fiscal year 1998, SSA received more
      than 3 million applications for DI and SSI benefits; and at year’s end, more than
      800,000 claims were pending an initial decision or an appeal hearing. From the
      time of application for benefits, many individuals who appeal to SSA’s Office of
      Hearings and Appeals (OHA) wait well over a year for a final decision; a period
      thgt could impose considerable economic and psychological hardship for
      applicants and their families.

      You have expressed concern about increasing complaints from SSA personnel
      that attorneys and other individuals representing disability applicants are often
      unprepared for disability hearings, causing delays in the adjudication process.
      You also have expressed concern that delays are often due to representatives’
      desire to maximiz e their fees, which are based on a percentage of past-due
      benefits paid to claimants. Accordingly, you asked us to determine (1) the
      extent to which disability representatives contribute to decisional delays, (2)
      other potential reasons for decisional delays, and (3) additional options available
      to SSA to ensure that disability decisions are reached in a more timely manner.



                                   GAO/HEHS-99-50R      Disability   Representatives
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To conduct our work, we held discussions with key SSA headquarters officials,
reviewed available national program performance data, and visited 4 of SSA’s 10
regions (Atlanta, San Francisco, New York, and Philadelphia).’ At these
locations, we interviewed about 70 staff and managers from four OHA regional
offices, seven local hearings offices, and three state Disability Determination
Services (DDS) offices. We also reviewed a total of nearly 200 claimant case
files provided to us by SSA that represented various stages of the disability
determination process. To obtain the views of disability representatives, we met
with officials from the National Organization of Social Security Claimants’
Representatives (NOSSCR),an association of about 3,400 attorney and
nonattomey disability representatives. We also interviewed representatives from
a large law firm specializing in disability cases. We conducted our work
between August 1998 and February 1999 in accordance with generally accepted
government auditing standards.                             ..

In summary, due to the lack of agency data pertaining to disability
representatives and limited case file documentation, we were unable to
document whether representatives are regularly delaying disability proceedings
in order to maximize their fees. However, many SSA staff and managers we
interviewed believe frequent delays in disability proceedings are a si,gnificant
problem and often attributable to the actions of some disability representatives.
More specifically, we found that many of those interviewed were frustrated by
disability program laws that provide numerous opportunities for representatives
to submit new evidence in support of their client’s claim throughout the entire
process and hold SSA primarily responsible for adequately developing the
evidentiary record, even when a claimant has representation. A number of
administrative law judges (ALQ also told us that, under current law, they could
not hold incompetent or uncooperative representatives accountable for their
actions and that contempt authority could be useful. In suggesting ways to
address perceived attorney unpreparedness and delays, a number of SSA staff
and managers argued that changes in the law underlying disability program
policy were needed. However, the disability representatives we interviewed
 cautioned that significant changes to the laws governing this program were
unnecessary and could place an undue hardship on individuals seeking benefits.
 Short of changes in the law, SSA currently does have some tools to influence
representative behavior and deter delays. For example, SSA may reduce the fees
 of individuals who inappropriately delay proceedings or abuse program policies.
 SSA also recently implemented new standards of conduct regulations that allow
 for the suspension or disqualification of problem representatives. However, the


‘We selected SSA regions representing varied workload levels, case backlogs,
and processing times. The selected offices also provided us with geographical
dispersion.

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new standards went into effect only recently, and SSA has yet to discipline any
representatives under them.

BACKGROUND

SSA decides claims for DI and SSI benefits under title II and title XVI,
respectively, of the Social Security Act. Applications for disability benefits for
both programs may be filed at any of SSA’s over 1,300 field offices. These
applications, along with supporting medical evidence, are then forwarded to one
of 54 state DDS offices for a medical decision. Claimants who are dissatisfied
with the decision may request a reconsideration decision by the DDS. Those
who disagree with this decision may appeal to SSA’s OHA and have the right to
a hearing before one of about 1,100 AUs located in 132 hearing offices
throughout the country. Individuals who disagree with the ALJ decision may
pursue their claim with SSA’s Appeals Council and ultimately may appeal to a
federal district court. In fiscal year 1998, the average length of time for an initial
decision at the DDS level was more than 70 days. From the time of appeal to
OHA, the average wait for an ALJ decision was 341 days.

At each level of the disability determination process, applicants may be
represented by an attorney or other individual in pursuing their claim. Over the
last 20 years, the proportion of applicants with representation has nearly
doubled; and in fiscal year 1997, about 70 percent of all cases decided at the
AU-hexing level involved representatives. Disability representatives have been
fairly successful in obtaining favorable disability decisions for their clients, In
fiscal year 1997,the percentage of favorable hearing decisions for claimants with
representation was about 58 percent, compared to 39 percent for individuals
without representation.2

In general, disability representatives are compensated for their services through
fee agreements authorized by federal statute. Fee agreements are formal
documents signed by the claimant and representative that limit the fee charged
by representatives to 25 percent of all past due benefits owed the claimant or
$4,000, whichever is less? No fee is charged if the claimant is ultimately denied


?ncluded in these percentages are other non-disability proceedings, such as
black lung, retirement, and health insurance hearings.
31nsome cases, representatives are paid via a fee petition, which is a more
detailed itemization of services provided and time spent on a particular case. A
fee petition allows for larger fees in cases that take longer to be decided by SSA,
that involve a significant investment of time and resources by the representative,
or both.

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benefits. SSA’s data show that the average fee agreement payment is about
$2,400. By law, SSA has the authority to ensure that representatives’ fees are
reasonable and in accordance with the services provided.

DATA INSUFFlClENT TO VERIFY STAFF CONCERNS
REGARDING DISABILI?TYREPRESENTATIVES

During our field visits, many staff and managers who we interviewed noted that
delays in proceedings were a significant problem and were often attributable to
the actions of some attorney and nonattorney disability representatives.
However, we could find no definitive evidence from our review of SSA’s
disability program performance data and claimant case files that representatives
were improperly delaying proceedings or that the presence of representatives led
to delays.                                              :.

SSA staff in the field generally complained that some representatives often
showed up unprepared to represent their clients at hearings, did not adequately
develop the evidentiary record, frequently requested unnecessary medical
documents and consultative exams, and regularly engaged in last-minute
submissions of evidence. They also noted that these behaviors were disruptive
to the proceedings and contributed to decisional delays. In responding to the
complaints voiced to us by SSA personnel, officials from NOSSCR and the head
of a private law firm specializing in disability claims disagreed that
representative unpreparedness and delays were a common problem. They
argued that disability representatives are working legally and ethically within the
existing system to present the best case for their clients. They also reiterated
that the program was designed to be claimant friendly and nonadversarial with
numerous opportunities for individuals to present evidence supporting their
disability claim. They further expressed the view that quickly processing large
volumes of cases was more economically advantageous to representatives than
extending a single case in hopes of a larger payout.

Other than the anecdotal concerns of SSA staff, we could find no dehnitive
evidence from our review of disability program performance data that attorneys
were regularly delaying proceedings. This was primarily due to the absence of
automated national, regional, and local hearing office data related to
representative involvement in disability proceedings. In general, DDS and OHA
performance data do not distinguish between individuals who have
representation and those who do not. Thus, we were unable to make any


“Azthough the ALJ is expected to consider SSA’s interests during the hearing, the
nonadversarial process means that SSA is not represented by a government
attorney or other advocate.

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comparisons between represented cases and unrepresented cases in regard to
processing times, frequency of hearings postponements and continuances,
disciplinary actions, and similar performance indicators. Management officials
noted that if SSA decided such data should be compiled for future use, it would
likely require significant reprogramming of current automated systems.

We. were also unable to draw any conclusions about representatives’actions
from our review of nearly 200 DDS and OHA case files. Through this review, we
attempted to manually document the details and day-to-day progress of specific
cases to determine whether frequent delays were occurring, the source of any
delays, and the amount of fees paid to representatives. We also sought evidence
of formal or informal complaints against representatives lodged by DDS or OHA
field staff alleging unpreparedness or inappropriate delays. Generally, the case
files confirmed that applicants wait a long time for a final decision, especially if
the case is appealed to OHA. However, they did not provide us with adequate            .
information to determine whether attorneys were regularly unprepared for
hearings. Nor could we determine whether representatives were requesting
excessive postponements, submitting medical and other evidence in an untimely
manner, or engaging in other delaying tactics. In only a few instances did we
identify any notations in the case file in which a DDS examiner or AIJ noted
such behavior.

LAWS GOVERNING DISABILITY PROGRAM
MAY CONTRIBUTE TO DECISIONAL DELAYS

Although the data were insufficient for us to determine whether disability
representatives were regularly unprepared for hearings, we did identify a
common frustration among many SSA personnel regarding disability program
laws that, in their view, allow delays to occur. Generally, SSA personnel were
concerned about laws that (1) require the disability record to remain open for
the submission of new evidence related to the initial impairment or any
additional impairment throughout the process; (2) hold SSA accountable for
adequately developing the evidentiary record, even when a claimant has
representation; and (3) affect ALJs’ability to ensure that representatives
adequately represent their clients’ interests. A number of staff and managers
argued that changes in the law underlying disability program policy were needed
to address perceived attorney unpreparedness and delays. However, the
representatives we interviewed cautioned that significant changes to the laws
governing this program were unnecessary and could place an undue hardship on
individuals seeking disability benefits.
-     Disabilitv records remain onen throughout entire nrocess. Under current
      law, the disability adjudication process is informal and nonadversarial with
      multiple opportunities for applicants or their representatives to present

5                            GAO/HEHS-99-50R       Disability   Representatives
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      new evidence regarding their client’s disability. While the law provides
      claimants with substantial due process protections, it may also have
      implications for the program in the form of longer case processing times.
      During our review, many DDS staff, AI&, and OHA attorneys responsible
      for processing disability claims complained about the requirement that the
      evidentiary record remain open throughout the process and the lack of
    _ specific due dates and time frames for presenting evidence. Interviewees
      commonly noted that this process invited late submissions of evidence by
    - some representatives and requests for unnecessary medical consultations
      and provided myriad opportunities for representatives to request
      postponements and continuances.

      At both the OH4 and DDS levels, interviewees complained that the
      hearings process allowed some attorneys to delay-proceedings. By law,
      ALIs do not review DDS decisions or rule on their adequacy. Instead, the.
      ALJ or other OHA adjudicator’ conducts a de novo review of (or reviews
      “afresh”) the case and may consider any new evidence submitted by a
      representative that was not heard by DDS examiners. In contrast,
      appellate courts generally review the findings of lower courts and only
      consider whether decisionmakers made errors in applying law or
      procedure. According to those we interviewed, the de novo process not
      only allows representatives to submit new evidence relevant to the initial
      impairment but also allows them to claim additional impairments at a later
      date in hopes of obtaining a favorable ALI decision. We reported in 1997,
      that in about 10 percent of the cases appealed to OHA, individuals switch
      their claimed impairment from a physical impairment to a mental one.6
      Consideration of newly claimed impairments by ALIs can take a significant
      amount of time and delay the process further.
-      SSA is resDonsible for ensuring case records are adeauatelv develoned.
       DDS and SSA staff also complained about another potential source of
       decisional delay: the law that holds SSA accountable for ensuring that the
       case record is adequately developed, even if a claimant has a
       representative. Under the Social Security Act, SSA has primary
       responsibility for both developing the evidence of disability and issuing the


“Not every case involves an ALJ hearing. Under processes recently implemented
by SSA, some cases may be awarded by OHA attorneys, paralegals, and other
designated personnel without a forrnal hearing by an ALJ. This process also
allows for a de novo review of the evidence by decisionmakers.
‘Social Securitv Disabilitvz SSA Must Hold Itself Accountable for Continued
Imnrovement in Decisionmaking (GAO/HEHS97-102, Aug. 12, 1997).

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      final decision. Thus, if a representative does not aggressively develop the
      case record, it is up to SSA to ensure that the necessary medical and
      vocational evidence is gathered before a decision can be issued. In other
      executive branch agencies-such as the Department of Veterans Affairs,
      Federal Communications Commission, and Department of
      Labor-responsibility for developing evidence is generally left to claimants
    _ and their representatives. During our field visits, DDS and OHA personnel
      commonly complained that this requirement provided little incentive for
    - representatives to develop the case record. Thus, in their opinion,
      representatives may accept cases knowing that the evidentiaty record will
      be developed for them by OHA if they do not fully develop the record
      themselves.
-     ALJs believe thev are limited in their abilitv to ensure adeauate
      renresentation. A number of the ALJs we met with believe that judges
      lack the tools to ensure representatives adequately represent claimants.
      For example, some AUs noted that, under current law, they lack contempt
      authority to hold uncooperative or incompetent representatives responsible
      for their actions. In the absence of contempt powers, some AUs told us
      that they resorted to verbally reprimanding unprepared or uncooperative
      representatives in front of their clients. This was done in hopes of getting
      claimants to put additional pressure on representatives to do a better job
      presenting their case. Most AI& viewed contempt authority as a
      necessary and effective tool for penalizing problem representatives.

In suggesting ways to address perceived representative unpreparedness and
delays, a number of SSA staff and managers noted that changes in the laws
governing disability program policy were needed. They commonly suggested
closing the evidentiary record earlier in the process and placing primary
accountability for developing the case record with the disability representative,
rather than SSA. DDS staff commonly stated that they have too few tools to
change the behavior of those representatives who chronically delayed
proceedings. Their primary recourse under the current process has been to
make a notation in the file or complain to their supervisor, but they said neither
action was used frequently or viewed as having any significant impact on
representative behavior. The frequent view among those interviewed was that
closing the record earlier and requiring representatives to develop the case
record would provide a significant incentive for attorneys to play a more active
role in the timely development of evidence necessary to decide disability claims.

Such changes would require legislation and potentially difficult changes in
fundamental disability program philosophy. During our review, individuals from
the representative community conceded that disability representatives may
sometimes be the source of delays. However, they cautioned that it would be

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B-281291
unfair to applicants if the record were closed earlier and benefits denied because
a representative missed a deadline for submitting evidence. Thus, changes in the
laws could potentially result in the loss of benefits to eligible clients.

SSA HAS TOOLS TO ADDRESS PROBLEM REPRESENTATIVES

Our work showed that SSA currently has some tools to influence the behavior of
disability representatives and ensure that decisions are reached in a timely
manner. First, SSA has statutory authority to review and reduce representative
fees if a claimant protests the fee charged. ALJs can also recommend a fee
reduction on their own if they believe fees are excessive compared to the level
of services provided or if the representative did not adequately represent his or
her client’s interests. Thus, fee reductions could be used by SSA to penalize
those representatives who are regularly unprepared for hearings or delay
proceedings. However, few ALJs interviewed said that they actually
recommended fee reductions for representatives who, in their opinion,
inappropriately delayed proceedings. Many Aws we mterviewed believe that
current procedures and requirements for obtaining a fee reduction were
administratively burdensome and not worth the additional paperwork SSA
requires. Several others believe current policies prevented them from reducing
fees once they had approved the initial fee agreement. SSA’s policies do allow
such actions.

Second, SSA recently developed and implemented new standards of conduct
regulations that could be used to penalize representatives who engage in
inappropriate delaying tactics or abuse program rules. The standards of conduct
became effective in September 1998 and are designed to clarify the obligations of
representatives and promote competence, diligence, and timeliness in
decisionmaking. They also outline both the duties and the prohibited actions for
all representatives in proceedings before SSA. In proposing the standards, SSA
stated that there have been sufficient instances of questionable representative
conduct to warrant promulgation of new regulations. According to SSA, prior
regulations did not adequately address a representative’s responsibility to
prepare and present a claimant’s case. The new standards are designed to better
protect claimants and the adjudicative process from representatives who are
incapable of providing, or unwilling to provide, meaningful and expeditious
assistance in resolving pending claims. They also affirm SSA’s authority to
suspend or disqualify representatives who engage in abusive behavior,
unreasonably delay proceedings without good cause, or charge fees that violate
applicable laws or regulations. SSA is currently investigating a number of
representatives under these regulations but has not yet taken action against any
individuals for misconduct. Until these investigations are completed, it is too
 early to tell what impact the regulations will ultimately have on SSA’s ability to
 ensure representative preparedness and prevent delays.

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AGENCY COMMEK-TS

We provided a draft of this correspondence to SSA, which agreed that it already
has some tools to influence the performance of disability representatives and
ensure that decisions are reached more quickly. The agency also noted that the
recently revised standards of conduct regulations for representatives could
further enhance OHA’s ability to successfully perdize those representdives who
engage in appropriate delaying tactics or abuse program rules.
                                      -_---


Copies of this correspondence are being sent to the Commissioner of SSA. We
will also make copies available to other interested parties. If you or your staff
have any question concerning this letter, please contactme at (202) 512-7215 or
Rod Miller, Assistant Director, at (202) X2-7246. Daniel Bertoni and Jeff
Bernstein also contributed to this report.




Associate Director, Income Security Issues




(207043)

9                                GAO/HEHS-99-5OR Disabili~     Representatives
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