Monday, October 28, 2013

socialNsecurity Appendix D



Testimony Before the Subcommittee on Social Security
of the House Committee on Ways and Means
Hearing on Social Security Disability Program's Challenges and Opportunities
June 28, 2001
Mr. Chairman and Members of the Subcommittee:
Thank you for the opportunity to testify before you today. My name is Ronald G. Bernoski. I am an Administrative Law Judge ("ALJ") who has been hearing Social Security disability cases at the Office of Hearings and Appeals ("OHA") of the Social Security Administration ("SSA") in Milwaukee, Wisconsin, for over 20 years.
This statement is presented in my capacity as the President of the Association of Administrative Law Judges ("AALJ"), which represents the ALJs employed in the SSA OHA and the Department of Health and Human Services. The stated purpose of the AALJ is to promote and preserve full due process hearings in compliance with the Administrative Procedure Act for those individuals who seek adjudication of program entitlement disputes within the SSA.
SSA has been unsuccessful in managing OHA’s mammoth appellate administrative caseload in addition to performing its many other duties. SSA also has been unable to refrain from efforts to implement policy through the OHA adjudication process. These failings chronically have interfered with the timeliness and quality of the final adjudication of Social Security Act claims by OHA adjudicators. To cure these problems, AALJ recommends that Congress create an ALJ-administered independent adjudication agency that has the exclusive jurisdiction to make the final administrative decisions of Social Security Act claims. An ALJ-administered independent agency will enable the ALJs to do their job: affording timely and high quality due process hearings and decisions to the members of the American public who seek Social Security Act benefits.
The Social Security Act hearing process should be reformed by the transfer of the authority to make final administrative adjudications of Social Security Act claims, which currently are made at the ALJ and SSA Appeals Council levels, from the Social Security Administration to a new independent adjudication agency. AALJ’s proposal would amend the Social Security Act to provide the claimants with timely, high quality, impartial and fair decisions of their claims pursuant to the Social Security Act and Administrative Procedure Act ("APA") by adjudicators who are in an agency independent of, but within, the SSA. A substantial amount of funds would be saved annually by our recommendations to (1) replace the Appeals Council with a nationwide network of appellate panels staffed by ALJs, and (2) abolish the ten OHA regional offices, which appears to be on the order of in excess of $75,000,000.
In this statement, I present (1) the reasons why an ALJ-administered independent adjudication agency that supplants the SSA OHA function is the right reform of the Social Security Act hearing process to address the timeliness and quality issues that chronically have beset the SSA OHA, and (2) a summary of the features of the proposed new agency, which may be called the United States Office of Hearings and Appeals ("USOHA").
A detailed version of the features of the proposed new agency and the rationales for such a new agency is presented in the AALJ’s "Report and Recommendations for the Transfer of the Authority to Make Final Administrative Adjudications of the Social Security Act Claims from the Social Security Administration to a New Independent Regulatory Agency," which is available upon request or from the homepage link on the AALJ website,
A.  Structure, Size and Workload of the Social Security Administration, Office of Hearings and Appeals
Essentially, OHA performs an adjudicatory function in an executive agency that was created by Congress, and handles the largest appellate administrative caseload of any agency in the world.
In 1994, the SSA became a Congressionally-created independent regulatory single commissioner agency. Social Security Administration Reform Act of 1994, Pub. L. No. 103-296, 108 Stat. 1472, codified at 42 U.S.C. § 901 et seq. The appellate adjudicatory function, namely the administrative review of the SSA’s initial determinations of Social Security Act claims that were partially or wholly denied by the state Disability Determinations Services agencies ("DDS") on behalf of the SSA, takes place within the SSA OHA. There is an Associate Commissioner for OHA, who reports to the Deputy Commissioner of Disability and Income Security Programs, who is one of eight Deputy Commissioners who report to the Commissioner of SSA. SSA’s Official Internet Site,
There are two primary organizational components of OHA. The first level of administrative appeal is handled within Hearing Operations, where a claimant is afforded an opportunity for a de novo hearing and decision by an Administrative Law Judge. ALJs are Article II Executive Branch competitive civil service employees who are hired pursuant to statute: 5 U.S.C. § 3501 of the APA through a Title V OPM civil service examination process. The Chief Administrative Law Judge oversees 140 hearing offices and 10 regional offices, and is described by SSA as the "principal consultant and advisor to the Associate Commissioner on all matters concerning the ALJ hearing process and all field operations." The Chief ALJ reports to the Associate Commissioner for OHA, there are over 1,000 ALJs and about 5,600 support staff. SSA ALJs issue over 500,000 decisions per year.
The second and final level of administrative appeal is handled within the Office of Appellate Operations, where a claimant is afforded an opportunity for a record review of the ALJ’s decision by the Appeals Council. The Office of Appellate Operations has about 800 employees and received over 115,000 appeals in fiscal year 1999. The Appeals Council decided over 101,000 cases in fiscal year 1999. OHA also has a Program Management unit, which makes policy and sets procedures for OHA, including policy for the processing of cases through OHA, and an Administrative Management unit, which provides administrative support for OHA. SSA’s Official Internet Site for the Office of Hearings and Appeals, About SSA’s Office of Hearings and Appeals; Information on OHA’s Hearing Sites. The Associate Commissioner of OHA is the Chair of the Appeals Council. The Appeals Council consists of administrative appeals judges who are not ALJs selected by the civil service procedure established by the APA. They are career civil servants who are required to be attorneys with a certain level of experience.
B.  The Social Security Administration’s Management of the Office of Hearings and Appeals Has Been a Failure
The SSA’s administration of OHA has failed. Management initiatives such as process redesign, process unification, prototype, and, most recently, the Hearing Process Improvement Plan ("HPI") and Appeals Council Process Improvement Plan ("ACPI"), have not achieved their goals. Also, most of these initiatives were undertaken by the SSA without consulting with the ALJs for their input, including HPI and ACPI, which is a major reorganization of OHA. The SSA’s plan to reorganize OHA, which became HPI and ACPI, was not revealed by SSA until shortly before the release of the first version of HPI in July 1999.
The Failure of the Process Unification and Prototype Projects: The failure of the process unification and prototype has been the foreshadowing for the failure thus far of HPI and ACPI. Process unification is an effort to have all DDS and OHA decisionmakers use the same standards for determining claims. The prototype is an elimination of the reconsideration determination step at the DDS level in favor of increased claimant contact and improved medical-vocational evaluations at the initial level with an evaluation of the claimant’s credibility. Even with three years of training, the simultaneous implementation of process unification and the prototype has resulted in a marked loss of efficiency, loss of experienced staff from the stress of the now complex job as an examiner, low pay, and an uneven quality of the initial determinations, according to the Social Security Advisory Board’s June 2000 Report of the Board’s Study of Process Unification and Prototype and Implementation of the Hearing Process Improvement Initiative in California ("SSAB California Study"). New staff require close to two years of training to do the complex work demanded by prototype and process unification and half of the training classes drop out. The move of DDS from focusing on objective medical findings to assessing credibility of the claimant has resulted in an inability of the DDS examiners in California to determine more than 12 cases per week even with extensive overtime work, which has resulted in longer case processing times and major workload backlogs that required extensive help from other non-prototype offices. The SSA underestimated the experience and quality of staff needed to do this more complex analytical work. However, the increase in the labor-intensive nature of their work has not resulted in any indication yet that the reversal rate of DDS denials at the ALJ level has declined, which was a primary purpose of process unification and prototype. SSAB California Study, pp. 1-9. (The SSAB’s findings are based upon the statements of those interviewed by SSAB, rather than SSAB’s own conclusions about the functioning of process unification, prototype and HPI.)
The average prototype case processing time has risen from 78 days in May 2000 to 241 days in March 2001, according to the HPI Monthly Monitoring Report for March 2001 by the Acting Deputy Commissioner for Disability and Income Security Programs to the Acting Commissioner ("March 2001 HPI Report"). The marked rise is explained in the report by a lack of a stable mix of cases among favorable on-the-record cases, dismissals, and favorable and unfavorable cases that require a hearing. The advancement of mostly favorable on-the-record cases during the first period of May 2000 through March 2001 resulted in what is described as an artificially low cumulative average processing time of 189 days, which has risen to 210 days for the Fiscal Year 2001.
The Failure of the Hearing Process Improvement Plan: Cases processed through HPI take longer to be heard and decided and are more labor-intensive than processing the cases in the way it was done before HPI. HPI is causing delays in claimants receiving hearings and decisions on their cases.
The HPI plan entails significant changes in job duties and titles for OHA employees that required new job descriptions for all OHA non-ALJ personnel and also entails major changes in how cases are prepared for hearing. HPI is an effort to reduce case processing time within OHA. OHA now readily admits that the implementation of the HPI process, which was supposed to reduce the time that cases are pending for a hearing and decision and increase output, so far has not done so. SSA’s report on the implementation of Phase 1 of HPI generally calls HPI a success, but the data for the four months surveyed, May-August 2000, show that the average processing time and per person work years expended is greater for the HPI cases than the non-HPI cases. Implementing a New Hearings Process in OHA: Hearings Process Improvement: Phase 1 Implementation Report, Appendix I (October 2000).
On an ongoing basis, HPI has resulted in an increase in the backlog of cases awaiting a hearing and an increase in the processing time for the cases. SSA OHA’s monthly national workload and performance statistics say it all: Nationally, the case backlog has been climbing (December 1999: 317,947, December 2000: 361,564, April 2001: 389,679), so that the backlog now is 22.5 % higher than in December 1999, just before HPI was implemented. In December 1999, the average case processing time was 287 days in HPI Phase I OHAs and 274 days in HPI Phase II/III OHAs. In December 2000, the average case processing time was 273 days in HPI Phase I OHAs and 294 days in HPI Phase II/III OHAs. However, by April 2001, the national average case processing time had risen to 316 days. The March 2001 HPI Report states that the average processing time for non-Medicare SSA cases in March 2001, compared to March 2000, was up 27 days (10%) in HPI Phase I OHAs and up 38 days (15%) in HPI Phase II/III OHAs. Although the report attributed the rise in processing time solely to the growth of per ALJ workloads, the downturn in dispositions far exceeds the loss of ALJ personnel (available ALJs down 8% but daily dispositions down 18% in Phase I OHAs, available ALJs down 7% but daily dispositions down 33% in Phase II/III OHAs).
The HPI process thus far has resulted in significant bottlenecks in (1) the clerical preparation of the files so that they are an organized record that is marked in exhibit form (known as case "pulling"), (2) the ‘certification’ of the cases as being done with pre-hearing development and ready for a hearing, and (3) the drafting of decisions by the writing staff who now also spend time reviewing and ‘certifying’ cases as ready for a hearing. These bottlenecks in the workflow have been acknowledged by the SSA in its formal training of the OHA hearing office staffs in the third and last wave of implementation last fall and the OHA Associate Commissioner’s November 22, 2000, issue of the HPI newsletter, "HPIdeas," and on an ongoing basis by SSA management to the staff in its efforts to overcome these bottlenecks. The production statistics and anecdotal evidence strongly suggest that ALJs now are hearing cases with unpulled files and the number of cases being heard and decided using the HPI model has declined significantly from the numbers that were heard using the prior practice of having the ALJs review the cases and determining what prehearing development is needed. The SSAB California Study also revealed concerns with (1) taking the ALJs out of the prehearing record development process until its end, (2) how the duties of the clerical staff were changed, which "slowed the process and reduced productivity," and (3) that "HPI will require additional resources." pp. 9-10. (The SSAB findings are based upon the statements of those interviewed by SSAB, rather than SSAB’s own conclusions about the functioning of HPI.)
The failure of the HPI process is typified by the experience at the Miami OHA. Despite the contrary unanimous recommendation of the ten Regional Chief Administrative Law Judges of OHA, the Associate Commissioner of OHA directed the nation-wide creation of 350 new decision-writer "paralegal" positions and the promotion of clerks and other staff members to fill these positions. These new positions involve drafting the legal decisions issued by the judges. Employees were promoted without having to demonstrate that they had the appropriate drafting skills and education to perform the job. In some cases, remedial training has been required. Because of this practice, under HPI, it is taking the Miami judges longer to edit draft decisions, adding to the delay experienced by the claimants. Under HPI, no additional attorney positions were created, although the 350 new paralegal positions are paid at the same level as attorneys.
Therefore, as is stated above, HPI cases take longer to process and are more labor-intensive than processing the cases in the way it was done before HPI, which is causing delays in claimants receiving hearings and decisions on their cases.
The Chronic Failure of the Appeals Council: The Appeals Council, which originally was intended as a policy making body, has failed in its function as the final step in the administrative review of Social Security claims.
In the face of a 66% increase in the number of appeals that the Appeals Council heard from fiscal year 1994 (69,171) to 1999 (115,150), its backlog of pending cases has ballooned to 144,525 and the average processing time has nearly quadrupled from 118 to 460 days. By early 2000, the average processing time climbed to 541 days. SSA OHA Appeals Council Process Improvement: Action Plan, pp. 3-4 (March 2000) ("ACPI Action Plan"); SSA OHA Associate Commissioner’s Message, Salute to the Appeals Council (April 2000), p. 1. At the same time, the quality of the Appeals Council decision process has plummeted. Cases that were decided by ALJs as long ago as 1995 and 1996 were remanded to ALJs in 2000. Particularly since the implementation of ACPI, numerous cases have been remanded only because the tape recording of the ALJ hearing or the entire file was lost by the Appeals Council. The Appeals Council does not have a reliable case tracking system in place.
Appeals Council decisions often do not include rationales, rarely refer to relevant statutes, regulations and cases, and only sometimes cite SSA Rulings, which reduces the consistency of the decisions. Appeals Council decisions all too frequently rely upon non-material errors that do not affect the results in the case. The unprofessional quality of the Appeals Council decisions was described by a federal Circuit Court of Appeals Judge over 15 years ago: "I have read many administrative law judges’ decisions on social security disability cases, all of which the disappointed claimant has asked the Appeals Council to review (as he had to do before he could begin judicial review proceedings), but I can remember only one occasion on which the Appeals Council wrote an opinion, even when the administrative law judge’s decision raised difficult questions." A Specialized Court for Social Security? A Critique of Recent Proposals, Robert E. Rains, 15 Fla. St. U.L. Rev. 1, 28 (1987), quoting, R. Posner, The Federal Courts Crisis & Reform, p. 161 (1985). Decisions that are supported by a full rationale still are rare.
Although there is no significant evidence of direct agency pressure to grant or deny more claims, concern has been expressed that "SSA policymakers nevertheless are able to create an adjudicative climate that subtly and indirectly inclines the Appeals Council toward more or fewer awards, noting that the Appeals Council always reflects, to some extent, the interests and style of the OHA Associate Commissioner. Some have expressed the view that the Appeals Council is still perceived in some quarters as an even more partisan "arm of the [agency]." The Fourth Bite at the Apple: A Study of the Operation and Utility of the Social Security Administration’s Appeals Council, Charles H. Koch, Jr. & David A. Koplow, 17 Fla. St. U.L. Rev. 199, 236-240 (1990). The Appeals Council’s administrative appeals judges are not independent adjudicators, unlike the ALJs, whose independence is established by the Administrative Procedure Act.
Although SSA’s ACPI Action Plan now states that higher productivity, much shorter processing times and improved public service are necessary, SSA has allowed the Appeals Council functioning to deteriorate for years without regard to the impact on due process and fairness for the claimants. (SSA’s ACPI Action Plan was issued 13 years after a recommendation by the Administrative Conference of the United States to abolish the Appeals Council if it cannot be fixed, which is described below.) There is an absence of timely and efficient case processing and high quality decisions at SSA’s final stage of administrative review. SSA states that it "will measure the success of the ACPI initiatives by improvements in average processing time, the number of pending appeals, and the productivity per [employee] work year ("PPWY")." Action Plan, p. 10. No measure of the quality of the Appeals Council decisions is mentioned in the Action Plan, which again demonstrates an absence of quality decisionmaking as a SSA priority.
C. The Social Security Administration’s Improper Implementation of Policy through the Office of Hearings and Appeals Adjudication Process Has Compromised the Claimants’ Right to Timely, High Quality and Impartial Adjudications of Their Claims
Separation of OHA’s Adjudication Function from SSA’s Policy, Rulemaking, Enforcement and Investigation Functions Is Necessary to Protect the Claimants’ Right to Timely, High Quality and Impartial Adjudications of Their Claims: Congress made SSA independent of the Department of Health and Human Services in 1994 to ensure that "policy errors resulting from inappropriate influence from outside the agency such as those occurring in the early 1980s do not recur in the future." Characteristics of Independent Executive Agencies, Statement by Rogelio Garcia, Congressional Research Service, House Subcommittee on Social Security, pp. CRS-4-CRS-5 (July 25, 1996), quoting, House Conference Committee Report No. 103-670, Social Security Administration Reform Act of 1994, 103rd Cong., 2nd Sess., p. 90 (1994).
However, Congress apparently was incorrect that the policy errors that led to the SSA’s interference with the administration of the OHA and ALJs’ decisional independence came only from influences outside SSA. The problems are within SSA, as is shown by the continuation and proliferation of inappropriate policy and policy implementation and management errors that negatively affect the timeliness, high quality, and impartiality of appellate administrative review of Social Security Act claims. A list of some of SSA’s major policy abuses of the OHA adjudication process is provided at the end of this section.
Leaving the adjudication function of OHA under the administration of SSA is not compatible with efficient and high quality service to the claimants and defeats the Congressional intent of providing full and fair hearings for Social Security claimants that is embodied in the Social Security Act and Administrative Procedure Act.
In 1935, the Supreme Court held that the desirability of the neutral exercise of expertise and impartiality of decisionmaking by Executive Branch agencies warranted the power of Congress to create independent regulatory agencies and commissions to insulate agency officers from at will removal by the President. Humphrey’s Executor v. United States, 295 U.S. 602 (1935). In 1955, the Hoover Commission strongly advocated the separation of the adjudication function of Executive Branch agencies from the agencies to protect the claimants’ due process rights: "Where the proceeding before the administrative agency is strictly judicial in nature, and the remedy afforded by the agency is one characteristically granted by the courts, there can be no effective protection of private rights unless there is a complete separation of the prosecuting functions from the functions of decision." Specialized Courts and the Administrative Lawmaking System, Richard L. Revesz, 138 U. Penn. L. Rev. 1111, 1118-1119 (1990), quoting, Commission on Organization of the Executive Branch of Government, Legal Services and Procedures: A Report to Congress, 84-85 (1955).
Thus, it is difficult to justify a "role" for politically appointed Commissioners or Board members for an agency that does only adjudication, since the independent entity would not set policy. Policy-setting is the function for which political accountability is desirable, not adjudication of claims.
The rationales that have justified Congressional separation of the appellate administrative adjudication function from Executive Branch agencies include an efficient and low cost process for the claimants, expertise, high case volumes, and decisional independence of adjudicators. The maintenance of a reasonably efficient, orderly and low cost adjudication system in the traditional domain of public rights is in the public’s interest, especially for programs that distribute benefits on a large scale. Specialized tribunals are more likely to make correct decisions in subject areas that are legally complex or have technical facts. The large increase in the administrative case volume also supports the use of specialized adjudication agencies. The most important rationale is the experience that effective protection of individual rights before agencies through independent decisionmaking cannot take place unless adjudications are separated from the agency’s rulemaking/policy, prosecutorial/enforcement and investigatory functions.
These rationales, particularly the need to separate the adjudicatory function from other conflicting agency functions, led Congress to create the Occupational Safety and Health Review Commission ("OSHRC") in 1970, 29 U.S.C. § 661, and the Federal Mine Safety and Health Review Commission ("FMSHRC") in 1977, 30 U.S.C. § 823, as independent Executive Branch agencies outside the Department of Labor with only adjudicative authority. The OSHRC determines whether regulations promulgated and enforced by the Occupational Safety and Health Administration have been violated. The FMSHRC adjudicates violations of standards promulgated and enforced by the Mine Safety and Health Administration.
Therefore, when an agency, such as SSA, exclusively uses rulemaking proceedings to set policy, rather than also using adjudications to set policy, there no longer is any rationale for keeping the adjudicatory function within the agency. The Congressional interest in providing a check on SSA’s enforcement powers, i.e., to withhold disability and other program benefits, is best served by having entitlement determinations decided by an independent adjudicatory agency based on the benefits entitlement standards set by SSA. Hence our proposal that the independent agency be an adjudicatory body that is self-administered by the ALJs with a right of appeal from an individual ALJ’s decision to an appellate panel staffed by ALJs.
There are additional reasons why an independent adjudication agency administered by ALJs provides a higher quality of due process for Social Security benefits claimants than the current SSA Appeals Council or an independent but politically appointed Commission or Board structure. First, a small body, such as the current Appeals Council, or a Commission or Board, cannot be of sufficient size to do meaningful administrative review of appeals from the ALJ decisions, which now number well over 100,000 per year. The SSA ALJs are a large group of highly qualified judicial professionals who are capable of administering themselves and the appellate administrative process in a competent and effective manner. Second, creating an independent agency would eliminate political oversight by appointees (ie., Commissioners or Board members) who do not have due process and adjudicative independence as their foremost goal in agency administration. Finally, if the SSA ALJs administer themselves, they will draft and issue the procedural regulations and rules of the new agency based upon their experience and needs of the process, rather than expediency and other policy concerns as they are now. There now is no coherent set of procedural regulations and rules for the SSA appellate administrative process.
SSA’s many efforts to implement policy through OHA’s adjudication function, only some of which are described below, reveal the nature of the change in the Social Security claims process the American public needs: Separation of OHA’s appellate administrative adjudication function into an entity that is independent of the political policy making and implementation portions of SSA. An independent adjudication agency would provide members of the American public who file claims for Social Security Act entitlement program benefits that have been denied by the SSA timely adjudications that give due process and a sense of a timely and fair hearing free of policy implementation and political pressure.
Examples of SSA’s Policy Abuses of the OHA Adjudication Process: SSA has a long history of trying to use the adjudicatory function to implement policy, rather than just to decide cases on their merits, which undermines the ALJs’ ability to provide the claimants with timely, impartial, high quality and fair adjudications of their claims. Examples of SSA’s policy incursions into the ALJs’ ability to timely and effectively hear and decide their cases and exercise their decisional independence, both before and since SSA became an independent agency in 1994, include:
  1. SSA’s reorganization in 1999-2000 of OHA’s entire hearings procedure with HPI without consulting with the ALJs, which includes, among many other things, a substantial reduction in the ALJs’ role in the pre-hearing development of the case records and a reduction in the control by ALJs over their work product. As is stated above, the implementation of HPI, which was completed in November 2001, has resulted in an increase in the backlog of cases waiting to be heard and a lengthening of the time it takes to dispose of cases.
  1. SSA’s attempt during the summer of 1999 to discharge the Chief Judge for reasons not related to good cause.
  1. The long term and ongoing "non-acquiescence" by SSA with decisions by the Federal Circuit Courts of Appeal. On January 31, 1997, the Commissioner of Social Security issued to the SSA Executive Staff a memorandum of law from the SSA Office of the General Counsel entitled Legal Foundations of the Duty of Impartiality in the Hearing Process and its Applicability to Administrative Law Judges ("Impartiality Memo"), which asserts the validity of its non-acquiescence policy as supreme over the ALJs’ judicial independence in making decisions, among other things. pp. 4-5. SSA’s ongoing "non-acquiescence" with decisions by the Federal Circuit Courts of Appeal. Non-acquiescence forces ALJs to chose between obeying SSA or following the law as interpreted by the Circuit Courts and risk the approbation of their employer. A bill was introduced in the 106th Congress to bar the SSA’s non-acquiescence policy. That an act of Congress should be necessary to compel a federal agency to follow the law of the federal appellate courts is extraordinary.
  1. The current Quality Assurance Review program, with its abuse of the adjudicatory purpose of the Appeals Council by having it implement SSA policy by reviewing only fully favorable ALJ decisions on its own motion. The SSA Office of Quality Assurance and Performance Assessment, which is not part of OHA, periodically conducts an ALJ peer review process to, among other things, assess whether ALJs’ decisions are supported by substantial evidence in the record, which is the standard of Appeals Council and judicial review of ALJ decisions. The most recent peer review resulted in a finding that 92% of the ALJ denial decisions were supported by substantial evidence, but only 83% of the fully favorable decisions were supported, the latter of which was an improvement over 79% in the prior evaluation. Findings of the Disability Hearings Quality Review Process: ALJ Peer Report III, pp. ix, 21-32. Although ALJs performed the review, it is interesting to note that denial decisions were found to be supported by substantial evidence significantly more often than were allowance decisions. This practice subjects the ALJs’ favorable decisions to more scrutiny than unfavorable decisions, which works to the detriment of the claimants and undercuts the perception of fairness and impartiality of agency adjudication of administrative claims that the APA is intended to foster. This program clearly shows that the independent SSA believes that targeting only favorable decisions is permissible and now subjects all of its ALJs to such review. SSA’s current Quality Assurance Review Program inherently is unfair and discourages the granting of benefits by ALJs.
  1. Statements by senior SSA management and a former SSA General Counsel that SSA is not required to hold hearings pursuant to the Administrative Procedure Act, notwithstanding that SSA’s hearing process uses APA judges who by law can conduct only APA hearings. However, on January 9, 2001, the Commissioner of the SSA issued a statement that "SSA always has supported the APA and is proud that the SSA hearing process has become the model under which all Federal agencies that hold hearings subject to the APA operate. SSA’s hearing process provides the protections set forth in the APA, and SSA’s Administrative Law Judges are appointed in compliance with the provisions of the APA." This is the first statement by a Commissioner regarding the APA and SSA hearings.
  1. Statements by senior SSA management and the SSA General Counsel in the Impartiality Memo that SSA has the power to discipline or remove ALJs by proceedings brought before the MSPB based upon a failure to decide a quota level of cases each month. pp. 7-21. This position is contrary to the APA, law set forth in Nash v. Bowen, agency policy stated in Social Security Commissioner Gwendolyn King’s memorandum on the Temporary Suspension of Numeric Performance Goals (March 5, 1990), and the agreement in the Bono settlement. Nash v. Bowen, 869 F.2d 675 (2nd Cir. 1989), cert. den., 493 U.S. 813, 110 S. Ct. 59, 107 L.Ed.2d 27 (1989). The Impartiality Memo was an effort to find the outer limits of all of the ways and things for which ALJs may be disciplined, which demonstrates the SSA’s desire to control the ALJs in the performance of their duties and hostility to the ALJs’ independence in the adjudication of Social Security Act claims. It is also an effort to commingle the functions of a policy-making component (OGC) and an adjudication component (OHA), which clearly is contrary to the APA.
  1. The SSA’s longstanding preoccupation with the production of decisions in quantity at the expense of quality. In SSA’s Strategic Plan 2000-2005, SSA states that one of its strategic goals is to "deliver customer-responsive, world-class service," which includes "strategies specific to improving service to disability applicants:"
Make changes to the hearings and appeals processes focused on reducing processing time and improving efficiency. Hearing process changes [HPI] include a national workflow model, group-based accountability and enhanced automation and data collection. Appeals process changes [ACPI] include short-term measures, such as case screening and expedited decisionmaking, as well as long-range proposals, such as restructuring and IT improvements designed to enhance service to the public by improving the timeliness of case processing at the Appeals Council.
pp. 23, 28. However, the quality of service is assessed mostly by statistical results: the percent of hearings decisions issued within 180 days, percent of final actions on appeals of hearings decisions that are issued within 105 days, average processing times for hearings decisions and for decisions on appeals of hearings decisions, and number of hearings and appeals processed per employee work year. Also, the substantial evidence support rate is used to assess ALJ decisional accuracy "pending development of a new accuracy indicator." Id., p. 30. No measure of the quality of the Appeals Council decisions is mentioned in the Strategic Plan. SSA’s disregard of quality has undermined the federal courts’ respect for SSA ALJ decisions and resulted in a de facto appellate standard of review that is unattainably high, rather than the substantial evidence rule that is supposed to be applied.
  1. The wholesale cessation of benefits of hundreds of thousands of recipients during 1980-1984 without the option to continue benefits pending appeal. Remedial legislation was necessary to end the practice.
  1. There were many incidents of SSA policy and management decisions during the 1980s to attempt to compel individual judges to reduce their allowance rate, to discipline or threaten to discipline ALJs for failure to meet production quotas, to control the content of ALJ decisions, to discourage the ALJs from using medical and vocational experts at their hearings, and to ignore SSA’s own regulations regarding the sequential evaluation process to deny mental impairment disability claims, among other things. For example, the SSA’s Bellmon Review Program in the early 1980s was a process by which SSA had the Appeals Council do "own motion" review of 25% to 100% of only the favorable decisions issued only by ALJs who the SSA had targeted as having high allowance rates of 70% or more. In 1983, the Subcommittee on Oversight of Government Management of the Senate Committee on Governmental Affairs held hearings on the ALJs’ role in the Title II disability insurance program and issued a report that stated its findings of SSA’s improprieties, including limits of ALJs’ decisional independence, non-acquiescence, and increasing case quotas:
The principal findings of the Subcommittee is that the SSA is pressuring its ALJs to reduce the rate at which they allow disabled persons to participate in the Social Security Disability Program….[The Subcommittee found that the SSA was limiting the decisional independence of ALJs through its Rulings, its non-acquiescence to federal court decisions, and its increasing of case quotas that reduced the time an ALJ could spend on each case to develop additional evidence that may support an allowance decision, among other things.] The APA mandates that the ALJ be an independent, impartial adjudicator in the administrative process and in so doing separates the adjudicative and prosecutorial functions of an agency. The ALJ is the only impartial, independent adjudicator available to the claimant in the administrative process, and the only person who stand between the claimant and the whim of agency bias and policy. If the ALJ is subordinated to the role of a mere employee, an instrument and mouthpiece for the SSA, then we will have returned to the days when the agency was both prosecutor and judge.
Sen. Rep. No. 98-111 (September 16, 1983). The pitched battle that the SSA ALJs had to wage against SSA during the 1980s to preserve the independent decisionmaking and due process under the APA for Social Security claimants was such that, in 1986, the President of the American Bar Association presented the SSA ALJs with an award to recognize their efforts to preserve the hearing process. The award states "[t]hat the American Bar Association hereby commends the Social Security Administrative Law Judge Corps for its outstanding efforts during the period from 1982-1984 to protect the integrity of administrative adjudication within their agency, to preserve the public confidence in the fairness of governmental institutions and uphold the rule of law."
D. Other Federal Government Entities Have Recognized the Need for Fundamental Reform of the Final Administrative Hearing and Decision Process of the Social Security Administration
The federal government entities that have considered the Social Security claims process all have concluded that substantial reform is necessary, especially with the Appeals Council, including the Administrative Conference of the United States ("ACUS"), the Judicial Conference of the United States ("Judicial Conference"), and the Social Security Advisory Board ("SSAB"). However, each adopts a different idea of how to go about reforming the Social Security process and none present details of how to implement the ideas. It is time to form a consensus around one idea that will work in its execution so that legislation can become a reality.
In 1987, ACUS issued a set of recommendations for improving the functioning of the Appeals Council, including reorganization, caseload control and the quality of the review of cases. ACUS concluded its recommendation by stating that "[i]f the reconstituted Appeals Council does not result in improved policy development or case-handling performance within a certain number of years (to be determined by Congress and SSA), serious consideration should be given to abolishing it." ACUS, A New Role for the Social Security Appeals Council, Recommendation 87-7 (December 18, 1987).
In 1990, the Federal Courts Study Committee, which was an independent review committee that was formed by Congress in 1988 to study and report on certain federal courts matters and that included members of Congress and the federal judiciary, issued a minority recommendation in its final report that the Appeals Council be abolished and replaced with a Social Security Benefits Review Board with no further review of the ALJs’ decisions by the SSA. Report of the Federal Courts Study Committee, pp. 58-59 (1990).
The Judicial Conference of the United States ("Judicial Conference") recently has advocated legislation to strengthen the Social Security disability claim adjudication process by establishing a new alternative mechanism for the administrative review of ALJ decisions to replace the Appeals Council. Recommendation 9 and Implementation Strategy 9a in the Judicial Conference Long Range Plan for the Federal Courts, p. 33 (1995). The commentary supporting this recommendation and strategy states that its purpose is to expand and improve the speed, accuracy and completeness of the administrative review process so that the frequency of the need to resort to judicial review of such claims is reduced. The 1990 proposal by the Federal Courts Study Committee for a Benefits Review Board was cited as an example of legislation that Congress may enact to improve the administrative review of Social Security Act disability claims. Long Range Plan, p. 33.
The SSAB makes a very strong case in favor of making fundamental changes at the SSA OHA, the concept of which was carried over into the title of its most recent report on the topic, but it does not present any specific recommendations or options for structural reform of the ALJ hearing process or Appeals Council process to engender a higher quality or faster handling of the caseload. "Charting the Future of Social Security’s Disability Programs: The Need for Fundamental Change" (January 2001) (the "SSAB Report"). The SSAB Report does make the point that many support making the individual ALJ decision the final decision of the SSA, which would eliminate the Appeals Council bottle neck. However, the SSAB Report also correctly points out the impracticality of taking this step, since the SSA has shown by testing that this would result in a large increase of court appeals.
Although the SSAB Report also correctly states that the Appeals Council model needs to be changed, its suggestion that another small body be substituted for the Appeals Council, namely a Review Board, which will have the same quality and timeliness issues as the Appeals Council, will not be an improvement. No small body of less than 30 people, such as the Appeals Council or a Board or Commission, effectively can handle the caseload, which now is over 115,000 cases per year.
The use of panels of ALJs as the final administrative step, instead of the Appeals Council, likely will have the same impact as the use of Bankruptcy Judge panels in lieu of District Court review: faster and higher quality decisions that are appealed less often and, when they are appealed, affirmed more often. The relatively high number of SSA ALJs, now about 1,000, provides a large pool of locally available adjudicators who are available for such work.
The AALJ proposal for a new adjudication agency is a detailed and practical blueprint to improve the Social Security disability process. The AALJ proposal would improve the timeliness and quality of ALJ and final administrative review decisions which, at the same time, likely will reduce the claimant’s need to resort to federal court review and thus reduce the federal court Social Security caseload. The process AALJ is proposing is realistic in terms of handling the large caseload, which I respectfully submit is not the case for the other proposals in this area. All of the agencies correctly recognize the need for change, but rely on the creation of small bodies, such as a Board, that would suffer from the same problems of low decision quality and untimely action as the SSA Appeals Council, another small body, has had for years.
Independent Agency within SSA; Agency Name: AALJ recommends the creation of a new ALJ-administered independent adjudication agency for Social Security Act claims that would provide a hearing before an ALJ with a right of appeal from the individual ALJ’s decision to an appellate panel staffed by ALJs. This agency may be called the United States Office of Hearings and Appeals ("USOHA"). The remainder of this section states in detail the proposals for the features of the USOHA.
The USOHA would be within the SSA for logistical reasons, but its officers and employees will not be supervised by any other part of SSA. The USOHA will be accountable only to Congress and the President. Placing the USOHA within SSA results in no new costs for office space and information systems and is a practical necessity, given the USOHA’s substantial space needs that currently are in place at SSA, the need to share the SSA’s information services and data bases, and the need to use the same case files.
An Article I or Article II court model cannot be used as the format for an Executive Branch agency that performs only an adjudicative function and continues to have the agency’s appellate administrative adjudications performed pursuant to 5 U.S.C. §§ 551 et seq. of the Administrative Procedure Act ("APA") by APA administrative law judges. The APA provides that, for its purposes, "agency" means "each authority of the Government of the United States, whether or not it is within or subject to review by another agency, but does not include...(B) the courts of the United States..." 5 U.S.C. § 551(1) (section 2(a) of the original statute). The APA definition of "agency" apparently excludes not only all Article III courts and Article I tribunals in the Judicial Branch, but also all Executive Branch Article I tribunals that perform judicial review of final administrative agency adjudications and Executive Branch Article II tribunals that review initial administrative agency adjudications but are labeled "courts" by Congress.
The Attorney General’s Manual on the Administrative Procedure Act (the "Manual") includes two Article I courts in the Judicial Branch and an Article II Executive Branch court as specific examples of Congress’ exclusion of APA application to "the courts of the United States: "The Administrative Procedure Act applies to every authority of the Government of the United States other than Congress, the courts, the governments of the possessions, Territories, and the District of Columbia (sec. 2(a)). The term "courts" is not limited to constitutional courts, but includes the Tax Court, the Court of Customs and Patent Appeals, the Court of Claims, and similar courts." U.S. Justice Dept., Attorney General’s Manual on the Administrative Procedure Act, p. 10 (1947), citing, S. Rep. No. 752, 79th Cong., 1st Sess., p. 38 (1945) (the Appendix to Attorney General’s Statement Regarding Revised Committee Print of October 5, 1945).
The Tax Court was functioning as an Article II "board model" independent agency in the Executive Branch that was doing appellate administrative review of initial decisions by the IRS, not judicial review of final agency decisions, at the time that the Attorney General stated that it was excluded from APA coverage because it is called a court. Thus, bearing the label "court" is enough to exclude an Article II independent adjudication agency from APA coverage. Also, Executive Branch Article I tribunals that review final administrative agency adjudications, such as the Court of Customs and Patent Appeals and the Court of Claims were when the Manual was written, are excluded from APA coverage.
Exclusive Jurisdiction over Final Decisions of Social Security Act Claims Vested in the USOHA; Permissive Jurisdiction over other Classes of Cases: The USOHA would have the exclusive jurisdiction to make the final administrative decisions of Social Security Act Title II and XVI claims. The USOHA will have permissive jurisdiction over other classes of cases, so it may hear and decide Medicare cases under Social Security Act Title XVIII, including those that currently are heard by SSA ALJs, and other classes of cases such as those that the SSA ALJs have heard in the past, which have included Black Lung and FDIC cases.
Abolishment of the Final Administrative Adjudication Authority the SSA Including the Appeals Council: The final administrative adjudication authority of SSA would be abolished, including the Appeals Council. The Commissioner of SSA, who sets and implements the policy standards for entitlement to Social Security Act benefits, will continue to have the power to make only initial decisions on Social Security Act claims. However, the Commissioner of SSA will retain all authority for all of the policy-making, policy-implementation, rulemaking, investigation, and prosecutorial functions vested in the SSA by law.
Final Administrative Appellate Review by the USOHA: Individual ALJs’ decisions would be appealed to appellate panels staffed by ALJs, each of which would consist of three ALJs who would review the cases locally. The appellate panel step would be the final and exclusive level of administrative appellate review. The USOHA would establish a Social Security Appellate Panel Service in each region composed only of ALJs from the hearing offices in each region. A sufficient number of appellate panels would be designated so that appeals may be heard and disposed of expeditiously. An ALJ may not hear an appeal of a case from his/her own hearing office.
The appellate panels would be akin to the Bankruptcy Court appellate panels and is one of the key features that makes the ALJ self-administration model superior to the current SSA Appeals Council model or a Commission or Board model, all of which are small bodies that cannot timely and effectively handle a heavy caseload. Based upon the Bankruptcy Court experience, the appellate panel model (1) is an appellate system that can handle a large caseload, (2) results in a shorter disposition time because the large pool of about 1,000 ALJs throughout the United States permits the timely determination of appeals that cannot take place with a small body such as the Appeals Council or a Commission or Board, (3) results in higher quality decisions because of expertise, (4) results in substantially fewer appeals to the courts and a substantially lower reversal rate by the courts because of the confidence in the high quality of the decisions, which reflects a higher degree of decision accuracy, (5) results in a substantially reduced federal court caseload, and (6) affords the claimants access to a local administrative appellate process.
Judicial Review: The final decisions of the USOHA that are made by its appellate panels would be appealed only to the federal courts, with the District Courts as the first step in the judicial review. A District Court appeal step is essential for several reasons: (1) The huge size of the Social Security appellate caseload would overwhelm the Circuit Courts if the District Court step is removed. An Article I court as a substitute for the District Courts would suffer from the same problems of being too small to effectively handle the case load that the Appeals Council does. (2) Retaining District Court judicial review keeps local decisional generalists in the appeals chain who are sensitive to due process concerns, including adherence to the Administrative Procedure Act. (3) Social Security claimants have come to rely on the availability of the District Courts as a part of the judicial review due process. (4) Congress has a demonstrated preference for local control and decisionmaking with Social Security programs. (5) It is desirable to retain local access to the judicial review process for the often indigent Social Security claimants.
Regarding judicial review at the District Court level, the SSAB did not make a convincing case in its SSAB Report for its suggestion that there is a need to replace the District Court with an Article I court. The pressing issue is to improve the final administrative adjudication process so that fewer claimants feel a need to resort to judicial review. This will result in fewer appeals to the courts. Also, as is stated above, there are several practical reasons to maintain the District Court appeal step for the claimants. These include the massive Social Security appellate caseload, which would overwhelm an Article I court of the small size typically created by Congress and result in the same quality and timeliness issues that have plagued the Appeals Council, another small body with an unmanageable caseload.
As of September 30, 1999, and September 30, 2000, the numbers of Social Security cases filed in the District Courts throughout the country during the preceding year were 13,320 and 15,829, respectively. Title II and Title XVI claims made up 99% of the cases in both 1999 and 2000. As of September 30, 1999, and September 30, 2000, the numbers of all civil cases filed in the District Courts throughout the country during the preceding year were 260,271 and 259,517, respectively. Judicial Business of the United States Courts: 1999 and 2000 Annual Reports of the Director, Tables S-7, S-9. Article I courts are small courts. The U.S. Court of Federal Claims has 16 judges, the U.S. Tax Court has 19 judges, and the U.S. Court of Appeals for Veterans Claims has 7 judges. As of October 1, 1999, there were 600 active and 334 senior District Court Judges, for a total of 934 Judges. As of February 1, 2001, there were 599 active and 342 senior District Court Judges, for a total of 941 Judges. Administrative Offices of the U.S. Courts, Statistical Report for Justices and Judges of the United States, October 1, 1999, and February 1, 2001. These numbers suggest that an Article I Social Security Court would require at least 50 to 75 judges to handle the caseload in a timely and high quality manner.
The appeals from the District Courts will remain with the regional Circuit Courts of Appeal, as they do now, rather than go only to the D.C. Circuit or the Federal Circuit. Even with District Court review, placing all of the Social Security Circuit-level appeals in either of these courts would increase their workload by over 50%. The SSAB’s suggestion of a specialized Social Security Court of Appeals in its SSAB Report superficially may sound attractive as a device to have one national interpretation of the Social Security Act. However, the SSAB does not demonstrate a strong need for such a specialized court. First, as SSAB points out, the Supreme Court already serves the function of providing a national interpretation of the Social Security Act, and having the regional circuits address the issues allows for legal debate that would otherwise not occur. Second, continuing to have the appeals go to the regional Circuits allows somewhat local access to the claimants. This is the same procedure as for appeals from both Bankruptcy Court decisions after District Court review and Tax Court decisions, which are appealed to the regional Circuits, which makes sense since they also serve individual claimants throughout the country who often have limited means. (Although the Tax Court is based in Washington, D.C., it sits throughout the country.) Regional circuit review has worked for tax and bankruptcy cases, despite the obviously strong argument that a single standard for construing the tax and bankruptcy laws is desirable so that they are applied the same to everyone. Finally, the regional circuits are not being overrun with Social Security cases. During the years that ended on September 30, 1999, and September 30, 2000, only 891 and 845 Social Security cases respectively were filed with the regional Circuit Courts of Appeals. Judicial Business, 1999 and 2000 Reports, Table B-1A. This is less than two percent of the 54,693 cases that were filed in 1999 and 54,697 cases filed in 2000 in the regional Circuit Courts. Judicial Business, 1999and 2000 Reports, Table B.
No substantive changes in the process of judicial review after the final administrative decision are recommended by AALJ, other than to amend the Social Security Act to reflect that judicial review will be from the final decisions of the new agency, not the SSA. Our recommendations pertain only to the appellate administrative adjudication process that results in a final administrative decision of the claimants’ entitlement to Social Security benefits, since that is where the problems lie.
Appointment and Duties of the USOHA Chief Administrative Law Judge, Principal Deputy Chief Judge, and Deputy Chief Judges: A Chief Administrative Law Judge ("Chief Judge") would be appointed from the ranks of the ALJs by the President, with the advice and consent of the Senate. The Chief Judge would be responsible for the administrative operations of the USOHA. A Principal Deputy Chief Judge, who would have the authority to act in the stead of the Chief Judge, also would be appointed from the ranks of the ALJs by the President, with the advice and consent of the Senate. The Chief Judge would recommend a candidate for Principal Deputy Chief Judge as a Schedule C appointment to the President. The Chief Judge would appoint five Deputy Chief Judges from the ranks of the ALJs. The Principal Deputy Chief Judge and five Deputy Chief Judges would perform duties and exercise powers assigned or delegated by the Chief Judge to assist the Chief Judge in administering the USOHA. The Chief Judge, Principal Deputy Chief Judge, and the Deputy Chief Judges all would be appointed for a six year term that is renewable once.
Centralized Administration of USOHA; Abolishment of the Ten SSA OHA Regional Offices and Position of Regional Chief Administrative Law Judge: The Chief Judge, Principal Deputy Chief Judge, and Deputy Chief Judges would administer the USOHA from a single national headquarters. The ten OHA regional offices and the position of Regional Chief Judge would be abolished so that only one set of support staff and administrative offices, instead of 11, will exist. A centralized structure also will eliminate inconsistencies in administration and carrying out policy, which has been a problem with the OHA regional offices. Also, having one central office will create a more efficient organization, in view of instant modern electronic communications.
Cost Savings from Abolishment of SSA OHA Appeals Council and OHA Regional Offices: A substantial amount of funds would be saved annually by the abolishment of the Appeals Council and the ten OHA regional offices, which appears to be on the order of in excess of $75,000,000. The appellate panel work would increase the workload of the ALJs and thus additional ALJs likely will be required and additional travel and other administrative costs incurred. However, given the elimination of the Appeals Council, with its staff of 27 Administrative Appeals Judges and over 800 support personnel and substantial facilities in the OHA headquarters, the costs for the appellate panels, which can meet in already established local facilities, likely will be less than the cost of the Appeals Council. The SSA Fiscal Year 2000 Performance and Accountability Report reflects that the cost of the Appeals Council process apparently was $64,671,200 in FY 2000. Thus, unlike the Bankruptcy Court Appellate Panel Service, which was a new creation in addition to the District Court review step that already was available, a Social Security Appellate Panel Service would replace a failed appellate review step that already exists and is funded. The staff and facilities for the ten OHA regional offices were estimated to cost about $13,000,000 annually in 1993 by the Congressional Budget Office, which likely is a greater figure now.
Maintenance of Field Offices: The USOHA will maintain a sufficient number of local permanent field offices throughout the United States to conduct its business, including all of the field offices of the SSA OHA.
Rulemaking Authority: The USOHA would have the exclusive power to set its own rules of practice and procedure and such other regulations as it deems necessary or appropriate to carry out its functions, which will be promulgated pursuant to 5 U.S.C. § 553 of the Administrative Procedure Act.
Administrative Budget Mechanics: The USOHA Chief Judge would prepare an annual budget for the USOHA, which would be submitted by the President to the Congress without revision, together with the President’s annual budget for the USA. The USOHA would include in the annual budget an itemization of the amount of funds required by the USOHA for the fiscal year covered by the budget to support efforts to combat fraud committed by applicants and beneficiaries. Appropriations requests for staffing and personnel of the USOHA would be based upon a comprehensive work force plan, which shall be established and revised from time to time by the Chief Judge. Appropriations for administrative expenses of the USOHA should be authorized to be provided on a biennial basis.
The degree of independence that an agency has is affected by the degree of control that it has in preparing and submitting its budget requests to Congress. Budget requests usually are changed by the Office of Management and Budget ("OMB"), but Congress can permit agencies to submit their budgets without revision, so that the Appropriations Committees can compare the agency budget with the OMB revisions.
Administrative Budget Levels: The USOHA’s administrative budget for the Title II Social Security program (the old age, survivors and disability insurance programs), which is paid out of the Social Security Trust Funds, expressly must be excluded from the statutory discretionary spending caps in order for it to provide high quality service to the public. The SSI administrative budget must be treated separately because it is paid out of general revenues, rather than the Social Security Trust Funds. However, the SSI administrative budget also expressly must set in reference only to the USOHA’s workforce, office space and other resource needs, not discretionary spending caps or other artificial spending limits, in order for it to provide high quality service to the public.
Direct Transmittals to Congress: The USOHA would annually transmit to the Congress and the President a report and recommendations on its activities. The USOHA would transmit to Congress and the President copies of budget estimates, requests (including personnel needs), information, legislative recommendations, prepared testimony for congressional hearings, and comments on legislation. An officer of an agency, including the OMB, may not impose conditions on or impair communications by the USOHA with Congress, or a committee of Member of Congress, about the information. The degree of independence that an agency has is affected by whether it must clear its communications and information that it wishes to submit to Congress with OMB before doing so.
Transfer Mechanics: In order to effect the transfer of functions from the SSA OHA to the USOHA, all of the components of the SSA OHA that are necessary to effect the adjudication of the appeals of all Social Security Act claims after denial by the SSA must be transferred to the USOHA. The components of OHA that perform policy, rulemaking, investigational and/or prosecutorial functions will remain with SSA. The personnel transfers may be permissive in that the USOHA may be permitted to choose who from SSA OHA that it wants to hire and/or SSA OHA employees may be given the option to stay with SSA OHA. However, all of the SSA ALJs must be transferred to the USOHA. The SSA administrative budget for the current fiscal year and physical plant of the adjudicative portions of SSA OHA, including necessary support operations, must be transferred to the USOHA.

                                     APPENDIX D-2

 Social Security Judges Sue The Commissioner of The Social Security Administration Alleging Unfair Labor Practices

Social Security’s disability program is overwhelmed by so many claims that judges sometimes award benefits they might otherwise deny just to keep up with the flow of cases, according to a lawsuit filed by the judges themselves. This practice is referred to as "paying down the backlog".
The Social Security Administration says the agency’s administrative law judges (ALJs) should decide 500 to 700 disability cases a year. The agency calls the standard a productivity goal, but a lawsuit filed by the Social Security Judges against the Commissioner and the Agency claims it is an illegal quota that requires judges to decide an average of more than two cases per workday.
                                        (Marilyn Zahm and Randy Frye)
‘‘When the goals are too high, the easy way out is to pay the case,’’ said Randall Frye, president of the Association of Administrative Law Judges (AALJ) and a judge in Charlotte, N.C. ‘‘Paying the case is a decision that might be three pages long. When you deny benefits, it’s usually a 15- or 20-page denial that takes a lot more time and effort.’’
The lawsuit raises serious questions about the integrity of the disability hearing process by the very people in charge of running it. It comes as the disability program faces serious financial problems.

Commissioner Astrue's story has not changed much, if at all, since he appeared before Congress in May 2007 and April 2008. (His statements and testimony are recorded in detail in my book, socialNsecurity, beginning at page 443. Available at

 He is still blaming the judges, asking for more money, more judges, and more time to reduce the backlog. Since 2007 the number of judges has gone from 1200 to 1500 and the backlog continues to grow. And Mr. Astrue continues to make excuses.
Mr. Astrue wants to have it both ways. "I find it interesting that there is so much wringing of the hands about a judge who pays almost 100% of his cases, as if the agency didn't know about it, as if the agency wasn't complicit in it, as if the agency didn't encourage it," said Marilyn Zahm, a Social Security judge in Buffalo, NY who is an executive vice president of the Association of Administrative Law Judges (AALJ), the judges' union.
Judge Zahm had a lot more to say in an interview in October 2009. (Read the entire interview starting at page 430 in my book, socialNsecurity, available at

It is a bit surprising that Judge Zahm would be so out-spoken, considering the minimum amount of work she does and the large amount of money she is paid. According to Social Security records Judge Zahm issued only 26 decisions for the 9 months between September 2010 and June 2011. At a salary of $167,000.00 per year, she earned $6,423.00 per decision. An average hearing lasts about 30 minutes; so, her hourly wage for that period was about $12,846.00. That is a nice salary for so little work.
However, Judge Zahm is only the Vice President of the AALJ. Perhaps, the President, Judge Randy Frye, sets a better example. According to Social Security records Judge Frye issued only 37 decisions for the 9 months between September 2010 and June 2011. At a salary of $167,000.00 per year, he earned $4,513.50 per decision. An average hearing lasts about 30 minutes; so, his hourly wage for that period was about $9,027.00. That is also a nice salary for so little work.
Judges Zahm and Frye are not unique. During the same period Judge Mark Anderson issued only 3 decisions; Judge JoAnn Andersen issued only 5 decisions; Judge William King held only 4 hearings and issued 1 decision. He was busy traveling between California and Hawaii to conduct the hearings.
These statistics came from an SSA report which contains raw data from SSA's Case Processing and Management System without regard to the amount of time Administrative Law Judges devote to actual adjudication. In other words, factors which would affect the number of dispositions (e.g., management and administrative responsibilities, special assignments, part-time status, union representational duties, retirements, deaths or extended leave, etc.) have not been taken into account.
Here is what Commissioner Astrue is failing to say. The 1500 SSA ALJs earn approximately $167,000 a year each. The salaries of those ALJs is $2 billion 505 million a year. That figure does not include the about $3 billion a year which pays the salaries of the ALJs support staff and Commissioner Astrue's salary and that of his support staff. Also 20% of the ALJs do not hold any hearings.
Some ALJs decide 200 cases per month without holding hearings. They award benefits in 100% of their cases, trying to "pay down the backlog" like the judge in Huntington, W.Va., who awarded benefits in every case he saw in the first six months of fiscal 2011.
A GS-9 lawyer could perform the same function at a fraction of the cost. A GS-9 lawyer earns about $40,000 a year. The cost to the taxpayer of 1500 such lawyers would be only $60 million a year. That is much less than the $2 and a half billion in salaries to 1500 ALJs. That is where the cuts should begin, not with benefits to claimants.
Just 4 years ago in the middle of the economic downturn there were 1200 ALJs. Today there are upwards to 1500 according to Michael Astrue. The backlog of cases waiting to be heard has not decreased, despite pressure from Mr. Astrue to force the ALJs to "pay down the backlog". Yet, Mr. Astrue kept hiring more judges at $167 thousand a year.
Former Commissioner Astrue could be vague in his testimony before Congress. We can be specific as to who the ALJs are and how many cases they decide each month and their reversal rates.
A court-by-court analysis of close to two million Social Security Administration (SSA) claims has documented extensive and hard-to-explain disparities in the way the administrative law judges (ALJs) within the agency's separate hearing offices decide whether individuals will be granted or denied disability benefits.

                                                             (Carolyn Colvin)
The lawsuit was filed by the AALJ and three judges on April 18, 2013 in Federal District Court in Chicago. It names the agency and Acting Social Security Commissioner Carolyn Colvin as defendants. Colvin took over in February after Commissioner Michael Astrue’s six-year term expired.
 In an interview, Former Commissioner Michael  Astrue disputed the union’s claims.
                                                          (Michael Astrue)
Social Security’s disability program is overwhelmed by so many claims that judges sometimes award benefits they might otherwise deny just to keep up with the flow of cases, according to a lawsuit filed by the judges themselves. This practice is referred to as "paying down the backlog".

"What’s really happening here is that the judges’ union doesn’t want accountability of its members and it’s been trying to sell this story to the media and to the Congress and to the agency for a very long time,’’ Astrue said. ‘‘And no one’s buying it because it’s not true, and no federal judge is going to buy this story, either.’’
‘‘There are a very small number of malcontents who want to litigate or put political pressure on the agency rather than do their work,’’ Astrue said.
The union represents 1,400 administrative law judges. Its lawsuit describes a disability system in crisis.
About 3.2 million people applied for disability benefits last year, a 25 percent increase from a decade before. Claims have increased in part because of aging baby boomers. As people get older, they become more prone to disabilities.
Disability claims also typically increase when the economy sours. Some people who manage to work despite their disabilities get laid off and apply for benefits, while others apply out of economic desperation.
When people apply for Social Security disability benefits, their cases are initially reviewed by the State Disability Determination Service (DDS), which reject most claims. If your claim is rejected, you can appeal to an ALJ. But the hearing process takes an average of 373 days — a little more than a year — according to agency statistics.
Astrue said the average processing time for a hearing peaked at 542 days shortly after he took over the agency. He said public outcry over the "backlog" led him to adopt productivity (that is, assign quotas) standards in 2007, which helped reduce the wait time (that is, forced ALJs to "pay down the backlog").
The hearing process, which is closed to the public, is different from a civil lawsuit or a criminal trial. There is no lawyer for the government. Instead, judges are expected to be impartial decision-makers while protecting the interest of taxpayers and ensuring that applicants get fair hearings. Most applicants have legal representation by the time their claim results in a hearing.

Social Security Disability hearings are not trials. They are more in the nature of fact finding inquiries. They are presided over by an administrative law judge (ALJ), who is trained in the law. At a hearing only one side of the case is present and represented by an attorney or a paralegal. That is the claimant’s side.
If only one side of a controversy is present for the hearing, then why does the claimant need to have a judge presiding? When the Government wants to win a case, Congress designs a system that provides it with an advantage. In Immigration Hearings, the Government is represented by an attorney. When the Government is a party to a hearing before the Supreme Court, it is represented by the Solicitor General. In any other federal judicial forum where the Government has an interest, the Attorney General will ensure that the Government is adequately represented.
In Social Security Disability hearings the Government is not represented. The Government is not even present. That is probably because the system was designed to give the claimant an advantage. The case is the claimant’s case, to win or to lose. A judge is not needed to collect the medical records and listen to testimony that is not really cross-examined. The presiding officer is forced to accept the claimant’s testimony, no matter how farfetched it may be. The only evidence available to impeach the testimony of the witnesses is the evidence that the claimant provides. This could hardly be considered cross-examination.

 See (

Frye said he has never awarded benefits just to clear a case faster, and he couldn’t name any judges who have.
‘‘It’s hard for anyone to say a judge is willingly deciding cases incorrectly just to meet the quota,’’ Frye said. ‘‘What they have told us is they are not reviewing all of the evidence, they are not developing the case as they should, and from that I think you can clearly see that the case may not be or could not be correctly decided.’’

The lawsuit says case quotas violate judges’ independence and deny due process rights to applicants.
‘‘Some ALJs respond by tending to grant more claims,’’ the lawsuit says. ‘‘For other ALJs, the quota impedes their ability to render carefully reasoned, impartial decisions based on a fully developed factual record.’’
The lawsuit alleges that ALJs are expected to meet their quotas, regardless of how complicated their cases are, even though many case files exceed 500 pages. ALJs have been disciplined for missing the quota, including receiving formal reprimands and facing removal proceedings, according to the lawsuit.
Nearly 11 million disabled workers, spouses and children get Social Security disability benefits. That’s up from 7.6 million a decade ago. The average monthly benefit for a disabled worker is $1,130.
In 2011, Social Security disability paid about $129 billion in benefits.

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