### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 17

‐ 1954

A LEJANDRO M ORENO

, Plaintiff

‐ Appellant

,

v.

N ANCY B ERRYHILL

, Acting Commissioner of Social Security,

Defendant

‐ Appellee

.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:15

‐ cv

‐ 11168

— Sidney I. Schenkier

, Magistrate Judge

.

____________________

A RGUED D ECEMBER 12, 2017

— D ECIDED F EBRUARY 16, 2018

A S A MENDED ON P ETITION FOR R EHEARING A PRIL 13, 2018

____________________

Before B AUER

, R IPPLE

, and S YKES

, Circuit Judges

.

P ER C URIAM

. Alejandro Moreno appeals the order of the

district court upholding the Social Security Administration’s

denial of his applications for Supplemental Security Income

and Disability Insurance Benefits. Mr. Moreno contends that,

among other shortcomings in the Administrative Law Judge’s2 No. 17

‐ 1954

(“ALJ”) determination, he improperly relied on an outdated

mental

‐ health assessment and failed to incorporate all of

Mr. Moreno’s limitations when posing the hypothetical to the

vocational expert. We agree that the record contains new and

significant evidence that could have affected Mr. Moreno’s

mental

‐ health assessment. We also agree that the ALJ’s hypo

‐

thetical to the vocational expert failed to include Mr. Moreno’s

limitations with respect to concentration, persistence, and

pace. Accordingly, we remand the matter to the agency for

further proceedings.

I

BACKGROUND

A. Mr. Moreno’s Condition

Mr. Moreno’s misfortunes began in February 2006 when

he fell off scaffolding and landed on his back while taping

drywall. He sought treatment from an orthopedist, who

found a soft tissue injury but no signs of fracture. Later testing

showed improvements in Mr. Moreno’s condition, but he re

‐ ported that he still felt significant pain. A follow

‐ up diagnos

‐

tic test revealed acute lumbar radiculopathy—lower back

pain caused by compression, inflammation and/or injury to a

spinal nerve root. In addition to this condition, Mr. Moreno

also is diabetic, has high blood pressure, and is obese.

Beginning in April, Mr. Moreno sought treatment for his

chronic pain from clinical psychologist Dr. Enrique Gonzalez.

Dr. Gonzalez saw Mr. Moreno “on an almost weekly basisNo. 17

‐ 1954 3

through 2009 for cognitive behavioral therapy.” 1 These visits

decreased in frequency to monthly between 2010 and the first

half of 2011; however, for the remainder of 2011 through at

least June of 2013, Mr. Moreno saw Dr. Gonzalez on a weekly

basis.

In his treatment notes, Dr. Gonzalez reported that

Mr. Moreno manifested, among other symptoms, a depressed

mood, irritability, memory difficulties, and an inability to con

‐

centrate. Critical to our analysis, Dr. Gonzalez documented an

ongoing inability to sleep, including times when Mr. Moreno

would go days without sleep. 2 Dr. Gonzalez also addressed

Mr. Moreno’s difficulties interacting with the public and with

his family, specifically outbursts of anger precipitated by feel

‐ ings that others were taking advantage of him. 3 Dr. Gonzalez

observed fluctuations in Mr. Moreno’s mood and behavior

over time, including some periods of improvement; for in

‐

stance, Dr. Gonzalez reported improved mood when Mr.

Moreno had scheduled activities with his daughter and fam

‐ ily. 4

From March 2008 through November 2013, Mr. Moreno

also saw a Dr. Walter Pedemonte on a monthly basis for psy

‐

chiatric medication management. Dr. Pedemonte observed

Mr. Moreno suffered from the following symptoms in March

2008: “depressed mood, anxious affect, poor immediate and

recent memory, fair remote memory, poor attention, [and]

1 A.R. at 827.

2 Id

. at 639, 1947–48, 1996–98.

3 Id. at 644, 648, 1994, 1996.

4 See, e.g

., id

. at 638.4 No. 17

‐ 1954

poor concentration.” 5 He diagnosed Mr. Moreno with major

depressive disorder and, over the years, prescribed

Mr. Moreno several medications, and combinations of medi

‐

cations, to address his condition.

B. The Administrative Proceedings

In March 2007, Mr. Moreno filed his applications for Sup

‐ plemental Security Income and Disability Insurance Benefits.

His claims were denied on initial application and upon recon

‐

sideration. A hearing was held before an ALJ in December

2009; the ALJ issued a decision denying relief in March 2010.

The Appeals Council denied review, and Mr. Moreno ap

‐ pealed to the United States District Court for the Northern

District of Illinois.

In the district court, the parties filed an agreed motion to

reverse and remand. The motion requested that, on remand,

the matter “be assigned to a different ALJ, who w[ould] con

‐

duct a new hearing, and reassess inter alia Plaintiff’s mental

impairment(s) and the treating physician opinion(s).” 6

On remand, a different ALJ held a supplemental hearing.

At the February 2014 hearing, Mr. Moreno testified regarding

his mental health. He described a significant number of psy

‐ chological concerns, including difficulty focusing, remember

‐ ing, and interacting with others. He recounted that his wife

administers his medication and keeps track of his physicians’

appointments because he struggles to remember things. He

5 Id. at 829.

6 R.34 (1:11

‐ cv

‐ 01771).No. 17

‐ 1954 5

also reported that he tried to take English classes but had trou

‐

ble concentrating. Mr. Moreno also testified, as he did in the

original hearing, that people “bother[]” him, 7 so he avoided

going to crowded church services and using public transpor

‐

tation.

In addition to the hearing testimony and the notes of

Drs. Gonzalez and Pedemonte, the second ALJ also looked at

Mr. Moreno’s mental

‐ health records, examinations, and as

‐

sessments that predated the hearing before the first ALJ.

Among these were the diagnosis and notes of Dr. Herman

Langner, who examined Mr. Moreno in 2007 and diagnosed

him with depression. The ALJ also considered the review of

Mr. Moreno’s mental

‐ health records conducted by psycholo

‐ gist Margaret Wharton in 2007. In her assessment of

Mr. Moreno’s residual functional capacity, Dr. Wharton ob

‐

served that Mr. Moreno manifested a “[d]isturbance of mood”

evidenced by “[d]ecreased energy,” “[f]eelings of guilt or

worthlessness,” and “[d]ifficulty concentrating or thinking.” 8

Under functional limitations, Dr. Wharton noted that Mr.

Moreno was only mildly limited in activities of daily life and

in social functioning, but he was moderately limited in main

‐ taining concentration, persistence, and pace. 9 Her summary

conclusions described Mr. Moreno as not significantly limited

in “[t]he ability to carry out very short and simple instruc

‐

tions”; “[t]he ability to perform activities within a schedule,

maintain regular attendance, and be punctual within custom

‐

ary tolerances”; “[t]he ability to work in coordination with or

7 A.R. at 874.

8 Id. at 411.

9 Id

. at 418.6 No. 17

‐ 1954

proximity to others without being distracted by them”; “[t]he

ability to make simple work

‐ related decisions”; and “[t]he

ability to interact appropriately with the general public.” 10

The ALJ then used this information to pose a hypothetical

question to a vocational expert regarding Mr. Moreno’s em

‐ ployability. Specifically, at the second hearing, the ALJ de

‐

scribed a hypothetical individual with Mr. Moreno’s physical

limitations. In addition to physical limitations, the ALJ in

‐

cluded in his question to the vocational expert that the hypo

‐

thetical “individual can understand, remember, and carry out

simple work instructions

... and exercise simple work place

judgments. And further, the individual would be limited to

routine work

... [with] no more than occasional changes in the

work setting.” 11 Finally, the ALJ required that the individual

could have “no more than occasional interaction with the

public.” 12 Given these restrictions, the vocational expert

opined that there were still a number of jobs that Mr. Moreno

could perform, including that of an assembler, an inspector, a

checker, and a hand packer.

Following the hearing, the ALJ issued a written opinion in

which he reviewed the evidence, applied the standard

five

‐ step analysis, see 20 C.F.R. § 404.1520(a), and concluded

that Mr. Moreno was not disabled. At step one, the ALJ deter

‐

mined that Mr. Moreno had not engaged in substantial gain

‐

ful activity since his alleged onset date in February 2006. At

step two, the ALJ evaluated Mr. Moreno’s physical and mental

10 Id

. at 422–23.

11 Id. at 921–22.

12 Id. at 922.No. 17

‐ 1954 7

conditions, and concluded that he was suffering from severe

impairments—lumbar disc disease, myofascial pain syn

‐

drome, left knee pain, obesity, and depression—within the

meaning of the Act and regulations, 20 C.F.R. §§ 404.1520(c),

416.920(c). But at step three the ALJ determined that these im

‐ pairments, individually or in combination, do not meet a list

‐ ing for presumptive disability. Applying the “special tech

‐ nique,” 20 C.F.R. §§ 404.1520a, 416.920a—the method that

considers “pertinent symptoms, signs, and laboratory find

‐ ings” to determine whether the claimant suffers from a med

‐ ically determinable mental impairment—the ALJ concluded

that Mr. Moreno’s mental impairments do not cause two or

more “marked limitations” or one such limitation coupled

with repeated episodes of decompensation. Therefore,

Mr. Moreno did not satisfy the paragraph B criteria of listings

12.04 and 12.06. He found, however, that Mr. Moreno’s mental

impairments do cause “moderate” restrictions in social func

‐ tioning and concentration, persistence, or pace, as well as

“mild” restrictions in his activities of daily living. 13

At step four the ALJ found that Mr. Moreno could not per

‐

form his past work as a drywall taper, but at step five he con

‐

cluded that Mr. Moreno could “perform light work” with

some restrictions. 14 In assessing Mr. Moreno’s residual func

‐

tional capacity, the ALJ afforded the opinion of Dr. Wharton

great weight, explaining that Dr. Wharton’s analysis was

“consistent with the longitudinal evidence of record.” 15 The

13 See id

. at 814–15.

14 Id

. at 816.

15 Id

. at 831.8 No. 17

‐ 1954

ALJ also reviewed the notes of Mr. Moreno’s treating psy

‐ chologist, Dr. Gonzalez, who documented fluctuating symp

‐

toms of depression, suicidal ideations, low motivation, and ir

‐ ritability. 16 But the evidence as a whole, in the ALJ’s view, did

not support a finding that Mr. Moreno’s depression precluded

him from engaging in work activity. The ALJ placed particu

‐

lar emphasis on portions of Dr. Gonzalez’s treatment notes

that showed improvements in Mr. Moreno’s mental health

during periods of increased activity.

Mr. Moreno appealed to the Appeals Council, which de

‐

clined review.

C. District Court Proceedings

Mr. Moreno then sought review in district court, which af

‐

firmed the agency’s decision. The court first rejected

Mr. Moreno’s argument that the ALJ’s assessment of residual

functional capacity was “flawed because

... it did not account

for the recommendation of Dr. Wharton that claimant is only

16 The ALJ found Dr. Pedemonte’s notes, as well as the other materials

that he submitted, unreliable. The ALJ noted that, according to Dr. Pedem

‐

onte’s notes, Mr. Moreno’s mental status exam remained completely un

‐ changed, yet Mr. Moreno reported vastly different moods during his vis

‐

its, and his medications were altered. Id

. at 828. Similarly, Dr. Pedemonte’s

source statement, completed on October 31, 2009, reported “clinical find

‐ ings of psychomotor retardation, hopelessness and helplessness”; how

‐

ever, the ALJ gave “little weight” to this report because it was inconsistent

with Dr. Pedemonte’s treatment records. Id

. at 832. Finally, in a letter

Dr. Pedemonte submitted in 2011, he reported treating Mr. Moreno for

“major depression chronic severe recurrent psychotic features.” Id

. at 834.

The ALJ observed, however, that the diagnosis of psychotic features is

“not supported by Dr. Pedemonte’s own treatment records.” Id

.No. 17

‐ 1954 9

capable of performing one

‐ two step jobs.” 17 The court con

‐

cluded that the record as a whole adequately supported the

ALJ’s determination that Mr. Moreno could carry out “simple

work instructions.” 18 The district court also was unpersuaded

by Mr. Moreno’s argument that the ALJ’s residual functional

capacity assessment did not account for Mr. Moreno’s limita

‐

tions in concentration, persistence, and pace: “the ALJ’s hy

‐ pothetical to the [vocational expert] adequately addressed Mr.

Moreno’s specific deficiencies” even if the words concentra

‐

tion, persistence, and pace were not used. 19 The district court

further determined that the ALJ was not required to seek an

updated mental

‐ health evaluation because the treatment

notes that postdated Dr. Wharton’s assessment did not show

a significant change in Mr. Moreno’s condition that would

have caused Dr. Wharton to revise her conclusions. Finally,

the district court found that the ALJ had “adequately consid

‐

ered the combined effects of Mr. Moreno’s physical impair

‐

ments, mental health impairments, and obesity when deter

‐ mining his [residual functional capacity].” 20

Mr. Moreno timely appealed.

17 R.26 (1:15

‐ cv

‐ 11168) at 14.

18 Id

.

19 Id

. at 18.

20 Id

. at 22.10 No. 17

‐ 1954

II

DISCUSSION

Mr. Moreno renews on appeal the arguments made to the

district court. We conclude that two of his contentions are

meritorious—that the ALJ improperly relied on an outdated

mental

‐ health assessment and that the ALJ’s hypothetical to

the vocational expert failed to incorporate all of Mr. Moreno’s

limitations.

A. Mental

‐ Health Evaluation

Mr. Moreno’s primary argument on appeal is that the ALJ

improperly afforded great weight to the mental

‐ health evalu

‐

ation of Dr. Wharton because the copious evidence submitted

after her initial assessment could have altered her conclu

‐

sions. The Commissioner, however, submits that the treat

‐

ment notes of Drs. Gonzalez and Pedemonte would not have

changed Dr. Wharton’s opinion because, as the ALJ con

‐

cluded, the notes indicated improvement in Mr. Moreno’s

mental health, not deterioration.

Because the Appeals Council denied review, we evaluate

the ALJ’s supplemental decision as the final word of the Com

‐

missioner of Social Security. Scrogham v. Colvin

, 765 F.3d 685,

695 (7th Cir. 2014). We must uphold the ALJ’s decision if it is

supported by “substantial evidence, that is, ‘such relevant ev

‐

idence as a reasonable mind might accept as adequate to sup

‐

port a conclusion.’” Moore v. Colvin

, 743 F.3d 1118, 1120–21

(7th Cir. 2014) (quoting Richardson v. Perales

, 402 U.S. 389, 401

(1971)).No. 17

‐ 1954 11

An ALJ should not rely on an outdated assessment if later

evidence containing new, significant medical diagnoses rea

‐ sonably could have changed the reviewing physician’s opin

‐

ion. See Stage v. Colvin

, 812 F.3d 1121, 1125 (7th Cir. 2016) (re

‐ manding where a later diagnostic report “changed the picture

so much that the ALJ erred by continuing to rely on an out

‐

dated assessment”); Goins v. Colvin

, 764 F.3d 677, 680 (7th Cir.

2014) (remanding after ALJ failed to submit new MRI to med

‐

ical scrutiny). Here, a comparison between Dr. Wharton’s as

‐

sessment and Dr. Gonzalez’s treatment notes reveal signifi

‐

cant and new developments in Mr. Moreno’s mental health

that could have affected Dr. Wharton’s assessment. We focus

on those aspects of Dr. Wharton’s assessment where the con

‐

trast is most stark.

Turning first to “Affective Disorders,” the form completed

by Dr. Wharton asks the evaluator to indicate if the claimant

has “[d]epressive syndrome characterized by at least four” of

the listed symptoms. 21 Dr. Wharton did not check this diag

‐

nosis because her evaluation suggested a presence of only

three of the nine symptoms: “[d]ecreased energy,” “[f]eelings

of guilt or worthlessness,” and “[d]ifficulty concentrating or

thinking.” 22 Critically, Dr. Wharton concluded that

Mr. Moreno did not exhibit “[s]leep disturbance” or

“[t]houghts of suicide.” 23 Dr. Gonzalez’s treatment notes,

however, indicate that, for at least some period of time after

Dr. Wharton’s assessment, Mr. Moreno experienced both of

21 A.R. at 411.

22 Id

.

23 Id

.12 No. 17

‐ 1954

these symptoms. Specifically, on February 17, 2010, Dr. Gon

‐

zalez noted that Mr. Moreno “has not slept for three days,”

and on March 24, 2010, that Mr. Moreno “continues to report

sleep disturbance.” 24 Sleep issues arose again from December

2011 through March 2012. 25 Moreover, at different times in his

treatment, Mr. Moreno reported to Dr. Gonzalez that he was

“capable of having” suicidal thoughts, was having suicidal

thoughts, or was having “negative thoughts related to

... the

purpose of living.” 26 Because it bears directly on criteria that

Dr. Wharton considered, this evidence certainly could have

altered her conclusion regarding the existence and severity of

Mr. Moreno’s affective disorder.

Similarly, with respect to Mr. Moreno’s functional limita

‐

tions, Dr. Wharton assessed only mild limitations in social

functioning. Her consultant’s notes reveal that Mr. Moreno

did “not like to be around others, as people bother him.” 27

Dr. Gonzalez’s notes reveal something more serious than a

general dislike of people—“anger outbursts in public

places,“ 28 especially when he felt “that people [we]re taking

advantage of him.” 29 This documented history of aggressive

behavior could have “changed the picture so much” that

Dr. Wharton would have concluded that Mr. Moreno was

24 Id

. at 1947–48.

25 See id. at 1994, 1996–98.

26 See id

. at 645, 1946, 1997.

27 Id. at 420.

28 Id. at 1994.

29 Id

. at 1996.No. 17

‐ 1954 13

more than mildly limited in social functioning. Stage

, 812 F.3d

at 1125.

We cannot accept the agency’s argument that the newer

mental

‐ health records would not have made a difference be

‐

cause they showed improvement. This argument is based on

the ALJ’s own assessment of the more recent records. That as

‐

sessment was not justified under the circumstances of this

case. Meuser v. Colvin

, 838 F.3d 905, 911 (7th Cir. 2016) (re

‐ manding because the ALJ improperly “played doctor”); Go

‐

ins

, 764 F.3d at 680 (prohibiting ALJs from “playing doctor”

by summarizing the results of a medical exam without input

from an expert).

The Social Security Administration’s ALJs are significantly

overburdened with massive caseloads and insufficient re

‐

sources. We therefore credit the ALJ with authoring a decision

that reviewed and considered the lengthy record in detail.

Nevertheless, the ALJ was presented with a case that had

trekked through a seven

‐ year

‐ long journey, which rendered

important aspects of the early mental

‐ health analysis stale.

Because the ALJ relied heavily on that stale analysis, we re

‐

mand to the Agency to conduct a new mental

‐ health assess

‐

ment on which Mr. Moreno’s functional capacity reasonably

can be determined. 30

B. Hypothetical Question

30 Because our remand requires the ALJ to solicit an updated men

‐

tal

‐ health evaluation, we do not address Mr. Moreno’s other argument

concerning Dr. Wharton’s assessment—that the ALJ erred in selectively

omitting Dr. Wharton’s recommendation of one ‐ to two

‐ step work in for

‐ mulating his hypothetical question to the vocational expert.14 No. 17

‐ 1954

The ALJ’s determination is faulty for another reason. Both

Dr. Wharton’s assessment 31 and Dr. Gonzalez’s notes set forth

problems with Mr. Moreno becoming distracted, “spacing

out,” and experiencing difficulties concentrating. 32 These lim

‐

itations, however, were not included in the hypothetical ques

‐

tion posed to the vocational expert.

Our cases require that an ALJ “orient the [vocational ex

‐ pert] to the totality of a claimant’s limitations,” including “de

‐

ficiencies of concentration, persistence and pace.” O ʹ Connor

‐ Spinner v. Astrue

, 627 F.3d 614, 619 (7th Cir. 2010). Moreover,

“the most effective way to ensure that the [vocational expert]

is apprised fully of the claimant’s limitations is to include all

of them directly in the hypothetical.” Id

. We, however, have

not required the ALJ to use “this specific terminology” in all

cases. Id

. For instance, “[w]e sometimes have assumed a [vo

‐

cational expert]’s familiarity with a claimant’s limitations, de

‐ spite any gaps in the hypothetical, when the record shows

that the [vocational expert] independently reviewed the med

‐

ical record or heard testimony directly addressing those limi

‐

tations.” Id

. “We also have let stand an ALJ’s hypothetical

omitting the terms ‘concentration, persistence and pace’ when

it was manifest that the ALJ’s alternative phrasing specifically

excluded those tasks that someone with the claimant’s limita

‐

tions would be unable to perform.” Id

.

Here, the question posed to the vocational expert included

that the hypothetical “individual can understand, remember,

31 Id

. at 418 (noting “[m]oderate” “[d]ifficulties in [m]aintaining [c]oncen

‐

tration, [p]ersistence, or [p]ace”).

32 See id

. at 648–49, 651, 655 (noting “distractibility”); 660 (noting “spacing

out”); 704, 706–07 (noting difficulty concentrating).No. 17

‐ 1954 15

and carry out simple work instructions,” can “exercise simple

work place judgments,” is “limited to routine work,” and can

have “no more than occasional changes in the work setting.” 33

Clearly, the ALJ’s question did not account explicitly for

Mr. Moreno’s moderate limitations in concentration, persis

‐

tence, and pace. Moreover, there is no evidence in the record

to suggest that the vocational expert engaged in an independ

‐

ent review of Mr. Moreno’s medical records.

The Commissioner contends, however, that the question

posed by the ALJ adequately accounted for Mr. Moreno’s lim

‐

itations. She asserts that the ALJ’s reference to simple work

instructions and to routine, low

‐ stress work “reasonably ac

‐

commodated Moreno’s moderate difficulties in concentra

‐

tion, persistence or pace.” 34 We cannot accept this argument.

“[W]e have repeatedly rejected the notion that a hypothetical

like the one here confining the claimant to simple, routine

tasks and limited interactions with others adequately cap

‐

tures temperamental deficiencies and limitations in concen

‐

tration, persistence, and pace.” Yurt v. Colvin

, 758 F.3d 850,

858–59 (7th Cir. 2014); see also Stewart v. Astrue

, 561 F.3d 679,

684–85 (7th Cir. 2009).

“When an ALJ poses a hypothetical question to a voca

‐

tional expert, the question must include all limitations sup

‐ ported by medical evidence in the record.” Stewart

, 561 F.3d

at 684. The question posed to the vocational expert did not

address Mr. Moreno’s documented limitations in concentra

‐

tion, persistence, and pace. As a result, the vocational expert’s

assessment of the jobs available to Mr. Moreno necessarily is

33 A.R. at 921–22.

34 Appellee’s Br. 23.16 No. 17

‐ 1954

called into doubt, as is the ALJ’s conclusion that Mr. Moreno

is not disabled under the Social Security Act.

Conclusion

For the reasons set forth in this opinion, we reverse the

judgment of the district court and remand for proceedings

consistent with this opinion.

REVERSED and REMANDED