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99–682 2005

COMMISSIONER OF SOCIAL SECURITY’S PROPOSAL 

TO IMPROVE THE DISABILITY PROCESS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON SOCIAL SECURITY 

AND

SUBCOMMITTEE ON HUMAN RESOURCES 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED EIGHTH CONGRESS 

SECOND SESSION 

SEPTEMBER 30, 2004 

Serial No. 108–64 

Printed for the use of the Committee on Ways and Means 

( 

ii 

COMMITTEE ON WAYS AND MEANS 

BILL THOMAS, California, Chairman 

PHILIP M. CRANE, Illinois 

E. CLAY SHAW, JR., Florida 

NANCY L. JOHNSON, Connecticut 

AMO HOUGHTON, New York 

WALLY HERGER, California 

JIM MCCRERY, Louisiana 

DAVE CAMP, Michigan 

JIM RAMSTAD, Minnesota 

JIM NUSSLE, Iowa 

SAM JOHNSON, Texas 

JENNIFER DUNN, Washington 

MAC COLLINS, Georgia 

ROB PORTMAN, Ohio 

PHIL ENGLISH, Pennsylvania 

J.D. HAYWORTH, Arizona 

JERRY WELLER, Illinois 

KENNY C. HULSHOF, Missouri 

SCOTT MCINNIS, Colorado 

RON LEWIS, Kentucky 

MARK FOLEY, Florida 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

ERIC CANTOR, Virginia 

CHARLES B. RANGEL, New York 

FORTNEY PETE STARK, California 

ROBERT T. MATSUI, California 

SANDER M. LEVIN, Michigan 

BENJAMIN L. CARDIN, Maryland 

JIM MCDERMOTT, Washington 

GERALD D. KLECZKA, Wisconsin 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

MICHAEL R. MCNULTY, New York 

WILLIAM J. JEFFERSON, Louisiana 

JOHN S. TANNER, Tennessee 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

EARL POMEROY, North Dakota 

MAX SANDLIN, Texas 

STEPHANIE TUBBS JONES, Ohio 

Allison H. Giles, Chief of Staff 

Janice Mays, Minority Chief Counsel 

SUBCOMMITTEE ON SOCIAL SECURITY 

E. CLAY SHAW, JR., Florida, Chairman 

SAM JOHNSON, Texas 

MAC COLLINS, Georgia 

J.D. HAYWORTH, Arizona 

KENNY C. HULSHOF, Missouri 

RON LEWIS, Kentucky 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

ROBERT T. MATSUI, California 

BENJAMIN L. Cardin, Maryland 

EARL POMEROY, North Dakota 

XAVIER BECERRA, California 

STEPHANIE TUBBS JONES, Ohio 

SUBCOMMITTEE ON HUMAN RESOURCES 

WALLY HERGER, California, Chairman 

NANCY L. JOHNSON, Connecticut 

SCOTT MCINNIS, Colorado 

JIM MCCRERY, Louisiana 

DAVE CAMP, Michigan 

PHIL ENGLISH, Pennsylvania 

RON LEWIS, Kentucky 

ERIC CANTOR, Virginia 

BENJAMIN L. CARDIN, Maryland 

FORTNEY PETE STARK, California 

SANDER M. LEVIN, Michigan 

JIM MCDERMOTT, Washington 

CHARLES B. RANGEL, New York 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Ways and Means are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 

iii 

C O N T E N T S 

Page 

Advisory of September 23, 2004 announcing the hearing .................................... 2 

WITNESSES 

McIntyre, Hon. Mike, a Representative in Congress from the State of North 

Carolina ................................................................................................................ 7 

Social Security Administration, Hon. Jo Anne B. Barnhart, Commissioner ...... 9 

National Association of Social Security Management Associations, Buffaloe, 

Ronald E. .............................................................................................................. 41 

American Federation of State, County, and Municipal Employees, Union of 

American Physicians and Dentists, Dann, Dr. C. Richard, .............................. 52 

Social Security Advisory board, Daub, Hon. Hal .................................................. 37 

National Council of Disability Determination Directors, Everett, Sheila ........... 56 

National Association of Disability Examiners, Marshall, Martha A. .................. 45 

Association of Administrative Law Judges, Bernoski, Ronald G. ........................ 102 

Consortium for Citizens with Disabilities, Social Security Task Force, Ford, 

Marty ..................................................................................................................... 70 

National Treasury Employees Union, Chapter 224, Hill, James A. .................... 87 

National Organization of Social Security Claimants’ Representatives, Sutton, 

Thomas D. ............................................................................................................. 79 

Federal Managers Association, Social Security Administration, Chapter 275, 

Zink, Laura ........................................................................................................... 95 

SUBMISSIONS FOR THE RECORD 

American Bar Association, Robert D. Evans, letter .............................................. 112 

American Federation of Government Employees, AFL–CIO, Witold 

Skwierczynski, statement .................................................................................... 114 

Arzt, Robin J., New York, NY, statement ............................................................. 120 

Blackwell, Bryan S., Dothan, AL, letter ................................................................ 128 

Employment and Training Administration, Emily Stover Derocco, statement .. 129 

Federal Bar Association, Gary Flack, letter .......................................................... 131 

Jaituni, Sudhir, statement ...................................................................................... 134 

Merrill, Jeff R., Seattle, WA, letter ........................................................................ 135 

National Association of Disability Representatives, Framingham, MA, James 

R. Shaw, statement .............................................................................................. 136 

Plumlee, Lawrence A., Dallas, TX, statement ....................................................... 137 

Schott, S.F., statement ............................................................................................ 145 

Social Security Disability Coalition, Linda Fullerton, statement ........................ 145 

York, Laurie L. Austin, TX, statement .................................................................. 149 

(1) 

COMMISSIONER OF SOCIAL SECURITY’S PROPOSAL TO IMPROVE THE DISABILITY PROCESS 

THURSDAY, SEPTEMBER 30, 2004 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON SOCIAL SECURITY, SUBCOMMITTEE ON HUMAN RESOURCES, COMMITTEE ON WAYS AND MEANS, Washington, DC. 

The Subcommittees met, pursuant to notice, at 1:17 p.m., in 

room 1100 Longworth House Office Building, Hon. E. Clay Shaw, 

Jr. (Chairman of the Subcommittee on Social Security), and Hon. 

Wally Herger (Chairman of the Subcommittee on Human Resources) presiding. 

[The advisory announcing the hearing follows:] 

2 

ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON HUMAN RESOURCES 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–9263 

September 30, 2004 

SS–11 

Shaw and Herger Announce Joint Hearing on 

Commissioner of Social Security’s Proposal 

to Improve the Disability Process 

Congressman E. Clay Shaw, Jr. (R–FL), Chairman, Subcommittee on Social Security, and Congressman Wally Herger (R–CA), Chairman, Subcommittee on Human 

Resources, Committee on Ways and Means, today announced that the Subcommittees will hold a joint hearing on the Commissioner of Social Security’s proposal to 

improve the disability determination process. The hearing will take place on 

Thursday, September 30, 2004, in the main Committee hearing room, 1100 

Longworth House Office Building, beginning at 1:00 p.m. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from invited witnesses only. However, any individual or organization 

not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittees and for inclusion in the printed record of the hearing. 

BACKGROUND: 

In September 2003, during a hearing before the Subcommittee on Social Security, 

the Commissioner of Social Security announced a proposal to reform the disability 

determination process. The Commissioner’s goal is to enhance the agency’s ability 

to make the correct determination as quickly as possible on claims for Social Security Disability Insurance (DI), and Supplemental Security Income (SSI) benefits. 

The proposal also aims to help individuals with disabilities return to work by establishing a number of new demonstration projects. The Commissioner intends to implement the proposal through the regulatory process once the Social Security Administration (SSA) successfully converts from a paper to an electronic disability 

claim folder. 

Individuals with disabilities applying for Social Security DI or SSI must first file 

an application online, via telephone, or in a local SSA field office. From there, the 

application is forwarded to a federally funded State Disability Determination Service (DDS) to determine medical eligibility for benefits. If the case is denied, the applicant may ask the DDS to reconsider the claim, and if the claim is denied again, 

the applicant may request a face-to-face de novo hearing with an Administrative 

Law Judge (ALJ) in the SSA’s Office of Hearings and Appeals. Applicants who are 

not satisfied with the ALJ’s decision may appeal their cases to the SSA’s Appeals 

Council, and finally, to the Federal courts. If an individual exercises all rights of 

appeal, the SSA projects it would take over 1,100 days, on average, before the individual receives a final decision. 

The Commissioner proposes to reform the initial disability determination process 

by establishing Regional Expert Review Units, staffed by medical experts, to handle 

claims from individuals who are clearly disabled. These ‘‘Quick Decision’’ claims 

would be earmarked by the SSA’s field offices, and would be sent directly to the Regional Expert Review Units, bypassing the DDSs. State DDSs would continue to 

handle all other claims, but the reconsideration step of the process, currently performed by the DDSs, would be eliminated. 

3 

After the initial decision, the Commissioner would change the process by allowing 

claimants to request a review by an SSA Reviewing Official (RO). The RO could either approve the claim, or prepare a recommended denial or a pre-hearing report. 

If the claim is denied by the RO, the claimant could then request a hearing before 

an ALJ. While the de novo hearing process would not change, the claimant’s record 

would be closed after the hearing, and the Appeals Council would be eliminated. 

While some cases would be reviewed by an Oversight Panel of two ALJs and one 

Administrative Appeal Judge, the decision rendered by the ALJ after the de novo 

hearing would be the final agency action for most claimants. 

The Commissioner anticipates that these changes to the disability determination 

system, along with the demonstration projects to help people return to work, will 

reduce processing time by at least 25 percent, provide quick decisions to people who 

are obviously disabled, improve accuracy and consistency in decisions, and remove 

barriers for those who wish to return to work. 

In announcing the hearing, Chairman Shaw stated, ‘‘Since her term began, Commissioner Barnhart has rightly made improving the disability process one of her top 

priorities. Her proposal to improve service to individuals with disabilities applying 

for benefits holds real promise. In the last year, much feedback has been provided 

to the Commissioner by key stakeholders. This hearing provides the opportunity for 

us to learn more about the details of that feedback, and how the Commissioner 

plans to move forward.’’ 

Chairman Herger stated, ‘‘As we all know, Social Security’s disability determination process is in need of improvement. Commissioner Barnhart is to be commended 

for putting forward a plan to make the process more accurate and efficient, and for 

focusing on return-to-work initiatives. I look forward to learning more about how 

this plan stands to benefit program applicants and recipients, as well as taxpayers.’’ 

FOCUS OF THE HEARING: 

The Subcommittees will examine Commissioner Barnhart’s proposal to reform the 

disability determination process and to implement new return-to-work demonstration projects. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select ‘‘108th Congress’’ from the menu entitled, 

‘‘Hearing Archives’’ (http://waysandmeans.house.gov/Hearings.asp?congress=16). Select the hearing for which you would like to submit, and click on the link entitled, 

‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, completing all informational forms and clicking ‘‘submit’’ on the 

final page, an email will be sent to the address which you supply confirming your 

interest in providing a submission for the record. You MUST REPLY to the email 

and ATTACH your submission as a Word or WordPerfect document, in compliance 

with the formatting requirements listed below, by close of business Thursday, October 14, 2004. Finally, please note that due to the change in House mail policy, the 

U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) 225– 

1721. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response 

to a request for written comments must conform to the guidelines listed below. Any submission 

or supplementary item not in compliance with these guidelines will not be printed, but will be 

maintained in the Committee files for review and use by the Committee. 

4 

1. All submissions and supplementary materials must be provided in Word or WordPerfect 

format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons, and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone and fax numbers of each witness. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://waysandmeans.house.gov. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

f 

Chairman SHAW. Good afternoon. Today, the Committee on 

Ways and Means Subcommittees on Social Security and Human 

Resources are holding a joint hearing to examine the Commissioner 

of Social Security’s proposal to reform the disability determination 

process. The Social Security Administration’s (SSAs) Disability Insurance (DI) and Supplemental Security Income (SSI) programs 

provide critical income support for individuals with disabilities. Unfortunately, many people who apply for these programs will experience a long wait, in some cases 3 or more years, to learn whether 

they are eligible to receive assistance. This wait can place crushing 

financial and emotional burden on individuals with disabilities and 

their families. 

In January of 2003, the U.S Government Accountability Office 

(GAO), designated Federal Disability Programs, including the DI 

and SSI Programs, as ‘‘high-risk.’’ The GAO found that the agency 

has difficulty managing its disability programs, as evidenced by 

lengthy processing times, inconsistencies in disability decisions 

across adjudicative levels and locations, and challenges with implementing effective quality control systems. Without change, these 

programs would likely worsen as the baby boomers age and more 

individuals enter their disability-prone years. 

In response to these challenges, Commissioner Barnhart has 

rightly made improving public service provided by SSAs disability 

programs one of her highest priorities. The agency is currently in 

the midst of an 18-month transition from a paper to an electronic 

disability (eDIB) folder that began just last January. Following this 

transition, the Commissioner has proposed implementing a major 

reorganization of the disability determination process. It is this latter proposal that we will examine today. 

Key components of this proposal include: a new quick decision 

step to approve benefits for those who are obviously disabled; centralized medical expertise; in-line as opposed to end-of-line quality 

review; replacement of the reconsideration step completed by the 

State disability determination agencies with a review by a Federal 

5 

reviewing official (RO) attorney; closing the record after the hearing by an administrative law judge (ALJ); and elimination of the 

Appeals Council step. The Commissioner’s proposal would change 

almost every facet of the disability determination process and affect 

about 4 million applicants a year. Changes of this magnitude must 

be thoroughly vetted and studied in order to protect individuals 

with disabilities and the American taxpayers. 

Today, we welcome the Commissioner, who will tell us more 

about the feedback she has received since premiering her proposal 

before the Subcommittee on Social Security 1 year ago. I look forward to learning how that feedback will shape implementing regulations and the timetable for moving forward. Following the Commissioner, the Subcommittees will hear from representatives of the 

employees who must transform these ideas into action, along with 

advocates for individuals with disabilities, claimant representatives, and the Chairman of the bipartisan Social Security Advisory 

board (SSAB) and former Member of the Committee on Ways and 

Means, Hal Daub. Each of these individuals and the organizations 

they represent have carefully considered the Commissioner’s proposal and have offered thoughtful suggestions for change. We 

thank you for your commitment to improving service provided 

through these vitally important programs. 

The disability determination process cannot continue to operate 

the same as it has in the past. Too many vulnerable individuals 

with disabilities are waiting too long for a decision from SSA. The 

Commissioner has said her proposed disability determination process will reduce the time between an application and a decision by 

at least 25 percent, improve accuracy and consistency in decisions, 

and remove barriers for those who wish to return to work. We must 

give this bold and ambitious plan the attention that it deserves. As 

I said, this is a joint meeting, and now I would defer to Mr. Herger, 

the Chairman of the Subcommittee on Human Resources. 

Chairman HERGER. Thank you, Chairman Shaw. I would like 

to take a moment to welcome Commissioner Barnhart and our 

other witnesses to the hearing today. I am looking forward to hearing comments on the disability determination process and ways to 

improve it for all those involved. With that, I submit my full statement for the record. 

Chairman SHAW. Mr. Cardin? 

Mr. CARDIN. Thank you, Mr. Chairman. Let me thank you for 

holding this hearing. I particularly appreciate the fact that this is 

a joint Subcommittee hearing between the Subcommittee on Social 

Security and the Subcommittee on Human Resources. Since I serve 

on both of the Subcommittees, it is nice to be able to have one 

hearing and get credit for two attendances. 

Chairman SHAW. You only get to speak once. 

Mr. CARDIN. Oh. 

[Laughter.] 

I want to thank Mr. Matsui for yielding me his time as the 

Ranking Member of the Subcommittee on Social Security, so I get 

double time. Let me welcome all of our witnesses here today, and 

particularly my colleague Congressman McIntyre from North Carolina. It is a pleasure to have you here, and I know of your interest 

6 

and work in this area and bringing it to our attention, and we certainly appreciate that. 

Commissioner Barnhart, it is always a pleasure to have you before our Committee, and we appreciate your leadership at the SSA. 

Every Member of Congress knows about the problem we are confronting on disability determination. All they need to do is talk to 

the people in their district office, the number of calls that we receive, the number of concerns about the length of time for disability 

determinations, particularly those that are on appeal. We know 

that there is frustration out there because of the long time it takes 

in order to make a full determination, particularly when the individual is in the appeal process. 

Now, I understand this is a very complex process, and we all understand that. We want to get it done right, but we also want the 

process to be streamlined. I particularly appreciate the Commissioner’s work on computerizing the entire files. I find it somewhat 

surprising that we have not done that to date, and I know that she 

has been fighting battles within the Administration to move that 

forward, and we are making progress in that area. I think that is 

absolutely essential to be done. It still takes on average about 3 

months for a decision on a benefit application, and nearly a year 

in regards to those cases that are appealed to the ALJ. That is a 

long time. They are averages. Of course, there are people that are 

well beyond that time period. It can take, in fact, several years if 

you go through the entire process, and that is just too long, and 

we need to be able to shorten that period of time. 

We need to be able to do that and still maintain the independence of the appeal process at the ALJ level. We do not want to compromise the integrity of the independent appeal, and we also want 

to make sure that this is still truth-seeking and not an adversarial 

process so that we try to make the right decisions. After all, fairness is the key here to treat all of our people fairly within the system itself. I think that really presents the challenges. You have 2.5 

million applications for disability that are filed every year, 2.5 million. We have half-a-million claims that are appealed to the ALJ 

on an annual basis. The backlog is more than is acceptable. We understand that. The Commissioner has attempted certain demonstration projects in order to test some ways of getting people 

through the process faster, as well as trying to get people back to 

work, which is always our objective, those who can work. So, I look 

forward to hearing from our witnesses today as we continue our 

partnership in streamlining the process to make it more efficient 

for the people who depend upon disability income, and to make 

sure that we do this in the fairest way. Thank you, Mr. Chairman. 

Chairman HERGER. Thank you. Now I would like to introduce 

our first witness, who is a Member of Congress, the Honorable 

Mike McIntyre, Representative from the State of North Carolina. 

Congressman McIntyre, I thank you for your involvement. I understand in your private practice you have been involved with this, 

and also you have legislation before us now. 

Mr. MCINTYRE. Yes, sir. 

Chairman HERGER. So, we invite you to present your testimony. 

7 

STATEMENT OF THE HONORABLE MIKE MCINTYRE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH 

CAROLINA 

Mr. MCINTYRE. Thank you, Mr. Chairman, and thanks to all of 

you for your time this afternoon. In very brief comments, I want 

to say how much it is a pleasure to be with you today as we discuss 

an issue that is of great importance, reforming the Social Security 

disability determination process. As you just mentioned, before I 

came to Congress, I represented several individuals in Social Security disability cases in my hometown as their attorney in Lumberton, North Carolina, and throughout Robeson County. Time 

after time, I saw the flaws in the current system. I saw the hurting 

citizens suffer needlessly. I saw claimants forced to wait and wait 

and wait several months for an appeal that ultimately results in 

a second denial from the exact same agency that denied their first 

claim. 

Throughout my time here in Washington, I have continued to 

hear these concerns from constituents and caseworkers in both my 

Washington and North Carolina offices. In fact, my District Director of Constituent Services, Marie Thompson, who has a passion for 

these issues and the individuals affected by them, knows too well 

the headaches that many claimants face on a repeated basis. In 

fact, she is currently, as my District Director, working on over 200 

cases that will take literally years to finalize, given the current 

process. 

In addition, the 3 caseworkers in my office handling Social Security cases are assisting approximately 500 of our constituents who 

have cases now pending. Many of these constituents have already 

waited for over a year for a decision while others are just beginning 

a process they know may be long and, indeed, agonizing. A larger 

number of these claimants are from single-income homes who now 

have no income at all with which to support themselves and their 

families, thus just exacerbating the situation. Many face increasing 

medical bills, while others simply are unable to receive needed 

medical care because they have no money and no health insurance. 

Others will watch as another family member struggles to earn 

enough money to keep the family just barely afloat while waiting. 

There will be families faced with mounting past-due bills and disconnection of utilities, basic quality-of-life issues for anyone. Yes, 

there will be those who will indeed lose their homes in which they 

live while they are simply waiting. All of this occurs while they 

battle a condition or an illness which keeps them from working, 

and, unfortunately, there will be those who will even lose that battle while they wait. 

To address these concerns, I introduced a bill earlier this year 

that would reform the disability determination process by eliminating the first level of appeal. This level, known as reconsideration, is redundant, and eliminating it will save time and resources 

and unnecessary delay. I am pleased that Commissioner Barnhart 

and her staff have included the elimination of this phase, known 

as reconsideration, in her proposal to reform the disability claims 

system. 

As someone who has worked on this issue on a personal and professional level before coming to Washington, and now over the last 

8 

years on a congressional level, I am committed to ensuring that the 

Social Security disability determination process is reformed and is 

fair to all concerned. Therefore, I offer my support and my willingness to work with Commissioner Barnhart and Members of both of 

these Subcommittees represented here today on these issues. It is 

indeed time that we in Congress work to make real reform, so that 

our constituents can finally receive the benefits that they deserve. 

Reforming this broken process is the next step to bringing real relief to claimants who truly deserve disability benefits and who 

truly do not need to face another unnecessary delay. Thank you, 

thanks to both of you, to your Subcommittees and the Committee 

in general. I thank you, gentlemen, and may God bless you in your 

kind consideration of literally this life-changing matter as we consider these important issues involving Social Security reform. 

[The prepared statement of Mr. McIntyre follows:] 

Statement of The Honorable Mike McIntyre, a Representative in Congress 

from the State of North Carolina 

Mr. Chairman, Ranking Member, and fellow colleagues: It is a pleasure to be here 

today as we discuss an issue that is of great importance—reforming the Social Security disability determination process. 

Before coming to Congress, I represented several individuals in Social Security 

disability cases as an attorney in my hometown of Lumberton, North Carolina. Time 

after time, I saw the flaws in the current system. I saw the hurting citizens suffer 

needlessly. I saw claimants forced to wait several months for an appeal that ultimately results in a second denial from the same agency that denied their first claim. 

Throughout my time in Washington, I have continued to hear these concerns from 

constituents and caseworkers in my Washington and NC district offices. My District 

Director of Constituent Services, who flew up from NC and is here today because 

of her passion for this issue, knows too well the headaches that many claimants face 

on a repeated basis. In fact, she is currently working on over 200 cases that will 

take years to finalize. 

In addition, the three caseworkers with my office handling Social Security cases 

currently are assisting approximately 500 of our constituents who have cases pending. Many of these constituents have already waited for over a year for a decision 

while others are just beginning a process they know may be long and agonizing. A 

large number of these claimants are from single-income homes who now have no 

income at all with which to support themselves and their families. Many face increasing medical bills, while many others simply are unable to receive needed medical care because they have no money and no health insurance. Others will watch 

as another family member struggles to earn enough money to keep the family just 

barely afloat during the wait. There will be families faced with mounting past-due 

bills and disconnection of utilities. And, yes, there will be those who will lose the 

homes in which they live. All of this occurs while they battle a condition or illness 

which keeps them from working. And, unfortunately, there will be those who will 

even lose that battle during the wait. 

To address these concerns, I introduced a bill in July that would reform the disability determination process by eliminating the first level of appeal. This level, 

known as reconsideration, is redundant, and eliminating it will help to save time 

and resources. I am pleased that Commissioner Barnhart has included the elimination of reconsideration in her proposal to reform the disability claims system as 

well. 

As someone who has worked on this issue on a personal level, I am committed 

to ensuring that the Social Security disability determination process is reformed and 

is fair to all concerned. Therefore, I offer my support and willingness to work with 

Commissioner Barnhart and Members of the two subcommittees represented here 

today on these issues. It is time that we in Congress stood up and worked to make 

real reforms so that our constituents can finally receive the benefits they deserve. 

Reforming this broken process is the next step to bringing real relief to the claimants who truly deserve disability benefits and who truly do not need to face any 

further delay! Thank you, and may God bless you in your kind consideration of this 

important matter! 

f 

9 

Chairman HERGER. Any questions? 

Mr. CARDIN. Mr. Chairman, let me again thank my colleague. 

We have the benefit of having Mr. McIntyre’s advice that we can 

seek while we deal with this issue. I think his practical experience 

particularly in his former role is going to be very helpful to this 

Congress as we try to confront these issues. Once again, let me 

thank you for appearing here today before our Committee, and I 

assure you that we look forward to working with you as we try to 

deal with these issues. 

Mr. MCINTYRE. Yes, sir. We will be available as necessary. 

Thank you. Thank you, gentlemen. 

Chairman HERGER. Thank you. 

Chairman SHAW. Before you leave, I just also want to compliment you for your statement. It is good to have somebody here 

who is one of us, and has the experience of being one of them and 

has confronted many of these things. Our Subommittee, for the 6 

years that I have been Chair, has been examining and re-examining ways that we can change the system, and I think in a bipartisan way we want to do that so that we can get a quick, decisive 

decision for people that are probably tremendously fragile. 

Mr. MCINTYRE. Yes, sir. 

Chairman SHAW. So, your view is valuable to the Committee. 

Thank you. 

Mr. MCINTYRE. Thank you. Thank you, gentlemen. 

Chairman SHAW. The next panel of one is the Honorable Jo 

Anne Barnhart, the Commissioner of the SSA. We are pleased to 

again have you before the Committee and are looking forward to 

your testimony. Ms. Barnhart. 

STATEMENT OF THE HONORABLE JO ANNE B. BARNHART, 

COMMISSIONER, SOCIAL SECURITY ADMINISTRATION 

Commissioner BARNHART. Thank you very much, Mr. Chairman. 

Chairman SHAW. I don’t know that your microphone is on. 

Commissioner BARNHART. Can you hear me now? 

[Laughter.] 

Chairman SHAW. We can hear you now. 

Commissioner BARNHART. Thank you very much, Mr. Chairman. Chairman Shaw, Chairman Herger, Mr. Cardin, and Members of the Subcommittees, it is really a pleasure to appear before 

you today to discuss my approach for improving the Social Security 

disability determination process. I always welcome the opportunity 

to appear before this Committee because I so greatly appreciate 

your ideas and insights as well as your consistent support for our 

agency. I am doubly pleased to be here today because it was before 

you that just about a year ago I first described my vision for an 

improved disability system, and it is particularly nice to go after 

Mr. McIntyre, who actually endorses one aspect of my proposal. 

Today I would like to update you on how we are proceeding to 

convert my approach into a detailed plan and ultimately into an effective process to make the right decision as early in the process 

as possible. I know that your Subcommittees are painfully aware 

10 

of the length of time that claimants have to wait for an initial determination or an appeal. In fact, it was the subject of many of 

your opening comments. Delays in the current system occur in 

spite of the best efforts of the dedicated public servants in the SSA 

and in the State Disability Determination Services (DDSs), who are 

such a vital part of our agency’s work. 

We have moved forward in several areas: we are implementing 

the eDIB process, which provides the infrastructure that is needed 

to support the new approach; we have conducted a massive outreach effort to obtain comments on the current system and the new 

approach, and we are giving thoughtful consideration to all of 

them; we are conducting an exhaustive study of all the issues. The 

Disability Service Improvement staff that I created is located organizationally in my immediate office, and it is coordinating this effort, making sure that we have all the information that we need 

to make decisions. 

Before I go any further, I do want to take this opportunity to emphasize that the new approach is just that. It is an approach or an 

outline. I have made no final decisions on how to implement it. Everyone I speak with understands the urgency of the need to improve the disability process; because this is such an important program and because it is so complex, as you have indicated and acknowledged in your opening statements, I really needed time to listen to the people involved at all stages of the process, both outside 

of and within the SSA. I have personally participated in 51 meetings with more than 35 organizations involved in the disability 

process, within our agency and outside it. Among the hundreds and 

hundreds of comments that we received, more than 500 came in 

through our website from individuals. Many of those individuals 

were themselves disability claimants or current recipients. 

I am not going to take time here to describe my new approach 

because it is summarized in my written testimony, and I know you 

are all familiar with it. I would say generally the approach has 

been well received. Certainly there are issues on which there is not 

consensus, but every group that I have talked to agrees on one 

thing, and that is that the current system needs to be changed. I 

want to thank everyone who is giving us the benefit of their views 

and sharing their concerns. I would like to make a special note of 

the cooperative and constructive attitude of all who have provided 

comments, and especially the individuals and organizations that I 

have met with personally. I really appreciate their willingness to 

work with me to improve the disability process. The comments that 

we have received have been extremely valuable and have definitely 

shaped and are continuing to shape my thinking. Many of the decisions are not going to be easy because there are multiple considerations for each issue. 

For example, when I developed the new approach, I envisioned 

Regional Expert Review Units (RERU) to provide specialized medical and vocational expertise for each step of the process. A number 

of organizations and individuals have raised excellent questions 

about how these units would work, questions such as how to ensure that DDSs can access the medical expertise they need; how 

these units could and should be staffed; how to use specialized exVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00014 Fmt 6633 Sfmt 6602 E:\HR\OC\99682A.XXX 99682A
11 

perts in cases of multiple disabling conditions; and how experts in 

these units would relate organizationally to the DDSs and to the 

Office of Hearings and Appeals (OHA). Similarly, there is a wide 

range of views as to where responsibilities for quick decisions 

should reside. The new approach calls for field offices to send them 

to the RERUs immediately after taking the application. 

Virtually everyone we have talked to thinks the idea of a quick 

decision process for the obviously disabled is a good idea. My idea 

was to allow DDSs to concentrate more on difficult cases by removing the obvious cases from their workload. We have heard from a 

number of parties who think the DDSs should handle the quick decision process. Eliminating the Appeals Council is another element 

of the new approach that has generated a large number of comments. Advocacy groups have expressed concern about the effects 

of such a step, especially because it means closing the record after 

the ALJ decision. These groups have suggested there should be a 

provision for good-cause exceptions. On the other hand, others fear 

that eliminating the Appeals Council could lead to significantly 

more cases being appealed to Federal court and, thus, overwhelming the court system. 

I cannot tell you today how I am going to resolve these issues 

because, as I said earlier, I have not made decisions. My task is 

to put together a cohesive package in which every element of the 

process contributes to its effectiveness and removes obstacles to our 

goal to make the right decision as early in the process as possible. 

I expect to make decisions relatively soon on the major issues so 

that we can put together a proposed rule on the new approach by 

early 2005. Of course, the draft proposed rule will be available for 

public comment, and I expect that we will receive many comments 

that will be very helpful. I look forward to the opportunity to hear 

these Subcommittees’ views as well. When I first described my approach to you, I said that it would require having an eDIB system 

fully implemented and in operation long enough for us to identify 

and address any startup problems. 

The new approach to disability claims processing can work efficiently only when all components involved in disability claims adjudication and review move to an electronic process through the use 

of an eDIB folder. I am pleased to say eDIB is right on schedule. 

Fourteen States have begun using the electronic folder, and the 

first three electronic hearings were held in Charlotte, North Carolina, in the last few weeks. I know that moving to eDIB poses significant challenges for the employees at SSA who are involved at 

all levels. I want to publicly thank them for their dedication, their 

willingness, and their hard work in making eDIB a success. 

I would like to give special thanks to Butch McMillen and Sheila 

Everett from the State of Mississippi. Under their leadership, earlier this month Mississippi became the first State to completely roll 

out the electronic folder, with all disability examiners (DEs) now 

using the electronic folder, and to thank our Regional Commissioner in Atlanta, Paul Barnes, for his superb leadership in making 

Region 4 the first region to lead the way for the Nation. 

Finally, I would like to thank you, Chairman Shaw, Chairman 

Herger, and the Members of the Subcommittees for your support 

and your guidance. I really appreciate the relationship that we 

12 

enjoy, and I look forward to working with you and your staff as we 

continue in our mutual efforts to improve the service provided to 

disabled individuals and their families because that is what this is 

all about. I will be happy to try and answer any questions Members of the Committee may have for me. 

[The prepared statement of Commissioner Barnhart follows:] 

Statement of The Honorable Jo Anne B. Barnhart, Commissioner, Social 

Security Administration 

It is a real pleasure to appear before these two subcommittees today to discuss 

my approach to improving the Social Security disability determination process. I always welcome the opportunity to appear before you because I so greatly appreciate 

your ideas and insights as well as your consistent support for our agency. And I am 

doubly pleased to be here today because it was before you that I first described my 

vision for an improved disability system. 

Today I would like to update you on how we are proceeding to convert my approach into a detailed plan and, ultimately, into an effective process to make the 

right decision as early in the process as possible. 

I know that these subcommittees are painfully aware of the length of time claimants have to wait for an initial determination or an appeal. And delays in the current system occur in spite of the best efforts of the dedicated public servants in SSA 

and in the state Disability Determination Services (DDS), who are such a vital part 

of the agency’s work. In fact, when I talk about SSA employees, I also refer to those 

who work in the Disability Determination Services, or DDSs. 

Where We Are Now 

We have moved forward in several areas: 

• We are implementing the electronic disability process, which provides the infrastructure needed to support the new approach. 

• We have conducted a massive outreach effort to obtain comments on the current 

system and the new approach and are giving thoughtful consideration to all of 

them. 

• We are conducting an exhaustive study of all the issues. The Disability Service 

Improvement staff, or DSI, located organizationally in my immediate office, is 

coordinating this effort, making sure that we have all the information we need 

to make decisions. 

Before I go any further, let me emphasize that the new approach is just that— 

an approach or an outline. I have made no final decisions on how to implement it. 

Everyone I speak with understands the urgency of the need to improve the disability process. But because this is such an important program, and because it is 

so complex, I needed to take the time to listen to people involved at all stages of 

the process, both outside of and within SSA. 

I have made an active personal role in this process one of my highest priorities. 

For example, I have personally participated in more than 40 meetings with more 

than 30 organizations involved in the disability process—within SSA and outside 

the agency. Among the hundreds and hundreds of comments we received were more 

than 500 comments on our website from individuals, many of them disability claimants or recipients. 

Elements of the New Approach 

As I said a moment ago, the new approach is designed to make the right decision 

as early in the process as possible. Another major purpose is to encourage return 

to work at all stages of the system. I made a decision early on, to focus on those 

steps that we can implement through regulation rather than legislation. 

The approach preserves some of the significant features of the current system. Initial disability claims will continue to be handled by SSA’s field offices; DDSs will 

continue to adjudicate claims for benefits; and Administrative Law Judges (ALJs) 

will continue to conduct de novo hearings and issue decisions. 

But there also are a number of important changes to the current system: 

• A ‘‘Quick Decision’’ step at the earliest stages of the claims process for people 

who are obviously disabled would allow their claims to be decided within 20 

days. 

13 

• Medical expertise within Expert Review Units would be available for decision 

makers at all levels of the process, including DDSs and the Office of Hearings 

and Appeals (OHA). 

• The DDS reconsideration step would be eliminated. 

• A Reviewing Official (RO) position would be created within SSA to evaluate 

claims appealed from the DDS. The RO could allow a claim or agree with the 

DDS decision. 

• The Appeals Council step would be eliminated. The ALJ decision would be the 

agency’s final action, unless the case was selected for review by an Oversight 

Panel of ALJs and an AAJ. 

The lynchpin of quality assurance under the new approach is accountability and 

feedback at each level of the process. At all levels, the quality process would focus 

on denials as well as allowances, and concentrate on ensuring that cases are fully 

documented at each stage. This last point is crucial because I believe that better 

documentation will allow cases to move through the system more quickly and will 

produce better decisions. 

The new approach would be workable only when SSA’s electronic disability system—which we call e-Dib—is fully functional so that a claimant’s file could be 

accessed by those working on the case anywhere in the nation. I’ll discuss that in 

more detail a little later. 

We also are working on several demonstration projects to encourage voluntary return to work. I believe these projects will let us learn a great deal about how to 

expand beyond the incentives in the Ticket to Work program that your Committee 

was so instrumental in creating. 

Reaction to the New Approach 

I began my presentation by describing our outreach to hear the full spectrum of 

views and concerns from those who are involved at every step of the process. Generally, the approach has been well received. 

Certainly, there are issues on which there is not consensus. For example, the two 

most common comments we have received on the Reviewing Official step are that 

the reviewing official does not need to be an attorney and that the reviewing official 

absolutely should be an attorney. But every group I’ve talked to agrees that the current system needs to be changed. 

I want to thank everyone who is giving us the benefit of their views and sharing 

their concerns. The comments we received have been extremely valuable and have 

definitely shaped my thinking. Many of the decisions will not be easy because there 

are multiple considerations for each issue. 

For example, when I developed the new approach, I envisioned Regional Expert 

Review Units to provide specialized medical and vocational expertise for each step 

of the process. A number of organizations and individuals have raised excellent 

questions about how these units would work—questions such as: 

• How to ensure that DDSs can access the medical expertise they need; 

• How these units should be staffed; 

• How to use specialized experts in cases of multiple disabling conditions; and 

• How experts in these units will relate organizationally to the DDSs and OHA. 

Similarly, there is a wide range of views as to where responsibilities for Quick 

Decisions should reside. The new approach calls for field offices to send them to the 

Expert Review Units immediately after taking the application. Virtually everyone 

we’ve talked to thinks the idea of a quick decision process for the obviously disabled 

is a good idea. My idea was to allow DDSs to concentrate more on difficult cases 

by removing the obvious cases from their workload. But we’ve heard from a number 

of parties who think the DDSs should handle the Quick Decision process. 

Eliminating the Appeals Council is another element of the new approach that has 

generated a large number of comments. Advocacy groups have expressed concern 

about the effects of such a step—especially because it means closing the record after 

the ALJ decision. These groups have suggested that there should be a provision for 

good cause exceptions. 

On the other hand, others fear that eliminating the Appeals Council could lead 

to significantly more cases being appealed to Federal court, and, thus, overwhelming 

the court system. 

I cannot tell you how I will resolve these issues because I have not made decisions. My task is to put together a cohesive package in which every element of the 

process contributes to its effectiveness and removes obstacles to our goal to make 

the right decision as early in the process as possible. 

14 

What Next? 

I expect to make decisions relatively soon on the major issues so that we can put 

together a proposed rule on the new approach by early in calendar 2005. 

Of course, the draft proposed rule will be available for public comment. I expect 

that we will receive many comments that will be very helpful. And I will look forward to the opportunity to hear your views. 

Advancements in Systems Technology 

When I first described my new approach to you, I said that it would require having the Electronic Disability System that we call eDIB fully implemented and in operation long enough for us to identify and address any startup problems. The new 

approach to disability claims processing can work efficiently only when all components involved in disability claims adjudication and review move to an electronic 

business process through the use of an electronic disability folder. 

I am pleased to say that eDIB is right on schedule. 

As you know, SSA field offices throughout the agency are now using the Electronic Disability Collect System (EDCS) that provides DDSs an electronic folder. In 

the DDSs, we rolled out eDIB in January 2004 starting in Jackson, Mississippi, and 

implementation has begun in 14 states. We expect this process to be complete by 

June 2005. 

The Office of Hearings and Appeals (OHA) has begun using the new Case Processing and Management System. CPMS is a new software system for processing 

cases and managing office workloads in the OHA. CPMS is a replacement system 

and will provide OHA with the ability to work with the electronic file. 

When these electronic processes are fully implemented, each component will be 

able to work claims by electronically accessing and retrieving information that is 

collected, produced and stored as part of the electronic disability folder. This will 

reduce delays that result from mailing, locating, and organizing paper folders. 

I know that moving to eDIB poses significant challenges for the employees at SSA 

who are involved at all levels. And I want to publicly thank them for their dedication and hard work that is making eDIB a success. 

Conclusion 

I’d like once again to thank Chairman Shaw, Chairman Herger and the members 

of these subcommittees for their support and guidance. I look forward to working 

with you and your staffs as we continue our mutual efforts to improve the service 

provided to disabled individuals and their families. 

f 

Chairman SHAW. Commissioner, you propose to establish RERU 

which would centralize the medical expertise to make it available 

to decisionmakers across the country. More detail is needed in 

terms of whether these experts will replace current personnel or 

whether they will be doctors or nurses, or both, and what their role 

would be. My question is: your proposal to reform the disability determination process would create new medical expert units located 

in Social Security regional offices. Would you agree that on-site 

doctors at the State DDSs currently provide essential services, including reviewing cases, training, preventing fraud, and working 

with other doctors in the State to bolster the medical evidence at 

a lower cost? 

Commissioner BARNHART. Let me say, Mr. Chairman, what I 

believe is at the root of your question is the idea that we want to 

have the best possible medical expertise all through the disability 

determination process. My goal in the new approach was to augment or fill in gaps that may exist in our existing medical expertise. We have very hardworking MCs across the country in our 

DDSs. When you look at the cases that come in to the DDSs, not 

always is the right set of medical eyes looking at those cases. Let 

me give you an example. Doing an inventory of the MCs that we 

15 

have, 2.5 percent of our MCs are orthopedic doctors, yet over 20 

percent of the cases that we decide on an annual basis deal with 

orthopedic issues. I think the medical personnel should reflect and 

certainly have the expertise to be able to handle the types of cases 

that are coming in. 

In one State that I visited earlier this year, I spoke with a pediatric oncologist at a DDS, and I said, ‘‘How many of the cases that 

you do have to do with pediatric oncology?’’ He said, ‘‘About 20 percent.’’ I said, ‘‘Well, in the new approach I want to change that. I 

want to make sure you are looking at 80 percent pediatric oncology 

cases and that we are using your expertise to make the right decision as early as possible.’’ I have read all the testimony of the other 

witnesses that are appearing here today, and I am aware of the 

concerns that have been expressed, and the basis of the Chairman’s 

question, and I would say this: my goal is to improve the availability of medical service. In the new approach, I recommended 

RERUs. As a result of the back-and-forth discussions that I have 

had with various interested parties over this last 12 months, I am 

looking at the possibility of having doctors in the DDSs provide 

service to other DDSs. If you are a pediatric oncologist in one 

State, maybe you can help with pediatric oncology cases coming in 

from another State. There are a number of issues that need to be 

dealt with: State licensure requirements for physicians, reimbursements between one State and another. So, I think that we will get 

to the right place in terms of making sure that we take the greatest advantage we possibly can of our existing medical expertise, but 

at the same time fill in the gaps that may exist. 

Chairman SHAW. Is State licensing a problem? 

Commissioner BARNHART. Well, the issue there, Mr. Chairman, 

as I have been advised by the medical commenters we have heard 

from, is that you get licensed to practice in a particular State, and 

so you might, let’s just say you are in the State of Delaware, my 

home State, and we are asking you to look at cases from Pennsylvania, we have to look at what the implications are of doing that 

and whether we have to address any State licensure issues. 

Chairman SHAW. I wonder whether examining a patient and 

testifying would be practicing medicine in another State if you are 

under the guidance of the court. 

Commissioner BARNHART. Those are the kind of issues that we 

are looking at, Mr. Chairman, and I will be happy to keep the 

Committee apprised as we identify the correct answers and resolve 

some of those operational issues. 

Chairman SHAW. It would be helpful if that is not an impediment, but you mentioned the specialty of doctors. What is the predominant specialty of the doctors that are now testifying or doing 

reviews? 

Commissioner BARNHART. You know, I did not bring the listing 

with me, but I would be happy to submit the inventory that we did 

to the Committee for the record. 

Chairman SHAW. I would appreciate it. I think that is important. 

[The information follows:] 

As of May 2004, there were 2,136 Medical Consultants on staff within DDSs. Of 

those, 1,700 (80 percent) were less than full time. 

16 

Clinical Specialist Percent of DDS 

MCs* 

Percent of DDS 

Workload** 

Cardiologists 1 .70 6 .70 

Child Psychiatry 0 .60 0 .50 

Child Psychology 0 .01 3 .70 

Endocrinologists 0 .20 3 .80 

Family Practice 6 .80 0 .00 

Gastroenterologists 0 .30 2 .40 

Internists 6 .30 6 .30 

Neurologists 1 .90 6 .80 

Oncologists 0 .30 4 .70 

Orthopedists 2 .50 19 .90 

Pediatricians 9 .80 0 .90 

Psychiatrists 10 .70 19 .60 

Psychologists 31 .20 7 .50 

Pulmonologists 0 .30 4 .70 

Rheumatologists 0 .30 6 .70 

Other 17 .09 5 .80 

*Percentages weighted based upon full-time or part-time status as of May 2004. 

**Workload percentages are based upon primary impairment only for FY 2003. 

Chairman SHAW. Are you eliminating some of the on-site doctors, and are you replacing some of them with nurses? 

Commissioner BARNHART. We have not, well, first of all, we 

have not done anything. I was laying out an approach of how we 

might get at the medical gaps that exist. I am listening to the comments. We have gotten a number of papers in from DDSs, and 

some of the witnesses today are going to speak to that fact, from 

the National Association of Disability Examiners (NADE) and from 

the National Council of Disability Determination Directors 

(NCDDD), as well as the medical consultant who is going to testify. 

We have talked with all those groups ourselves, and so we are looking at how we address the concerns that they have raised. 

Chairman SHAW. Thank you. Mr. Herger? 

Chairman HERGER. Thank you. Commissioner Barnhart, one of 

the great satisfactions I have as I travel around my Northern California district is to periodically be able to observe those individuals 

who have disabilities that are out working and to be able to witness the great sense of self-worth and satisfaction that these individuals have of being involved in the process. I know that while 

you are currently working on improving the disability determination process, you also are conducting demonstration projects to help 

these people with disabilities be able to return to work. The idea 

that people with disabilities can work rather than collect disability 

benefits for years and years is an important concept that needs to 

be made a more integral part of the Social Security disability system. If you could, Commissioner, could you bring us up-to-date on 

work-related demonstration projects and any other progress that 

has been made in helping more disabled beneficiaries be able to 

work? 

Commissioner BARNHART. Yes. Let me say, first of all, I share 

your strong belief that return-to-work issues are extremely important in providing adequate services, and incentives and removing 

disincentives in these programs to help people with disabilities be 

able to continue to work or start to work if they choose to do so 

is definitely a priority of ours, and certainly the Ticket to Work legislation that was passed several years ago with the leadership of 

17 

this Committee has made a big difference in terms of reorienting, 

I think, the mission of the SSA in that regard. 

As part of the new approach, I actually outlined four different 

demonstrations that would not wait until an individual was adjudged disabled but, rather, would start from the very beginning of 

the process. Not to take the time to explain each of them, they all 

looked at the central theme was providing services and benefits 

earlier in the process to allow people to continue working, not necessarily to go on full-time disability benefits. I would be happy to 

provide a write-up of those for the record again. None of those have 

actually started yet, but we are in the process of working through 

in several locations hopefully being able to start some of those as 

early as next year. 

I want to emphasize that all of those demonstrations, as we contemplate them, would be voluntary. They are not mandatory. It 

would be up to the individual person with disabilities to make the 

decision if they want to avail themselves. The reason for delay in 

some cases is we have to develop a predictive model that would tell 

us whether people with certain kinds of conditions and disabilities 

could be expected to improve, would benefit from the kinds of services that we would offer in those demonstrations. Right now we 

have been working with the State of Florida, and the State of Florida, in my understanding, in January intends to implement the 

Florida Freedom Initiative. This is something that I know that, 

Chairman Herger, you have an interest in, we talked about this I 

think this summer when I testified before your Subcommittee, 

where we actually modify SSI rules to allow, along the lines of individual development accounts that have been created in the welfare 

system to encourage people to go to work and to remove the disincentive that occurs from accumulation of resources. 

The Youth Transition Program is another demonstration that is 

actually up and running. Six different States are involved in that, 

Mr. Chairman, and this is very important because I feel very 

strongly about this. In a prior life, I was the Assistant Secretary 

for Children and Families and had a lot of interaction with the foster care system and the whole issue of when children age out of 

a particular program and oftentimes there is a gap in service. The 

issue here is to make sure that when children would age out of SSI 

for disabled children that we have actually taken steps to help 

move them into making the transition to work. So, I have a complete report I could submit that details what is happening with 

every single one of our demonstrations that I would be happy to 

submit for the record in addition. 

Chairman HERGER. Without objection, I would like you to do 

that. 

[The information follows:] 

Updates of Demonstration Projects 

Benefit Offset Demonstrations 

Description: The Ticket to Work legislation requires the Commissioner to ‘‘conduct demonstration projects for the purpose of evaluating . . . a program for title 

II disability beneficiaries . . . under which benefits payable . . . based on the beneficiary’s disability, are reduced by $1 for each $2 of the beneficiary’s earnings that 

is determined by the Commissioner.’’ 

18 

The National Benefit Offset Demonstration will test a range of employment support interventions in combination with a $1 reduction in benefits for every $2 in 

earnings, with the goal of enabling more beneficiaries to return to work and maximize their employment, earnings, and independence. At the same time, we are developing plans for a 4 state demonstration that could be run at a lower cost (and 

in an earlier timeframe). Our intent is to gather information for the national 

demonstraton. 

Status: We plan to conduct this project in two distinct phases: an initial fourstate pilot project (Connecticut, Utah, Vermont, and Wisconsin), and the national 

study. The purpose of the initial project is to collect early information on the demonstration that will be useful in developing the national study. We expect to enroll 

participants in the four-state pilot by the end of the calendar year or early in 2005. 

We awarded the contract for the national study on September 30, 2004 to Abt Associates. 

Early Intervention (EI) 

Description: With the EI project, SSA will, for the first time, conduct a demonstration focused on applicants. The concept underlying the EI project is that providing services and supports as close to disability onset as possible will enable individuals to remain in or return to the workforce. 

The project will offer interventions to a sample of Social Security Disability Insurance (SSDI) applicants with impairments that may reasonably be presumed to be 

disabling (i.e., they are likely to be awarded SSDI benefits) and who are likely to 

return to work as a result of the program. The interventions will include access to 

a wide range of necessary employment services, a 1-year cash stipend equal to the 

applicant’s estimated SSDI benefit and Medicare for three years. 

Status: SSA released a solicitation on the process demonstration project on August 2, 2004. We hope to award a contract in November 2004 and begin enrolling 

participants in early CY 2005. 

Disability Program Navigator (DPN) 

Description: SSA and the Employment and Training Administration (ETA) of 

the Department of Labor (DOL) are jointly funding approximately 200 DPN positions in 17 states (Arizona, California, Colorado, Delaware, Florida, Iowa, Illinois, 

Maryland, Massachusetts, New York, Oklahoma, So,uth Carolina, Vermont, and 

Wisconsin in the first year; and Mississippi, New Mexico, and Oregon in the second 

year). DPNs operate in DOL’s One-Stop Career Centers and provide seamless employment services to individuals seeking to enter the workforce. DPNs also provide 

an important link to the local employment market and facilitate access to programs 

and services that impact the success of individuals with disabilities who are seeking 

employment. 

Status: The DPN project is in its second year of operation. In June 2003 DOL 

awarded cooperative agreement funding to 14 states to establish DPNs. In June 

2004, DOL continued funding to the 14 original states and awarded funding to 3 

additional states. DOL’s technical assistance contractor is conducting a process evaluation in all states and will review and evaluate outcomes in selected states. SSA 

expects a final report from the DOL contractor in fall 2005. 

Mental Health Treatment Study (MHTS) 

Description: The MHTS will focus on SSDI beneficiaries with mental health impairments. It will test the effect of treatment funding on the health and health-care/ 

job-seeking behaviors of those beneficiaries. The study intervention calls for SSA to 

pay for the costs of outpatient mental health disorder treatments (pharmaceutical 

and psychotherapeutic) and/or vocational rehabilitation that are not covered by 

other insurance for those individuals. 

Status: As a first step in a three-part process (design, pilot, and larger demonstration), a pre-design contract was awarded to the Urban Institute in September 

2003. SSA and the Urban Institute have selected a Technical Advisory Panel (TAP) 

(consisting of national experts on the subject) to provide recommendations on demonstration interventions. The first TAP meeting was held in June 2004 and the second meeting is scheduled for late October 2004. 

Homeless Outreach Projects and Evaluation 

Description: Congress provided $8 million in both FY 2003 and 2004, for SSA 

to conduct outreach to ‘‘homeless and under-served populations.’’ SSA used this earmarked funding to establish the Homeless Outreach Projects and Evaluation 

19 

(HOPE) in support of the President’s initiative to end chronic homelessness within 

10 years. 

The HOPE initiative is focused on assisting eligible, chronically homeless individuals in applying for Supplemental Security Income (SSI) and SSDI benefits. The 

HOPE projects will help SSA to demonstrate the effectiveness of using skilled medical and social service providers to identify and engage homeless individuals with 

disabilities as well as assist them with the application process. 

Status: SSA awarded $6.6 million in cooperative agreement funding to 34 public 

and private organizations in April 2004 and conducted an Orientation Conference 

for the organizations in August 2004. We awarded an evaluation contract on September 17, 2004. 

Youth Transition Process Demonstration (YTPD) 

Description: To further the President’s New Freedom Initiative goal of increasing employment of individuals with disabilities, in September 2003, SSA awarded 

cooperative agreements to six states (California, Colorado, Iowa, New York, Maryland, and Mississippi) for the purpose of developing service delivery systems to assist youth with disabilities to successfully transition from school to work. During 

this critical period of transition to adulthood, the services provided to youth with 

disabilities can prepare them for postsecondary education, employment and economic self-sufficiency. 

The states will establish partnerships to improve employment outcomes for youth 

ages 14–25 who receive SSI or Social Security Disability Insurance (SSDI) payments 

on the basis of their own disability. The projects will provide a broad array of transition-related services and supports to SSI and SSDI applicants and children. 

Status: The demonstration projects are at various stages of implementation. Most 

projects currently are testing their designs while others began pilots at the start of 

the 2004 school year. A technical assistance contract was awarded September 30, 

2004 to the Virginia Commonwealth University. An evaluation solicitation will be 

released by the end of the calendar year. The second year of funding for YTD 

projects was awarded September 30, 2004. 

State Partnership Initiative (SPI) 

Description: SSA and the Rehabilitation Services Administration (RSA) funded 

a combined total of eighteen demonstration states in 1998. SSA provided 5-year 

funding to twelve states (California, Illinois, Iowa, Minnesota, New Hampshire, New 

Mexico, New York, North Carolina, Ohio, Oklahoma, Vermont and Wisconsin) to develop innovative projects to assist individuals with disabilities in their efforts to reenter the workforce. These awards helped states develop state-wide programs of 

services and support for their residents with disabilities that increased job opportunities for them and decreased their dependence on benefits, including SSDI and SSI. 

California, Vermont, New York and Wisconsin implemented SSI waivers to test alternative rules. 

Status: The SPI projects are in the sixth and final year. Eleven of the twelve 

states received no-cost extensions to phase out the projects by the end of September 

2004. As of August 2004, the states testing waivers received no-cost extensions for 

three to nine months to complete waiver closeout and outcome evaluations. 

Florida Freedom Initiative 

Description: The Florida Department of Children and Families has a CMS waiver program which allows individuals to obtain cash instead of certain Medicaid services to allow participants greater control in the planning and purchase of supports 

and services. SSA has waived certain SSI Program rules to allow our beneficiaries 

to participate in the FFI. 

Status: SSA signed an IAA with ASPE/DHHS to provide $100,000 in support of 

the evaluation activities. 

Ongoing Medical Benefits 

Description: This project will test the effects of providing ongoing health insurance coverage to beneficiaries who wish to work, but have no other affordable access 

to health insurance. 

Status: The design of a national project is under development and we expect to 

start a pilot project (focusing on HIV–AIDS) in 2005. 

Interim Medical Benefits 

Description: This project will provide medical benefits to individuals with no 

medical insurance (no ‘‘treating source’’ evidence) whose medical condition would 

20 

likely improve with treatment. This intervention will facilitate the development of 

the necessary documentation for disability adjudication while providing the applicant needed services. 

Status: The projects still are in the preliminary stages of development and no 

specific information is available at this time. 

Accelerated Benefits 

Description: These demonstration projects will provide immediate cash and medical benefits for a specified period (2–3 years) to title II disability applicants who 

are highly likely to benefit from aggressive medical care. This 4-year project will 

provide immediate access to both DI benefits and Medicare coverage by utilizing a 

predictive model currently under development. This project was formerly called the 

‘‘Temporary Allowance’’ demonstration project. 

Status: The projects still are in the preliminary stages of development and no 

specific information is available at this time. 

Again, I thank you for working in that area, very important to 

the lives of many people who want to be able to be productive as 

well. So, thank you very much for your work. 

Commissioner BARNHART. Thank you. 

Chairman SHAW. Mr. Cardin? 

Mr. CARDIN. Thank you very much, Mr. Chairman. Commissioner Barnhart, again, welcome. I noticed several times that you 

complimented the workforce at the SSA, and I just want to underscore that. I have the opportunity frequently to visit and see the 

workforce. I know how hard they work under extremely difficult 

circumstances. The volume of work continues to increase, and yet 

the additional resources for staff has not really kept up. I very 

much appreciate your advocacy for adequate support for the SSA. 

Commissioner BARNHART. Thank you. 

Mr. CARDIN. Just to follow up on Mr. Herger’s point very quickly, it would seem to me that one of the things we could do to encourage people who are on SSI to be able to be gainfully employed 

is to deal with the disregard, the wage earnings disregard. That 

has not been changed in a long time from $65. 

Commissioner BARNHART. That is right. 

Mr. CARDIN. It seems to me that that may be one way that we 

really could encourage people to work without the adverse consequences if they are unable to maintain gainful employment. 

Commissioner BARNHART. Certainly that is an issue that has 

been discussed, periodically. I think it came up at the Subcommittee hearing with you all this summer, and we would be 

happy to provide any kind of technical assistance we can to you or 

Members of the Subcommittee who are interested in looking at that 

issue. 

Mr. CARDIN. I have been told it has been over 30 years since 

we made any adjustment on that. 

Commissioner BARNHART. It has been a very long time. 

Mr. CARDIN. It is time for that to keep up. Again, if we really 

want to have a coordinated effort to try to encourage people who 

can to work—— 

Commissioner BARNHART. If I may say, Mr. Cardin, that is 

precisely the point of the Florida Freedom Initiative. One of the 

waivers there, it waives that $65. I think that we will get some 

good empirical evidence as a result of that demonstration that may 

show us the effect it has. 

21 

Mr. CARDIN. That is good. Also, your demonstration programs, 

at least some of the ones that I have looked at, will also be providing other services to SSI recipients so that they have some help 

in their effort to be gainfully employed, which is one of the points 

that I really want to underscore. It is one thing about cash assistance. It is another thing about supplementing cash assistance with 

additional services so that individuals can become more independent. So, I think that you are going about that the right way, 

and we will wait to see what, of course, they are voluntary, and I 

think that also is helpful. 

There are 36,000 elderly disabled refugees who will face termination of their SSI benefits because of the 7-year restriction that 

was imposed in law. The chief obstacle for these individuals of 

maintaining their benefits toward becoming citizens has been basically the time delays in these applications being approved. The Administration has recommended an extension. There is a bipartisan 

bill that I am part of in Congress that would extend so these lowincome refugees would be able to continue their SSI benefits. 

My reason for mentioning it at this hearing is that we are anticipating that Congress will adjourn next week, and come back for a 

session in the middle of November. I expect a rather short session. 

I am just reaching out to you whether we can find some vehicle, 

some way, some strategy to make sure that before Congress adjourns this year that we extend that SSI limitation; otherwise, we 

are going to be faced with thousands of individuals being really 

subject to a hardship. There is also, by the way, support in the U.S. 

Senate. So, we have broad bicameral support. 

Commissioner BARNHART. Yes, Mr. Cardin. I certainly agree 

with you. As you stated, we have our own proposal for an extension. I think yours allows one more year of extension than ours. 

There are some other relatively minor differences. I feel confident 

that if we got together, we could sit down and work out some sort 

of agreement between us. I do agree that because of the fact the 

clock is ticking for these individuals, it is important that we take 

action. So, I would, certainly like to extend the offer to work with 

your staff to do whatever we can to make that become a reality before the Congress adjourns. 

Mr. CARDIN. I appreciate that, and, Mr. Chairman, or Mr. 

Chairmen, both, I just really want, I hope we can find a vehicle. 

Again, this is bipartisan. The Administration supports it. I am confident that our leadership would be prepared to support a suspension bill if we cannot find another vehicle for it to go forward on, 

and we are certainly willing to work out the language between the 

Administration and the legislation that is pending both in the 

House and the Senate. This should be non-controversial. I would 

just hope that we would find a way that we could move that before 

Congress adjourns this year. Thank you. 

Commissioner BARNHART. If I may mention, too, Mr. Cardin, 

you may be interested to know that we at SSA will be doing an annual notice to the individuals who are subject to that provision to 

let them know the number of years that they have left of eligibility 

so that they are aware that they need to move to file for citizenship 

in the future. 

22 

Mr. CARDIN. The problem, of course, is that many have, and it 

is in the, in fact, this is the leading cause. They have applied for 

citizenship. It just takes a long time for the process to work its 

way. 

Commissioner BARNHART. Yes. I realize that. 

Mr. CARDIN. Thank you. 

Chairman SHAW. I would say to my friend from Maryland, by 

way of a history on that particular piece of legislation, without 

criticizing your position at all, it was that it was originally 5 years, 

and then we figured that the people needed an extra 2 years to 

complete the application for citizenship. Maybe there is some middle ground for those that have already applied or something of that 

nature. The whole thought was that we don’t want that to be a reason for people coming to our shores, and that was the reason for 

that legislation. 

Mr. CARDIN. I appreciate that, Mr. Chairman, and you are absolutely correct. I would just bring to your attention that I think 

the Administration has been convinced that the need for the delay, 

for extending it is not because individuals were delinquent in seeking citizenship. It is the process taking a lot longer, and that is 

why the Administration suggested an extension. That is why I 

think you have both houses and both parties wanting to do this. 

So, I would just urge you to take a look at the reasons why. It is 

not because these individuals have not tried to become citizens. 

They have. It is just taking longer than we had anticipated for I 

think some obvious reasons, not least of which was September 

11th. 

Chairman SHAW. Well, if we are looking for inefficiencies, I 

think the immigration process in this country is probably about as 

inefficient as you could possibly get. 

Mr. Lewis. 

Mr. LEWIS OF KENTUCKY. Thank you, Mr. Chairman. Good 

afternoon. 

Commissioner BARNHART. Good afternoon. 

Mr. LEWIS OF KENTUCKY. Our staff contacted the JCUS of 

the United States (JCUS) to request their attendance at this hearing, and they were unable to provide a witness, but they did submit a letter, which is in each Member’s packet. I would like to request that be inserted into the record. This letter highlights the 

fact that annually about 77,000 claimants request review by the 

Appeals Council. In addition, last year more than 17,000 disability 

cases were filed in U.S. district courts. According to the letter, this 

suggests that a substantial number of cases are being resolved at 

the Appeals Council level without claimants’ having to seek judicial 

review. Commissioner, should you eliminate the Appeals Council, 

what will be the impact on the U.S. district courts? 

[The information follows:] 

23 

Committee on Federal-State Jurisdiction 

United States District Court 

Wheeling, West Virginia 26003 

September 28, 2004 

Honorable Frederick P. Stamp, Jr. Chair 

Honorable Susan H. Black; Honorable Kathleen A. Blatz; Honorable Glen H. Davidson; Honorable Charles E. Jones; Honorable Kermit V. Lipez; Honorable Howard 

D. McKibben; Honorable James D. Moyer; Honorable Michael R. Murphy; Honorable Robert E. Nugent; Honorable Loretta A. Preska; Honorable Linda Copple 

Trout; Honorable Gerald W. VandeWalle; Honorable Roger L. Wellman 

Hon. E. Clay Shaw, Jr. 

Chairman, Subcommittee on Social Security Committee on Ways and Means 

United States House of Representatives B–316 Rayburn House Office Building 

Washington, DC 20515–6353 

Dear Mr. Chairman: 

I am the Chair of the JCUS Committee on Federal-State Jurisdiction.The Committee is responsible for making recommendations to the JCUS onproposals regarding the elimination, modification, or creation of Federal jurisdiction. This advisory 

responsibility encompasses proposed changes to the manner in which administrative 

claims are screened and the posture in which they become subject to review in Federal court. 

I understand that the Subcommittee on Social Security will be holding a hearing 

onSeptember 30, 2004, regarding the proposed revisions to the disability claims 

process. Although the JCUS has not adopted a formal position in response to the 

current proposal and therefore is unable to provide a witness as requested by your 

staff, I would like to take this opportunity to share with the Subcommittee the status of the JCUS’s consideration of this topic. 

The Committee on Federal-State Jurisdiction is guided, as your Subcommittee is 

certainly guided, by the principle that disability claimants are entitled to a fair and 

prompt resolution of their claims. The Federal courts have a role in pursuing that 

principle, albeit a limited one. We intend to do what we can to work with you and 

Commissioner Jo Anne B. Barnhart to make a positive contribution to the Commissioner’s current reform process. 

In April 1994, the Social Security Administration (SSA) launched an initiative to 

revise the administrative process governing Social Security disability claims. At that 

time, the plan called for reducing the number of decisional steps from four to two, 

including the elimination of the requirement that a claimant request review by the 

Appeals Council prior to seeking judicial review in Federal district court. The resulting two-level administrative review process would have consisted of (1) an initial 

disability determination by a ‘‘disability claim manager’’ and (2) a hearing before an 

administrative law judge (ALJ). Although the Appeals Council would have continued to exist, it would have only been authorized to selectively review cases after 

they had been filed in U.S. district courts. 

In response, the JCUS determined to communicate to SSA its seriousconcerns regarding the restructuring of the Appeals Council, noting that the proposed role for 

the.Appeals Council could create jurisdictional problems and could have significant 

caseload ramifications. Report of the Proceedings of the JCUS of the U.S. at 38 (September 1994). Through its many communications to SSA over the next several 

years, the judiciary urged serious reconsideration of the proposed elimination of the 

requirement that a dissatisfied claimant must request review by the Appeals Council prior to seeking judicial review in the district court. The judiciary stated that 

the proposed acceleration of district court review of disability claim denials was likely to be inefficient and counter-productive. It pointed out that while about one-third 

of claimants before the Appeals Council received favorable relief at that stage (either through reversal or remand), only approximately 10 percent of those appeals 

in which the Appeal’s Council granted no relief to the claimant were then submitted 

for Federal judicial review. Thus, the JCUS felt that substituting immediate access 

to the district courts prior to Appeals Council review could potentially create a significant increase in the caseload of the district courts. The judiciary encouraged SSA 

to seek to streamline and expedite the Appeals Council review process rather than 

to bypass it. The Conference also noted that the screening function performed by 

the Appeals Council furthered consistency and accuracy of decisions within SSA 

while lessening the need for claimants to pursue more costly review in Federal district court. 

24 

Recognizing the importance of providing thorough review of benefit-type claims at 

the agency level, the judiciary addressed this issue in its 1995 LongRange Plan for 

the Federal Courts. That Plan supports measures to broaden and strengthen the administrative hearing and review process for disputes assigned to agency jurisdiction, 

and to:Facilitate mediation and resolution of disputes at the agency level. The Plan 

also supports efforts to improve the adjudicative process for Social Security disability claims both by establishing a new mechanism for administrative review of 

ALJ decisions and by limiting; the scope of appellate review in the Article III courts. 

In addition, the Plan recognizes that agencies need the requisite authority and resources to review and, where possible, achieve final resolution of disputes within 

their jurisdiction. 

When Commissioner Barnhart announced in September 2003 plans to restructure 

the disability claims process, our Committee began to analyze her approach, to seek 

additional information, and to determine whether another JCUS position was warranted. On February 12, 2004, the Commissioner and her staff met with me and 

staff of the Administrative Office of the U.S. Courts. In addition, on June 10, 2004, 

the Commissioner met with our Committee, along with Martin H. Gerry, Deputy 

Commissioner of the Office of Disability and Income Security Programs. We: appreciate her efforts and those of her staff to take the time to explain her ideas and 

to solicit comments from us. 

Many of the details and components of the Commissioner’s proposal regarding initial agency operations are not directly within the scope of our inquiry. As mentioned 

above, the JCUS has set forth a general statement supporting measures to broaden 

and strengthen the administrative hearing and review process for disputes assigned 

to agency jurisdiction and to facilitate the resolution of disputes at the agency level. 

The Committee on Federal-State Jurisdiction is particularly interested in the component of the Commissioner’s current approach to abolish the Appeals Council, 

thereby apparently allowing, although it is not clear, ALJs’ decisions to become the 

agency’s final decision subject to judicial review. (See 42 U.S.C. § 405(g).) At the 

same time, SSA intends to create a quality control entity to review certain ALJ decisions. As we understand it, if a claim is selected for review and the quality control 

staff disagrees with an allowance or disallowance determination, the claim would 

then be referred to an Oversight Panel (two ALJs and one administrative appeals 

judge), which could affirm or reverse the ALJ’s decision. In those instances, the decision of the Oversight Panel perhaps would be the final agency action. These are the 

details that we now have. 

Under this proposal, however, it is unclear how the agency’s disability decisions 

would become ‘‘final’’ for purposes of judicial review if an optional quality review 

stage existed. In addition, we do not know what standards would apply in selecting; 

cases for the proposed quality assurance phase and how often ALJ decisions would 

be chosen for such optional review. These and other questions that our Committee 

raised at the June meeting; and shared with the Commissioner presently remain 

unanswered, possibly because those decisions have not yet been made. 

‘We recognize that the Commissioner’s efforts are directed toward improving the 

administrative process so that more citizens receive an accurate assessment of’ their 

claim for benefits as soon as possible and that management accountability can be 

strengthened. The Commissioner apparently views elimination of the Appeals Council as contributing to that goal. We have been informed by SSA that approximately 

77,000 claimants currently request review each year by the Appeals Council, with 

approximately 2% of the claims being allowed and 25% being remanded. During the 

last fiscal year, 17,127 Social Security disability insurance and Supplemental Security Income cases were filed in U.S. district courts. This suggests that a substantial 

number of cases are being resolved at the Appeals Council level without claimants 

having to seek judicial review. Therefore, before a decision is made on whether to 

eliminate the Appeals Council, we would hope that the new claims process would 

be adequately tested. It may be that substituting Appeals Council consideration 

with judicial review in the Federal courts would result in more costs and further 

delay for many claimants. 

I hope the Subcommittee on Social Security finds this information helpful. If the 

JCUS of the United States takes action with regard to the changes to the disability 

claims process now under discussion, the Conference will promptly notify your Subcommittee. 

Sincerely, 

Frederick P. Stamp, Jr. 

25 

Commissioner BARNHART. Well, let me say, as I indicated in 

my opening statement, certainly this is an area where there has 

been substantial concern expressed by many parties throughout the 

system. I would like to mention that I had the opportunity to work 

with the Subcommittee of the JCUS and actually did go to New 

York and meet with them for several hours to answer their questions, to present the new approach and answer their questions. I 

saw the letter that the Conference submitted that you requested be 

submitted to the record, and it absolutely reflects the concerns they 

expressed to me, and it is this issue of opening the floodgate, as 

they put it, of cases to the courts. At the same time, I tried to use 

as a guiding point in developing the new approach not only making 

the right decisions as early in the process as possible and doing 

that, improving the quality of the record at every step, but also 

making sure that every step of the process added value to the process, value particularly commensurate in terms of commensurate 

with the delay that it produced in the time. 

The Appeals Council now takes somewhere around 250 days to 

complete its work. I would like to say that is a huge improvement. 

When I came into this post, it took 447 days for a case to go 

through the Appeals Council, so the staff there has worked very 

hard and are really doing a good job in terms of speeding it up. 

Even so, when one looks at the results of the cases that are reviewed by the Appeals Council, what one sees is 2 percent of the 

cases that move to the Appeals Council are allowed, approximately 

25 percent of the cases are remanded, and the remainder of the 

cases are denied. 

The remand one can say in large measure are due to mistakes 

that were made earlier, inadequacies in the record, and documentation, those kinds of things, all of which the new approach seeks to 

address. We substituted at that stage of the process an oversight 

panel which would conduct a full and comprehensive quality review 

of all the decisions that are made by the ALJs, allowances and denials both, not just one or the other. Those recommendations and 

the findings of that quality review unit go to an oversight panel 

comprised of ALJs and administrative judges to make the final decision on whether or not the case decision as rendered by the ALJ 

should stand or be reversed. 

I understand the concerns that the JCUS has, and I guess when 

I talked to them, I tried to explain, and one of the things I think 

is very difficult for all of us to do is when you step back and look 

at the new approach, if you look at the results we get today at each 

step of the process and simply apply those to the new approach, 

then one would say it won’t make any difference. What I am suggesting is with the new approach we will not see the same number 

of cases moving through what we call the waterfall at each step. 

I am well aware of the JCUS’s concerns, and for that reason, as 

we move to make final decisions, the whole issue of the Appeals 

Council will be one that is taken very carefully. 

Mr. LEWIS OF KENTUCKY. Thank you. 

Chairman SHAW. Mr. Becerra? 

Mr. BECERRA. Thank you, Mr. Chairman. Commissioner, thank 

you very much again for being here. I think we always appreciate 

your testimony because it is always spoken with a lot of clarity, 

26 

and not only that, it seems like a lot of thought and I think a lot 

of caring involved as well. So, we thank you for that. 

Commissioner BARNHART. Thank you very much. 

Mr. BECERRA. You seem to be one of those people who really 

does know how to manage, and we appreciate that. 

Commissioner BARNHART. Thank you. 

Mr. BECERRA. A question regarding the streamlining of the 

process. The concerns that are being raised by eliminating the Appeals Council that, while we may be trying to accelerate the process, we actually may be hurting ourselves because trying to go from 

the ALJ hearing stage to the Federal district court is not only a 

big step but an expensive step. If the courts are correct in saying 

that it would bog them down, it could become an even more tardy 

step in the process. Comments? 

Commissioner BARNHART. Yes, thank you. That is a concern 

that I have heard, and I appreciate you raising it here. The emphasis is to make the right decision as early in the process as possible, 

if we look at how the decisions fall out today, approximately 40 

percent, around 38 percent, I believe it is, of disability claims are 

allowed at the initial DDS phase. About 61 percent are allowed at 

the ALJ phase, 61 percent of those that apply for appeal. 

What I am trying to do is get the allowance level of the cases 

that should be allowed higher earlier in the process, and so with 

the RO that we have, creating the Federal position that would be 

accountable to a single authority at the SSA, it would improve consistency in decisions across the Nation at an earlier point, because 

I do not envision ROs working on a State-by-State basis. In fact, 

I think it is important they not take cases on a State-by-State basis 

so that you know that you are having more of a random assignment of cases to the ROs, which makes it a national decision, not 

a State-based decision. 

I think what we will see more cases that should have been yeses 

decided at an early stage, at the RO, and then because of the prep 

work that the RO does, the fact they have to issue a prehearing 

report or a recommended disposition, and wherever we come out 

there, because I know some of the advocacy organizations say they 

just one report, they do not want a prejudicial title, and I am sensitive to those concerns. When that goes forward to the ALJ, it 

should allow the ALJ to have the case better laid out for them in 

terms of looking at what has happened to that point. So, I guess 

my . . . 

Mr. BECERRA. Let me stop you for a second, Commissioner. I 

sense what you are saying is that by improving the process up 

front, we should be able to get better decisions from the ALJs at 

the later stage and, therefore, we are able to then send cases directly to the district court because we believe by that stage we really will have a controversy that should be kicked up to the highest 

level. 

Commissioner BARNHART. That is exactly what I am trying to 

say. 

Mr. BECERRA. I have not had a chance to thoroughly review 

your proposal, but having seen how the Federal courts work, it is 

a very imposing process, and I think for the most we are talking 

about claimants who are not very wealthy and who are in a difVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00030 Fmt 6633 Sfmt 6602 E:\HR\OC\99682A.XXX 99682A
27 

ficult situation. I suspect we are going to find that, as imposing as 

it is to go before a reviewer or perhaps an ALJ in an administrative hearing, which is very similar in every respect to a court trial, 

it becomes extremely imposing on people to go directly to a district 

court and very expensive. We are constantly hearing from the district court judges, at least in my 9th Circuit area in the district 

courts that we have there, they are completely swamped. If we do 

end up with the several thousand cases that you currently see 

going to appeal from the ALJs going to the district courts, you 

could see a logjam occur, which could become very difficult but, 

more importantly, very expensive for the claimants to continue a 

case in Federal court. So, I have not come to any conclusions either, other than I sympathize with those who raise these concerns 

that bypassing the process rather than trying to come up with an 

even better streamlined review process of an ALJ decision could 

lead to more difficulty than not. 

Commissioner BARNHART. I appreciate what you are saying, 

Mr. Becerra. I do. The concerns that you are expressing have been 

echoed by others involved in this process, and obviously they are 

concerns I take very seriously. I have greater respect for the JCUS 

and certainly realize that whatever action is finally taken, if it does 

not have the basic support of all elements in the system, including 

the district courts, it is not going to be a process that is headed for 

success. 

Mr. BECERRA. Can I mention one other thing? Gosh, I wish I 

had more time because I would love to talk to you about some of 

these other aspects, because I think for the most part, I really believe that you are trying to find those ways to streamline the system and make it more consumer-friendly for the claimants. I have 

a feeling you are going to really run into trouble with the review 

process that you have for the quality assurance, where some of the 

ALJ decisions, it seems like you are saying after the ALJ, that is 

a final decision, and the only recourse you now have is to go to the 

district court. In some cases, you will have this quality review that 

will occur where, indeed, if there is a problem that is found by 

those who are part of this quality assurance committee, or whatever it is called, you could actually see a different decision come 

forward from that review, which leads to the conclusion, and I will 

end with this, Mr. Chairman, that you leave open the question for 

the courts at least to consider, if you really have a final decision 

by an ALJ, if there really is some other entity administratively 

that could still undo what was done by the ALJ, so I think you are 

going to run into some real issues about whether this is truly a 

final decision if you have this quality assurance detour. 

Commissioner BARNHART. I appreciate what you are saying. 

The role of the oversight panel was actually to render the final decision and make it actually, that would be the final decision of the 

agency in the case where they decided based on the quality review 

that the case needed to be decided differently. To the point about 

which cases would be reviewed, let me say that was one area that 

we were looking at because I really have solicited comments from 

everyone I have talked to about maybe what we should do is review 

all the cases that go through, that go through serious—— 

Mr. BECERRA. You have an Appeals Council. 

28 

Commissioner BARNHART. Seriously, review all cases that go 

through with a quality review, and then only the ones where the 

quality reviewers see it differently than the ALJs saw it, those go 

to the oversight panel, as opposed to doing a sample of cases which 

then does not ensure that everybody is treated the same. So, I appreciate the comment—— 

Mr. BECERRA. Believe me, everyone is going to want to go 

through the quality review before they have to head to district 

court, which in essence means you have some type of administrative review before you go to the courts. Thank you, Mr. Chairman, 

for being very gracious. 

Chairman SHAW. You are most welcome. Mrs. Johnson? 

Mrs. JOHNSON. Thank you very much, and welcome, Commissioner Barnhart. First of all, I reread your testimony from last year 

in preparation for this hearing, and it really is impressive the degree to which you are really looking at the nitty-gritty of how government has worked in the past and trying to bring it into the 

modern era. It will certainly improve the quality of service for our 

disabled people, but in the end it will improve the quality of services as well. I was curious about your interest in having the reviewers in your central offices take over the role that currently the 

State DDSs are playing. They apparently are doing about 20 percent of the reviews of the quick decision cases now. 

Why can’t they do most of the quick decision cases? One of the 

things that I think was really marvelous about your proposal was 

this categorization of quick decision cases. Nothing has been more 

anguishing to my caseworkers than in an ALJ case or a child with 

cancer or clearly something that is an open-and-shut case. Why 

can’t those go to the State reviewers? Why wouldn’t that be faster, 

and why wouldn’t it save us money? 

Commissioner BARNHART. I appreciate your comments, Mrs. 

Johnson. Perhaps I should back up and say my intent in moving 

the quick decision out of the DDS in the new approach was to take 

a workload away from the DDSs but to leave the resources the 

DDSs currently have in the DDSs, because resources are an ongoing concern, particularly with the increase in disability claims that 

we have seen in recent years, and it is a trend that continues this 

year as we are getting about 100,000 to 200,000 more claims than 

we had originally anticipated. 

So, the idea was if we pull the quick decision workload out, the 

DDSs where our more experienced and trained workers are could 

focus on the more difficult cases. I recognize, of course, in doing 

that, therefore, the allowance rate for DDSs would go down because the easier cases, the obvious cases would be done up front, 

and for that reason was going to combine the quick decision allowance rate with the DDS allowance rate so that it would not appear 

to the people in a given State that all of a sudden the DDS was 

denying a larger number of people. 

This is an issue that I have heard a lot from the NCDDD, as well 

as NADE, and one of the things I am looking at is having the units 

in the DDS do the quick decision. I will say this: in my discussions 

with those organizations and their leadership, I feel very strongly 

if we decide to go that route, it needs to be a separate quick decision unit in the DDS, not that each DDS worker can work some 

29 

quick decisions cases, because I feel very strongly that the focus of 

quick decision workers needs to be the quick decisions. The idea is 

on the outside it would take 20 days for these decisions. Not an average of 20 days but absolutely on the outside, and so I am discussing some of these possible modifications within individuals 

from those organizations. 

Mrs. JOHNSON. Thank you very much. I do think the issue of 

workload is terribly important, and there will be some areas in 

which we can get resources into from our end more effectively than 

other functions possibly. I do appreciate your continued focus on 

what is going to be best for the disabled person. Thank you very 

much. I appreciate your being here today. 

Commissioner BARNHART. Thank you. 

Chairman SHAW. Mr. Pomeroy? 

Mr. POMEROY. Thank you, Mr. Chairman. Madam Commissioner, I want to join the comments made by other panel Members 

about the acknowledgment of your great work. For an agency head, 

especially an agency whose work is so critically linked to so many 

Americans all across the country, throwing yourself into these 

management challenges with the competence you have demonstrated has really been something to observe. 

Commissioner BARNHART. Thank you very much. 

Mr. POMEROY. I commend you for it. I want to specifically acknowledge a couple things and ask you about another thing. On 

telecommunication, I appreciate your expanding the disability application process to include being able to relay through videoconference over the telephone critically needed information without 

requiring people in rural areas to come vast distances. I believe 

these physical impediments to bringing forward an application 

sometimes discouraged people from pursuing that which they ought 

to and that which they need to. It was a telling demonstration in 

Dickinson, North Dakota, that you and I were able to observe on 

that point. 

Commissioner BARNHART. Right. 

Mr. POMEROY. Well done. Very important to rural America. 

Secondly, and feel free, I think, to elaborate on the eDIB renovation. I was not fully appreciative of the delays caused by physical 

management of records in the disability process until I had a 

chance to focus on it in a little more detail. Lost records, shipping 

records back and forth, misplaced files, all of these have, I believe, 

wreaked havoc on any untold numbers of claimants if their file gets 

lost or a critical piece of it gets lost. I think having it all move to 

an electronic format is going to really do some good there, some superb good there, and I am excited about it. 

The last thing I would ask, and then I would like you to comment, but I want to be able to explore this third one most fully, 

and that is how you are coming on these ALJ judges. I was 

alarmed to hear that the pending court challenge had basically frozen everything in place on ALJs and your backlog was in part you 

did not have the numbers of ALJs that you needed to do that. You 

had a plan for bringing a number on board, but that did require 

the Office of Personnel Management (OPM) to also fully cooperate 

and execute their end of the hiring process on ALJs. It is frustrating to not be able to control that piece of the effort to get this 

30 

area staffed up, and I am interested in hearing from you in terms 

of how things are coming between SSA and OPM in getting us to 

the numbers of ALJs that we need. Thank you, and, again, it is a 

pleasure working with you. You are doing a great job. 

Commissioner BARNHART. Thank you very much for your kind 

comments, Mr. Pomeroy, and I just want to say I really enjoyed my 

trip to North Dakota. It is quite something to visit a largely rural 

State like that, and with an expert on the State pointing out the 

specific challenges that individuals in your home State face in applying for our benefits and other programs. With respect to video 

hearings, I simply want to say I share your view. I think this is 

such an important new tool for us. We have 120 video sites up and 

operating across the counties, and we have a plan to move them 

out to all of our major hearing officers. 

Just as a point of information, we actually conducted in the 

month of August, 953 video hearings, and the time difference for 

a video hearing, and this is what is so important and one of the 

points you were making. The time difference is this: The processing 

time for non-video hearings was 518 days. For video hearings, it 

was 352 days. So, we are talking about making significant gains, 

and that was just for the month of August. When I have annual 

data, I will be happy to provide it to you and the Subcommittee for 

your review. 

In terms of eDIB, as I mentioned, we are right on schedule with 

eDIB. We said we were going to start in January of 2004, and we 

started in January of 2004. The State of Mississippi and the State 

of So,uth Carolina are both fully rolled out with eDIB. I want to 

commend again all the States in Region 4, and particularly the 

State of Florida who, despite the hurricane, the many hurricanes, 

Mr. Chairman, we were talking about before the hearing, went 

ahead and rolled out eDIB on September 20th and did not ask for 

an extension. I think that speaks to the confidence that the State 

DDSs have in this system. 

We have run into issues. We have had glitches. You do with any 

new computer program, obviously any automated system, and we 

are fixing them. We are doing the same thing as we move on to 

the OHA. We have just a few OHA sites, hearing offices up able 

to use the electronic folder at this point, really at a pilot stage, but 

with our new case processing management system (CPMS), it has 

had some stumbles and trip-ups, too, since it was rolled out earlier 

this year, but we are making changes. In fact, several new applications to fix some of the issues that have been identified by the 

users are going to into effect this week. So, I think we are well on 

track with eDIB, and we already have over 1 million documents 

stored in our eDIB system. 

Just to refresh everyone’s memory, when this is up and fully 

operational, it will be the largest repository of electronic medical 

evidence in the entire world. I think a very impressive accomplishment for us. We will eliminate the 100 days that we spend locating 

cases and reconstructing files, as you pointed out, or the 60 days 

that we spend mailing cases back and forth from one area to another. Simply, at the push of a button, the case can come up and 

between viewed from anywhere in the country where people have 

access. So, I am very, very happy, and I am also happy to say that 

31 

we are expecting a good rate of return on it, a savings of $1.3 billion for an investment of $800 million, and we have received full 

funding for the eDIB up to this point. The President has requested 

full funding and a 6.8-percent increase for SSA. I wanted to do a 

plug for our budget request. My staff would kill me if I left here, 

my budget staff, without doing that. We have always appreciated 

the support we have gotten from this Committee, and without the 

proper resources, it is just impossible to make the gains and strides 

we want to make. 

Finally, with respect to ALJs, you are absolutely right, we had 

a real problem. Part of our backlog is due to the fact we were not 

able to hire ALJs for several years to do the cases. That has been 

decided. We actually, I am pleased to say, hired 102 ALJs this 

year, and we are looking to hire the same number next year, assuming that we have adequate resources to do that. The issue at 

this point is, and you asked about the status of the new register 

in OPM. We have been advised by OPM that they need to redo the 

examination and they need to pilot it, and, therefore, we cannot expect to have a brandnew register until the end of calendar year 

2005, which means that if the budget issues gets resolved, appropriation bills get passed, we get sufficient resources to continue to 

hire ALJs, we will be in the situation of using a register that closed 

actually, I believe, in 1999 but really there are people on it from 

as far as 1993. The issue there for us is this: there could be individuals who maybe did not score as high for placement on the register 

in 1993 but now, 11 years later, have much more significant experience, that would have relevant experience that would have placed 

them much farther in a current register. So, that is the situation. 

Mr. POMEROY. Will you be able to use that old list then while 

they are developing the new list? 

Commissioner BARNHART. We will be able to use the old list. 

The issue as we have gone pretty far down the register at this 

point, as you can imagine, because we are not the only Federal 

agency, obviously, that hires ALJs, although we are sort of the big 

gorilla on the block; in the sense that we have over 1,000 ALJs, I 

am pleased to say, 1,075 ALJs on duty now. We believe we need 

to have around 1,300. I would be happy, because of the Committee’s longstanding interest, and Mr. Brady also was very active in 

this issue a few years ago for us, I would be happy to submit a list 

of where all the ALJs were hired, because many of them were hired 

in States that the Committee Members are from. 

[The information follows:] 

ALJ Hires 2004 

Region & HO Report 

June 1, 2004 

Report 

August 30, 2004 Total 

Region I: No New Hires 

Region II 

Bronx, NY 1 1 2 

Buffalo, NY 1 0 1 

32 

ALJ Hires 2004—Continued 

Region & HO Report 

June 1, 2004 

Report 

August 30, 2004 Total 

Mayaguez, PR 0 1 1 

Ponce, PR 0 1 1 

Queens, NY 1 0 1 

San Juan, PR 1 1 2 

Syracuse, NY 1 1 2 

Region III 

Johnstown, PA 0 2 2 

Morgantown, WV 0 1 1 

Region IV 

Atlanta, GA 0 1 1 

Birmingham, AL 0 1 1 

Charlotte, NC 0 1 1 

Florence, AL 3 0 3 

Fort Lauderdale, FL 3 0 3 

Hattiesburg, MS 0 1 1 

Jackson, MS 1 0 1 

Macon, GA 2 0 2 

Miami, FL 3 0 3 

Montgomery, AL 0 3 3 

Orlando, FL 2 0 2 

Savannah, GA 0 1 1 

Tampa, FL 4 0 4 

Tupelo, MS 0 4 4 

Region V 

Cincinnati, OH 0 1 1 

Cleveland OH 3 3 6 

Columbus, OH 0 1 1 

Detroit, MI 4 0 4 

Evansville, IN 2 0 2 

Fort Wayne, IN 2 0 2 

Grand Rapids, MI 3 3 6 

Indianapolis, IN 0 1 1 

33 

ALJ Hires 2004—Continued 

Region & HO Report 

June 1, 2004 

Report 

August 30, 2004 Total 

Lansing, MI 0 2 2 

Milwaukee, WI 2 0 2 

Minneapolis, MN 0 2 2 

Peoria, IL 0 1 1 

Region VI 

Alexandria, LA 3 0 3 

Dallas N, TX 0 1 1 

Houston DT, TX 0 2 2 

Little Rock, AR 3 0 3 

Metairie, LA 2 0 2 

Shreveport, LA 0 2 2 

Tulsa, OK 0 2 2 

Region VII 

Creve Coeur, MO 1 1 2 

Kansas City, KS 2 0 2 

Omaha, NE 0 1 1 

St. Louis, MO 1 0 1 

W. Des Moines, IA 1 0 1 

Region VIII 

Billings, MT 0 3 3 

Region IX 

Los Angeles DT, CA 0 2 2 

Region X 

Spokane, WA 0 2 2 

Total 52 50 102 

Chairman SHAW. Mr. Ryan? 

Mr. RYAN. Thank you. I actually had two questions. One was 

about the ALJs and the backlog, so I think you have covered that 

pretty well. First of all, thank you for the streamlining proposal. 

I think it is overdue, and I am very glad that you are implementing 

it. I just had a quick question. You may not be prepared to answer 

it. I just wanted to get an update on the Chicago-Milwaukee situation and the cleanup operation that is going on there. If you are 

not prepared, if you could just send me something in writing, that 

would be great. 

34 

Commissioner BARNHART. I would be happy to submit, provide 

information in writing to you, a complete update of what is going 

on. I can tell you some information that you may be interested in, 

in terms of the workload and what is going on. 

[The information follows:] 

Chicago File Assembly 

October 2004 

The total number of cases identified for file assembly is 1,375 (this number includes cases that were transferred into the hearing office (HO). 

• 1,180 cases, or 86% have been decided (733 or 62% are favorable decisions and 

279 or 24% are unfavorable, this number does not include dismissals or remands). 

• 195 cases or 14% are at the various processing levels awaiting a decision. 

Issue 

A contract file assembly unit was started in the Chicago (So,uth) HO in November 

2002, working cases from various hearing offices in the Chicago Region. In early 

May 2003, HO management discovered that significant amounts of material had 

been removed from the files by contract workers, allegedly because it duplicated material already in the file. Upon review, it was determined the material was original 

evidence, not duplicate documents. 

On May 9 and May 20, 2003, respectively, both contractors, Training So,lutions 

and Worldwide Industries, were advised that SSA would not use their services until 

it completed a full investigation of the situation. On July 23, 2003, SSA subsequently terminated both contracts. 

The agency decided to notify all 1,375 claimants affected by the actions of these 

contractors. The notices advised claimants that their file may be incomplete and discussed their remedies, including: examining their file, having a new hearing, and 

having a new decision. 

Notification Process 

• Region V (Chicago) completed initial notification to all 1,375 claimants. 

• Region V sent a second notice to all claimants who failed to respond to the first 

notice. 

• In cases where the HO did not hear from the claimant after two notices, a closeout letter was issued. The closeout letter is required before an ALJ can issue 

an adverse action (i.e., denial or dismissal), thus ensuring that a claimant has 

been notified three times. 

• The Appeals Council was alerted of those cases in which an adverse decision 

was released by the HO before all notices were sent to the claimants. 

• The Council issued a total of 101 remand orders on those cases. Most remands 

(87) were issued before December 31, 2003; the remaining (14) were issued by 

February 13, 2004. 

• There are no outstanding cases pending at the Appeals Council level. 

Claimant Allegations of Missing Evidence 

Two claimants alleged missing evidence upon review of their files. The HO is obtaining the missing evidence in both cases. 

More recently, one additional claimant alleged possible missing evidence. The allegation was determined to be unfounded, however, as the identified treating source 

had no record or report of any evidence that it had submitted to OHA. 

Conclusion 

The OHA Chicago Region took all the necessary steps to preserve the claimants’ 

due process rights and performed the required notification process in every affected 

case. We are confident the matter has been completely and positively resolved to 

address the issues raised by all concerned. In conclusion, no claimant has been adversely affected by the events at the Chicago File Assembly Unit. 

I wish I could report to you that the situation had eased incredibly in Milwaukee in terms of the backlog. Unfortunately, it has 

35 

not. We received 5,299 hearing requests this fiscal year to date. 

This is as of August. I will have fiscal year data in approximately 

another 15 days. We have actually disposed of 3,635 hearings—— 

Mr. RYAN. Three thousand what? 

Commissioner BARNHART. It was 3,635 of those hearings. The 

processing time has averaged 413 days. That is an improvement 

from last year. It was 438 days. 

Mr. RYAN. Are some of the new ALJs going to come to this area? 

Commissioner BARNHART. Excuse me, that is an improvement 

from June. I am looking at June, July, and August. It is an improvement from June. It was 438, 464 in July, but fiscal year to 

date, 413. So, the average is creeping up on the processing. The 

pending per ALJ, we are at 843 cases per ALJ, and the total pending in the office is 8,435. 

Mr. RYAN. Are some of these new ALJs coming to Milwaukee? 

Commissioner BARNHART. Pardon? 

Mr. RYAN. Are you sending some of your new ALJs to this region? 

Commissioner BARNHART. Yes. 

Mr. RYAN. Milwaukee and Chicago. 

Commissioner BARNHART. Let me check and see. I can tell you 

where they are going. I have got a list right here. Yes, two of the 

judges are going to Milwaukee. 

Mr. RYAN. The people who had their identities compromised, I 

will not go through the problem we had, but the problem with the 

contract employees with respect to the records that got compromised in the Chicago office, is that all but settled now? 

Commissioner BARNHART. It is absolutely settled. 

Mr. RYAN. I know everybody got a notice and everybody got a 

chance to redo their claims. Where are we in that process? 

Commissioner BARNHART. To my knowledge, everything has 

been resolved, and no one had any adverse effect as a result of 

that. Actually, as of today, that contracting that we were doing, 

which simply was to move cases because with the onset of hearing 

process initiative in 2001, it really stalled our hearing process in 

the hearing offices, and we just needed to prepare cases. Those contracts, the remaining ones, terminate today, and the approach that 

I am using from this point out is we have five cadres basically, special regional units, that are going to be providing that service of 

case pulling that was previously done by contractors. 

Mr. RYAN. Like Earl said, and others, I think the paperless, the 

electronic file is really the big answer here, but I look forward, and 

if you could just give me more details, if you have them, with respect to the Milwaukee thing, we are very concerned about the 

backlog. I am sure you get this from other regions as well, but I 

am glad you are sending some ALJs to Milwaukee because, this is 

our caseworkers’ biggest nightmare, and I am just pleased with the 

reforms, but hopefully we can clean up this backlog as quickly as 

possible. 

Commissioner BARNHART. I appreciate your concern, and eliminating the backlog in disability has been one of my top priorities 

since I came into this job, and the service delivery budget that I 

have crafted the last 2 years, and will be submitting again to OMB 

this year hold out as the goal the elimination of the backlogs. UnVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00039 Fmt 6633 Sfmt 6602 E:\HR\OC\99682A.XXX 99682A
36 

fortunately, despite the fact that the last 2 years we did not get 

the budget request that we asked for as an agency, because of productivity enhancements, the fact that, as Mr. Cardin pointed out 

and as he has seen firsthand many times at our Baltimore headquarters, the staff works very hard in headquarters as well as out 

across the country, we have managed to keep backlogs from growing greater than they have, butt they are still growing. The first 

step in eliminating backlogs is being able to have enough trained, 

experienced people on staff to be able to do the work. Of course we 

had the technical stumbling block of not being able to hire ALJs, 

but then we have the resource limitation we may face next year. 

Mr. RYAN. All right. Thanks. 

Chairman SHAW. Thank you, Ms. Barnhart. I couldn’t help but 

notice the generosity with which my colleagues on the other side 

of the aisle were handing out accolades to you. They are not known 

for such generosity when it comes to—— 

Mr. CARDIN. I beg your pardon. 

[Laughter.] 

Chairman SHAW. So, I think that must be, that is probably the 

sincerest form of compliments that you could possibly get here in 

Washington. Obviously you are doing a great job, and we are very 

grateful for the service that you are performing, and particularly, 

in this area of moving this caseload and bringing the SSA into this 

century. I very much appreciate it. Did you want to, I have not offended you? 

Mr. CARDIN. No, not at all. We always give praise when praise 

is due, and, of course, I think Commissioner Barnhart, because of 

her strong presence in the Baltimore region, there is good reason 

as to why she is doing such a great job. 

[Laughter.] 

Commissioner BARNHART. Thank you very much. 

Chairman SHAW. Thank you, Commissioner. We really appreciate it. At this particular point, I have a letter from the Honorable 

Frederick Stamp, who is the Chair of the Committee on FederalState Jurisdiction of the JCUS, and without objection, I would like 

to place it in the record. Mr. Herger? 

[The information was previously published:] 

Chairman HERGER. Thank you. Again, we thank you very 

much, Commissioner Barnhart. 

Commissioner BARNHART. Thank you. 

Chairman HERGER. With that, we will call up our next panel: 

the Honorable Hal Daub, Chairman of the SSAB, former Member 

of the Committee on Ways and Means; Ron Buffaloe, President of 

the National Council of S,cial Security Management Associations 

(NCSSMA); Sheila Everett, President of NCDDD; Martha Marshall, President of NADE; and Dr. C. Richard Dann, who is representing the Union of American Physicians and Dentists (UAPD), 

of the American Federation of State, County, and Municipal Employees (AFSCME), and is from my home State of California. 

Chairman Daub to testify. 

37 

STATEMENT OF THE HONORABLE HAL DAUB, CHAIRMAN, 

SOCIAL SECURITY ADVISORY BOARD 

Mr. DAUB. Chairman Shaw, Chairman Herger, thank you very 

much for the opportunity to be with you, Mr. Cardin, Members of 

the Committee. I appreciate the opportunity to discuss the Commissioner’s proposed reforms of the Social Security disability process. The independent SSAB has carefully studied the disability 

process over the past several years. We have made many recommendations for fundamental change. We congratulate our 

former colleague, who is now the Commissioner, for boldly tackling 

this problem. We applaud her and you for making sure that the 

views of all affected parties are heard and considered. 

Today I want to focus on the hearing part of the overall process. 

That is where the greatest delays and most serious backlogs occur. 

Some of the Commissioner’s changes will expedite the hearings 

process. A consultant study that the Advisory board commissioned 

identified inadequate development of the case record as a major 

reason why claims bog down. The RO position should assure that 

cases that go on to a hearing are fully developed and include a 

clear decision rationale. The RO step should result in fewer cases 

needing to go to the hearings level. It is crucial that the ROs be 

carefully selected and well trained. Other changes, like closing the 

record after the hearing and eliminating the additional step of the 

Appeals Council, may also serve to reduce timelines by sharpening 

the focus on the hearing itself as the final administrative step. Due 

process is much more assured as that RO, under the current recommendation, will be an attorney, and on our board there is strong 

bipartisan support to eliminate the Appeals Council. I’m looking at 

how to move the case and assure quality from the beginning to the 

end, the approach is take more time in the beginning, which should 

save a lot of time in the end. 

I would like to make two important cautions, however. First, the 

proposed reforms will help in the long run, but they are still in the 

planning stage. Second, although the proposed changes may ultimately reduce the appeals workload, the appeals process will remain an important element of the system. The Commissioner and 

the Congress need to continue searching for both short-run and 

long-run improvements in that process. 

As of June 30th of this year, there were 612,000 people waiting 

for hearing decisions on their Social Security claims; over 170,000 

of them have been waiting for more than 1 year. The agency has 

become more productive, but the workloads are overwhelming. 

Pending levels have been rising now for 5 years. Just during the 

recent fiscal year, there has been a 43-percent increase in cases 

that have been in the hearing system for more than a year. If these 

backlogs continue to grow, they will make it very hard for the proposed changes to be fully effective. 

I would urge both you and the agency to look carefully at the 

hearings process to find ways to make it operate more efficiently. 

The board has spoken with many ALJs, chief ALJs, and employees 

at the management and staff levels. We have heard many suggestions for improvements. I will mention just a few that are much 

more fully detailed in my longer statement, which I have submitted 

for the record, and I will repeat them here just in bullet points: the 

38 

absence of effective rules of procedure; the need for more extensive 

training of judges; the need to improve the policy base and to 

rethink some of the rules and regulations that many judges believe 

undercut their ability to deliver supportable decisions; and, last, 

the need for more effective management tools to encourage performance and accountability. 

Also, the Commissioner quite properly designed a set of proposals that she could implement administratively. I hope, however, 

that you will look for ways that you might legislatively support this 

improved process. The board has, for example, suggested that you 

examine the possibility of establishing a Social Security Court, and 

we have also suggested looking at sharpening the hearings process 

by including an individual to represent the agency position. 

I know that this hearing is focusing on the procedural changes 

that the Commissioner is recommending. My last point to you: that 

is an important and urgent need, and she is to be commended. 

However, the Advisory board also believes that the time has come 

for serious consideration of whether the definition of disability is 

consistent with our National goals for the disabled. We have issued 

a report on this and are continuing to look at it, and we hope that 

your Subcommittees will also begin to seriously examine this issue. 

Thank you very much. 

[The prepared statement of Mr. Daub follows:] 

Statement of The Honorable Hal Daub, Chairman, Social Security Advisory 

Board 

Chairman Shaw, Chairman Herger, Mr. Matsui, Mr. Cardin, Members of the Subcommittees. I appreciate this opportunity to discuss the Commissioner’s proposed reforms of the Social Security Disability Process. 

The Social Security Advisory Board has carefully studied the disability process 

over the past several years. We have made many recommendations for fundamental 

change. We congratulate the Commissioner for boldly tackling this problem. We applaud her and you for making sure that the views of all affected parties are heard 

and considered. 

The Board has always emphasized that it is important to look at the disability 

process as a whole, because changes in one part affect the other parts of the process. 

Today, however, I want to focus my comments on the hearings part of the overall 

process, because that is where the greatest delays and the most serious backlogs 

occur. 

Some of the Commissioner’s proposed changes will expedite the hearings process. 

I would begin with two important cautions, however. First, the proposed reforms 

will help in the long run, but they are still in the planning stage. Once a final process is decided upon, the way in which they are implemented becomes crucial. Second, although the proposed changes may ultimately reduce the appeals workload, 

the appeals process will remain an important part of the system. The Commissioner 

and Congress need to continue searching for both short-run and long-run improvements to the process. 

One aspect of the Commissioner’s approach will improve the quality of the case 

record that makes its way to the hearing process. A consultant study commissioned 

by the Board identified the quality of the case record as the key to fair and accurate 

disability determinations. A poorly developed claim at one stage not only affects the 

quality of the decision at that level but also burdens the process at the next level. 

Developing a high quality record requires the assessment of complex medical and 

vocational information. Unfortunately, workload pressures at the State agency level 

sometimes lead to decisions being made based on a record that is less than complete, and the record that makes its way to the Office of Hearings and Appeals is 

sometimes lacking in evidence and in rationale for the decision that was made. 

When claims are appealed to the hearings level, the hearing office develops the 

record independently and without assuming that the State agency had all the information available. The hearing office may obtain existing medical reports from docVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00042 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
39 

tors or hospitals and can order consultative examinations. This need for case development is one of the reasons cases get bogged down at that level. 

The reviewing official (RO) position that the Commissioner has proposed has the 

potential to expedite the hearing process by ensuring that cases that go to a hearing 

are fully developed and include a clear decision rationale. The RO is also authorized 

to issue allowance decisions, which would both expedite decisions and reduce workload pressures at the hearings level. For claims that are not allowed, the ROs would 

prepare either a recommended disallowance (if they think the evidence indicates 

that the claimant is ineligible) or a pre-hearing report (if they think the record does 

not definitively show that the claimant is ineligible but is inadequate to establish 

that the claimant is eligible). The pre-hearing report would outline what evidence 

is needed to establish eligibility. If a case with a recommended disallowance goes 

to a hearing and is allowed, the administrative law judge (ALJ) would describe in 

the written opinion the basis for rejecting the recommended disallowance. If a case 

with a pre-hearing report goes to a hearing and is allowed, the ALJ would describe 

the evidence gathered at that stage to address the points defined in the pre-hearing 

report. 

The reviewing official is clearly an important innovation that has potential for significantly improving the process. It is therefore important that the new position be 

implemented thoughtfully. The ROs should be carefully selected and well trained. 

Expectations for the new ROs should be well defined and reasonable to ensure that 

they have enough time to do a thorough job. And if they are selected from other 

parts of the agency, it will become important to backfill those positions carefully. 

Reduced hearing backlogs are another condition for the success of the RO position. 

If the administrative law judge gets a well-developed case with a clear decision rationale, the hearing process will go more smoothly and more quickly. But if cases 

coming from the RO sit in a hearing office backlog for months before being heard, 

the case development may no longer be current and the rationale may no longer fit 

the facts. If the very large current backlogs in the hearing offices are not dealt with 

or if delays at the hearings level continue to be lengthy, they will make it very hard 

for the new process to be fully effective. 

The number of cases pending at the hearings level has been rising for the last 

five years. As of June 30 of this year, there were 612 thousand people waiting for 

hearing decisions on their claims. Over 170 thousand of them have been waiting for 

over a year. Pending levels are now even higher than they were when the number 

of disability claims spiked in the early 1990s. 

There are reasons for this that you are familiar with. The Azdell court case prevented the agency from replenishing its ranks of ALJs as judges retired or left for 

other reasons. The Hearing Process Initiative that was implemented in 2000 hurt 

productivity for a time and added to the backlogs. The Office of Hearings and Appeals (OHA) has become more productive in recent years, but the workload is overwhelming. OHA has been disposing of more hearings cases for the last two years, 

but receipts have also been climbing. 


Insert offset folio 99682a.001
40 

Just during the current fiscal year, there has been a 43 percent increase in cases 

that have been in the hearing system for more than a year. While the new process 

changes may help in the future, there is also a need to deal with these current large 

and growing backlogs. Moreover, the impact of the proposed changes to the disability process may be undermined if they have to be implemented in the context 

of huge backlogs. 

So, in addition to the Commissioner’s proposals, I would urge both you and the 

agency to look carefully at the hearings process to find ways to make it operate 

more efficiently. The Board has conducted public hearings and has spoken with 

many managers, judges, attorneys, and other staff at hearings offices. They have 

given us many suggestions for improvements to the process. Let me give you some 

examples of the recommendations made to us: 

• Rules of procedure—Many of those we talked with have told us that the absence 

of effective rules of procedure contributes to unnecessary delays in the process. 

For example, we have heard that representatives sometimes get inadequate advance notice of hearings, and we have also heard that many hearings have to 

be postponed because of late submission of evidence. Implementing improved 

rules of procedure could make the hearing process more orderly and efficient. • Need for training—Administrative law judges receive a short introductory 

course of four to five weeks, with no required ongoing training of the kind that 

many States require of lawyers. Although much of their work deals with medical and vocational factors, the medical training they receive is far shorter than 

that of State agency disability examiners. • Improved policy infrastructure—Clearer and more objective formulation of agency policy has great potential to facilitate a quicker more efficient process. Much 

of the workload which now burdens the hearings process reflects an unnecessarily complex body of rules and regulations that are subject to differences of 

interpretation at different levels and account for much of the churning of cases 

through appeals and remands. We have frequently heard, for example, that the 

Social Security rulings put an unreasonable burden on the hearings process to 

have a written decision which explicitly comments on each item of evidence. In 

fact, we have heard from agency officials that these rules are the cause of many 

remands of cases that were, in fact, decided correctly. • Management tools—Office managers and supervisors need better tools to evaluate and motivate their staffs, and chief judges need support in motivating their 

colleagues. Claimants are entitled to fair decisions, but they also are entitled 

to timely decisions. Those goals are not incompatible. 

This hearing is focused on the Commissioner’s proposals, all of which can be implemented administratively. I hope, however, that you would consider ways in which 

you might support an improved process legislatively. The Board has, for example, 

suggested that you reexamine the possibility of establishing a Social Security Court. 

Concerns about national uniformity in policy and procedures have led some to question the current arrangement for review by Federal courts. Allowance rates in DisVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00044 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A

Insert offset folio 99682a.002
41 

trict Courts have varied widely, and courts frequently issue decisions that vary from 

district to district and from circuit to circuit, resulting in the application of different 

disability policy in different parts of the country. Over the history of the disability 

program, the courts have played a major role in defining the standards for disability. Whether the existing arrangements for judicial review represent the best 

public policy is a question that deserves careful study. 

The Board has also suggested another look at whether there should be a government representative when the agency’s prior decision is being reviewed at the hearings level. One reason frequently cited for the backlogs in the appeals process is 

that the administrative law judge is required to assume responsibility not only for 

decision making but also for perfecting both the agency’s and the claimant’s cases. 

Having an agency representative participate in hearings could help to clarify issues 

and introduce greater consistency and accountability. 

Finally, looking at the question of disability even more widely, the Advisory Board 

also believes that the time has come for serious consideration of whether the definition of disability in the Social Security Act is consistent with our national goals for 

the disabled. We issued a report on this subject last October and hosted a forum 

on the definition of disability in April. This report, The Social Security Definition 

of Disability: Is It Consistent with a National Goal of Supporting Maximum Self 

Sufficiency?, is available on the Board’s website, www.ssab.gov. The papers delivered at the April Forum are also on the website. We hope to foster a continued discussion of the topic. Much has changed in the half-century since the disability program began. Medical and rehabilitative knowledge and technology have made great 

strides in that time. The nature of work and the workforce has changed. And attitudes about disability and work have also been revised. It is time to consider whether the old definition still fits. As an adjunct to the process changes, SSA will be piloting some different approaches to disability benefits that will encourage work, and 

we look forward to discussing their outcomes with you in the future. 

f 

Chairman HERGER. Thank you, Mr. Daub. Mr. Buffaloe to testify. 

STATEMENT OF RONALD E. BUFFALOE, PRESIDENT, NATIONAL COUNCIL OF SOCIAL SECURITY MANAGEMENT ASSOCIATIONS, SALISBURY, NORTH CAROLINA 

Mr. BUFFALOE. Chairmen Shaw and Herger, Ranking Minority 

Member Cardin, and Members of the Subcommittees, my name is 

Ron Buffaloe, and I am the Social Security District Manager in 

Salisbury, North Carolina. I am here today as President of the 

NCSSMA. Our organization is comprised of more than 3,200 managers and supervisors who work in SSA’s field offices and teleservice centers in more than 1,300 locations across the country. 

Thank you for giving me the opportunity to come before you today 

to talk about the Commissioner’s proposal to improve the disability 

determination process and to give our association’s thoughts about 

her proposal. 

The NCSSMA applauds Commissioner Barnhart for proposing a 

new approach to disability determinations. As an organization, we 

hold great hope that her proposed changes will shorten decision 

times and pay benefits faster to people who are obviously disabled. 

While our written testimony reviews our opinions on all the various 

aspects of the Commissioner’s proposals, I am going to spend most 

of my time today on the part that most directly impacts field offices. We note that the Commissioner’s proposal recommends as its 

first element, and I quote, ‘‘a quick decision step at the very earliest stages of the claims process for people who are obviously disabled.’’ This is not only a great idea, it has been around for a long 

time. The presumptive disability process in the SSI Program is esVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00045 Fmt 6633 Sfmt 6602 E:\HR\OC\99682A.XXX 99682A
42 

sentially a quick decision approach. We think these existing procedures need to be refined and broadened. 

We strongly recommend that claims representatives in field offices be empowered to make or recommend the quick decisions envisioned in the Commissioner’s proposal and that those cases not 

meeting the quick decision criteria be moved to the State DDSs, 

without an intermediate step. We also recommend that claims representatives be given other functions such as taking the first action 

to secure medical evidence and claims being forwarded to the DDS 

for development and medical decision. This is obviously predicated 

on appropriate medical training being given to these field office employees. 

The quick decision step is tailor-made for field offices. Many impairments meet the medical listings, and can be allowed with minimal medical evidence. This evidence can be obtained via telephone 

and fax, and the efficiencies inherent in local field office staff dealing with local treating sources are obvious. We also feel this arrangement is compatible with the Commissioner’s desire to expedite the decision process for those individuals who are obviously 

disabled. We feel this approach will serve to streamline and expedite the disability process as a whole. 

Well-trained claims representatives with a greater knowledge of 

the disability process would be able to provide DDSs with a higherquality product, even in those cases where a quick decision is not 

possible. Evidence would be requested earlier in the process, allowing DDS examiners to make disability decisions in a timelier manner. So,me additional resources may be necessary to implement 

this recommendation. 

As to the other parts of the Commissioner’s proposal, we believe 

RERUs should be located in selected DDSs, not SSA regional offices. They would be organized in the same manner envisioned by 

the Commissioner’s proposal and would perform the same functions. Additional resources should be allocated to the DDSs involved to compensate for this added responsibility. We recommend 

and endorse implementation of the in-line quality review process as 

well as the centralized quality control function envisioned by the 

Commissioner’s proposal. We believe the DDS reconsideration step 

should be eliminated. We believe the requirement that the RO be 

an attorney should be eliminated. We believe the record should be 

closed after the ALJ decision and that the Appeals Council should 

be eliminated. 

Finally, we believe all affected components should be staffed appropriately. Both DDSs and field offices will need additional staff 

if this new process is to work. The NCSSMA is committed to working with all interested parties in making the Commissioner’s vision 

of a new and improved disability process a reality. We are hopeful 

our comments will be useful in streamlining this process. Again, 

thank you for this opportunity to appear before the Committee. I 

would welcome any questions you may have. 

[The prepared statement of Mr. Buffaloe follows:] 

Statement of Ronald E. Buffaloe, President, National Association of Social 

Security Management Associations, Salisbury, North Carolina 

Chairmen Shaw and Herger, Ranking Minority Members Matsui and Cardin, and 

Members of the Committee, my name is Ron Buffaloe and I am here today repVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00046 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
43 

resenting the National Council of Social Security Management Associations 

(NCSSMA). I am also the manager of the Social Security District Office in Salisbury, North Carolina and have worked for the Social Security Administration for 31 

years. On behalf of our membership, I am both pleased and honored that NCSSMA 

was selected to testify at this joint hearing on the Commissioner of Social Security’s 

proposal to improve the disability determination process. 

NCSSMA is a membership organization of more than 3200 Social Security Administration managers and supervisors who work in SSA’s more than 1300 field offices 

and 36 teleservice centers in local communities throughout the nation. It is most 

often our members with whom your staffs work to resolve issues for your constituents relative to Social Security retirement benefits, disability benefits or Supplemental Security Income. Since our organization was founded 34 years ago, NCSSMA 

has been a strong advocate of locally delivered services nationwide to meet the variety of needs of beneficiaries, claimants and the general public. We represent the essence of ‘‘citizen centered’’ government. We consider our top priority to be a 

strong and stable Social Security Administration that delivers quality service to our 

clients—your constituents. 

The Challenge 

SSA’s field offices must spend a great deal of their time and resources on the disability program. Approximately two-thirds of SSA’s administrative budget will be 

spent on the work generated by the disability program. We know that this workload 

will only continue to grow as the baby boom generation moves into their ‘‘disability 

prone’’ years. Field offices deal directly with disability applicants and recipients; 

they take disability claims, provide information to claimants and their representatives, initiate continuing disability reviews and provide the public and third parties 

with information about the disability program. In dealing directly with disability 

claimants and recipients, we hear their stories and see firsthand the impact of their 

impairments and our current disability determination procedures on their lives. 

The most prevalent criticism heard in field offices is about the amount of time 

it takes to get a decision. Applicants wait an average of almost 4 months from filing 

to receipt of an initial decision. The almost half a million claimants who request a 

hearing before an Administrative Law Judge (ALJ) each year can expect to wait, 

on average, over a year from the date of initial filing for a decision. 

The Commissioner’s Proposal 

NCSSMA applauds Commissioner Barnhart for proposing a new approach to disability determinations. As an organization we hold great hope that her proposed 

changes will shorten decision times and pay benefits faster to people who are obviously disabled. 

We know that processing an increasing number of disability claims is one of the 

major challenges facing the Social Security Administration. We believe it is essential that decisions be made now on how best to process this growing workload. 

NCSSMA has been actively involved in all the various projects and initiatives in 

the past to improve the disability process. NCSSMA representatives served on steering committees and workgroups in connection withvarious pilots. Because of the experience gained from the agency’s three year Disability Claims Manager Pilot, 

NCSSMA believes that there is compelling evidence of significant potential for improving the speed and quality of SSA’s initial disability determinations by modifying 

the role of the field office at the earliest point in the claims process. 

While we are receptive of and encouraged by the Commissioner’s proposal for a 

new approach to disability determination, we believe that there will be a better 

chance of improving speed and accuracy if we begin the new approach with a change 

in the role of the disability interviewer at the point the application is filed in the 

field office. 

The Commissioner’s proposal recommends as its first element a ‘‘quick decision 

step at the very earliest stages of the claims process for people who are obviously disabled.’’ This is not only a great idea, but it has also been around for 

a long time. The Presumptive Disability (PD) process in the Supplemental Security 

Income claims process is essentially a quick decision approach. To expand this concept and make it work as part of the Commissioner’s new approach the procedures 

need to be refined, broadened, and implemented in a manner that is both effective 

and takes into account the realities of the Federal-State relationship. 

We strongly recommend, therefore, that field office claims representatives be empowered to make or recommend the quick decisions envisioned 

in the Commissioner’s proposal at the field office level, and that those 

44 

cases not meeting the quick decision criteria be moved to the State Disability Determinations Services (DDSs) without an intermediate step. 

We would recommend that additional disability responsibilities be assigned to claims representatives to permit such disability decision making 

(where arrangements can be made with individual DDSs). We also recommend that they be given other functions such as taking the first action 

to secure medical evidence on claims being forwarded to the DDS for development and medical decision. This is predicated on additional appropriate medical training being given to these field office employees. 

There are many impairments that meet the medical listings and can be allowed 

with minimal medical evidence. This evidence can be obtained via telephone and fax 

and the efficiencies inherent in local field office staff dealing with local treating 

sources are obvious. The quick decision step is tailor-made for field offices. 

We feel this arrangement is compatible with the Commissioner’s desire to expedite the decision process for those individuals who are obviously disabled. We feel 

this approach will also serve to streamline and expedite the disability process as a 

whole. Well trained claims representatives, with a greater knowledge of the disability process, would be able to provide DDSs with a higher quality product even 

in those cases where a quick decision is not possible. Evidence would be requested 

earlier in the process, allowing DDS examiners to make disability decisions in a 

timelier manner. 

Regarding the Commissioner’s proposal to establish Regional Expert Review 

Units, we believe these units would be the proper place to provide expert support 

for all disability examiners. The Commissioner’s proposal indicates that ‘‘Most of 

these units would be established in SSA’s regional offices.’’ This, we believe, could 

be a deal breaker for the DDSs. We recommend that these units be established in 

individual DDSs within each region. The resources earmarked for the units planned 

for Regional Offices can be diverted to the appropriate DDSs. The medical expertise 

centralized in an individual Expert Review Unit could still be made available to decision makers at all levels. 

We understand that the Commissioner envisions that the role of the DDS will not 

diminish under her plan and in fact, anticipates that it will expand with the need 

for more vocational experts and the need to manage temporary allowances, early 

intervention and interim medical benefits. We need to point out that these factors 

could have an even greater impact on SSA’s field offices where logically the task 

of dealing directly with the claimant on these issues should reside. 

We strongly endorse the implementation of an in-line quality review process managed by the DDSs as well as the centralized quality control unit to replace the current SSA quality control system. In a joint proposal from the National Association 

of Disability Examiners (NADE) and NCSSMA entitled ‘‘The Front End of the Disability Claims Process’’, submitted to the Deputy Commissioner for Disability in December 2002, NADE and NCSSMA recommended that an in-line quality review 

process be established rather than relying exclusively on the current end-of-line review. 

We also endorse the elimination of the DDS Reconsideration step. The Commissioner’s proposal specifically indicates that the additional time required for the 

State DDS examiners to do a more complete job of documenting their initial decisions would be compensated by redirecting DDS resources freed up by the Quick Decision process. For this to be possible under our proposal to locate the Regional Expert Review Units in DDSs it is essential that commensurate additional resources 

be allocated to the DDSs. 

The Reviewing Official (RO) position and function in the Commissioner’s proposal 

is valid, logical and essential to an improved disability process. Here again, as a 

matter of selling this to the DDS community, we believe that this function does not 

require that the RO be an attorney. The Adjudicative Officer (AO) Pilot, which performed a similar role, established that this function does not require a law degree. 

We strongly endorse the Commissioner’s proposal to close the record following the 

Administrative Law Judge decision and to eliminate the Appeals Council. 

Summary 

To summarize: 

• The Commissioner’s proposal has the promise to be the basis for an improved 

SSA disability determination process. 

• The role of the SSA field office in the initial stage of the disability intake process needs to be expanded and modified by assigning additional disability responsibilities to claims representatives including, where feasible, the initiation 

45 

of medical development, scheduling of consultative examinations, and recommending and/or making medical determinations in quick decision cases. 

• Expert Review Units should be located in selected DDSs. They would be organized in the same manner envisioned by the Commissioner’s proposal and 

would perform the same functions. Additional resources should be allocated to 

the DDSs involved to compensate for this responsibility. 

• We recommend and endorse implementation of the in-line quality review process as well as the centralized quality control function envisioned by the Commissioner’s proposal. 

• The DDS Reconsideration step should be eliminated. 

• The requirement that the Reviewing Official be an attorney should be eliminated. 

• The record should be closed after the ALJ decision and the Appeals Council 

should be eliminated. 

• Finally, all affected components should be staffed appropriately. Both DDSs and 

FOs will need additional staff if this new process is to work. 

NCSSMA is committed to working with all interested parties in making the Commissioner’s vision of a new and improved disability process a reality. We are hopeful 

our comments will be useful in streamlining this process. 

Again, I thank you for this opportunity to appear before the Committee. I would 

welcome any questions that you may have. 

f 

Chairman HERGER. Thank you, Mr. Buffaloe. Ms. Marshall to 

testify. 

STATEMENT OF MARTHA A. MARSHALL, PRESIDENT, NATIONAL ASSOCIATION OF DISABILITY EXAMINERS, LANSING, 

MICHIGAN 

Ms. MARSHALL. On behalf of the NADE membership, thank 

you for providing this opportunity. 

Chairman HERGER. Could you speak into the microphone, 

please? There we go. Thank you. 

Ms. MARSHALL. To present our views on the Commissioner’s 

proposal to reform the Social Security and SSI disability programs. 

The NADE believes that for people with disabilities it is crucial 

that the SSA reduce any unnecessary delays and make the process 

more efficient. However, any changes in this process must be practical and affordable and implemented in a manner that allows appropriate safeguards to assure that the current level of claimant 

service is improved or, at the very least, maintained. We are not 

convinced that all parts of the Commissioner’s approach will 

achieve this and are concerned that some of the proposed changes 

will, in fact, increase both administrative and program costs. The 

experience of past pilots has shown that ideas that may sound good 

in theory have proven to be inadequate to meet the demands for 

service and affordability when implemented on a wide-scale basis. 

We agree with Commissioner Barnhart that successful implementation of eDIB is a critical feature of any new approach to SSA 

disability determinations. For eDIB to be successful, however, it is 

critically important that adequate infrastructure support and proper equipment be in place. The eDIB implementation issues must be 

addressed quickly and efficiently in order to make the process work 

as intended and not cause real delays in the program and in the 

system. Experience with eDIB to date has shown that proper 

equipment has not always been provided to the DDSs, and while 

technology can produce some processing time efficiencies, it is 

46 

merely a tool. It cannot replace the highly skilled and programmatically trained DE and DDS medical consultant. 

The Commissioner’s approach envisions that quick decisions for 

those who are obviously disabled would be adjudicated in RERU. 

The NADE believes that the DDSs are better equipped in terms of 

adjudicative experience, medical community outreach, and systems 

support to fast track claims and gather evidence to make a decision 

timely, accurately, and cost-effectively. Establishing a RERU to 

handle this workload constitutes an additional hand-off with no improvement in the process. 

In addition, at the present time, if an SSI claimant presents with 

a condition that is likely to be found disabling, the statute provides 

for a presumptive disability decision. Therefore, currently, an obviously disabled SSI claimant can immediately begin receiving cash 

benefits and medical benefits while the DDS obtains the supporting 

evidence. Unfortunately, there is no such provision for Social Security claimants. A person found disabled under the SSI Disability 

Program must complete a 5-month waiting period before they can 

receive cash benefits. An allowance, no matter how quickly it is 

processed, will not benefit the individual if he or she has to wait 

5 full calendar months before receiving benefits. The NADE strongly opposes any proposal to remove on-site MCs from the DDSs. 

These MCs interact daily with DEs and offer advice on complex 

cases. 

The Commissioner has proposed establishment of a Federal RO 

as an interim step between the DDS decision and the OHA. We 

agree that an interim step is necessary to reduce the number of 

cases going to OHA as much as possible. We do not, however, believe that this must be handled by an attorney. Decisions made at 

all levels of adjudication are medical-legal ones. Disability hearing 

officers who are programmatically trained in disability adjudication 

as well as in conducting evidentiary hearings can handle the first 

step of appeal between the DDS initial decision and the ALJ hearing. Using trained hearing officers instead of attorneys will be substantially less costly. 

In addition, we do believe that the single decisionmaker model 

should be implemented throughout the new approach, that MCs 

should be basically used to consult with on cases without requiring 

sign-off in every case, unless required by the statute. We appreciate the Commissioner’s emphasis on quality as described in her 

new approach. We support closing the record after the ALJ decision 

and elimination of the Appeals Council. The NADE believes that 

any proposal to reform the Social Security and SSI Disability Programs must balance the dual obligations of stewardship and service, and we look forward to working with the Congress and with 

the Commissioner as she refines this process. Again, thank you. 

[The prepared statement of Ms. Marshall follows:] 

Statement of Martha A. Marshall, President, National Association of 

Disability Examiners, Lansing, Michigan 

Chairman Shaw, Chairman Herger, and members of the Subcommittees, thank 

you for providing this opportunity for the National Association of Disability Examiners (NADE) to present our views on the Commissioner’s proposal to reform the 

Social Security and Supplemental Security Income (SSI) disability programs. 

NADE is a professional association whose purpose is to promote the art and 

47 

science of disability evaluation. The majority of our members work in the state Disability Determination Service (DDS) agencies and thus are on the ‘‘front-line’’ of the 

disability evaluation process. However, our membership also includes SSA Field Office, Regional Office and Central Office personnel, attorneys, physicians, and claimant advocates. It is the diversity of our membership, combined with our extensive 

program knowledge and ‘‘hands on’’ experience, which enables NADE to offer a perspective on disability issues that is both unique and pragmatic. 

NADE members, whether in the state DDSs, in SSA or in the private sector, are 

deeply concerned about the integrity and efficiency of both the Social Security and 

the SSI disability programs. Simply stated, we believe that those who are entitled 

to disability benefits under the law should receive them; those who are not, should 

not. We also believe decisions should be reached in a timely, efficient and equitable 

manner. Any change in the disability process must promote viability and stability 

in the disability program and maintain the integrity of the disability trust fund by 

providing good customer service while protecting the trust funds against abuse. 

Quality claimant service and lowered administrative costs that the American taxpayer can afford should dictate the structure of any new disability claims process. 

In addition, to rebuild public confidence in the disability program, the basic design 

of any new process should ensure that the decisions made by all components and 

all decision-makers accurately reflect a determination that a claimant is truly disabled as defined by the Social Security Act. 

In her September 25, 2003 testimony before the Subcommittee on Social Security, 

Commissioner Barnhart presented her approach to improving the disability determination process designed to ‘‘shorten decision times, pay benefits to people who are 

obviously disabled much earlier in the process and test new incentives for those 

with disabilities who wish to remain in, or return to, the workforce’’. NADE supports these goals. We appreciate the Commissioner’s focus on improving the disability program and her willingness to tackle the monumental task of improving the 

disability process and are fully committed to working in partnership in this effort. 

NADE believes that for people with disabilities, it is crucial that SSA reduce any 

unnecessary delays and make the process more efficient. However, any changes in 

the process must be practical and affordable and implemented in a manner that allows appropriate safeguards to assure that timely claimant service is improved, or 

at the very least, maintained. NADE is not convinced that all parts of the Commissioner’s approach will achieve this and is concerned that some of the proposed 

changes will, in fact, increase both administrative and program costs. 

For the past decade, SSA has attempted to redesign the disability claims process 

in an effort to produce a new process that will result in more timely and more accurate decisions. Results of numerous tests undertaken by SSA to improve the disability process have not produced the results anticipated. The experience of past pilots has shown that ideas that may sound good in theory have proven to be inadequate to meet the demands for service and affordability when implemented on a 

wide-scale basis. 

There is a pervasive public perception that ‘‘everyone’’ is denied disability benefits 

twice and their claim is allowed only when they reach the Administrative Law 

Judge (ALJ) level. In fact, nearly 80% of those currently receiving benefits were allowed prior to going before an ALJ. In addition, in Fiscal Year 2000, 78% of all cases 

were finally decided in the DDS and were completed in an average case processing 

time of about 85 days at the initial level and 63 days at the reconsideration level. 

The processing delays that appear to be of the greatest concern to the Commissioner, 

and to the public, are delays that occur, not at the DDS, but in association with the 

appeals process. Wholesale changes at the DDS level do not address these concerns. 

Both formally and informally, NADE has provided extensive feedback to the Commissioner on her ‘‘New Approach to SSA Disability Determinations’’. Our comments 

are summarized below. In addition, a flow chart incorporating NADE’s suggestions 

accompanies this testimony. 

NADE fully supports all efforts to allow earlier access to health care, treatment 

and rehabilitation needs of disabled individuals, as well as efforts to assist those individuals who wish to return to work by providing them the needed services to allow 

them to do so. We believe that early intervention efforts will provide improved service to disabled individuals by providing needed treatment and services earlier in 

their disease process. This early intervention has the potential to decrease the lifelong disability payments that some individuals receive once they have been determined eligible for benefits. Although there are still few details available in the Commissioner’s approach regarding potential demonstration projects, it appears that individuals chosen for participation in these projects could be screened based upon 

age, education, work history and claimant allegations. This type of data is currently 

collected in the initial disability interview; using these types of screening criteria 

would not require system changes or other modifications to the existing process. 

48 

Therefore, NADE believes that a trained ‘‘technical expert in disability’’ in a SSA 

Field Office could screen applicants for disability into these demonstration projects. 

Oversight of these projects could be done on a regional basis by Regional Expert Review Units as proposed by the Commissioner. 

NADE agrees with Commissioner Barnhart that successful implementation of 

eDIB is a critical feature of any new plan to improve the disability program. NADE 

remains supportive of these new technologies as a means for more efficient service 

to the public. We believe that SSA’s goal of achieving an electronic disability claims 

process represents an important, positive direction toward more efficient delivery of 

disability payments. However, while technology can be expected to reduce hand-offs, 

eliminate mail time and provide other efficiencies, technology is merely a tool. It cannot replace the highly skilled and trained disability examiner who evaluates the 

claim and determines an individual’s eligibility for disability benefits in accordance 

with Social Security federal rules and regulations. 

In order for eDIB to be successful, it is critically important that adequate infrastructure support and proper equipment to make the process work effectively and 

efficiently is in place. Until eDIB is fully implemented nationwide, it is impossible 

to determine critical service delivery issues that impact on daily case processing. If 

DDSs are pushed to meet arbitrary deadlines without the necessary hardware and 

software, there will be delays in case processing and no improvements in customer 

service. It is an absolute necessity that eDIB implementation issues be addressed 

quickly and efficiently in order to make the process work as intended and not cause 

real delays in service to our most vulnerable citizens. Experience with eDIB to date 

has shown that proper equipment has not always been provided to DDS disability 

examiners to allow for optimal use of this new technology. 

NADE strongly supports the Commissioner’s emphasis on quality as described in 

the new approach. National uniform decisions with consistent application of policy 

at all adjudicative levels requires a consistent and inclusive quality assurance (QA) 

review process. A well-defined and implemented QA process provides an effective deterrent to mismanagement, fraud and abuse in the disability program. By including 

both in-line and end-of-line review, accountability can be built into every step. We 

believe that this will promote national consistency that, in turn, will build credibility into the process. In addition, NADE supports requiring similar medical training for all decision-makers at all steps in the disability claims process. Making disability decisions can be extremely difficult without sufficient medical training. Disability is based on a physical or mental medical condition and the assessment of 

how such a condition impacts on a claimant’s ability to work must be based on an 

understanding of how such conditions normally affect an individual’s ability to function. Adequate training of all decision-makers in the medical program requirements 

is essential to ensure quality decisions and integrity in the disability program. 

Although the Commissioner’s approach envisions that ‘‘quick decisions’’ for those 

who are obviously disabled would be adjudicated in Regional Expert Review Units, 

NADE believes that the DDSs are better equipped in terms of adjudicative expertise, medical community outreach, and systems support to fast track claims and 

gather evidence to make a decision timely, accurately, and cost effectively. DDSs already process at least twenty percent of allowance decisions in less than twenty-five 

days. In addition, DDS disability examiners are well versed in the evaluation of disability onset issues, unsuccessful work attempts and work despite a severe impairment provisions to quickly and efficiently determine the correct onset for quick decision conditions. Establishing a Regional Expert Review Unit to handle this workload 

constitutes an additional hand-off of a claim with no value added to the process. We 

see no need to add another layer of bureaucracy to process quick decisions when 

such cases are already ‘‘triaged’’ and handled expeditiously by the DDS disability 

examiners. In order to implement a Regional Expert Review Unit for quick decisions, SSA would need to change its existing infrastructure to make these decisions 

and provide for hiring, training and housing staff. In addition, business processes 

would have to be developed to secure and pay for medical evidence of record. 

In addition, a person found disabled under the Social Security disability program 

must complete a five month waiting period before they receive cash benefits. A disability allowance decision, no matter how quickly it is processed, will not 

solve the problem of having to wait five full calendar months before being 

able to receive any cash benefits. The SSI disability program does not require 

such a waiting period. In fact, if an SSI claimant presents with a condition that is 

likely to be found disabling, the statute provides for a presumptive eligibility decision on the case before obtaining any additional supporting evidence. This provision 

allows the claimant to immediately start receiving cash benefits and medical benefits while the DDS obtains the supporting documentation needed for the final eligibility decision. There is no such provision for Social Security claimants, and even 

49 

if a final eligibility decision is made earlier, they still have to wait five full calendar 

months before being able to receive any cash benefits and, with the exception of individuals diagnosed with ALS or undergoing dialysis, twenty-four calendar months 

before becoming eligible for Medicare benefits. This waiting period has caused many 

claimants and their families to suffer severe economic and emotional hardship while 

waiting to receive benefits. It also fosters a perception that SSA is denying cash benefits to disabled workers when they need these benefits the most. This is especially 

true for claimants who suffer from a terminal illness and have a short life expectancy. 

NADE is strongly opposed to any proposal to remove onsite Medical Consultants 

from the DDS. The DDS medical consultant interacts with disability examiners on a daily basis and offers advice on complex case development or decision-making issues. As an integral part of the DDS adjudicative team,DDS medical consultants play a vital role in the disability evaluation process, not only in reviewing medical evidence and providing advice on interpretation, but also in training and mentoring disability examiners, as well as performing necessary public outreach in the community. He/she maintains liaison with the local medical community 

and has knowledge of local care patterns and the availability of diagnostic studies 

and state regulations to facilitate the adjudication process within the complex Social 

Security system. Most disability applicants have multiple impairments involving 

more than one body system and require a comprehensive view of the combined limitations and resultant impact on function. Specialty consultants with limited scope 

and experience cannot fully assess the combined effects of multiple impairments on 

an applicant’s functioning. The SSA programmatically trained DDS medical consultant has the education, clinical experience and decision-making skills, along with expertise in evaluating medical records and disease conditions and making prognosis 

predictions regarding a claimant’s function and future condition, to more accurately 

assess the case as a whole. 

DDS medical consultants are not only medical specialists—physicians, psychologists or speech/language pathologists—they are also SSA program specialists. There 

is a very real difference between clinical and regulatory medicine and it takes at least 

a year to become proficient in Social Security disability rules and regulations. The 

DDS medical consultant’s unique knowledge of SSA’s complex rules and regulations 

and regional variants of those regulations, their medical expertise in many fields 

and knowledge of local medical sources, and their familiarity with DDS examiner 

staff, quality specialists and supervisors, make them an invaluable asset to the 

DDS’s and the SSA disability program as a whole. It is critical that this expertise 

be on-site in the DDSs and readily available to the disability examiner for case consultation and questions, particularly in those more complex cases and, if as proposed 

under the Commissioner’s plan, disability examiners are to, ‘‘more fully document 

and explain their decisions’’. 

The Social Security and SSI disability programs are unique among disability programs. The disability examiners who evaluate claims for Social Security and SSI 

disability benefits must possess unique knowledge, skills and abilities. Those who 

adjudicate Social Security and SSI disability claims are required, as a matter of routine, to deal with the interplay of abstract medical, legal, functional and vocational 

concepts. Disability examiners are required by law to follow a complex sequential 

evaluation process, performing at each step an analysis of the evidence and a determination of eligibility or continuing eligibility for benefits before proceeding to the 

next step. Adjudication of claims for Social Security and SSI disability benefits requires that disability examiners be conversant (reading, writing and speaking) in 

the principles of medicine, law and vocational rehabilitation. The disability examiner is neither a physician, an attorney nor a vocational rehabilitation counselor. 

Nevertheless, he or she must extract and employ major concepts that are fundamental to each of these professions. The disability examiner must appropriately and 

interchangeably, during the course of adjudication, apply the ‘‘logic’’ of a doctor, a 

lawyer and a rehabilitation counselor. A disability examiner must have knowledge 

of the total disability program as well as proficiency in adult and child physical and 

mental impairment evaluation, knowledge of vocational and job bank information 

and the legal issues which impact on case development and adjudication. It takes 

years before an individual becomes adept at this complex task. 

NADE has long supported an enhanced role for the disability examiner and increased autonomy in decision-making for experienced disability examiners on certain cases. We were pleased, therefore, that in NADE’s discussions with Commissioner Barnhart we were told that it was her intent in the new approach to enhance 

the disability examiner’s role in the disability process. In order to achieve that, we 

believe that the Single Decision Maker (SDM) from the highly successful Full Process Model project and currently operating in the prototype and ten other states 

50 

should be fully integrated into the new approach. (Under the SDM model, medical 

sign-off is not required unless mandated by statute.) 

Decisions regarding disability eligibility can be considered to be on a continuum 

from the obvious allowances on one end, through the mid-range of the continuum 

where only careful analysis of the evidence by both adjudicator and medical consultant can lead to the right decision, and finally to the other end of the continuum 

where claims are obvious denials. It is at both ends of the continuum where the disability adjudicator can effectively function as an independent decision-maker. Use 

of the SDM to make the disability determination, and retaining the availability of 

medical consultant expertise for consulting on cases without requiring medical sign 

off on every case, promotes effective and economical use of resources. It is prudent 

to expend our medical and other resources where they can most positively impact 

the quality of the disability claim. 

Of all the ‘‘reengineered’’ disability processes proposed or piloted in the past, the 

SDM process has been the most successful. It has had a more positive impact on 

cost-effective, timely and accurate case processing than any other disability claims 

initiative in many years. Statistical results have shown that disability examiners 

operating under the SDM model in the twenty states where this concept was tested 

have the same or better quality than disability examiners operating under the traditional disability adjudication model. Studies of the SDM have demonstrated its 

value as an integral part of the Social Security Administration’s disability claim adjudication process. NADE strongly believes that the SDM model should be integrated fully in any new initial claims process, expanded to Continuing Disability Reviews and adopted as standard procedure in all DDSs. 

The Commissioner, in her Approach, has proposed establishment of a federal Reviewing Official (RO) as an interim step between the DDS decision and the Office 

of Hearing and Appeals (OHA). NADE agrees that an interim step is necessary to 

reduce the number of cases going to the OHA as much as possible. An interim step 

laying out the facts and issues of the case and requiring resolution of those issues 

could help improve the quality and consistency of decisions between DDS and OHA 

components. NADE supports an interim step because of the structure it imposes, 

the potential for improving the consistency of decisions, reducing processing time on 

appeals, and correcting obvious decisional errors at the initial level. The establishment of uniform minimum qualifications, uniform training and uniform structured 

decision-writing procedures and formats will enhance the consistency and quality of 

the disability decisions. NADE is not convinced, however, that customer service is improved from the current process if this remains a paper review at this interim step. 

NADE believes that this interim step should include sufficient personal contact 

to satisfy the need for due process. We do not believe that it needs to be handled 

by an attorney. There is little, if any, data that supports a conclusion that this interim step needs to be handled by an attorney. In fact, a 2003 report commissioned 

by the Social Security Advisory Board to study this issue recommended that this 

position NOT be an attorney. 

Decisions made at all levels of adjudication in the disability process are medicallegal ones. NADE believes that Disability Hearing Officers (DHOs) can handle the 

first step of appeal between the DDS initial decision and the ALJ hearing. DHOs 

are programmatically trained in disability adjudication as well as in conducting evidentiary hearings. Using trained Disability Hearing Officers instead of attorneys will be substantially less costly. In addition, there is currently an infrastructure in place to support DHOs and using such a structure will prevent creation 

of a new costly and less claimant friendly federal bureaucracy. Since this infrastructure is already in place, national implementation of the DHO alternative can occur 

very quickly. 

NADE supports closing the record after the Administrative Law Judge’s decision 

since this decision will, under the Commissioner’s proposed approach, represent the 

final decision of the Commissioner of Social Security before any subsequent appeal 

to the federal courts. We support providing the assistance of programmatically 

trained medical and vocational experts to the Administrative Law Judges. 

NADE supports elimination of the Appeals Council review step. We continue to 

advocate for establishment of a Social Security Court. As long as judicial review of 

disability appeals continues to occur in multiple district courts across the country, 

a bifurcated disability process will continue to exist as different DDSs operate under 

different court rulings and regulations depending upon where the claimant lives. 

In summary, NADE’s key recommendations are to implement only strategies 

which balance the dual obligations of stewardship and service. These are: 

• Implement eDIB only with adequate infrastructure support and proper equipment. 

51 

• Keep Quick Decisions in the DDS. 

• Eliminate or reduce the five month waiting period for Social Security beneficiaries. 

• Extend Presumptive Disability provisions to Social Security disability claimants. 

• Maintain Medical Consultants on-site in the DDS. 

• Fully integrate the Single Decision Maker into any new disability process. 

• Utilize the current infrastructure of DDS Disability Hearing Officers as an interim appeals step. 

• Require training in the medical program requirements for all decision makers 

in all components. 

• Include both in-line and end of line review at all levels of the process. 

• Recognize that technology is only a tool. It does not replace the highly skilled 

trained disability examiner. 

NADE appreciates this opportunity to present our views on the Commissioner’s 

New Approach to SSA Disability Determinations, and we look forward to working 

with the Social Security Administration and the Congress as the Commissioner continues to refine her approach to improve the disability process. 

f 


Insert offset folio 99682a.003
52 

Chairman HERGER. Thank you very much. Dr. C. Richard 

Dann, please, to testify. 

STATEMENT OF C. RICHARD DANN, M.D., UNION OF AMERICAN 

PHYSICIANS AND DENTISTS, AND AMERICAN FEDERATION 

OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES, AUBURN, 

CALIFORNIA 

Dr. DANN. Mr. Chairman and Honorable Members of the Subcommittees, thank you very much for the opportunity to present 

my views on Social Security’s new approach to disability determinations. I am Dr. Richard Dann from the Roseville, California 

DDS. I am a DDS medical consultant (MC) with 21 years experience in disability medicine. I am testifying on behalf of the UAPD 

as well as the AFSCME. Of 2,100 DDS MCs nationwide, I represent 160 in California and hundreds in other States. 

The new approach eliminates the DDS medical consultant, replacing us with nurses. At proposed ratios of about 2 to 1 in current wages, two nurses would actually cost more than the DDS MC 

replaced. The statutes require MC signatures on denials of certain 

claim types. The DDS MCs fulfill those requirements. It is unclear 

who will make the medical assessments and sign medical decision 

documents if we are eliminated from the DDS. New Approach 

sends easier quick decision cases to a regional unit. Currently, 

DDSs decide 20 percent of all claims in under 25 days. Skimming 

quick decision cases from the DDS will concentrate a more complex 

caseload into the DDS. This seems an inappropriate time to replace 

the medical consultant with nurses. 

Abandoning the DDS reconsideration step for a regional RO is 

somewhat troubling. An attorney does not have adequate medical 

knowledge to make a better medical assessment than the DDS MC. 

The DDS MCs provide convenient, close on-site medical support to 

the DE. Adding a nurse and a computer between the DE and the 

medical resource will hinder its use. The DDS MC is an educator, 

training DEs, MCs and exam vendors. Off-site regional medical experts would have trouble fulfilling these DDS support roles. Medical licensure is a problem with New Approach. State medical licensure is required for doctors to make diagnoses and order diagnostic 

tests routine parts of casework at the DDS. Nurses and attorneys 

cannot do this. State licensure costs a lot and can be difficult to obtain due to a lack of reciprocity between States. Regional medical 

experts would not be licensed in every State of their region. Case 

development will be impossible without the State-licensed DDS 

medical consultant. 

The DDS MCs save millions of dollars each year by obtaining 

medical evidence by phone. Regional medical experts would lack familiarity with local medical providers and consultative examiners. 

Regional medical experts would be less able to obtain phone evidence. 

The DDS MC approaches cases strategically and saves time and 

cost by recognizing and allowance early. Disability examiners consult casually with the on-site medical consultant. I can allow cases 

early that might wrongly be denied by a nurse or attorney. I have 

53 

done this with multiple throat cancer claims by using my knowledge of anatomy to technically review an operative report and find 

evidence for an allowance. Off-site regional experts would not as 

user friendly to the DE. 

To summarize, the DDS medical consultant should be retained in 

New Approach. Social Security Disability is defined, quote, ‘‘Due to 

a medically determinable impairment,’’ unquote. There is no one 

better to assess this than a physician. The medical consultant has 

superior medical knowledge to a disability evaluator, nurse or attorney. Our accessibility and knowledge of Social Security regulatory medicine make us a unique asset. Federally measured DDS 

accuracy is greater than 90 percent. The DDS MC assessments are 

more legally defensible than those from a DE, nurse or attorney. 

The DDS medical consultant provides unparalleled professional 

training for the next generation of DEs, MCs and vendors. 

Eliminating the DDS medical consultant will waste millions of 

dollars on wrong allowances and fraud, delay true allowances, and 

weaken legal defense, and also impede the DE. Importantly, it will 

erode public confidence in the Social Security Disability decision. 

The DDS stakeholders, UAPD, AFSCME, NADE and NCDDD, 

have all voiced solid support for retaining the on-site DDS medical 

consultant; 2,100 MC jobs are threatened by New Approach. Experienced DDS MCs will soon begin leaving. We have obligations that 

will force us to seek secure jobs. Many groups have worked diligently to show how Social Security goals can be better achieved retaining the DDS MC. We are an unparalleled resource to the DDS 

and Social Security and our clients. Let us not let that resource 

disappear. Thank you very much. 

[The prepared statement of Dr. Dann follows:] 

Statement of C. Richard Dann, M.D., Union of American Physicians and 

Dentists, and American Federation of State, County, and Municipal Employees, Auburn, California 

Mr. Chairman and distinguished members of this Subcommittee; 

We appreciate the opportunity to testify today regarding the Social Security Administration’s New Approach to Disability Determinations plan. 

I am Dr. Richard Dann, MD, from the Roseville, California Disability Determination Service, (DDS). I am a DDS Medical Consultant (MC) with over 21 years experience in disabilitymedicine. I am testifyingon behalf of the Union of American Physicians and Dentists (UAPD) and the American Federation of State, County and 

Municipal Employees (AFSCME). I am one of approximately 2,100 DDS MCs nationwide. I am testifying on behalf of the 160 DDS MCs in California and several 

hundred more represented by AFSCME nationwide. I am a shop steward and Board 

Member of UAPD. 

I enjoy my job and obtain great satisfaction performing an important medical, fiscal and civil service. I am here to explain why the DDS MC is a critical resource 

in the adjudication of Social Security Disability Claims and why MCs should remain 

in the State DDS. In my judgment, eliminating the DDS Medical Consultant will 

waste millions of dollars on erroneous allowances, encourage fraud, delay bona fide 

allowances, weaken legal defense of decisions, and further burden the Disability Examiner (DE). But most importantly, it will erode the integrity of the SSA disability 

decision, along with the public trust of the American people. 

My job is to act like a medical detective, seeking accurate medical assessments 

to determine if a claimant is disabled under SSA regulation by a ‘‘medically determinable impairment.’’ I save costs by making physician to physician phone calls to 

treating sources, obtaining high quality evidence at no cost. I help to develop local 

vendor sources and monitor their quality. The DDS MC helps provide initial and 

ongoing training of the DE and new MC staff. 

On Sept. 25, 2003, Commissioner Barnhart announced her New Approach to Disability Determinations plan. The Commissioner stated that applicant service would 

54 

improve, and that ‘‘no SSA employee would be adversely affected by my approach,’’ 

explaining that included DDS employees and Adjudicative Law Judges. The Commissioner then noted that she planned to eliminate the position of the DDS MC, 

later elaborating we would be replaced with nurses. The DDS nurse would liaison 

between the DE and a Regional Medical Expert. At the staffing ratio proposed by 

SSA and current wage scales, two nurses would cost more than the MC replaced. 

Many operational specifics have not yet been shared with stakeholders and the public. Statutes require DDS MC signatures on denials of pediatric and mental health 

claims. Under the New Approach, who will sign these claims? Where would all of 

these disability trained nurses come from? I have helped write several position papers on elimination of the DDS MC for UAPD, AFSCME, and the National Association Disability Examiners (NADE), all of which have been submitted to this Subcommittee. 

The Commissioner seeks faster disability decisions in her ‘‘Quick Decision’’ plan, 

where cases of obvious severe disability would be sent to a planned Regional Quick 

Decision Unit rather than to the DDS. There are already mechanisms in place to 

expedite DDS claim review for the obviously disabled and for those in dire need 

(E.G. PD or Presumptive Disability and TERI cases). The speed of the decision must 

be weighed against the accuracy of the decision; speed and quality tend to be inversely proportional. Excessive emphasis on speed erodes quality substantially. DDS 

administrators juggle these two factors constantly. Very minor regulatory changes 

at the DDS would accomplish the goals of the ‘‘Quick Decision’’ part of ‘‘New Approach’’ with considerably less expense, staff training and change in procedures. The 

DDS team of Disability Examiner and MC currently do quite well in this area, with 

a mean DDS processing time of approximately 85 days nationwide and 75 days in 

California. About 20 percent of claims are adjudicated in less than 25 days. Only 

a half hour or so is spent in review by the DDS MC; the value added with that short 

step is enormous. Removing ‘‘Quick Decision’’ cases will concentrate a more complex 

caseload into the DDS. Accordingly, replacing the DDS MC with nurses at the same 

time as concentrating more difficult cases into the DDS does not make sense. 

The accuracy and quality of the disability decision are heavily influenced by the 

DDS MC. Local DDS inline review and Regional quality review keep DDS decision 

accuracy above 90 percent. Accuracy is important; an allowance costs SSA between 

$100,000 and $200,000. Erroneous allowances are very difficult to reverse due to 

SSA statutes, and no one wants to wrongly deny benefits. This is a decision worth 

getting right, for both the claimants and the budget. The quality of the DDS decision is excellent, and more, rather than less, reliance should be placed on it. 

At the DDS, the MC provides medical knowledge at the doctorate level rather 

than nurse level, peer level review of treating source evidence, and inline quality 

review of the DDS decision. I have been able to allow brain cancer cases to proceed 

quickly where the grade of the tumor was not clearly stated, but my knowledge of 

histopathology enabled me to support an allowance. Due to my knowledge of neck 

anatomy and my ability to analyze operative reports, I have been able to promptly 

allow claims for throat cancer that the DE would have denied. Conversely, I have 

prevented inappropriate allowances for claims involving multiple traumas due to my 

knowledge of fracture sites and expected bone healing times. MCs recognize functional impacts of cumulative impairments as well as potential disease complications 

a DE or nurse cannot. 

Many times every day, I carefully rationalize why a treating source’s diagnosis or 

assessment of capacity is inconsistent with the medical evidence of record. The 

claimant’s physician may not be as objective as SSA would like. A treating doctor’s 

functional capacity statement is often noncritical in nature, based solely on what the 

patient tells them. Applicants can distort the truth, deliberately or unwillingly, and 

treating physicians are variably skilled at detecting this. They are their patient’s 

advocate, not their judge. Frequently, I see statements from treating sources stating 

that their patient cannot walk two hours or sit for six hours a day. Yet, the record 

shows that the claimant lives alone, rides a bike, vacuums, and does his or her own 

grocery shopping. Deliberate exaggeration of symptoms is common, involving many 

cases every day. 

Preventing fraud is a substantial part of our DDS job. There is a big difference 

to SSA between ‘‘uses a cane’’ and ‘‘needs a cane.’’ The DDS MC is best suited to 

evaluate those diagnoses and statements of capability with the case findings. Careful assessment of evidence by the DDS MC frequently reveals inconsistencies. DEs 

and nurses lack the scope and depth of a medical doctorate to detect various subtle 

exam and diagnostic findings and critically review treating source statements. In 

Prototype states and under the Single Decision Maker (SDM) models, the DE may 

make the medical assessment on some claims without the input of a DDS physician; 

55 

if the DE has questions or concerns regarding aspects of the case, he or she consults 

with the DDS MC. The SDM pilots and Prototype studies have shown at least a 

70 percent rate of consultation with the MC. In non-Prototype DDSs, currently the 

vast majority, the DE summarizes their findings in a consult to the MC, who then 

completes the medical assessment on every claim. It is not yet clear in the Commissioner’s ‘‘New Approach’’ exactly what percentage of cases will have MC review or 

who will prepare and sign medical decision documents. 

UAPD and AFSCME continue to strongly support DDS MC assessment for every 

single claim. Statistics have shown absolutely no improvement in processing time 

or accuracy under SDM or Prototype, and a 70 percent rate of MC consultation. The 

continued need for the DDS MC’s input is clear. In fact, the Agency’s own report, 

#A–07–00–10055, published in June 2002, noted increased claim processing times, 

appeal rates, case pending numbers, and an erosion of quality in SDM and Prototype DDSs. Current SSA promotional materials assure the public that doctors are 

involved in the disability decision process, and the public expects doctors to be utilized on most if not all claims. Imagine the response of the public and the courts 

to denials of benefits by a DE or nurse, despite endorsement from treating physicians. 

The ‘‘New Approach’’ proposes using offsite Regional Medical Expert Units to provide case consultation to DEs via DDS nurse and computer, adding a computer and 

nurse between the DE and medical expert. This change complicates the process 

without any apparent value added, and causes some substantial problems. The DEs 

and DDS Directors have been asked for input and have replied universally that remote Regional Medical Experts will be much less efficient and user friendly than 

walking down the hall to the familiar MC. 

Medical licensure is another big problem with ‘‘New Approach.’’ MCs are licensed 

by state. Most states require state medical licensure to make diagnoses and order 

diagnostic tests, all very routine parts of developing cases at the DDS. State medical 

licensure costs hundreds of dollars a year and can be difficult to obtain due to lack 

of reciprocity between states. Regional Medical Experts would find it difficult and 

expensive to be licensed in every state of their Region; Region 9 contains California, 

Hawaii, Arkansas, and Nevada. When further testing needs to be ordered, this will 

be a major problem under the ‘‘New Approach’’ if there is no state licensed DDS 

MC onsite. 

The proposed replacement of the DDS Reconsideration Step by a Regional Reviewing Official is especially troubling. How can a single attorney better assess medical 

disability than the DDS team of MC and DE? How will this attorney obtain adequate medical knowledge to make a better medical assessment than the DDS? The 

low reversal rate of the Reconsideration Step certainly does not devalue it. To the 

contrary, it affirms the high quality of initial DDS decisions. With DDS accuracy 

rates averaging above 90 percent, one should not expect substantial reversal rates. 

Reconsideration reversals generally occur when new evidence is presented or when 

disease progresses, not because of errors. The DDS MC is a graduate of medical 

school as well as a specialist in SSA disability. They are better qualified than an 

attorney or nurse to do medical assessments of disability. The DDS Reconsideration 

Step maintains integrity of the SSA Disability process by providing a prompt second 

medical evaluation of the claim by DDS DE and MC, and should not be exchanged 

for an attorney Reviewing Official. 

Cost control is another fundamental role of the DDS doctor. The DDS MC saves 

SSA millions of dollars every year. As noted earlier, doctor-to-doctor phone contact 

obtains critical medical evidence from treating sources quickly and at no cost. The 

DDS MC applies a strategic approach to case processing, and development can cease 

as soon as a fully favorable allowance can be made. Several times a week, I am able 

to allow a case early in development by identifying a single impairment severe 

enough to allow the claim. In cases involving multiple diagnoses, early review of the 

medical evidence by the DDS MC frequently leads to prompt allowance without costly time consuming consultative exams. Nurses are untrained in this area, and Regional Medical Experts would be less able to obtain phone evidence. 

The DDS MC is an educator, training Disability Evaluators, new MCs, and Consultative Exam vendors. He or she provide initial and refresher medical training to 

the DEs and provide critical peer training to new DDS MC. The MCs help the DDS 

find and train local CE vendors in program requirements, then help monitor for 

quality. It is not clear how Remote Regional Medical Experts might fulfill this important educator role. 

In summary, the DDS MC is an invaluable component of the Social Security Disability Program and should be retained in the ‘‘New Approach.’’ Contrary to the 

goals stated, the elimination of the DDS MC will increase errors, promote fraud, 

56 

slow processing time, increase expenses, make the DE’s job tougher, and degrade 

the integrity of the process. 

MC contributions to decision accuracy are critical, preventing many inappropriate 

allowances and denials at both initial and reconsideration levels. The current DDS 

team of DE and MC is the most effective way to accomplish the job. By statute, disability must be from a medically determinable impairment, and no one is better 

suited to assess this than a physician. The DDS MC provides strategic professional 

case review and has medical knowledge deeper and broader in scope than a DE, 

nurse or attorney. The MC is able to assess SSA disability better than most treating 

sources and provides legally defensible medical assessments, more defensible than 

those of a DE, nurse or attorney. The DDS MC provides unparalleled professional 

training to DEs and Consultative Examiners. Those stakeholders most closely involved in the DDS process, UAPD, AFSCME, NADE, and NCDDD, have voiced solid 

support for retaining the DDS MC onsite. Their knowledge and experience in regulatory medicine and SSA regulations makes them uniquely qualified to make this 

judgment. 

If the DDS MC jobs remain threatened, overwhelming numbers of valuable experienced DDS MCs will soon leave due to job uncertainty, before any Regional Medical Experts even exist. Many groups have worked diligently to show the Commissioner how to achieve her goals without eliminating the DDS MC. For over a year 

now, 2,100 MCs have felt their jobs threatened. We have obligations that will soon 

force many of us, myself included, to seek more secure positions. DDS MCs take 

pride in providing the best possible service to our SSA clients and training to the 

next generation of DDS MCs and DEs. We offer an unparalleled resource to the 

DDS and SSA. Let’s not let that resource disappear! 

I thank the Chairman and members of the Subcommittee for the opportunity to 

present this statement and am pleased to answer any questions you may have. 

f 

Chairman HERGER. Thank you. Ms. Everett to testify. 

STATEMENT OF SHEILA EVERETT, PRESIDENT, NATIONAL 

COUNCIL OF DISABILITY DETERMINATION DIRECTORS, 

JACKSON, MISSISSIPPI 

Ms. EVERETT. Thank you, Mr. Chairman, for the opportunity to 

provide written testimony today and comments before the panel. I 

am the Director for the Mississippi DDSs, and as President of 

NCDDD, represent the disability directors and managers in over 54 

DDS State agencies and over 16,000 State employees. We too applaud the Commissioner’s bold vision for changes and want to 

thank her for inclusion of NCDDD in part of the process to decide 

the final plans. We believe that DDSs are in an excellent position 

to offer the Commissioner solutions as we are considered to be a 

very cost effective, productive and efficient part of the disability 

programs. Let me talk about our solutions. 

In the area of quality we do concur with the Commissioner’s definition that quality should be a combination or a balance of accuracy, customer service, timeliness, cost and productivity. Our solution will deliver consistency and quality across and among all components. Our quality plan begins with sound disability policy. We 

will work with the SSA to ensure that their policy for disability is 

concise, clear and communicated across all lines. For example, Social Security Disability policy has evolved over the last several 

years from a purely medical model to one that has more functioning in the listing and in the policy. This has added inconsistency and increased administrative costs. 

Our solution would focus on consistently and adequately communicating and applying policy to all components. We would align the 

quality reviews with the policy component. We would centralize 

57 

end-of-line reviews. We would review all components from the field 

office to the DDS to the proposed regional officials, as well as OHA 

under the same rules. We would institute and end-line or end-process reviews to ensure quality at all steps in the process, and we 

would address the different standards of evidence, for example, 

preponderance of evidence standards used by the DDSs and substantial evidence standards used by the ALJs. The results of our 

plan would improve consistency and quality among all components 

and reduce administrative cost. 

Regarding quick decisions, we believe we can improve upon the 

current infrastructure already in place in the State DDSs. Our 

data shows that 19 percent of cases are allowed by DDSs in 25 

days or less already. Our solution is to improve the profile. We 

have identified to the Commissioner almost 50 impairments that 

would fit this category. We would have highly trained and skilled 

examiners process these cases with curtailed and expedited development independent of medical consultant input, saving them for 

more complex cases. Therefore, our result would improve the numbers of quick decisions, reduce the times to process these, and process these cases 26 million fewer dollars than a Federal component. 

Regarding medical experts, the NCDDD solution does leave MCs in 

the DDSs to process and rate cases along with all the other duties 

that they perform. We would place these MCs in electronic queues 

so that medical specialists could be shared among all components. 

Our solution does make MCs available also to OHA and ALJs for 

medical ratings so that we could improve consistency and decrease 

administrative costs. 

We also propose a service delivery expert. This is a highly 

trained DE that would be able to make independent decisions on 

denial claims, also saving medical consultant time for more complex cases. We have recognized in the process that it does take 

extra test time for MCs. This would be a great way to balance and 

use those MCs and to decrease administrative costs. 

We concur with the elimination of Recon, and creation of a RO. 

However, we believe that State employees such as our current disability hearing officers could also perform this job at a cost savings 

to the agency. We concur with the need for vocational specialists 

that are consistently trained the same skill set from the same 

training used at all components to improve consistency in the process. We also concur with all demonstration projects and ‘‘return to 

work.’’ In summary, I would like to thank the Commissioner for 

her bold vision, her inclusion of NCDDD, and given the proper resources, we believe that we could deliver her goals. Thank you. 

[The prepared statement of Ms. Everett follows:] 

Statement of Sheila Everett, President, National Council of Disability 

Determination Directors, Jackson, Mississippi 

Mr. Chairmen, thank you for your invitation to participate in this hearing on our 

thoughts about Social Security Commissioner Jo Anne Barnhart’s ‘‘New Approach 

to Changing the Disability Process’’. 

Before commenting on specific issues on the topic of today’s hearing, as the representative of the National Council of Disability Determination Directors (NCDDD), 

I would like to restate the purpose of our organization and reaffirm all our previous 

commitments to participate in finding and implementing responsible solutions with 

accountability by all stakeholders. 

58 

The NCDDD is a professional association of Disability Determination Services 

(DDS) Directors and managers of the agencies of state government performing the 

disability determination function on behalf of Social Security. NCDDD represents 54 

state Disability Determination Services (DDS) agencies and over 16,000 staff nationwide. NCDDD’s goals focus on finding ways to establish, maintain, and improve fair, 

accurate, timely, and economical decisions to persons applying for disability benefits. 

We applaud Commissioner Barnhart’s bold vision for a new Disability process. 

The Commissioner stated that she was guided by three questions from the President 

as she considers changes to the Social Security Disability program: 

• Why does it take so long to make a disability decision? • Why can’t people who are obviously disabled get a decision immediately? • Why would anyone want to go back to work after going through such a long 

process to receive benefits? 

Together with those questions, Commissioner focused on two over-arching operational goals: 

1. To make the right decision as early in the process as possible. 

2. To foster ‘‘return to work’’ at all stages of the process. 

The NCDDD had nearly every DDS Director’s involvement in formulating our response, reaction, and recommendations to the proposed changes. We presented our 

position to Commissioner Barnhart and her staff on April 7, 2004. At that time, we 

also discussed the need for further research and input in several areas related to 

this new position. Our membership is working to complete those assignments. We 

have a meeting scheduled with the Commissioner and her staff in October to discuss 

our findings. In addition, the NCDDD Officers have begun meetings with the Office 

of Disability Policy to work together on common solutions on disability policy. We 

are actively working with the Commissioner and SSA to achieve our common goals 

in these areas. 

NCDDD has offered several solutions and recommendations to the Commissioner 

to help her achieve her goals and ensure consistency in decision making. I will outline the recommendations we believe will achieve the Commissioner’s goals, best utilize the existing resources and staffing, achieve consistency in the program, and 

allow us to be good stewards of the trust funds. DDSs are the most efficient, productive, and cost-effective component of the disability process. 

Quality 

NCDDD supports the Commissioner’s plan to provide quality disability decisions. 

We support her definition of Quality as accuracy, customer service, timeliness, cost, 

and productivity. We concur with this ‘‘balance’’ in case processing and believe that 

all components should operate under this same definition. We support the concept 

that quality reviews should be centralized and that the policy component must play 

a central role in the review and assessment of quality. We further support the concept that quality must be instilled at every step in the process and quality measures 

should be applied consistently within and across components. We support the Commissioner’s plan to instill an in-line, or in-process quality system that would address 

the consistency between the DDS and Administrative Law Judge’s (ALJ) decisions, 

the variations among DDSs, and the variation among ALJs. Most importantly, it 

would result in the right decision being made as early in the process as possible. 

NCDDD feels that any quality review process should be aligned organizationally 

or in function with SSA’s Policy component. Policy must be written that is clear, 

concise, and which lends itself to a consistent quality process. We recommend a culture change in which all SSA components (Operations, Disability and Income Security Programs, Quality Assurance and Performance Assessment, and Systems /eDib) 

are committed to the same intent and definition of Quality. Currently, DDSs operate 

under a preponderance of evidence standard while ALJs operate under a substantial 

evidence standard. All components should focus on the same outcomes. Currently 

some of these components stress competing outcomes which result in problems within the program. For example, stressing certain workload numbers at one component 

at the expense of another component contributes to cost and time delays in the overall process. Another example concerns policy that is written without regard to the 

operational impact on case processing. Over the past few years SSA Disability Policy 

has developed from a medical model to one where there is emphasis on the functioning which is subjective and which adds unnecessary costs, time delays, and inconsistency to the decision. 

We are willing to work with SSA’s Policy Component to ensure that SSA disability 

policy is clear, concise, and consistent among DDSs and across all components. We 

59 

want to work with SSA to ensure an operational success in this area and to help 

the Commissioner achieve her goals. We strongly believe that the DDSs need the 

adequate resources to achieve the Commissioner’s definition of quality and consistent application of policy. 

Lastly, we believe that specific measures of success for these quality outcomes 

should be SMART: 

Specific 

Measurable 

Attainable 

Relevant 

Time based 

Quick Decisions 

We concur with the Commissioner that there ought to an expedited decision making process for those cases where there is an obvious disability. The NCDDD has 

identified nearly 50 impairments that might potentially fit this category. We believe 

that the documentation requirements have grown over recent years to include an 

expanded role of the claimant’s functional ability as opposed to a purely medical 

model. This change in the documentation requirements has resulted in increased 

documentation of claims and has decreased the consistency of the process. We applaud the Commissioner’s approach to identify those ‘‘Quick Decisions’’ and render 

these decisions expeditiously. 

We believe that the DDSs already achieve this goal in the current model and that 

with further definition of the criteria, the DDSs are the best place to make these 

decisions. We believe that the placement of this process at any other component 

adds an unnecessary level of bureaucracy. In fact, even with the current process an 

NCDDD study revealed that 19% of allowance decisions are made in less than 25 

days. We believe that we can surpass this goal with the current trained disability 

staff and a refined and streamlined process of ‘‘Quick Decisions’’. 

We further propose that these decisions be given to the DDSs’ most experienced 

Disability Examiners so they can correctly and timely make as many of these decisions with curtailed development and documentation and independent of MC input. 

Using the current electronic environment of case processing (eDib) these cases can 

be queued to the DDS electronically, flagged for a ‘‘Quick Decision’’ review, and assured of case processing of less than ten days in many instances. 

The DDSs are willing to conduct the disability interview on these cases provided 

we are given the adequate staffing and resources. Our cost analysis shows that the 

DDSs can process these cases $26 million dollars less than a federal component. 

Medical Experts 

The NCDDD’s solution to the Commissioner’s use of Medical Experts is that we 

leave the DDS Medical Consultants (MC) in the DDSs so that they can continue to 

provide medical ratings and continued to provide the necessary ongoing medical 

training to adjudicator staff, assist with medical/public relations, work with medical 

source recruitment, and provide medical consultant training. We propose an electronic model to pool and share DDS and other trained disability medical experts. 

Currently, the process requires all of the DDS MCs as well as the SSA Regional 

Office MCs to process the disability workload. 

Early information has demonstrated increased task time in reviewing the medical 

evidence on-line and preparing the electronic medical ratings that are required in 

the eDib process. However, it is hoped that some of this will be offset by the ‘‘endto-end’’ time required of the total disability process. The benefits gained by having 

the ability to share these resources in an expanded electronic pool will further add 

consistency to medical ratings. To further enhance consistency, we propose these 

medical experts provide medical ratings to all components: DDSs, Reviewing Officials, and Administrative Law Judges (ALJs). Currently, resources are expended 

with the purchase of consultative examinations and medical source opinions requested by ALJs. We recommend making trained disability MCs available to ALJs 

who will provide medical ratings. This will ensure the consistency of medical evaluations and provide the best usage of the Agency’s resources. 

We believe that leaving these MCs in the DDS can maximize the efficiencies, accountability, and productivity of this staff. By placing cases for these MCs in an 

electronic queue, SSA gains the added benefit of ensuring consistency and of providing specialists to those areas where currently there is none. DDSs support this 

opportunity for expanded MC specialists availablility across the nation and to all 

compontents. 

60 

Service Delivery Expert Proposal 

DDS Directors strongly support an enhanced role for experienced Disability Examiners (DE) in the decision making process. While we support an expanded Quick 

Decisions process, we maintain that this is just one area whereby a highly skilled 

and experienced DE should be able to recommend disability decisions. NCDDD recommends a triage decision making process whereby experienced DEs are able to 

make decisions on those obvious allowances and denials. This reserves valuable 

agency resources and MC time to be devoted to those more complex medical decisions. We believe that this is an integral step in the process ensuring that the 

trained medical resources are best utilized at the appropriate steps in the process. 

Currently, using a test model, there are DDSs who utilize a similar model which 

has demonstrated efficient, cost effective, and quality decisions on those cases. We 

are requesting that the remaining DDSs be allowed to participate in this process. 

We will work with SSA to develop and maintain the training to ensure quality and 

consistency in this area. 

Elimination of Reconsideration and Creation of Reviewing Official 

NCDDD supports the elimination of the Reconsideration step as it currently exists. 

While the Commissioner’s plan calls for a federal Reviewing Official position as 

the first level of appeal, NCDDD proposes that this function could be achieved by 

a state Reviewing Official that would perform an on-the-record review of the file, 

give an expanded explanation of the reasoning for a denial, process expedited decisions in allowance claims, and provide feedback to the quality component for purposes of policy and decisional accuracy. While the Commissioner’s proposed plan 

calls for an attorney to handle this appeals step, we propose that experienced DDS 

staff with the appropriate skill-sets can also be effectively employed to achieve this 

goal. For example, the DDS Disability Hearing Officers currently conduct evidentiary hearings that have received very good feedback from various components, 

including OHA. 

The DDSs have long been under-resourced in terms of providing an expanded rationale. However, previous tests demonstrated effectiveness in this area. The DDSs 

support the expanded rationale but would also need the necessary resources to implement this. We believe that there is already a structure in place at the state DDS 

level that can address this appeal level within the parameters outlined above and 

we are very concerned about adding another administrative layer and the increased 

cost associated with this. The state model for appeals saves over $21 million in administrative costs for SSA. 

Vocational Specialists 

NCDDD supports the use of Vocational Specialists (VS) throughout the disability 

process. We propose the following process across all components: 

• Updated vocational policy • Vocational training for all adjudicators and VSs for all components • Develop a curriculum and training plan for VSs • VS certification by SSA • Identification of VS in all components available for consultation • Electronic queue of VS via the electronic process 

The current model is lacking since SSA has not devoted the resources to a comprehensive vocational training package such as the basic training model available 

for DEs. This has been left up to the various DDSs to develop their own vocational 

training packages, leading to variations among DDSs in this area. There are even 

greater differences between DDSs and ALJs in regard to Vocational Specialist training, causing inconsistency between components. We advocate a consistent training 

module for all VSs and that this staff should be utilized consistently among DDSs 

and across all components via the eDib process. NCDDD will work with SSA to develop a Vocational Specialist training curriculum. We believe this would ensure consistency within and across components. While this expanded vocational training 

would require resources, we believe that overall administrative costs can be curtailed as all components use the same vocational criteria. As vocational evidence 

and analysis is consistently applied earlier in the process, the agency will realize 

consistency in case processing as well as administrative cost savings. 

Demonstration Projects 

NCDDD supports the various ‘‘return to work’’ initiatives endorsed by a new disability plan and we welcome the opportunity to participate in demonstration 

61 

projects of this nature. Since these demonstration projects do not require the electronic infrastructure for implementation, we recommend that SSA begin this process 

immediately. We support the notion of early intervention in this area and believe 

that such efforts are not only cost-effective but also serve as a social/psychological 

boost to potential disability applicants involved in the process. We support the 

added resources needed to fully fund such endeavors, since we believe that such outreach would also increase disability applications. 

We strongly support the transitional (youth) initiatives and believe that public Vocational Rehabilitation should play a major role in such efforts. We further support 

ongoing continuation of medical benefits as part of the claimant’s rehabilitation 

process and any other changes that would entice disabled individuals to return to 

work. 

In conclusion, we support the Commissioner’s desire to structure a disability program that renders the right decisions as early in the process as possible and that 

fosters ‘‘return to work’’ at all stages in the process. We share Commissioner 

Barnhart’s definition of quality and her goal of improved consistency in decision 

making within and across components. We are appreciative of the fact that Commissioner Barnhart has solicited input from NCDDD in an active manner. We are continuing to provide information to her that will help her to achieve her stated goals. 

We are also appreciative of SSA’s recent efforts to include NCDDD in active discussions regarding disability policy. The DDSs will need the necessary resources to effectively implement these changes. It is our understanding that an average DDS 

cost-per-case is $400 as compared to the nearly $2000 cost-per-case at the OHA 

level, making us the best value in the entire SSA disability process. We are confident that by working together we can achieve our common goal of improved service 

to current and future disabled Americans. 

Mr. Chairmen, thank you for the opportunity to provide this testimony today. 

f 

Chairman HERGER. Thank you, Ms. Everett. The gentleman 

from Florida, Chairman Shaw, to inquire. 

Chairman SHAW. Thank you. Hal, it has been 24 years since 

you and I first came to Congress. We look a little different. I never 

thought at that time that either one of us would have the word 

‘‘Chairman’’ before our name for anything. 

Mr. DAUB. I enjoyed being your classmate, and I enjoy being on 

this side of the microphone now. It is a pleasure to be with you 

today, thanks. I hope you didn’t take too much time to calculate 

that 24-year figure. 

Chairman SHAW. I am pretty quick about that. Hal, looking at 

this, and maybe you are not the right person to direct this question 

to, but do any of the Commissioner’s recommendations require congressional action to implement them? 

Mr. DAUB. In my view, none of them. 

Chairman SHAW. So, these are all administrative processes? So, 

none? 

Mr. DAUB. That can be done without further authorization. My 

last point in my testimony was the electronic claims processing, the 

eDIB system, as we are referring to is fundamental. That has to 

be in place as the launching pad for this to work. Assume that that 

gets done, then reforming the process administratively in generally 

the way that the Commissioner is attempting to suggest would be 

helpful. It is still going to run up against a wall of needing to look 

at the one problem that we have, which is, if you look at the inconsistencies between the Americans with Disabilites Act (P.L. 101– 

336) goals, and the definition, the 50-year-old statutory definition 

of ‘‘disability,’’ which has never been changed, and if you look at 

the improvements that have been made in medications, rehabilitation, and therapy, we have made so much progress, and we have 

62 

a very different workplace, but we are still saying to people, you 

are disabled, you cannot work, and if you try to work and have a 

little dignity and a little extra money, you are going to lose your 

health benefits. So, Congress does have, as the next step, a very 

important opportunity to look at the statutory definition, which in 

turn, relates back to this whole idea about whether people get hung 

up for, sometimes, 4 and a half years in this current process that 

is pretty much based on an old definition. 

Chairman SHAW. The appellant process, which the Commissioner proposes to shorten by removal of one step, that is not in 

the statute, that is in the regulations? 

Mr. DAUB. The appeals process, everything flows inside of the 

current Commissioner’s prerogative. 

Chairman SHAW. That is what I wanted, to have that in the 

record. Ms. Marshall, while NADE supports the Commissioner’s 

proposal to replace the reconsideration step of appeals with a decision by a RO, you are not convinced that such a step improves customer service. How would you change the Commissioner’s proposal 

so that it would improve customer service? 

Ms. MARSHALL. We are not sure exactly what role the RO is 

going to be taking right now. We do think that having this person 

as an attorney rather than having the current process that we have 

with the State Disability Hearing Officers, would make it more adversarial, which would be less customer friendly we think. The current system, where we have disability hearing officers who are programmatically trained, as well as trained in the process, would 

work, we feel, would be more friendly to the claimant, more customer friendly and more effective, and because we think that medical input, and attorneys are not, necessarily are not trained in the 

medical aspects of the disability program, they would not, the decisions they make would be, we think, probably less accurate. 

Chairman SHAW. Ms. Everett, the Commissioner, in her testimony, mentioned some of the things that were, in a very favorable 

light, I might say, to the Mississippi office, I assume that is your 

office in Jackson? 

Ms. EVERETT. It is. 

Chairman SHAW. Congratulations. 

Ms. EVERETT. Thank you. 

Chairman SHAW. In your testimony you suggest that having 

State disability determination staff conduct certain disability interviews, that was on page 6, and appeals processes, that was on page 

8 of your testimony, would save about 26 million and 21 million respectively in administrative costs for the SSA. You also suggest the 

need for additional resources to implement such a plan. Could you 

explain how you arrive at these figures, and what level of additional staff and resources that you have in mind? 

Ms. EVERETT. We are basing our information on the best data 

that we have. We certainly would welcome any independent review 

and assessment of that by SSA, who would have more access to 

data. We certainly take the opportunity to compare current infrastructures already in place in the DDSs, and the current infrastructures which would need some additional resources, but if you 

had to create independent Federal components to set up both independent units with all the ancillary functions at the salary difVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00066 Fmt 6633 Sfmt 6602 E:\HR\OC\99682A.XXX 99682A
63 

ferences between the State and Federal levels is how we determined the cost differences there. Of course, we need the additional 

resources primarily if we take on additional tasks in addition to 

keeping up with the additional workload. 

Chairman SHAW. Thank you. Mr. Chairman? 

Chairman HERGER. Thank you. The gentleman from Maryland, 

Mr. Cardin, to inquire. 

Mr. CARDIN. Thank you, Mr. Chairman. In the interest of full 

disclosure, let me acknowledge that I was trained as an attorney. 

I notice some of you are recommending that we change some of the 

requirements here. As I said in the beginning, I am concerned 

about how long it takes to get through the process. All of you have 

expressed the same concern. The Commissioner has expressed the 

same concerns. I also am concerned about the independent review 

and the fact that we try to maintain a truth-seeking process rather 

than an adversarial process. 

With that in mind, I want to concentrate on two of the suggestions that have been made by the Commissioner that causes me at 

least to want more information about. The first is that the ALJ, if 

he or she disagrees with the ROs, has to document or show the difference as to how he or she reached that judgment. I am concerned 

that that could compromise the de novo or independent review by 

the ALJ if that person has the burden to justify a change from the 

RO. 

The second, and many of you have talked to this, is the elimination of the Appeals Council. I have been told by staff that the 

statistics show that about one out of every four matters that go 

through the Appeals Council, there is some relief to the claimant. 

In many cases it is remanded, but there is some relief. I am concerned that the District Court is not well suited to deal with truth 

seeking, is more adversarial, and it might be more difficult for that 

type of relief to be granted at a District Court level rather than 

within the agency at the Appeals Council. So, I would welcome 

comment from any of our panelists in regards to these two issues, 

whether they share these concerns or can help me in alleviating 

these issues. Dr. Dann? 

Dr. DANN. Thank you. I would like to reply to that. With the 

current DDS statistics of 90 percent accuracy and above, as noted 

by Federal agencies, I am very concerned that after typically two 

runs through the DDS at 90-percent accuracy, the case then proceeds on to the ALJ and we have a reversal of the DDS decision 

61 percent of the time. There currently is no critical quality review 

of ALJ decisions, and I believe that is what the Commissioner was 

getting at by having a panel of people to review the ALJ decision. 

I definitely admire your quest for the truth, and I think that is 

what we are all here for. 

I would just note that, unfortunately, having been a physician for 

24 years now, medicine is not an exact science. There is a lot of 

subjectivity to it, and unfortunately, not everybody can assess their 

own capabilities accurately, in fact not even their own physician 

necessarily assesses their capabilities accurately. When I was practicing clinical medicine I was my patients’ advocate and did whatever I could for them. I was not their judge, and so I think that 

it is very important to have a review of what we get from commuVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00067 Fmt 6633 Sfmt 6602 E:\HR\OC\99682A.XXX 99682A
64 

nity physicians by a physician to make sure that what is being 

stated about a person’s capabilities is accurate. 

Mr. CARDIN. Appreciate that. Hal? 

Mr. DAUB. At the Appeals Council, about 2 percent of the cases 

get approved, which is about 1,500 cases out of 77,000 get approved. I need to go back and look at this point that you make that 

it is one out of four, I haven’t looked at it that way before, who get 

relief. I think it proves the point when you see the reversal rate, 

and when you look deeper into that reversal rate and you see the 

great disparity between jurisdictions as to how cases are resolved. 

That reversal rate does raise questions of consistency, when you 

take someone who is well trained and has been deciding these 

cases in DDS for 20 years with great knowledge, particularly of the 

larger caseload, which is mental impairments. It is not like in the 

old days when it was physical, broken arms and bad backs and 

things of that sort. Now, much more of the caseload is mental impairment, that are subjective. You begin to ask yourself how do you 

step back from the existing system and adapt what we have, given 

the constraint of keeping a fair process. Certainly we can do better 

than putting somebody through 5 months to wait from point of 

onset, then 2, 3, or 4 years in a process, knowing that if they stay 

in the system long enough and appeal it long enough, with the 

record never being closed, that they are probably going to get a reversal and probably going to get their benefits. 

Mr. CARDIN. Understand that first. 

Mr. DAUB. So, the RO then fills a need here to do a couple of 

things I think. This is so, whether they are attorneys or not; I happen to think that we will get a better quality of a file moved into 

the ALJ system if they are attorneys. They may not have as much 

medical knowledge, but neither does the judge who is going to ultimately look at that case. We have trusted the judge to be able to 

deal with the medical evidence, so we can trust the RO to put together a more objective file, and the judges will tell you, I think, 

that one of the biggest problems they have is that the cases, when 

they come on appeal, are not complete. So, I think that that is a 

wise step, and it is worth the risk to get an overall better result. 

Mr. CARDIN. That is a good point. I just wanted to underscore 

the ALJ is still the first opportunity independent of the agency, 

and that that is important to maintain that. I think you make a 

good point though that it is important that the ALJs have the opportunity to do this objectively, and having a good complete file in 

some orderly way is important as long as there isn’t additional 

pressure, because there are some who already think the ALJ has 

pressure from the agency, as long as there isn’t the pressure for 

conformity to the agency’s position more so than to what the ALJ 

thinks is the appropriate, 

Mr. DAUB. We put the judge in a tough position, Congressman, 

to wear the hat of a judge in the hearing, not the courtroom but 

the hearing room, and then also have to assure a completeness of 

the record as if they were sort of adversarial to the claimant who 

is sitting there in the ALJ hearing room. It is an awkward situation we put the judge under, in a way, to wear two hats like that 

since it is not adversarial, but 90 percent now almost I think or 85 

65 

percent of all the claimants that come, come with an attorney into 

that hearing room. 

Mr. CARDIN. Thank you. Thank you, Mr. Chairman. 

Chairman HERGER. I thank the gentleman. The gentleman 

from Texas, Mr. Brady, to inquire. 

Mr. BRADY. Well, thank you, Mr. Chairman, and thank you for 

holding this hearing. I apologize that I missed the earlier testimony, but I got to look at it last night for a period. Throughout all 

the discussions on making this a better system, I continue to hear 

the complaint that the disability cases and the information is not 

complete early enough in the process, and it seems in some way 

that I keep looking for an incentive or some requirement that 

forces these cases really to be complete at every stage, each stage 

in the process. It seems that it is better for the claimant, it is better for you as decisionmakers, and my question, a simple layman’s 

questions, is what can be done to sort of front-load the completeness and accuracy of a claimant’s record, both medical, occupational, all that? Ideas from the panel? 

Mr. BUFFALOE. If I may start on that since I represent the 

managers and the supervisors in the Social Security field offices 

where the claim is taken. Certainly that has been an issue as long 

as we have had disability claims. Part of the problem is we do have 

two components involved, obviously, but field office claims representatives who are responsible for initiating the application have 

no medical training. That is part of why my organization feels that 

on the quick decision piece certainly, that with some additional 

training, rather than having that handoff and then starting the 

process after we have handed it off to the DDS, that with some additional medical training we could avoid that hand-off in many, 

maybe most, of the quick decision cases, and then only later hand 

off the ones that have to go on for additional review and start the 

normal DDS, ALJ process, but that has been something that has 

been with all of us that deal with the disability programs, the fact 

we initiate the claim, our claims representatives, but they don’t 

have the medical training. So, we do the shotgun approach. We try 

to gather information on all possible disabilities even though there 

may be only one or two they have that actually may be pertinent 

to a disability decision. We would have to gather everything, and 

then when the DDS gets involved, they can focus in on what are 

the key things that may in fact turn out to be an approval of a decision. 

Mr. BRADY. Isn’t one of the roles of the claimant’s representatives or attorney to create as complete a package as early in the 

process? Yes, ma’am? 

Ms. EVERETT. Sometimes we have competing goals. I mentioned that we concur with the Commissioner’s definition that quality be the combination or the balance between all those components. Sometimes the DDS’s productivity expectations drive some 

of this. Part of what I reference, I talk about the quality all 

throughout the process. It must begin with the field office. It must 

be consistently applied all throughout is part of the problem also. 

The policy speaks to some of it. 

In the past few years, the policy evolved from a more purely 

medical model to one in which there is more subjectivity and funcVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00069 Fmt 6633 Sfmt 6602 E:\HR\OC\99682A.XXX 99682A
66 

tioning in the listings in the policy. Mr. Daub referenced the fact 

that we see more mental claims now. We see more allegations of 

mental claims. Whether or not we see more mental patients is another area for discussion, but as you evolve this policy from a more 

purely medical model to one that has introduced more functioning, 

therefore more subjectivity, it becomes harder to define what is a 

complete record. Then of course we all recognize that between the 

time a case is decided at the DDS, and the 18 months or 2 years 

that it is seen by the ALJs, it is a different case. 

Mr. BRADY. Sure. 

Ms. EVERETT. So, it is a very complex picture. 

Mr. BRADY. Yes, sir? 

Dr. DANN. Congressman, you have hit one of the nails on the 

head. One of our difficulties in the DDS is obtaining good quality 

evidence, and in a timely manner. Right now, the way this is done 

is requests go out to treating physicians for their information. That 

is completely voluntary, whereas in other legal, medical-legal programs, a subpoena goes out and the record comes. There is no 

choice of whether or not to send that in. I would ask that at some 

point the Commissioner and Congress consider whether or not the 

medical records for a Federal decision like this might be worth a 

subpoena to obtain. You could certainly get better records faster. 

Mr. BRADY. In real life, what kind of impact would that have, 

timely return of requested medical records? 

Dr. DANN. I can tell you on both sides of the coin. I practiced 

occupational medicine for a long time before I joined the DDS, and 

I can tell you in my very fast-paced clinic that when record requests came in for Social Security information, we would try to get 

to them, but they were very low on our priority list. There was not 

a substantial amount of reimbursement for those records, and unfortunately, they did not always go out when they should have, because of that, I think that we really should consider the possibility 

that these records are important legal documents, and that maybe 

they are something worth a subpoena. 

Mr. BRADY. Thank you. 

Mr. DAUB. Congressman, let me comment, just briefly. It probably is always going to be a very frustrating process at the early 

stage of intake, but the eDIB process of electronically building the 

input more thoroughly and more consistently will help. Then, it 

will improve even more with Secretary Thompson’s idea of moving 

to electronic medical records. We are starting to see new forms of 

communicating. Physicians now can dictate and have their audible 

voice actually computer type the report. I have watched this myself 

in some offices. Our independent board goes out twice a year to 

field offices, and I have tried to read through a paper file. You have 

to be a magician to read the handwriting that comes, not only in 

original form, but over the fax. To decipher it, you spend hours, for 

nurses, physicians, and consulting groups, to just try to figure out 

what somebody wrote, even if you get the records. So, a lot of the 

things we have to do are just to improve the gathering and the 

clarity of information. I think one of the things the Commissioner 

is saying is that if we spend more time in the beginning on that, 

then a lot of the rest of the process isn’t going to be so prolonged 

and so costly. 

67 

Mr. BRADY. If you think the handwriting is bad, wait until that 

software tries to decipher a Texas accent. 

[Laughter.] 

The only other point I would make, Mr. Chairman, is I think, 

one, those are good ideas. Two, I still think there is a way, especially, I think it is great, I think it is important and vital really 

that claimants have the ability to have representatives or attorneys 

moving their case through this process. I think it is that attorney’s 

and representative’s responsibility to make that document, an application as complete and thorough as early as possible in the process. I sometimes hear comments on the opposite side of that where 

that may not be happening. At some point I think we need to explore their role, if you are getting paid to advocate and complete, 

then we probably need to require that type of job be done so that 

the other decision makers can hopefully reach a decision faster and 

more accurately. So, thank you, Mr. Chairman. 

Chairman HERGER. I thank the gentleman. His time is expired. 

The gentleman from California, Mr. Becerra, to inquire. 

Mr. BECERRA. Thank you, Mr. Chairman. Thank you to all of 

you for your testimony. Let me see if I can focus on just a couple 

of items that were discussed with the Commissioner a bit, and perhaps, Chairman Daub, you could help me a little bit here because 

of the recommendations made by the board itself, the Advisory 

board. My understanding is that the board also recommended or at 

least suggested consideration of this idea of going straight from the 

ALJ determination to the District Court for review. 

Mr. DAUB. A Social Security Court. 

Mr. BECERRA. A Social Security Court, right, which would be 

a totally new entity within the Federal Court system. 

Mr. DAUB. Maybe very responsive to your concern a moment 

ago. 

Mr. BECERRA. Yes, and I think that could be. 

Mr. DAUB. That takes a statutory change, though. That is something you all are going to have to do. 

Mr. BECERRA. Did the Advisory board say where we would get 

the money to establish a fully new court system? 

Mr. DAUB. We think that if you look at the way that happens 

now, if there is time to answer your question? 

Mr. BECERRA. Please. 

Mr. DAUB. You are looking at a huge amount of time and resources being absorbed now in this whole process of constant appeal over time. With no closing of the record, you just keep adding 

a little to it and it changes, and the medical condition changes. So, 

there is a lot of efficiency that can be added. When that case gets 

to a District Court or to a magistrate under the current process, 

they sort of describe it as a shoe box. I have talked to magistrates, 

and they say they get the case and it is in sort of a confused state. 

Then they look at it, and it is not nearly in the shape they want 

it in, so they automatically order a remand of the case. Back it 

comes up through the system, and the lawyer got $2,000 simply for 

going for 5 minutes and saying, ‘‘Let us have a remand.’’ Federal 

judges don’t want to look at these cases. So, it will go to a specialized court. 

68 

Mr. BECERRA. What about trying to streamline the process 

after the ALJ before the District Court, where you have a functioning administrative review of the ALJ’s decision, in essence, the 

appeal of the ALJ’s decision, but handled administratively so you 

do it in-house with the expertise that you have without creating an 

entirely new court system or using the Federal Court. 

Mr. DAUB. I would certainly be open to that approach, except a 

lawyer is also going to say there was no lawyer in there in that 

hearing room on the other side of that case to start with. 

Mr. BECERRA. I think that trying to avoid the adversarial conditions that exist in a District Court or in most of these settings 

to begin with, I think it is always good to try to have this be as 

consumer friendly as possible. 

Mr. DAUB. We agree. 

Mr. BECERRA. No one is trying to deny someone benefits if they 

are entitled to them. What we are trying to do is develop the best 

record, so it seems to me that we almost lose the spirit of what we 

are trying to do in these disability claims if we make it too adversarial, because this should not be a hostile setting. We are not trying to prove that you are not disabled. We are trying to get the best 

evidence to prove whether or not you are entitled to the benefits, 

and to me, again, knowing how the courts work and how bogged 

down they already are, and how expensive they are, especially for 

a claimant to use, it seems to me to jump directly to a court level, 

rather than trying to refine the decisions, I think the idea that the 

Commissioner has of making sure that up front decisions are made 

competently, so that from thereon in you are developing a good 

record is obviously the best approach first. I would hope that we 

would avoid trying to circumvent the process or shorten it to try 

to expedite a final decision, and instead, take something to the 

Federal Court level, where the rules are much more rigorous, it 

will not be consumer friendly because there it is a court, so it is 

naturally adversarial. There is where the claimant will lose all 

touch with any humanity that exists in a system where hopefully 

you are not trying to undo a claimant’s benefits claim. 

Mr. DAUB. With 5 or 6 million people that are on the disabled 

rolls today, costing the Federal Insurance Contributions Act Trust 

Fund about $100 billion, and when you begin then to look to 1 person who spends the agonizing 4 to 4-and-a-half years in that appeals process today. 

Mr. BECERRA. Absolutely, I don’t think anyone. 

Mr. DAUB. So, the cost of the court that we are talking about 

should not be all that. 

Mr. BECERRA. I don’t think anybody should go through a process that runs, that is why we are here. Let us not try to accelerate 

a process and send them to purgatory at the same time that we are 

telling them we are trying to get them benefits. Let me ask one 

last question, and, gosh, it is always the case that you run out of 

time. 

Chairman HERGER. The gentleman’s time has just about expired. 

Mr. BECERRA. Chairman, I will just ask this last question. The 

record is closed after the ALJ makes a determination under the 

proposal made by the Commissioner. Right now there are certain 

69 

circumstances under which a record can be, additional evidence can 

be supported for the record even after the ALJ has submitted his 

or her decision. It seems to me that there is a good claim that can 

be made that we should at least have an exception, a good cause 

exception to closing the record. 

A quick example would be you have an individual who has Multiple Sclerosis (MS) or claims to have MS, and is therefore disabled. 

At the point that the ALJ makes the determination, the determination is, no, that is not enough of a disabling condition to stop you 

from being able to function. Time goes by. The appeals process goes 

by. All of a sudden at this stage now the medical determination is 

that this person is disabled as a result of MS, but because the 

record is closed once the ALJ decided, that new evidence can’t be 

considered. It would seem to me that any recommendation, they 

should have some latitude for the claimant so that at least good 

cause, if there is good cause, then why reject good evidence from 

being considered? 

Mr. DAUB. That should always be the case, and I think even 

under the Commissioner’s proposal that will practically be the case 

because a judge will still have the authority at some point to find 

good cause. The problem is now that even if it is past the ALJ and 

is up at the Appeals Council, they can still enter the evidence in. 

In most cases that ought not to be allowed. You will never get finality at any stage of the proceeding. 

Mr. BECERRA. Well, that is why you say it has to be good cause. 

Mr. DAUB. I think you are correct. 

Chairman HERGER. The gentleman’s time has expired. 

Mr. DAUB. I think you make a good point, Congressman. 

Mr. BECERRA. Thank you very much. 

Chairman HERGER. Dr. Dann, if you could please provide us 

with more information regarding your statement that eliminating 

the DDS medical consultant will waste money, encourage fraud, 

delay legitimate allowances, and further burden DDS examiners? 

Also, do you have any suggestions that could be implemented right 

away that would further discourage disability applicants from attempting to defraud the system? 

Dr. DANN. Yes. The DDS medical consultant saves money in a 

great number of ways, number one, we frequently are able to avoid 

further development of the case. We basically have enough evidence to come to a decision and can avoid a consultative exam. 

Those typically cost $100 to $150 per claimant. We can avoid erroneous allowances. An allowance in today’s Social Security system 

averages a value of $100,000 to $200,000. Unfortunately, allegations and subjective evidence are not always the truth, and they do 

need to be critically assessed. There is a large difference to us 

whether a patient uses a cane or needs one. We need to look for 

objective findings to support the subjective allegations, swelling, atrophy, deep tendon reflex changes. 

The DDS MC avoids fraud by looking for that type of findings in 

the record and looking for inconsistencies. It is not unusual for me 

to get a statement from a treating physician that their patient cannot sit more than 6 hours a day, or not even 6 hours a day, and 

cannot walk or stand 2 hours a day. That would make them an 

automatic allowance by our standards, and yet in the same record 

70 

I find evidence that they live alone, keep house, do their grocery 

shopping and ride a bicycle. Unfortunately, exaggeration of symptoms is a part of multiple claims every day. That is what I do for 

a living. 

On continuing disability reviews, it is very important to be familiar with the statutes here. There is a medical improvement review 

standard. We are not necessarily reviewing how a patient is doing 

today. We are actually reviewing how their condition today compares to when they were allowed. It is an important legal principle 

because we do not want to clutter the courts with decisions going 

back and forth, disabled here, not disabled there. 

It turns out, unfortunately, that if a bad decision takes place, 

that decision is perpetuated literally ad infinitum, because I have 

seen cases, I assure you, of patients that had normal examinations 

and were assessed by the DDS as having very little impairment, 

no disability, or maybe even a medium level capacity for work, and 

because of some very compelling subjective complaints given to an 

ALJ, or possibly a note from their doctor saying that they can’t do 

these things, the decision of the DDS was ignored, and the ALJ allowed the claim. Erroneous denials, on the other hand, certainly 

are not only a huge disservice to the disabled individual, but they 

end up costing us a great deal later in reconsideration and OHA 

process. It is important to have a physician looking at the record 

to come up with the true medical assessment. Most importantly, we 

are already in place, and I feel that we have a lot of experience and 

a lot of good skills to offer to the system. 

Chairman HERGER. Thank you very much, Dr. Dann. Certainly 

while we want to ensure that those who legitimately are deserving 

of the services, we also by the same token want to make sure that 

those who are not, are not defrauding the system and the American 

taxpayers. Thank you very much. I want to thank each Member of 

this panel for your testimony, and you are excused. 

Chairman SHAW. For the final panel this afternoon, we have 

Marty Ford, who is a Co-Chair of the Social Security Task Force, 

Consortium for Citizens with Disabilities (CCD); Thomas Sutton, 

who is Vice President of the National Organization of Social Security Claimants’ Representatives (NOSSCR) from Langhorne, Pennsylvania; James A. Hill, who is President of the National Treasury 

Employees Union (NTEU), Chapter 224, Cleveland Heights, Ohio; 

Laura Zink, who is a member of the Federal Managers Association 

(FMA), Social Security, Chapter 275, Phoenix, Arizona; and Ronald 

Bernoski, who is President of the Association of ALJs from Milwaukee, Wisconsin. Thank all of you for being here with us today. 

We have your full statement which will be made a part of the 

record, and we would ask you to summarize as you see fit. Ms. 

Ford, we will begin with you. 

STATEMENT OF MARTY FORD, CO-CHAIR, SOCIAL SECURITY 

TASK FORCE, CONSORTIUM FOR CITIZENS WITH DISABILITIES 

Ms. FORD. Chairman Shaw, Members of the Subcommittee, 

thank you for this opportunity to testify. Improving the disability 

determination process is critically important for people with disabilities, and we applaud Commissioner Barnhart for establishing 

this as a high priority. We also applaud her work in making the 

71 

design process an open one. She has sought the comments of all interested parties including beneficiaries and consumer advocacy organizations. We believe the resulting discussions will have a positive impact on the final proposal. We have submitted a detailed 

written response to the Commissioner, and I will highlight our key 

recommendations here. 

We strongly support efforts to reduce unnecessary delays and to 

make the process more efficient so long as changes do not affect the 

fairness of the process to determine entitlement to benefits. Emphasis on improving the front end of the process is appropriate 

since changes could substantially improve the quality of decisionmaking and possibly reduce the need for appeals in some cases. 

However, any changes to the process must be measured against the 

extent to which they ensure fairness and protect the rights of people with disabilities. We have made the following major recommendations. 

There should not be a separate appeal from the reviewing official 

to the ALJ level. The record should not be closed after the ALJ decision. If the record is closed, there should be a good cause exception to submit new and material evidence. The claimant’s right to 

request review by the Appeals Council should be retained. Any 

changes considered for the Appeals Council should be postponed 

until SSA determines whether the electronic folder and other 

changes improve the timeliness and quality of the work at the Appeals Council stage. The independence and quality of medical experts, consultative examiners and vocational experts need to be ensured. 

We strongly support efforts to implement the eDIB folder since 

it has great potential for improving the adjudication process and is 

critical to the success of the proposed changes. An overarching concern is whether claimants and their representatives will have appropriate access to the files. We have also urged the SSA to ensure 

protection of original documents by requiring that exact, unalterable electronic copies of all originals be permanently maintained in 

the electronic folder. 

The Commissioner’s proposal would create a new RO position 

prior to review by the ALJ. We support the RO’s ability to obtain 

additional evidence, narrow issues in the claim, and issue a fully 

favorable decision. However, we recommend that there not be a 

separate appeal from the RO level to the ALJ level. Further, to 

guarantee the claimant’s right to a de novo hearing at the ALJ 

stage, the RO’s decision should not be entitled to more weight or 

a presumption of correctness when considered by the ALJ. 

The Commissioner’s proposal would close the record to new evidence after the ALJ decision. While we strongly support the submission of evidence as early as possible, there are many legitimate 

reasons why evidence it not submitted earlier and why closing the 

record could be harmful to claimants, including changes in the person’s medical condition, and the fact that the ability to submit evidence is not always in the claimant’s or representative’s control. 

We believe that the claimant should retain the right to submit new 

and material evidence after the ALJ decision. 

The Commissioner’s proposal would eliminate the Appeals Council and establish an oversight panel to review decisions by ALJs. 

72 

We believe that the claimant’s right to request review by the Appeals Council should be retained. The Appeals Council has important functions that benefit claimants, such as the ability to allow 

new and material evidence, review of improper ALJ dismissals and 

denials of reopening requests, review of ALJ unfair hearing allegations, and review of non-disability issues. If the Appeals Council is 

not retained, we believe that its function should be carried out by 

some other appropriate entity within the SSA. We fear that elimination of the Appeals Council and its important functions could increase the caseload of the Federal Courts. In any event, consideration of eliminating the Appeals Council should be postponed because proposed changes earlier in the process, combined with the 

electronic folder, may relieve pressure on the Appeals Council. 

Again, thank you for this opportunity to testify, and I am happy 

to answer any questions you may have. 

[The prepared statement of Ms. Ford follows:] 

Statement of Marty Ford, Co-Chair, Social Security Task Force, Consortium 

for Citizens with Disabilities 

Chairman Shaw, Chairman Herger, Ranking Member Matsui, Ranking Member 

Cardin, and Members of the House Ways and Means Social Security Subcommittee 

and Human Resources Subcommittee, thank you for this opportunity to testify regarding the Commissioner’s proposal to change the disability claims process. 

I am Director of Legal Advocacy for The Arc and UCP Public Policy Collaboration, 

which is a joint effort of The Arc of the United States and United Cerebral Palsy. 

I am testifying here today in my role as co-chair of the Social Security Task Force 

of the Consortium for Citizens with Disabilities. CCD is a working coalition of national consumer, advocacy, provider, and professional organizations working together with and on behalf of the 54 million children and adults with disabilities and 

their families living in the United States. The CCD Social Security Task Force focuses on disability policy issues in the Title XVI Supplemental Security Income program and the Title II disability programs. 

We applaud Commissioner Barnhart for establishing as a high priority her administration’s efforts to improve the disability determination process. We also applaud 

her work in making the design process an open one. She has sought the comments 

of all interested parties, including beneficiaries and consumer advocacy organizations, in response to her initial draft. We believe the resulting discussions will have 

a positive impact on the proposals as they are refined into official proposals for rulemaking. We have submitted a written response to the Commissioner on her initial 

draft proposal and I will highlight our key recommendations here. 

For people with disabilities, it is critical that SSA improve its process for making 

disability determinations. People with severe disabilities who by definition have limited earnings from work often are forced to wait years for a final decision. This is 

damaging not only to the individual with a disability and his or her family, but also 

to public perception and integrity of the program. 

We strongly support efforts to reduce unnecessary delays for claimants and to 

make the process more efficient, so long as the steps proposed do not affect the fairness of the process to determine a claimant’s entitlement to benefits. Further, 

changes at the ‘‘front end’’ can have a significant beneficial impact on improving the 

backlogs and delays later in the appeals process, by making correct disability determinations at the earliest possible point. Emphasis on improving the ‘‘front end’’ of 

the process is appropriate and warranted, since the vast majority of claims are allowed at the initial levels. Any changes to the process must be measured against 

the extent to which they ensure fairness and protect the rights of people with disabilities. 

Our comments primarily address the proposed changes at the reviewing official 

and later stages, with the following major recommendations: 

• There should not be a separate appeal from the Reviewing Official to 

the Administrative Law Judge level. 

• The record should not be closed after the ALJ decision. 

• If the record is closed, there should be a good cause exception to submit new and material evidence. 

73 

• The claimant’s right to request review by the Appeals Council should 

be retained. Any changes being considered for the Appeals Council 

should be postponed until SSA determines whether, once in place, the 

combination of Ae-DIB, the electronic folder and other changes 

planned for earlier stages of the process improve the timeliness and 

quality of work at the Appeals Council stage. • The independence and quality of medical experts, consultative examiners, and vocational experts needs to be ensured. 

Before addressing these areas, we would like to address our support for two other 

features in the Commissioner’s proposal: (1) the Electronic Folder: AeDIB and (2) 

retaining access to judicial review in the federal court system. 

The Electronic Folder: AeDIB 

We support the Commissioner’s efforts to implement technological improvements, 

including the electronic disability process, AeDIB. These improvements have great 

potential for improving the adjudication process and are critical to the success of 

any changes. We believe that it will reduce delay caused by moving and handingoff files, allow for immediate access by any component of SSA or DDS working on 

the claim, eliminate the problems created when paper files become ‘‘lost’’ in the system, and allow adjudicators to organize files to suit their preference. 

An over-arching concern is how claimants and their representatives will have access to the files. We have been told that CDs will be burned and provided upon request. To know what is in the record at any given point during the process, we believe that optimum meaningful access requires secure online access with a ‘‘readonly’’ capacity. 

In addition, claimants should not be precluded from presenting available evidence 

in any format. We urge SSA to ensure protection of original documents, which are 

valuable and sometimes irreplaceable evidence, by requiring that exact, unalterable 

electronic copies of all originals be permanently maintained in the electronic folder. 

Retaining current access to judicial review in the federal court system 

The Commissioner’s proposal retains the current process of judicial review by the 

federal courts and does not make any recommendations regarding creation of a Social Security Court. However, other stakeholders have recommended creation of 

such a court. 

We support the current system of judicial review and strongly oppose creation of 

a Social Security Court. We believe that both individual claimants and the system 

as a whole benefit from the federal courts deciding Social Security cases. Proposals 

to create either a Social Security Court to replace the federal district courts or a 

Social Security Court of Appeals to provide for consideration of appeals of all Social 

Security cases from district courts have been considered, and rejected, by Congress 

and SSA over the past twenty years. 

It is important to consider the impact of the Commissioner’s proposals on the 

workload of the federal courts. For example, elimination of the Appeals Council 

could dramatically increase the number of cases being filed in federal court, as there 

would be no opportunity for a claimant to see review of an ALJ’s decision within 

the agency. While neutral on its face, this step would, in all likelihood, result in 

federal district courts urging creation of a new court to hear these cases, as a way 

to reduce their overall caseloads. This is another reason why it is so important to 

move more slowly in consideration of the Commissioner’s proposal to eliminate the 

Appeals Council. 

I. Reviewing Official (RO) 

In general, we support the proposal to create a ‘‘Reviewing Official’’ (RO) position. 

The RO has features similar to those employed in the Senior Attorney Program in 

the 1990’s: the RO would be a federal employee and would be an attorney; the RO 

should have a level of expertise and training similar to the OHA senior staff attorneys; and the RO should be able to obtain additional evidence, narrow issues in the 

claim and, if warranted by the evidence in the record, issue a fully favorable decision. And, like the rest of the administrative process, the RO stage would not be 

viewed as an adversarial process, a position we support. We do, however, have several concerns about this stage. 

• A Separate Appeal To The ALJ Level Should Not Be Required. 

To create a more streamlined process, we have supported elimination of the reconsideration level and adding some type of predecision contact with the claimant. We 

are concerned that, as initially proposed, the RO stage will become a replacement 

74 

for reconsideration and, as a result, will not streamline the process. Further, by requiring a separate appeal to the ALJ level, many claimants will be discouraged from 

appealing denials and drop out of the process. We recommend that one appeal from 

the initial decision stage should cover review by both the RO and the ALJ (if a fully 

favorable decision on the record cannot be issued by the RO). 

• The RO Should Issue Only One Type Of Decision In All Cases That Are 

Not Fully Favorable To The Claimant, The ‘‘Pre-Hearing Report.’’ 

We are concerned that issuing more than one type of RO decision will be confusing to claimants and could discourage them from pursuing an appeal, if a separate appeal to the ALJ is ultimately required. While we understand the distinction 

between the two types of decisions outlined in the proposal, we recommend that 

there should be only one title for all decisions, preferably the more neutral and less 

intimidating title, ‘‘pre-hearing report.’’ 

• The RO Decision Should Not Be Accorded A Presumption Of Correctness. 

The proposal describes a process where the ALJ must describe in detail the basis 

for rejecting the RO’s Recommended Disallowance or respond in detail to the RO’s 

description of evidence needed in the Pre-Hearing Report. This could build in a bias 

to deny a claim, because it will be easier to issue an unfavorable decision, especially 

if there are administrative demands to reduce processing times. 

To guarantee a claimant’s right to a de novo hearing before an ALJ, the RO’s decision should not be entitled to more weight than other evidence in the folder or be 

given any presumption of correctness. As a de novo process and to ensure the ALJ’s 

independence, the ALJ should not be required to explain why he or she is not following the RO’s report. However, in order to provide accountability and to provide 

a record for the next reviewing level, we understand the need for every adjudicator 

to explain the rationale for his or her decision. 

II. The Right to a Full and Fair Hearing Before an ALJ 

A claimant’s right to a hearing before an ALJ is central to the fairness of the adjudication process. This is the right to a full and fair administrative hearing by an 

independent decision maker who provides impartial fact-finding and adjudication. 

As described above, in order to guarantee a claimant’s right to a de novo hearing 

before an ALJ, the RO’s decision should not be entitled to more weight than other 

evidence in the folder.Since there is a need to avoid a built-in bias for denial (by 

making it easier for ALJs to adopt the RO decision than to issue a different decision), the ALJ should not be required to respond in more detail than required by 

the current regulations. 

III. The Record Should Not Be Closed After the ALJ Decision 

• The Claimant Should Retain The Right To Submit New And Material 

Evidence After The ALJ Decision. 

We strongly support the submission of evidence as early as possible. However, 

there are many legitimate reasons why evidence is not submitted earlier and thus 

why closing the record is not beneficial to claimants including: (1) the need to keep 

the process informal; (2) changes in the medical condition which forms the basis of 

the claim; and (3) the fact that the ability to submit evidence is not always in the 

claimant’s or representative’s control. For these reasons, the record should not be 

closed to new and material evidence submitted after the hearing decision. 

• Keep the process informal 

For decades, Congress, the United States Supreme Court, and SSA have recognized that the informality of SSA’s process is a critical aspect of the program. Closing the record is inconsistent with Congress’ intent to keep the process informal and 

with the intent of the program itself, which is to correctly determine eligibility for 

claimants, awarding benefits if a person meets the statutory requirements. 

The value of keeping the process informal should not be underestimated: it encourages individuals to supply information, often regarding the most private aspects 

of their lives. The emphasis on informality also has kept the process understandable 

to the layperson, and not strict in tone or operation. SSA staff should be encouraged 

to work with claimants to obtain necessary evidence and better develop the claim 

earlier in the process. But, to the extent that important and relevant evidence becomes available at a later point in the claim, the claimant should not be foreclosed 

from submitting it, since this is not an adversarial process but a ‘‘truth-seeking’’ 

process. 

75 

• Changes in the medical condition 

Claimants’ medical conditions may worsen over time and/or diagnoses may 

change. Claimants undergo new treatment, are hospitalized, or are referred to different doctors. Some conditions, such as multiple sclerosis, autoimmune disorders or 

certain mental impairments, may take longer to diagnose definitively. The severity 

of an impairment and the limitations it causes may change due to a worsening of 

the medical condition, e.g., what is considered a minor cardiac problem may become 

far more serious after a heart attack is suffered. It also may take time to fully understand and document the combined effects of multiple impairments. Further, 

some claimants may be unable to articulate accurately their own impairments and 

limitations, either because they are in denial, lack judgment, or simply do not understand their disability. By their nature, these claims are not static and a finite 

set of medical evidence does not exist. 

• The ability to submit evidence is not always in the claimant’s or representative’s control. 

Claimants always benefit by submitting evidence as soon as possible. However, 

there are many reasons why they are unable to do so and for which they are not 

at fault. Closing the record penalizes claimants for factors beyond their control, including situations where: (1) DDS examiners fail to obtain necessary and relevant 

evidence and do not use forms tailored to specific impairments or the SSA disability 

criteria; (2) Neither SSA nor the DDS explains to claimants or providers what evidence is important, necessary and relevant for adjudication of the claim; (3) Claimants are unable to obtain records either due to cost or access restrictions; (4) Reimbursement rates for providers are inadequate; and (5) Medical providers delay or 

refuse to submit evidence. 

The current system provides a process to submit new evidence at the ALJ hearing 

and, if certain conditions are met, at later appeals levels (see discussion below). So 

that claimants are not penalized for events beyond their control, the opportunity to 

submit evidence should not be eliminated in the name of streamlining the system. 

Filing a new application is not a viable option. Requiring claimants to file 

a new application simply to submit new and material evidence does not improve the 

process and may in fact severely jeopardize, if not permanently foreclose, eligibility 

for benefits. 

By reapplying rather than appealing: (1) benefits could be lost from the effective 

date of the first application; (2) in Title II disability cases, Medicare benefits could 

be delayed, since eligibility begins only after the individual has received Title II disability benefits for 24 months; (3) in Title II disability cases, there is the risk that 

the person will lose insured status and not be eligible for benefits at all when a new 

application is filed; and (4) if the issue to be decided in the new claim is the same 

as in the first, SSA will find that the doctrine of res judicata bars consideration of 

the second application. 

In the past, SSA’s notices misled claimants regarding the consequences of reapplying for benefits in lieu of appealing an adverse decision and Congress responded by addressing this serious problem. Since legislation enacted in 1990, SSA 

has been required to include clear and specific language in its notices describing the 

possible adverse effect on eligibility to receive payments by choosing to reapply in 

lieu of requesting review. 

Apart from these harsh penalties, a claimant should not be required to file a new 

application merely to have new evidence considered where it is relevant to the prior 

claim. If such a rule were established, SSA would need to handle more applications, 

unnecessarily clogging the front end of the process. Further, there would be more 

administrative costs for SSA by creating and then developing a new application. 

While AeDIB may make the application procedure more efficient, it also may make 

it more reasonable for SSA to take new evidence at later stages of the process. 

Current law already sets limits for submission of new evidence after the 

ALJ decision. Under current law, an ALJ hears a disability claim de novo. Thus, 

new evidence can be submitted and will be considered by the ALJ in reaching a decision. However, the ability to submit new evidence and have it considered becomes 

more limited at later levels of appeal. At the Appeals Council level, new evidence 

will be considered, but only if it relates to the period before the ALJ decision and 

is ‘‘new and material.’’ At the federal district court level, the record is closed and 

the court will not consider new evidence. Under the Social Security Act, the court 

can remand for additional evidence to be taken by the Commissioner (not by the 

court), but only if the new evidence is (1) ‘‘new’’ and (2) ‘‘material’’ and (3) there 

is ‘‘good cause’’ for the failure to submit it in the prior administrative proceedings. 

76 

We recommend that these rules be retained. In any event, changes would require 

congressional action. 

• Recognize ‘‘Good Cause’’ Exception For The Post-ALJ Decision Submission Of New And Material Evidence. 

While it benefits claimants to submit evidence as soon as possible, there are many 

reasons, as discussed earlier, why they are unable to do so and for which they are 

not at fault. If SSA’s rules are changed to provide that the record is closed after 

the ALJ level, there should be a good cause exception that allows a claimant to submit new and material evidence after the ALJ decision is issued. 

We recommend an approach similar to that which already exists in SSA’s regulations for extension of time to file an appeal if the claimant can show ‘‘good cause’’ 

for missing the deadline. The regulations are constructed so that SSA has general 

discretion in making the ‘‘good cause’’ determination with several criteria that must 

be considered: the circumstances that led to missing the deadline; whether SSA actions were misleading; whether the claimant did not understand the requirements; 

and whether the claimant has any physical, mental or linguistic limitations. 

This construct could be adapted to ‘‘good cause’’ determinations for submitting 

new evidence. It is important that the regulations do not include an exhaustive list 

of reasons since each case turns on the facts presented. 

IV. Retain the Claimant’s Right to Request Review of Unfavorable ALJ Decisions 

Under the proposal, the Appeals Council would be eliminated. Centralized quality 

review staff would review a sample of ALJ allowances and denials. If the staff disagrees with the ALJ decision, the claim would be referred to an Oversight Panel 

for review. The claimant would have no opportunity to request administrative review of unfavorable ALJ decisions. The next level of appeal would be to federal district court. 

We recommend retention of a claimant’s right to administrative review of an unfavorable ALJ decision. Because of the important functions provided by the Appeals 

Council (discussed below) and because it is at the end of the administrative appeals 

process, we also recommend that any consideration of elimination of the Appeals 

Council be postponed while the changes at the earlier levels of the process are implemented. These changes may result in less pressure on the back end of the process, making it unnecessary to consider implementing the proposed change at this 

level. As described below, the Appeals Council plays an important role in protecting 

the rights of claimants and beneficiaries: 

• The Appeals Council Can Provide Efficient Review And Effective Relief 

To Claimants. 

The Appeals Council currently provides relief to over twenty-five percent of claimants who request review, either through outright reversal or remand back to the 

ALJ. The Appeals Council has made significant improvements in reducing its backlog and processing times. When it is able to operate properly and in a timely manner, the Appeals Council provides claimants with effective review of ALJ decisions. 

A major basis for remand is not the submission of new evidence, but rather legal 

errors committed by the ALJ, including the failure to consider existing evidence according to SSA regulations and policy, the failure to apply correct legal standards, 

and the failure to follow procedural requirements. By providing relief in these cases, 

the Appeals Council allows the Commissioner to rectify errors administratively, 

rather than relying on review in the federal courts. As recognized by the Judicial 

Conference of the United States, the Appeals Council can act as an effective screen 

between the ALJ and federal court levels and prevent a significant increase in the 

courts’ caseloads. 

In addition, the procedure to request review is relatively simple. SSA has a onepage form that can be completed and filed in any Social Security office, sent by mail 

or faxed. In contrast, the procedure for filing an appeal to federal district court is 

much more complicated and, unless waived, there is a filing fee, which may be costprohibitive for a claimant. Under the current process, there is a large drop-off in 

appeals from the Appeals Council to federal court. As a result, having an administrative mechanism to correct injustices is essential. 

• The Ability To Submit New And Material Evidence 

Claimants can submit new evidence at the Appeals Council level in appropriate 

situations, as described earlier. There is no provision in the Commissioner’s proposal 

77 

that would allow submission of new evidence after the ALJ decision; therefore, a 

procedure for addressing such circumstances would be lost. 

Asking the ALJ to reopen his or her decision to submit new evidence is problematic from a claimant’s perspective. First, the claimant needs to affirmatively request 

the reopening which creates another hurdle for pro se claimants. Second, a claimant 

cannot appeal the ALJ’s decision to deny the request for reopening (see discussion 

in next section). 

Also, eliminating the right to request review would prevent review of situations 

where the ALJ should have obtained the evidence in the first place. 

• Review Of Improper ALJ Dismissals And Denials Of Reopening Requests 

Current regulations provide that an ALJ can dismiss a request for a hearing 

under certain circumstances, such as: lack of good cause of both the claimant and 

representative for failing to appear at the hearing; lack of good cause for failing to 

request a hearing within the 60 day time period; and application of res judicata 

(which precludes consideration of an issue because of a prior, final decision on that 

issue). When an ALJ dismisses a hearing request, a notice of dismissal must be 

sent, stating that there is a right to request that the Appeals Council vacate the 

dismissal action. 

Dismissals generally are not subject to judicial review. However, by regulation, 

claimants have the right to request review of ALJ dismissals by the Appeals Council. A significant number of appeals to the Appeals Council are for inappropriate dismissals and many of these claims are remanded. If the right to request review by 

the Appeals Council is eliminated, many claimants will essentially be unable to 

have these improper decisions reviewed. As a result, they would be ineligible for 

benefits, perhaps forever. 

• Reviewing Allegations Of Unfair ALJ Hearings. 

The Appeals Council (AC) reviews allegations that a claimant’s right to a full and 

fair hearing has been violated. If the allegation is supported, the AC will either reverse the denial of benefits or remand the case to a different ALJ for a new hearing. 

A recent report by the Government Accountability Office (GAO), SSA Disability 

Decision Making: Additional Steps Needed to Ensure Accuracy and Fairness of Decisions at the Hearing Level, GAO–04–14 (Nov. 2003), emphasizes the necessity of providing a viable process to review allegations that an ALJ hearing was unfair. Eliminating the current review mechanism provided by the AC would be a step backwards. 

• Review Of Nondisability Issues 

The AC reviews cases that do not involve a claim for disability benefits, such as 

survivors’ eligibility. Also, many disability claims will have related nondisability 

claims, e.g., whether the claimant has engaged in SGA, overpayments due to earnings. The process must continue to accommodate the need for these reviews. 

V. The Proposed Oversight Panel Does Not Provide Fair and Adequate Review of ALJ Decisions 

The Oversight Panel would consist of two ALJs (who will rotate onto the panels) 

and one Administrative Appeals Judge (member of the Appeals Council). In addition 

to the loss of the important functions of the Appeals Council, we are concerned that 

the Oversight Panel (OP), as proposed, does not provide fair and adequate review 

of ALJ decisions. 

We seriously question whether a process in which ALJs review the decisions of 

other ALJs will offer a neutral review of each case. Are ALJs likely to reverse another ALJ when their roles might be reversed in the future, with the other ALJ now 

considering the quality of their decisions? In addition, we have several concerns 

about the impact of the proposed review process on claimants. How will the claimant know that the decision is final or that it is under review? Will the same due 

process safeguards currently provided when the Appeals Council intends to reopen 

a claim be afforded by the Oversight Panel? 

When would the decision be ‘‘final’’ for judicial review purposes? It seems that a 

fair amount of confusion will arise to determine whether a decision is final for the 

court’s purposes. Given the costs involved in filing a court action (and the additional 

time without needed benefits), it would be especially unfair to the claimants to 

eliminate their opportunity to seek review within SSA. 

How will SSA address cases in which it determines that additional evidence 

should have been secured by the ALJ? There is no process for remand in the proVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00081 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
78 

posal. Would the OP secure the additional evidence and make the final decision? 

As the OPs will be ad hoc panels, basically meeting electronically from their offices 

anywhere in the United States, it is difficult to see how that process would permit 

securing additional evidence. 

VI. Maintain The Independence And Ensure The Quality Of Medical Experts, 

Consultative Examiners, And Vocational Experts 

• Changing the role of medical advisors. 

Under the Commissioner’s proposals, the medical advisors currently located in the 

state DDSs would be moved to regional medical expert units. They would be available to provide advice to DDS staff, reviewing officials, and administrative law 

judges. In clarifying the proposal, SSA has indicated that the same medical advisor 

would not be used at the ALJ stage that was used at the DDS or RO level in a 

case. 

We generally support this approach but have several concerns: Advocates in the 

field have raised questions and concerns about this portion of the SSA proposal. 

These concerns include: By concentrating medical expertise in a few locations, will 

the agency’s medical advice be too insular? Is it realistic to expect that SSA will 

be able to create the walls between medical experts at the DDS and RO levels and 

those at the ALJ level, especially if they are all located in regional units? Will the 

interactions among experts in the regional offices make it less likely that they will 

feel comfortable disagreeing with or second-guessing their colleagues? Will it be 

more difficult to determine whether a medical advisor has the appropriate expertise? Will this change create a sealed system of medical expertise that will not seek 

the advice of medical experts in the claimants’ own communities? Will it be more 

difficult to ensure that people with multiple impairments have their cases reviewed 

by physicians with the type of crosscutting expertise needed to evaluate the combined effect of their impairments? 

• Improving the quality of consultative examinations 

One important theme in the Commissioner’s proposal is the emphasis on securing 

higher quality and more comprehensive evidence earlier in the process, preferably 

at the DDS level. We are very concerned that steps be taken to improve the quality 

of the consultative examination (CE) process. There are far too many stories about 

inappropriate referrals, short perfunctory examinations, and examinations conducted in languages other than the applicant’s. This is wasted money for SSA and 

unhelpful to low-income individuals who do not have complete medical records documenting their conditions and who need a high quality CE report to help establish 

their eligibility. 

Another concern is increased use of volume providers for CEs. SSA has a long and 

troubling history of using such examiners. Congress last devoted its attention to the 

problems with use of volume provider CEs in the early 1980s. SSA’s goal should be 

to improve the quality of CEs used—past experience in these programs shows that 

using volume providers is antithetical to securing high quality examinations. In 

order to secure quality examinations and reports, SSA may need to increase its payment for CE examinations. As having quality information early in the process 

should improve the decisionmaking and may shorten the process, purchasing higher 

quality CE examinations would be a cost-effective investment. 

Another very significant concern is that the regionalization of the medical advisors will lead to increased use of volume provider CEs, possibly even to national volume provider CE contracts. 

• Consideration of vocational evidence earlier in the administrative 

process 

The Commissioner has indicated her intention to better incorporate vocational expertise into the DDS stage. A significant number of ALJ decisions are based on 

medical-vocational factors. A certain percentage of these cases could be allowed earlier in the process if the medical-vocational rules were applied properly. Also, it may 

result in greater agreement between DDS and ALJ decisionmaking, as ALJs already 

generally consider vocational evidence and expertise in making their decisions. 

Conclusion 

As organizations representing people with disabilities, we strongly support efforts 

to reduce unnecessary delays for claimants and to make the process more efficient. 

However, these changes should not affect the fairness of the process to determine 

a claimant’s entitlement to benefits. As changes are made to the proposal and as 

79 

more details become available, we look forward to working with SSA to ensure that 

the new process meets the needs of both the agency and people with disabilities. 

ON BEHALF OF: 

American Association of People with Disabilities 

American Council of the Blind 

American Foundation for the Blind 

BazelonCenter for Mental Health Law 

Brain Injury Association of America 

National Alliance for the Mentally Ill 

National Association of Councils on Developmental Disabilities 

National Association of Disability Representatives 

National Association of Protection and Advocacy Systems 

NationalLawCenter on Homelessness & Poverty 

National Organization of Social Security Claimants’ Representatives 

National Rehabilitation Association 

NISH 

The Arc of the United States 

United Cerebral Palsy 

United Spinal Association 

f 

Chairman SHAW. Thank you, Ms. Ford. Mr. Sutton? 

STATEMENT OF THOMAS D. SUTTON, VICE PRESIDENT, NATIONAL ORGANIZATION OF SOCIAL SECURITY CLAIMANTS’ 

REPRESENTATIVES, LANGHORNE, PENNSYLVANIA 

Mr. SUTTON. Thank you, Mr. Chairman, for inviting us to testify. I am Thomas Sutton. I am Vice President of the NOSSCR. We 

are over 3,400 attorneys and other advocates representing claimants for benefits across the United States before both the agency 

and the Federal Courts. Our written testimony that has been submitted for the record conveys our view that the Commissioner’s 

goals and many of her proposals are worthwhile. We share her goal 

of reducing the processing time required to decide disability claims 

and will continue to work with her to accomplish that goal. At the 

same time, however, we have very serious concerns about some aspects of her proposal, especially the plan to eliminate the Appeals 

Council. I will focus my brief remarks entirely on this issue. 

The elimination of the Appeals Council with nothing to replace 

it for claimants seeking review of their cases would be virtually 

certain to create an explosion in the number of cases filed in the 

District Courts. This is obviously a major concern to an already 

over-burdened Federal Judiciary as evidenced by this week’s letter 

to your Subcommittees from Judge Stamp, which you have already 

admitted to the record, Mr. Chairman. 

Judge Stamp points out in his letter from the JCUS that in the 

last fiscal year about 77,000 claimants requested review by the Appeals Council. Approximately 2 percent of the claims were allowed 

outright and 25 percent were remanded to an ALJ for a new hearing. In the same fiscal year 17,000 Social Security cases were filed 

in the U.S. District Courts. To quote Judge Stamp, ‘‘This suggests 

that a substantial number of cases are being resolved at the Appeals Council level without claimants having to seek judicial review. Therefore, before a decision is made on whether to eliminate 

the Appeals Council, we would hope that the new claims process 

would be adequately tested. It may be that substituting Appeals 

80 

Council consideration with judicial review in the Federal Courts 

would result in more costs and further delay for many claimants.’’ 

We could not agree more with Judge Stamp from JCUS. I can 

personally attest from conversations with judges in the court in 

which I practice most often, that is the U.S. District Court for the 

Eastern District of Pennsylvania, that the judges are extremely 

concerned about the impact that the abolition of the Appeals Council would have on their dockets. The numbers cited by Judge Stamp 

provide a stark illustration of the problem we have. Using this current reversal and remand rate as a benchmark of the Appeals 

Council is overturning 27 percent. This would mean that of the 

77,000 cases filed with the Appeals Council in the last fiscal year, 

we would expect over 20,000 would be reversed or remanded because they were not correctly decided by the ALJs. However, under 

the Commissioner’s proposal, if because they could no longer request review by the Appeals Council, all of those claimants filed 

suit in the courts, as they should because the Commissioner erroneously decided their claims, we know that, the Social Security 

caseload of the courts would more than double. It is currently 

about 17,000 cases. That would add another 20,000 or so cases. 

However, the situation is actually worse than that. Under current regulations the vast majority of claimants who are denied by 

the Appeals Council accept the outcome and do not file suit. However, if claimants know that over a quarter of the cases denied by 

ALJs would have been overturned by the Appeals Council if it still 

existed, they will obviously be more inclined to file suit in hopes 

that theirs are among the 27 percent which the Commissioner 

would agree have merit. As a result of that effect, the actual impact of Appeals Council elimination could easily be a tripling of the 

number of cases filed in the courts. This would obviously be an unacceptable outcome for both the courts and claimants, as the backlogs which have plagued the SSA would simply be shifted to the 

District Court. 

The Appeals Council backlog has been a major problem, as this 

Committee well knows, for us and our clients. Under the Commissioner’s leadership the backlog has greatly declined over the last 

couple of years. At this point the average wait to a decision is 

about 8 months, which is still too long for us, but is certainly a vast 

improvement. Moreover, we are getting decisions from the Appeals 

Council on cases that should be made by the agency and should not 

have to go to the courts. 

I want to give you just a few examples from my own firm’s case 

files. Miss M was a young woman with a bright future until she 

suffered a catastrophic head injury. She was granted disability benefits immediately, but was later terminated in a decision she did 

not understand how to appeal. After several appeals, the Appeals 

Council acted earlier this year to reinstate her benefits retroactive 

to the date she was terminated, based on their rulings protecting 

claimants who are mentally unable to pursue their appeal rights. 

Had the Appeals Council not acted, Miss M would have been forced 

to appeal again to a Federal Court, which almost certainly would 

have remanded her case to an ALJ again, resulting in even more 

delay in her ability to receive the benefits that never should have 

been cut off in the first place. 

81 

In another case, Mr. H was denied benefits by an ALJ despite 

his documented mental retardation. After the Appeals Council received new evidence showing that he had also had a foot amputated due to severe diabetes, it awarded benefits to Mr. H outright, 

it didn’t remand for a new hearing, just awarded him. Had the 

record been closed to new evidence at the time of the ALJ decision, 

a new application, which is all Mr. H could have done, if successful, 

would have resulted in a loss of 5 years worth of retroactive benefits for Mr. H who was disabled all along. These are just a couple 

of examples, Mr. Chairman. As these cases illustrate, the Appeals 

Council has played an essential role in providing relief to claimants, by considering new evidence, by obtaining their own medical 

expert opinions and resolving cases that did not need to be filed in 

the Federal Courts, thus saving time and expense for claimants. 

On their behalf, we urge the Commissioner to reconsider her proposal to abolish the Appeals Council, or at the very least, to retain 

the right of claimants to request review of ALJ decisions by some 

component of the SSA, the review panels that she has spoken of, 

for example, without having to file suit in Federal Court. Without 

such appeal rights, the Federal Courts will be inundated with disability cases which could and should have been resolved by the 

agency. Thank you. 

[The prepared statement of Mr. Sutton follows:] 

Statement of Thomas D. Sutton, Vice President, National Organization of 

Social Security Claimants’ Representatives, Langhorne, Pennsylvania 

Chairman Shaw, Chairman Herger, Ranking Member Matsui, Ranking Member 

Cardin, and the Members of the Social Security and Human Resources Subcommittees, thank you for inviting NOSSCR to testify at today’s hearing on the Commissioner’s proposal to improve the disability claims process. My name is Thomas D. 

Sutton and I am the vice-president of the National Organization of Social Security 

Claimants’ Representatives (NOSSCR). 

Founded in 1979, NOSSCR is a professional association of attorneys and other advocates who represent individuals seeking Social Security disability or Supplemental 

Security Income (SSI) benefits. NOSSCR members represent these individuals with 

disabilities in legal proceedings before the Social Security Administration and in 

federal court. NOSSCR is a national organization with a current membership of 

3,400 members from the private and public sectors and is committed to the highest 

quality legal representation for claimants. 

I currently am an attorney in a small law firm in the Philadelphia, PA area. Adding to my experience in legal services programs, I have represented claimants in Social Security and SSI disability claims for the past 18 years. While I represent 

claimants from the initial application through the Federal court appellate process, 

the majority of my cases are hearings before Social Security Administrative Law 

Judges and appeals to the Social Security Administration’s Appeals Council. This 

also is true for most NOSSCR members. In addition, I represent claimants in federal district court and in the circuit courts of appeals. 

We agree with the Commissioner that reducing the backlog and processing time 

must be a high priority and we urge commitment of resources and personnel to reduce delays and make the process work better for the public. We strongly support 

changes to the process so long as they do not affect the fairness of the process to 

determine a claimant’s entitlement to benefits. 

NOSSCR is a member of the Consortium for Citizens with Disabilities Social Security Task Force and we endorse the testimony presented today by Marty Ford on 

behalf of the Task Force. Specifically, we support CCD’s major recommendations in 

response to the Commissioner’s proposal: 

• There should not be a separate appeal from the Reviewing Official to the Administrative Law Judge level. 

• The record should not be closed after the ALJ decision. 

• If the record is closed, there should be a good cause exception to submit new 

and material evidence. 

82 

• The claimant’s right to request review by the Appeals Council should be retained. 

• Any changes being considered for the Appeals Council should be postponed until 

SSA determines whether, once in place, the combination of Ae-DIB, the electronic 

folder and other changes planned for earlier stages of the process improve the timeliness and quality of work at the Appeals Council stage. 

• The independence and quality of medical experts, consultative examiners, and 

vocational experts needs to be ensured. 

My testimony today will focus on two provisions of the Commissioner’s proposal: 

(1) closing the record after the ALJ decision; and (2) eliminating the Appeals Council. Like CCD, we believe that the record should remain open and that claimantinitiated review by the Appeals Council should be retained. 

Before addressing these two issues, I would like to state our full support for several provisions in the Commissioner’s proposal. 

• A de novo hearing before an ALJ is retained. 

A claimant’s right to file a request for hearing before an Administrative Law 

Judge (ALJ), which is central to the fairness of the adjudication process, will continue under the Commissioner’s proposal. This right affords the claimant with a full 

and fair administrative hearing by an independent decision-maker who provides impartial fact-finding and adjudication, free from any agency coercion or influence. The 

ALJ asks questions and takes testimony from the claimant, may develop evidence 

when necessary, considers and weighs the medical evidence, evaluates the vocational factors, all in accordance with the statute, agency policy including Social Security Rulings and Acquiescence Rulings, and circuit case law. For claimants, a fundamental principle of this right is the opportunity to present new evidence in person 

to the ALJ and to receive a decision from the ALJ that is based on all available 

evidence. 

• The process will remain nonadversarial and SSA will not be represented at the ALJ level. 

We support the Commissioner’s decision to retain a nonadversarial process. This 

will keep the disability determination process informal and focused on the intent of 

the program itself, which is to correctly determine eligibility for claimants. Past experience, based on a failed project in the 1980’s, demonstrated that government representation at the hearing level led to extensive delays and made hearings inappropriately adversarial, formal, and technical. Based on the intended goals of better decision-making and reducing delays, the pilot project was an utter failure. In addition, the financial costs could be very high. Given the past experience and the high 

costs, we believe that the limited dollars available to SSA could be put to better use 

by assuring adequate staffing and developing better procedures to obtain evidence. 

• Review in the federal court system is retained. 

We support the current system of judicial review. Proposals to create either a Social Security Court to replace the federal district courts or a Social Security Court 

of Appeals to provide appeal of all Social Security cases from district courts have 

been considered, and properly rejected, by Congress and SSA over the past twenty 

years. 

We believe that both individual claimants and the system as a whole benefit from 

the federal courts deciding Social Security cases. Over the years, the federal courts 

have played a critical role in protecting the rights of claimants. The system is wellserved by regular, and not specialized, federal judges who hear a wide variety of 

federal cases and have a broad background against which to measure the reasonableness of SSA’s actions. 

Creation of either a single Social Security Court or Social Security Court of Appeals would limit the access of poor disabled and elderly persons to judicial review. 

Under the current system, the courts are geographically accessible to all individuals 

and give them an equal opportunity to be heard by judges of high caliber. 

Rather than creating different policies, the courts, and in particular the circuit 

courts, have contributed to national uniformity by helping to establish the standards 

for termination of disability benefits, denial of benefits to persons with mental impairments, rules for the weight to give medical evidence, and evaluation of pain. The 

courts have played an important role in determining the final direction of important 

national standards, providing a more thorough and thoughtful consideration of the 

issues than if a single court had passed on each. As a result, both Congress and 

SSA have been able to rely upon court precedents to produce a reasoned final product. 

83 

1 20 C.F.R. §§ 404.970(b) and 416.1470(b). 

2 42 U.S.C. § 405(g). 

Finally, the financial and administrative costs of creating these new courts must 

be weighed against their questionable effectiveness to achieve the stated objectives. 

The new courts, if created, would involve new expenditures. We believe that with 

limited resources, the focus should not be on the end of the appeals process but, 

rather, on the front end. Requiring claimants to pursue an appeal to obtain the justice they are due from the beginning will only add to the cumulative delay they currently endure. 

We share concerns about the growth in the number of civil actions filed in federal 

court. We believe that there are ways to lessen the workload impact on SSA and 

the courts, and that in many cases, claimants should not be required to appeal to 

the court level to obtain relief. We also believe that the technological improvements 

discussed later in my testimony will help to alleviate this problem. 

We are ready to work with SSA and the courts to find ways to make the court 

process more efficient for all parties involved. 

THE RECORD SHOULD REMAIN OPEN FOR NEW EVIDENCE AFTER THE ALJ 

DECISION 

The Commissioner’s proposal would close the record to new evidence after the 

ALJ decision. In the past, similar proposals to close the record have been rejected 

by both SSA and Congress because they are neither beneficial to claimants nor administratively efficient for the agency. We recommend retention of the current process for submission of new evidence. 

NOSSCR strongly supports the submission of evidence as early as possible, since 

it means that a correct decision can be made at the earliest point possible. However, 

there are many legitimate reasons why evidence is not submitted earlier and thus 

why closing the record will not help claimants, including: (1) worsening or clarified 

diagnosis of the medical condition which forms the basis of the claim; (2) factors outside the claimant’s control, such as medical provider delay in sending evidence; and 

(3) the need to keep the process informal. 

Under current law, new evidence can be submitted to an ALJ and it must be considered in reaching a decision. Contrary to assertions by some that there is an unlimited ability to submit new evidence through the court levels, the current regulations and statute are very specific in limiting that ability at later levels of appeal. 

At the Appeals Council level, new evidence will be considered, but only if it relates to the period before the ALJ decision and is ‘‘new and material.’’ 1 While the 

Appeals Council remands about one-fourth of the appeals filed by claimants, it is 

important to note that the reason for most remands is not the submission of new 

evidence, but rather legal errors committed by the ALJ, including the failure to consider existing evidence according to SSA regulations and policy and the failure to 

apply the correct legal standards. 

At the federal district court level, the record is closed and the court will not consider new evidence. Under the Social Security Act, the court is only allowed to remand under specified circumstances.2 The Act provides for two types of remands: 

1. Under ‘‘sentence 4’’ of 42 U.S.C.§ 405(g), the court has authority to ‘‘affirm, 

modify, or reverse’’ the Commissioner’s decision, with or without remanding 

the case; and 

2. Under ‘‘sentence 6,’’ the court can remand (a) for further action by the Commissioner where ‘‘good cause’’ is shown, but only before the agency files an Answer 

to the claimant’s Complaint; or (b) at any time, for additional evidence to be 

taken by the Commissioner (not by the court), but only if the new evidence is 

(i) ‘‘new’’ and (ii) ‘‘material’’ and (iii) there is ‘‘good cause’’ for the failure to submit it in the prior administrative proceedings. 

Because courts hold claimants to the stringent standard in the Act, remands occur 

very infrequently under the second part of ‘‘sentence 6’’ for consideration of new evidence submitted by the claimant. The vast majority of court remands are not based 

on new evidence, but are ordered under ‘‘sentence 4,’’ generally due to legal errors 

committed by the ALJ. 

Several examples from cases handled by NOSSCR members emphasize the importance of new evidence obtained after the ALJ decision. These examples demonstrate 

that the ability to submit new evidence and have it considered is beneficial to the 

claimant and the agency: 

• The Appeals Council awarded benefits based on new evidence related to the 

claimant’s multiple sclerosis. The new evidence consisted of a four page MulVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00087 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
84 

3 Comments dated May 26, 1994,of Chief Judge John F. Gerry, Chairman of the Judicial Conference of the United States, in response to SSA’s April 1, 1994 ‘‘Disability Reengineering 

Project Proposal.’’ 

tiple Sclerosis Questionnaire from the treating physician and a medical journal 

article. 

• The Appeals Council affirmed the allowance in a subsequent application filed 

in 2000 and found that the claimant also met the disability criteria for mental 

retardation in a prior application. The Appeals Council considered and admitted 

new evidence submitted by the claimant’s attorney, and obtained a medical 

opinion from a staff consultant who agreed with the finding of disability. 

• The Appeals Council awarded benefits to a claimant with bipolar disorder. His 

condition had deteriorated after receiving the ALJ denial. He became more depressed and his judgment and insight lapsed. He rationalized that since the 

ALJ found him able to work, he must not be mentally ill or need his medications. He had another psychotic break that progressed from disposing of a recent inheritance impulsively to engaging in some dangerous behavior and he 

eventually was involuntarily hospitalized. 

‘‘Good cause’’ exception. If the Commissioner decides to close the record, there 

should be a ‘‘good cause’’ exception that allows a claimant to submit new and material evidence after the ALJ decision is issued. The statutory provision for sentence 

6 court remands could be adopted. The ‘‘good cause’’ exception for district court ‘‘sentence six’’ remands for new and material evidence is well-developed. A review of 

published court decisions shows a wide variety of reasons why evidence was not submitted prior to the court level, including: 

• Medical evidence was not available at the time of the hearing. 

• The claimant was unrepresented at the hearing and the ALJ did not obtain the 

evidence. 

• Medical evidence was requested but the medical provider delayed or refused to 

submit evidence earlier. 

• The claimant underwent new treatment, hospitalization, or evaluation. 

• The impairment was finally and definitively diagnosed. The claimant’s medical 

condition deteriorated. 

• Evidence was thought to be lost and then was found. 

• The claimant’s limited mental capacity prevented him from being able to determine which evidence was relevant to his claim. 

• The existence of the evidence was discovered after the proceedings. 

• The claimant was unrepresented at the hearing and lacked the funds to obtain 

the evidence. 

CLAIMANT-INITIATED REVIEW BY THE APPEALS COUNCIL SHOULD BE RETAINED 

The Appeals Council, when it is able to operate properly and in a timely manner, 

provides claimants with effective review of ALJ decisions. The Appeals Council currently provides relief to nearly one-fourth of claimants who request review of ALJ 

denials, either through outright reversal or remand back to the ALJ. The Appeals 

Council has made significant improvements in reducing processing times and its 

backlog. The Commissioner has recently testified that in November 2003, the average processing time was 252 days, down from 467 days in November 2001. 

In addition, elimination of Appeals Council review could have a serious negative 

impact on the federal courts. As long ago as 1994, the Judicial Conference of the 

United States opposed elimination of the claimant’s request for review by the Appeals Council prior to seeking judicial review in the district courts, stating that such 

a proposal was ‘‘likely to be inefficient and counter-productive.’’ 3 The Judicial Conference also recognized the Appeals Council’s role as a screen between the ALJ and 

federal court levels, noting that ‘‘[c]laimants largely accept the outcome of Appeals 

Council review.’’ Further, the Conference expressed concern that allowing direct appeal from the ALJ denial to federal district court could result in a significant increase in the courts’ caseloads. As a result, the Judicial Conference concluded: 

From the perspective of both unsuccessful litigants and the federal courts, the 

present system of Appeals Council review as a precondition to judicial review is 

sound. The right of judicial review by Article III courts for all claimants remains 

intact under the present system. To the extent that the process of Appeals Council 

review is thought to be too time-consuming, despite the high degree of finality that 

results, it would be wiser to seek to streamline and expedite the process of review 

rather than to bypass it as a precondition to federal judicial review. 

85 

We agree with the conclusion of the Judicial Conference of the United States. Access to review in the federal courts is the last and very important component of the 

hearings and appeals structure. Court review is not de novo, but rather, is based 

on the substantial evidence test. We believe that both individual claimants and the 

system as a whole benefit from federal court review. The district courts are not 

equipped, given their many other responsibilities, to act as the initial screen for ALJ 

denials. 

The CCD testimony has outlined a number of reasons why it is important to retain the important functions of the Appeals Council that benefit claimants such as: 

the ability to submit new and material evidence; review of improper ALJ dismissals 

and denials of reopening requests; review of ALJ unfair hearing allegations; and review of nondisability issues. Cases handled by NOSSCR members demonstrate the 

critical role of the Appeals Council in providing fair and effective administrative review of ALJ decisions: 

• Substantive review of claim 

• The Appeals Council awarded benefits to a claimant with a diagnosis of bipolar disorder with depression. The treating physician noted that medications 

were only partially effective and that the claimant had not been able to cope 

with normal stress. 

• The Appeals Council awarded SSI benefits under Listing 12.04, relying on 

their medical consultant’s report that the claimant had bipolar disorder of 

lifelong duration with an overlapping diagnosis of Post Traumatic Stress Disorder. Evidence indicated significant limitations. 

• The Appeals Council remanded because the ALJ erred in finding that the 

claimant had no ‘‘severe’’ mental impairment. The treating source evidence 

showed that the claimant had post-traumatic headaches and was incapable 

of even low stress jobs due to symptoms of visual disturbances, mood changes 

and hallucinations. 

• The Appeals Council remanded, finding that the claimant’s work as a data 

entry clerk more than 15 years earlier was not past relevant work. Further, 

although the vocational expert (VE) testified that there were transferable 

skills that the claimant had learned from vocationally relevant work, the VE 

did not mention the specific skills. Given her mental residual functional capacity, the claimant would not be able to perform the jobs identified by the 

VE. 

• ALJ bias 

• The Appeals Council reversed, finding that the ALJ was biased and demonstrated prejudice by statements made throughout the hearing, including inappropriate use of words and phrases regarding the claimant’s weight and 

evidence from the treating physician. 

• The Appeals Council reversed an ALJ denial in an SSI childhood disability 

claim. The Appeals Council found that the ALJ was biased, noting that ‘‘certain lines of questioning directed at the claimant’s mother during the hearing 

were inappropriate and lacked objectivity.’’ 

• The Appeals Council remanded the case to a different ALJ, finding that the 

claimant was denied a full and fair hearing because the ALJ was abusive. 

• Review of hearing dismissals 

• The Appeals Council found good cause for the claimant and her representative’s failure to attend the hearing, and remanded for a new ALJ hearing. The 

ALJ had dismissed the first hearing request. The claimant had moved to a 

different state before the hearing and had asked to have the claim transferred. She was unaware the hearing had been dismissed, which was supported by the notice of hearing being returned by the post office as ‘‘address 

unknown.’’ 

• The Appeals Council found good cause based on the dislocation in the claimant’s affairs caused by her hospitalizations, and based on the prompt action 

by her attorney in faxing the appeal. 

The ALJ erroneously used the date that the request for hearing arrived at the 

district office as the date of appeal, and dismissed the appeal as filed one day late. 

The ALJ made no attempt to contact the claimant or her representative about submitting evidence of good cause or timely filing. The claimant’s attorney showed that 

the request was timely faxed and that the claimant was psychiatrically hospitalized. 

• Review of other procedural issues 

86 

• Post-hearing evidence 

• The Appeals Council remanded because the ALJ failed to consider the 

claimant’s request for a supplemental hearing and failed to rule on the 

claimant’s objections to post-hearing interrogatories to the VE as required 

by agency policy. • The Appeals Council remanded because the ALJ obtained additional medical evidence after the hearing and did not proffer the evidence to the 

claimant’s representative for review and comments as required by agency 

policy. • The Appeals Council remanded because the ALJ failed to submit material 

to the claimant or representative for a post-hearing, pre-decision review 

and comment according to agency policy, and also for his inadequate explanation for rejecting the treating physician’s opinion. 

• Right to appoint legal representative 

• The Appeals Council remanded after finding that a minor in state foster 

care had the right to appoint a legal representative to pursue an appeal of 

a disability cessation and overpayment determination. The ALJ had determined that the minor had no right to a hearing because she was in the 

legal custody of the state and the state had not signed the appeal form. The 

Appeals Council found that the minor had properly appointed a legal representative who properly had filed a hearing request. Further, good cause 

had been shown for filing an untimely appeal (the State/Guardian had not 

appealed a 1998 disability cessation) because the minor was not notified of 

the initial cessation and overpayment determinations. On remand, the ALJ 

ruled that the minor’s disability continued and the overpayment from the 

cessation was eliminated. 

• Reopening 

• The Appeals Council remanded, finding that the ALJ did not provide adequate notice in the Notice of Hearing that, as required by regulations, he 

intended to reopen the favorable portion of a partially favorable DDS decision. An ALJ may consider new issues, but only after proper notice. 

• The Appeals Council decision found that a subsequent application, filed just 

2 months after the initial determination on the prior claim, constituted an 

implied request for reopening. A prior final determination may be reopened 

for any reason within 12 months of the date of the notice of the initial determination. 

OTHER ISSUES 

A. Provide SSA With Adequate Resources To Meet Current And Future Needs 

To reduce delays, better develop cases and implement technological advances, SSA 

requires adequate staffing and resources. We urge commitment of sufficient resources and personnel to resolve the waiting times and make the process work better for the benefit of the public. To this end, NOSSCR supports removing SSA’s administrative budget, like its program budget, from the discretionary domestic spending caps. 

B. Technological Improvements 

Commissioner Barnhart has announced major technological initiatives to improve 

the disability claims process. NOSSCR generally supports these initiatives because 

they have the potential of dramatically reducing processing times for disability 

claims. 

• The Electronic Folder 

In several states, SSA has begun to process some disability claims electronically. 

Evidence from medical sources, including consultative examinations, is received either in electronic form or in paper form, which is then scanned and turned into an 

electronic document. The project is enormous in scope and ambitious in both design 

and implementation. This initiative has the prospect of significantly reducing delays 

by eliminating lost files, reducing the time that files spend in transit, and preventing misfiled evidence. 

We want to thank the Commissioner for her inclusive process to seek comments 

about these changes, which will help to ensure that claimants benefit from these 

important improvements. Several NOSSCR members recently were invited to an Office of Hearings and Appeals in Mississippi, the first state to implement the elecVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00090 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
87 

tronic folder and eDIB, for an explanation and demonstration. Our members reported back that they had a very productive meeting and we appreciate this valuable opportunity to provide input. 

Several of our concerns regarding eDIB have been answered through these meetings. First, advocates can continue to submit evidence that is on paper. It will then 

be scanned into the system by SSA. Advocates also can choose to submit evidence 

by email. 

Second, advocates can continue to request copies of the file. SSA will ‘‘burn’’ a CD 

and send that to the appointed representative and to unrepresented claimants as 

well. Representatives can then print out the file or view it on their own computers. 

In addition, at some point in the future, SSA plans to set up a special, secure 

website for the use of appointed representatives. With their assigned identification 

numbers, they will be able to go online to see the contents of their clients’ folders. 

• Video teleconferencing 

The Commissioner has announced her plan to expand the use of video teleconferencing (VTC) for ALJ hearings. The initiative has the potential to reduce processing 

times and increase productivity. 

Where available, ALJs can conduct hearings without being at the same location 

as the claimant and representative or the medical or vocational experts. In general, 

we support the use of video teleconference hearings, so long as the right to a full 

and fair hearing is adequately protected and the quality of video teleconference 

hearings is assured. 

NOSSCR members who have participated in VTC hearings have reported a mixed 

experience, depending on the travel benefit for claimants, the quality of the equipment used, and the hearing room set-up. Also, some have raised concerns that the 

ALJ’s inability to see the claimant in person will be disadvantageous. 

We are in the process of surveying our members regarding their participation— 

or nonparticipation—in VTC hearings. To date, the surveys we have received indicate that receptivity remains mixed. We would be glad to share the results and comments with you and the Commissioner when the survey is final. 

• Digital recording of hearings 

Another important component of technological improvement is digital recording of 

ALJ hearings. Currently, hearings are taped on obsolete tape recorders, which are 

no longer even manufactured. If copies are needed, they must be transferred to cassette tapes, which is time-consuming. Tapes are frequently lost because they are 

stored separately from the paper folder. Given the age of the taping equipment, the 

quality of tapes is often quite poor, which also results in some remands from the 

Appeals Council or the district court. A digitally recorded hearing would not only 

be of high audio quality but would be easy to copy for representatives or transfer 

to the district court as part of the administrative record. 

CONCLUSION 

For people with disabilities, it is critical that the Social Security Administration 

address and significantly improve the process for determining disability and the 

process for appeals. We strongly support efforts to reduce unnecessary delays for 

claimants and to make the process more efficient, so long as they do not affect the 

fairness of the process to determine a claimant’s entitlement to benefits. 

We are pleased to see Commissioner Barnhart take on this task as a major goal 

of her tenure as Commissioner. We support her view that this is a vitally necessary 

course of action for the agency and we look forward to working with the Commissioner in meeting the challenges. 

Thank you for this opportunity to testify before the Subcommittees on issues of 

critical importance to claimants. I would be glad to answer any questions that you 

have. 

f 

Chairman SHAW. Thank you, Mr. Sutton. Mr. Hill? 

STATEMENT OF JAMES A. HILL, PRESIDENT, NATIONAL 

TREASURY EMPLOYEES UNION, CHAPTER 224, CLEVELAND 

HEIGHTS, OHIO 

Mr. HILL. Good afternoon. My name is James Hill. I have been 

employed as an attorney advisor at the Cleveland OHA for over 21 

88 

years. I am also the President of Chapter 224 of the NTEU that 

represents attorney advisors and other staff members in approximately 110 OHA hearing and regional offices across the United 

States. I thank Chairman Shaw and Chairman Herger for inviting 

me to testify at this hearing. Testifying today is a pleasure. I have 

testified before the Subcommittee on Social Security on numerous 

occasions over the past 10 years. On most of those occasions I criticized the SSA for failing to effectively deal with the backlog problem at OHA. I do not enjoy public criticizing the SSA. The major 

initiatives formerly advanced by the SSA, the disability process redesign and hearings process improvement plan were, as I predicted, failures. 

The only effective program at reducing the backlog, the Senior 

Attorney Program, which was terminated by HPI, was a temporary 

solution that did not address long-term systemic problems. The salient fact is that for the last 10 years the Social Security Disability 

Program has been in crisis. It still is, but now for the first time 

a plan has been advanced that addresses its systemic shortcomings 

and will finally end the crisis. 

Perhaps the most important factor in successfully dealing with 

crisis situations is leadership. I believe that the leadership provided by the Subcommittee on Social Security, particularly its 

Chairman, Clay Shaw, and Ranking Member Robert Matsui, has 

provided a stable environment in which wide-ranging improvements in the process can be instituted. I also note with pride the 

role that my congressional representation, Stephanie Tubbs Jones 

is playing in improving the disability process. Of course, the need 

for dynamic leadership does not end here at the Hill. The quality 

of leadership at the SSA will be a major factor in determining 

whether the agency can meet the expectations of the American 

public. With Commissioner Jo Anne Barnhart and her executive 

staff, the SSA finally has the leaders with the vision, the will, the 

intelligence and the courage to solve the long-term disability crisis 

at the SSA. 

The SSA leaders are confronting a disability adjudication system 

that is fundamentally flawed. It is clear that wide-ranging systemic 

changes are necessary. However, these changes must address the 

actual flaws, and not, as in the past, simply be the result of philosophical leanings and the bureaucratic inclinations of senior SSA 

officials. To this end, Commissioner Barnhart and Deputy Commissioner Martin Gerry, conducted an objective review of the entire 

disability system, resulting in a remarkably accurate picture of its 

strength and weaknesses. I believe that for the first time senior 

SSA officials truly understand the deficiencies and strengths of the 

current system. This insight, combined with the Commissioner’s 

commitment to create a process which serves the needs of the public rather than the dictates of the bureaucracy, has led her to propose a plan for implementing fundamental process changes that 

will provide a level of service of which we can all be proud. 

The plan is comprehensive and involves extensive changes such 

as the replacement of paper folders with electronic folders, the formation of a quick decision process to service those with obvious disabilities, the elimination of reconsideration determination, the 

elimination of the Appeals Council, a completely revamped processVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00092 Fmt 6633 Sfmt 6602 E:\HR\OC\99682A.XXX 99682A
89 

wide quality assurance system, the creation of three-judge panels 

to review ALJ decisions, and the creation of the RO position to provide an intermediary step between the State agency and the ALJ. 

These are fundamental changes that address fundamental flaws in 

the current system. 

I am convinced that this plan, if implemented, will result in an 

efficient, effective and most importantly, a fair adjudicatory process. The plan advocated by Commissioner Barnhart will finally end 

the disability crisis and provide the American public with a level 

of service it deserves. Of course, implementing such a comprehensive plan will require adequate funding. I urge the Congress to provide the funding necessary to implement this plan as expeditiously 

as possible. Thank you. 

[The prepared statement of Mr. Hill follows:] 

Statement of James A. Hill, President, National Treasury Employees Union, 

Chapter 224, Cleveland Heights, Ohio 

My name is James Hill. I have worked as an Attorney-Adviser in the Office of 

Hearings and Appeals for over 21 years. I am also the President of Chapter 224 of 

the National Treasury Employees Union (NTEU) that represents Attorney-Advisers 

and other staff members in approximately 110 OHA Hearing and Regional Offices 

across the United States. I thank the Subcommittees for allowing me to testify regarding Commissioner Barnhart’s proposal to reform the disability determination 

process. 

The Backlog at OHA—A Problem Inherited by Commissioner Barnhart 

The current disability backlog problem at OHA is neither recent nor unique. 

Nonetheless, a quick review of the history of the number of cases pending at OHA 

demonstrates that the backlog problem is not altogether intractable. The backlog 

problem in the SSA disability program began in the early 1990s. Primarily as a result of increased receipts and SSA inaction, cases pending at OHA hearing offices 

rose from approximately 180,000 in 1991 to approximately 550,000 cases nationwide 

by mid-1995. However, by October 1999 the number of cases pending was reduced 

to 311,000. Since 1999, a number of factors including the termination of the Senior 

Attorney Program, increased receipts, and the implementation of the disastrous 

Hearings Process Improvement Plan (HPI) have resulted in a record number of 

cases pending. Currently, there are approximately 660,000 cases pending at OHA 

hearing offices and processing times in some hearing offices are significantly in excess of one year. 

90 

As discouraging as the increase in cases pending may be, it does not fully reflect 

the harmful effect of the inefficient disability process on the public. Average processing time at OHA was approximately 270 days in 2000; it is currently nearly 400 

days. This is an unconscionably long wait for a disability decision, and it is causing 

untold harm to some of the most vulnerable members of society. None will dispute 

that the public deserves far better service than SSA is presently providing. 

There is no question that the current disability system is fundamentally flawed 

and that wide ranging systemic changes are necessary. SSA recognized this as early 

as 1993 and in response proposed the ‘‘Disability Process Redesign’’ (DPR), a plan 

so complex and misguided that despite the expenditure of millions of dollars, it was 

never implemented. By 1995 the backlog problem at OHA had become so severe 

SSA empowered its experienced Attorney Advisors to review cases and issue fully 

favorable on-the-record decisions where justified. This was known as the Senior Attorney Program. During the period from 1995 through 1999 Senior Attorneys produced over 220,000 fully favorable on-the-record decisions with an average processing time of just over 100 days. It is not a coincidence that during the time the 

Senior Attorney Program was in operation the number of cases pending at OHA 

hearing offices dropped from 550,000 to 311,000. 

The Senior Attorney Program was focused on a specific problem: the many cases 

coming to OHA that could be adjudicated favorably to the claimant without the need 

for an ALJ hearing. It was a small, low cost program that addressed a specific operational reality. It did not address the systemic problems plaguing the disability adjudication process. Nonetheless, the termination of the Senior Attorney Program 

was a bureaucratic blunder. 

SSA’s next foray into solving the ‘‘disability crisis’’ was the disastrous Hearings 

Process Improvement Plan. Unfortunately, HPI was implemented with catastrophic 

results. SSA Management believed that the Hearings Process Improvement Plan 

(HPI) obviated the need for the Senior Attorney Program. Since the advent of HPI 

the number of cases pending in OHA hearing offices has more than doubled. The 

implementation of HPI disrupted nearly every aspect of hearing office functioning 

with predictable results. A persistent lack of vision and leadership at SSA resulted 

in programs such as DPR and HPI that did not realistically address the root causes 

of the problems. Not surprisingly, they failed to improve the disability process, and 

in fact, wasted resources while actually harming the adjudicatory process. 

The Beginning of a Solution 

At the beginning of her term, Commissioner Barnhart was confronted by a discredited disability process with severe structural and operational problems at all 

levels. Commissioner Barnhart and Deputy Commissioner Martin Gerry conducted 


Insert offset folio 99682a.004
91 

a truly objective review of the entire disability system resulting in a remarkably accurate picture of its strengths and weaknesses. I believe that for the first time senior SSA officials truly understand the deficiencies at each level of the current system. This insight combined with the Commissioner’s commitment to create a process 

which serves the needs of the public rather than the dictates of the bureaucracy, 

has led her to propose a plan for implementing fundamental process changes that 

will provide a level of service of which we all can be proud. 

It is apparent that a considerable amount of research and insight went into the 

process of formulating this plan. The systemic problems that have plagued the disability adjudicatory process have been identified and politically plausible and operationally sound solutions have been advanced. Specifically, problems including the 

State Agencies’ inadequate development of the record, their cursory rationale for unfavorable determinations, and their chronic failure to award many deserving claimants are all addressed and potentially solved through the ‘‘Quick Decision Process’’, 

the elimination of the Reconsideration Determination, and the creation of the Reviewing Official. Additional problems including long delays at the hearing level, the 

lack of adequate development prior to the ALJ hearing, closing the record after the 

ALJ decision, the lack of decisional consistency at the various levels of adjudication, 

the excessive number of voluntary remands from the U.S District Courts, and the 

lack of an effective appellate process are also addressed and potentially solved. 

Other mechanisms which will be employed to improve the adjudication process 

are the elimination of regional Disability Quality Bureaus (DQBs) and the introduction of an integrated quality control process, the placement at the regional level of 

medical and vocational experts who are available to adjudicators at all levels, and 

the replacement of the Appeals Council with three judge review panels. 

Commissioner Barnhart recognizes that the SSA disability adjudication system 

must be a truly integrated system that better utilizes the expertise of its various 

components in the most efficient manner. To view or analyze each component individually without considering its role in the entire system leads to a distorted view 

and introduces needless inefficiencies. The Commissioner’s Approach must be 

viewed in its totality, recognizing the effects changes at one level have at the other 

levels. 

Quick Decision—An Excellent Idea 

In order to provide benefits to those who are ‘‘obviously disabled’’, the Commissioner has proposed ‘‘The Quick Decision Process’’ It will significantly improve the 

disability adjudication process for those claimants with specified medical conditions 

that normally result in a finding of disability. A Panel of Medical Experts that will 

be located in various regional offices will review those with verified medical conditions and quickly determine whether these claimants should receive disability benefits. The Commissioner projects that approximately 10 % of initial claims can be 

handled through this process. The Quick Decision process will perform a valuable 

service in identifying those ‘‘obviously’’ disabled claimants. 

The Role of the State Agency 

The disability adjudication process is an integrated process that should promote 

the efficient, accurate, and fair adjudication of disability claims. An efficient disability adjudication process must recognize that some adjudicatory tasks are better 

performed by one component than by others. The Commissioner has proposed 

changes that will permit State Agencies to focus on fully developing the record thus 

improving the efficiency of the entire process as well as improving their own decision making. 

The State Agencies are far better situated to develop the record than either the 

Reviewing Official or the OHA Hearing Office. They have the facilities and expertise 

to efficiency acquire medical evidence. The Commissioner’s plan recognizes and utilizes this expertise. Consequently, primary responsibility for developing the record 

should be placed upon the State Agencies. Securing possession of the medical documents necessary to adjudicate a claim is a difficult and at times a time-consuming 

process. 

Accurate adjudication of disability claims requires a relatively complete compilation of the record. Decisional consistency is significantly enhanced if, at the different 

levels of adjudication, the adjudicators are considering essentially the same record. 

The Commissioner’s plan places emphasis on the full development of the record at 

the earliest practicable time—at the State Agency level. The elimination of the Reconsideration Determination eases the time constraints under which the State Agencies currently operate, and will permit more complete development at the initial 

level. The Commissioner’s Plan includes feedback mechanisms and in extreme cases, 

92 

a remand process that will combat the lack of a realistic incentive to properly develop the record before sending the case to OHA. More complete development initially will lessen the necessity of expending considerable time and resources developing the record at OHA and permit more timely adjudication. 

Better development at the State Agency means better decision making at that 

level, fewer cases being appealed to OHA, and fewer resources being expended at 

the OHA level to develop cases. It also permits both the State Agency and OHA to 

make the right decision as quickly as possible. 

The overall efficiency of the adjudication process is enhanced by the changes suggested by the Commissioner. 

The Commissioner’s Approach will provide the resources for the State Agencies 

to more completely develop a case. The Commissioner has promised that the appropriations provided to the State Agencies will not be decreased. The State Agencies 

will receive 10% fewer cases because of the Quick Decision Process. This combined 

with the elimination of the Reconsideration Determination will permit more resources to be directed toward more completely developing the record. 

The Role of the Reviewing Official (RO) 

Perhaps the most innovative initiative contained in the Commissioner’s approach 

is the creation of the Reviewing Official (RO), a federal attorney with complete adjudicatory authority placed between the State Agency and the ALJ. The RO process 

does more than replace the current Reconsideration Phase. The Reconsideration Determination has very little credibility with the public or with ALJs because it is 

viewed as a mere rubber stamp of the initial determination. One of the recommendations from the Association of Administrative Law Judges, and one that we 

fully support, is that the RO and the ALJ use the same standards for adjudication. 

Past experience with the Senior Attorney Program and the current ALJ review of 

unpulled files demonstrates that the application of those standards results in a fully 

favorable decision in approximately 30% of the cases reviewed. The review and decision making by the RO will result in many disabled claimants being awarded benefits in as little as 30 days rather than subjecting the claimant and the Agency to 

the time and resource consuming activities associated with conducting a full ALJ 

hearing. 

One of the most important aspects of the RO process is to introduce an element 

of credibility that is presently lacking prior to the ALJ hearing. Currently, the State 

Agencies provide almost no rationale for their unfavorable determinations which seriously undermines their credibility. The Commissioner recognizes that it is essential to the success of her Approach that the decisions made by the RO be recognized 

as independent decisions by an individual who has the discretion to award or deny 

benefits as justified by the record. To ensure the credibility of the RO decision, it 

must be a well reasoned, comprehensive and literate explanation of why a claimant 

is or is not entitled to disability benefits. To be effective the RO must establish its 

credibility with claimants, the State Agencies, Administrative Law Judges and most 

importantly with the American public. The importance of attaining this credibility 

cannot be overstated. 

The Commissioner’s Approach demands that the RO issue an accurate, complete, 

convincing, and legally defensible decision that explains in detail the rationale for 

each finding of fact and conclusion of law. This necessitates that the RO have extensive legal and disability program knowledge and experience. This requires the legal 

expertise of an attorney to apply the rules, regulations and law to the evidence and 

to make and issue a legally defensible decision. It also demands extensive knowledge and experience in evaluating the functional effects of medical impairments. 

Fortunately, SSA already employs personnel with the education, training, and experience to decide and draft disability decisions necessary to assure the success of the 

RO process—OHA Attorney Advisers. Attorney Advisors have many years of experience in deciding and/or drafting disability cases, and with minimal training and expense, can effectively perform the functions of the RO from its inception. 

Another objective of the Commissioner is to facilitate decisional consistency at all 

decisional levels. The inconsistency of decision-making between the State Agencies 

and the ALJs is undeniable. Through the Process Unification effort, the agency did 

take some measures to attempt to create a higher level of consistency. Despite some 

level of success, primarily represented by an increase in payment rates by some 

State Agencies, decisional consistency still eludes the Agency. 

The introduction of the RO will significantly improve decisional quality as well 

as consistency through all the levels of adjudication. The Commissioner’s Approach 

requires substantial interaction between the RO and the State Agencies. If the RO 

decision is different from that of the State Agency, the RO’s written decision will 

explain to the State Agency why a different decision was reached. In extreme cases, 

93 

the RO will be able to remand cases to the State Agency. This level of communication, both formal and informal, between the RO and State Agency will result in improved decision making by both entities and promote decisional consistency without 

adversely affecting the claimants. 

The increased level of decisional consistency promoted by the RO will result in 

the reality and perception that the proper decision is being made at the lowest possible level. The RO decision will present the ALJ and the claimant with a comprehensive explanation of why the Agency denied the claim. While it imposes no 

limitation on the ALJ, it does help focus the issues in controversy leading to a more 

efficient hearing process. By providing the claimant with a detailed explanation of 

why his/her application was denied, the RO assist the claimant in marshalling evidence needed to establish disability. 

The ALJ Hearing 

The Commissioner’s approach wisely retains the Administrative Law Judge hearing process essentially unchanged. Hearing offices will continue to prepare cases for 

hearing, Administrative Law Judges will continue to conduct due process hearings, 

and the decisional independence of the ALJ continues to be protected by the APA. 

However, concern has been expressed about the relationship between the RO and 

the ALJ. The Commissioner has made it clear that the RO decision is not entitled 

to any deference on the part of the ALJ. The Commissioner’s Plan recognizes that 

the reality of the de novo hearing must be maintained and the freedom of the ALJ 

to decide cases based upon his/her evaluation of the evidence and the appropriate 

law and regulations must be preserved. 

Elimination of the Appeals Council 

Another bold initiative proposed by the Commissioner is the elimination of the 

Appeals Council and the claimant’s right to make an administrative appeal of the 

ALJ decision. While on its surface the elimination of the Appeals Council appears 

to be detrimental to claimants, that is not the case. The effect of the elimination 

of the Appeals Council must not be viewed in isolation, but in the context of the 

entire adjudicatory process. Improvements in the decision making process at the 

State Agency level, the introduction of the RO, and the quality assurance program 

proposed by the Commissioner render the administrative review of ALJ decisions 

unnecessary. We believe that considering the Commissioner’s New Approach in its 

totality, an additional administrative appeal of the ALJ decision is unnecessary. 

As currently constituted the Appeals Council serves two distinct purposes. It 

serves as an appellate body and as a quality assurance entity, but performs neither 

with distinction. This is not intended to disparage the hard-working employees at 

the Appeals Council, but rather its basic concept and design. The Commissioner’s 

approach replaces the Appeals Council with an end-of-line review by a centralized 

quality control staff and a potential review by a Commissioner’s Oversight Panel. 

The Agency, in its effort to improve quality assurance at the ALJ level of adjudication, should take care not to repeat its mistakes of the early 1980s when it attempted to interfere with ALJ decisional independence. In order to avoid the appearance of interference with ALJ decisional independence, it is essential that ALJs 

be intimately involved in any quality assurance program. 

There is concern that the lack of a right of administrative appeal of the decisions 

of Administrative Law Judges will result in a substantial increase in the caseload 

of the District Courts. We agree that any action that significantly increases the 

caseload of the district courts is unacceptable. However, we believe that the assumption that eliminating the Appeals Council will significantly increase District Court 

caseload is unwarranted. While such an assumption is sustainable if one considers 

the elimination of the Appeals Council in isolation, it is far less sustainable when 

one considers the whole breadth of the Commissioner’s plan. In that light, we expect 

that after a period of adjustment, the increased quality of the adjudication system 

will actually decrease the number of cases filed at the District Court. It will certainly significantly decrease the number of voluntary remands. 

Currently, the State Agency unfavorable determinations are given little credibility 

due to their nearly complete lack of a comprehensive explanation to the claimant 

and his/her representatives why he/she is not entitled to the disability benefits. Consequently, it is commonly believed that the first step at which an individual can receive fair consideration of his/her application is at the ALJ level. Therefore, appeal 

to the Appeals Council represents the second time that the claimant’s application 

receives fair consideration. The lack of credibility of the determinations made prior 

to the ALJ decision virtually mandates an additional (second) level of appeal. 

94 

The Commissioner’s approach contains an entirely new step, the review and decision by the Reviewing Official. As noted earlier, the RO will bring a level of credibility far in excess of that of the current Reconsideration Determination. The RO 

will apply the same adjudicatory standards as the ALJ. For those cases in which 

the RO cannot issue a decision favorable to the claimant, the Commissioner’s Approach mandates that the RO prepare a detailed explanation of why the claimant 

is ineligible for benefits. It is essential that the explanation of why the claimant is, 

or is not, entitled to disability benefits be thorough, fair and unbiased. The decision 

of the RO will be the first step at which the claimant receives a detailed and credible explanation of why he/she is not entitled to disability benefits. Under the Commissioner’s approach, the ALJ decision will be the second level at which a claimant 

receives a detailed decision from an independent decision maker. In as much as the 

ALJ process involves a de novo hearing rather than the appellate review currently 

performed by the Appeals Council, dissatisfied claimants actually have more substantial review and greater opportunity to achieve a favorable result than provided 

by the current system. The combination of the RO process and the ALJ hearing renders an additional administrative appellate step unnecessary in most circumstances. 

The claimant always retains the right to appeal to the District Court. 

While appealing unfavorable decisions to the District Court is appropriate, claimants should not have to file an action in the District Court to contest a dismissal 

of a Request for Hearing. We believe a three judge panel should consider appeals 

of dismissals. If the claimant is dissatisfied with the decision of that panel, then appeal to the District Court would be appropriate. 

The Commissioner’s Approach introduces major changes to the SSA disability 

process, and if properly implemented, it will result in substantial improvement in 

disability adjudication. However, it will require substantial changes in both organization and systems. The Commissioner has made it clear that inauguration of her 

new approach is predicated upon the successful implementation of Ae-DIB. SSA has 

had sufficient experience with implementing substantial process changes without 

ensuring the necessary system improvements are in place to know the dangers of 

premature implementation. Fortunately, Ae-DIB is progressing as well as can reasonably be expected. While the Commissioner’s prudence in this matter is welcomed, 

the transition to her ‘‘New Approach’’ should begin as soon as practicable. 

Ae–DIB 

The years 2004 and 2005 will be notable in SSA history for a number of reasons, 

not the least of which are the changes in business processes driven by Information 

Technology (IT). This year saw the introduction of a new case tracking system 

(CPMS), and the change from analogue to digital recording of hearing proceedings, 

the further expansion of video teleconferencing for conducting hearings, and the implementation of the electronic folder are all in the immediate future. Each of these 

programs, once installed and operating properly will improve Agency operations. By 

far the most far reaching change will be brought about by the electronic folder. The 

savings, both in time and money, that can be realized by converting from paper folders to electronic folders are substantial and will result in improved service to the 

public. The electronic folder will significantly increase the Agency’s flexibility in 

managing its workload and permit cases to be processed more expeditiously. 

These innovations recognize the advances in information technology and demonstrate SSA’s commitment to maximize the efficient use of its limited resources. 

NTEU is concerned that the hardware and software currently in hearings offices is 

inadequate to the demands that the electronic folder will place upon them. We are 

further concerned that not enough effort has been expended in considering the 

needs of the end user in using the electronic folder. The functionality of that interface will have a significant impact on the functionality of the entire system. 

Conclusion: 

Since 1993 SSA has been aware that its disability adjudication process has been 

fatally flawed. It was not designed to process the workload now imposed on it. Previous attempts to improve the process, the Disability Process Redesign and Hearings 

Process Improvement Plans were fundamentally flawed and actually degraded the 

level of service provided to the public. 

SSA, under the leadership of Commissioner Barnhart and Deputy Commissioner 

Gerry, has proposed a new process which if properly implemented will result in an 

adjudicatory process that serves the needs of the claimants and as well as the public 

at large. Given the magnitude of the problems facing SSA, only a program that is 

bold and innovative will achieve the desired result. Commissioner Barnhart has deVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00098 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
95 

livered such a plan. NTEU recommends that SSA implement the Commissioner’s 

proposal to reform the disability determination process as quickly as practicable. 

f 

Chairman SHAW. Thank you, Mr. Hill. Ms. Zink? 

STATEMENT OF LAURA ZINK, MEMBER, FEDERAL MANAGERS 

ASSOCIATION, SOCIAL SECURITY ADMINISTRATION, CHAPTER 275, PHOENIX, ARIZONA 

Ms. ZINK. Chairman Shaw and distinguished Members of the 

Subcommittees, thank you for this opportunity to voice some of the 

concerns managers and supervisors at the Social Security OHA 

have with the SSA Commissioner’s proposal for reforming the disability process. I am here as a member of the FMA, which represents the interests of nearly 200,000 managers, supervisors and 

executives serving in the Federal Government. Within FMA we 

represent executives, managers and supervisors in all Social Security Program Service Centers, the Office of Central Operations and 

the OHA. 

Last year Commissioner Barnhart unveiled her proposal for restructuring the OHA, and the appeals process. We at the FMA support the Commissioner’s overall mission to support the disability 

adjudication process, including her commitment to retention of the 

due process hearing and the modernization of the disability claims 

process, including migration of the eDIB folder, otherwise known 

as eDIB. However, there are some remaining challenges and concerns that need to be addressed while the reforms move forward. 

The most significant concern to managers and supervisors agency 

side is a lack of meaningful performance management system. Our 

employees have vague and nearly unenforceable performance 

standards. Supervisors are not permitted to document performances, good or bad, in personnel files. The pass/fail appraisal system is a disservice to our employees and to the American people. 

There is no incentive for excellent performance because every employee gets the same appraisal. Moreover, our performance award 

system is disconnected from performance appraisals of necessity, 

because when you look at their appraisals, you cannot tell one employee from another, and nobody likes it. 

In a September 2003 poll, many Federal employees expressed 

their dissatisfaction with the current system. Seventy-six percent of 

respondents do not believe that the pass/fail system is an improvement over the more traditional multi-tiered performance appraisal 

system. Sixty-eight percent indicated that the biggest problem with 

pass/fail was that outstanding performers get the same rating as 

low performers. Where is the incentive to excel in that? 

In addition to the need for an appropriate performance management system, we’re still woefully short on meeting staffing needs 

of the current workload seen by the OHA. At the hearing office 

level we are devoting extensive resource to the preparation of a 

more automated system. However, we must recognize that we are 

facing a workload crisis today which will continue into the foreseeable future. Between 2002 and 2012, SSA expects the disability 

rolls to grow by 35 percent. Currently OHA has 600,000 cases 

pending at the hearing level. That is more than a year’s worth of 

96 

work. Even though our production has increased year after year, 

we are unable to keep pace with the increasing receipts. We will 

not fully realize the benefits of automation for at least 2 to 3 years. 

In the meantime we must deal with the paper claims that are with 

us now, and that will continue to come to us for the next year or 

2. In order to address this shortfall, we need additional staff. 

It is widely recognized that Social Security and the Federal Civil 

Service in general is facing a huge retirement wave. Sixty percent 

of Federal managers and 50 percent of the overall Federal workforce will be eligible for retirement in the next few years, including 

me. It makes sense for us to hire employees, both ALJs and support staff now to reduce the backlog of cases now and over the next 

several years. Attrition will bring the staff levels back down over 

time. The OHA affects the lives of millions of Americans. With increased staffing and funding the agency would be able to improve 

its service to its customers, the American public. 

Last, the Commissioner’s proposal to eliminate the Appeals 

Council and replace it with decentralized oversight panel is particularly troubling. The Appeals Council is the only body that reviews cases from the entire Nation, and is responsible for the implementation of the Commissioner’s policies. In a disability program that is supposed to be uniform and consistently administered 

nationwide, it is extremely valuable to have one body that can spot 

trends, regional variations and potential problems. We are concerned that without the Appeals Council our National perspective 

may be lost. 

Additionally, the Appeals Council performs a number of crucial 

functions. It provides the only recourse and dismissal cases, and 

provides protection for unrepresented claimants who would otherwise have to navigate their way through the Federal Courts. The 

council further deals with a number of due process issues which 

arise at the hearing level, and handles allegations of bias and unfairness from claimants. Last, it plays a vital role in the preparation of cases for court review and performs nationwide quality assurance. These functions are essential and best performed by one 

central body. Thank you for your time and for allowing me to speak 

on behalf of the many dedicated and hardworking OHA managers 

and supervisors. 

[The prepared statement of Ms. Zink follows:] 

Statement of Laura Zink, Member, Federal Managers Association, Social 

Security Administration Chapter 275, Phoenix, Arizona 

Chairman Shaw, Ranking Member Matsui, Chairman Herger, Ranking Member 

Cardin and Members of the Subcommittees on Social Security and Human Resources: 

Thank you for allowing us at the Federal Managers Association (FMA) to testify 

about the challenges and opportunities facing the implementation of the Social Security Commissioner’s proposal to improve the disability process as it relates to the 

Office of Hearings and Appeals (OHA) in the Social Security Administration (SSA). 

FMA represents the interests of the nearly 200,000 managers, supervisors and executives serving in the Federal government. Within FMA, we have Conferences divided along agency lines, one of which is the FMA–Social Security Administration 

(SSA) Conference representing executives, managers, and supervisors in all Social 

Security Program Service Centers, the Office of Central Operations, and the Office 

of Hearings and Appeals. 

Last year, Social Security Commissioner Jo Anne Barnhart unveiled her proposal 

for restructuring OHA and the appeals process. While FMA supports certain aspects 

97 

of the Commissioner’s plan, we cannot support her proposal to eliminate the Appeals Council in favor of the creation of Oversight Panels. The Appeals Council is 

the only body that reviews cases from the entire nation and is responsible for the 

implementation of the Commissioner’s policies. In a disability program that is supposed to be uniform and consistently administered nationwide, it is extremely valuable to have one body which can spot trends, regional variations and potential problems. We are concerned that, without the Appeals Council, our national perspective 

may be lost. 

Additionally, the Appeals Council provides the only recourse in dismissal cases, 

deals with a number of due process issues which arise in the hearing process, and 

handles allegations of bias and unfairness from claimants. These are important 

workloads that can best be performed by one central body. Moreover, we continue 

to have concerns about underlying problems in the hearings and appeals process, 

which, if not specifically addressed, will continue to inhibit the success of any reform 

plan. 

Briefly, FMA supports the: 

• Due Process Hearing; 

• Recommendation to close the hearing record following the decision by the Administrative Law Judge (ALJ); 

• Acceleration of the use of the Electronic Disability Folder (eDIB), video teleconferencing, digitally recorded hearings, and a strong management information 

system; 

• Need to aggressively address the staffing issue in the Social Security Administration (SSA); 

• Agency’s efforts to make meaningful improvements to the OHA process; 

• Elimination of the reconsideration step only after the full implementation of the 

Reviewing Official (RO) position; and, 

• Establishment of the Regional Expert Medical Units. 

The most significant underlying problems we see include: 

• The lack of a meaningful performance appraisal system; 

• Severe staffing shortages and imbalances; and, 

• The cumbersome and lengthy process to hire and assign ALJs. 

While we believe that some of Commissioner Barnhart’s proposals may have a 

positive impact on OHA processes in the long term, others, such as the elimination 

of the Appeals Council, should not be implemented. It is also important to note that 

full implementation of other aspects of the proposal will take time. The plan is 

predicated on the successful implementation of eDIB, which even the most optimistic forecasts indicate will take two to three years. Additional changes will then 

be followed by the necessary learning curve for affected employees. This two to three 

year process is expected to see initial disruptions in office operations and a decrease 

in productivity. The July 2, 2004 GAO report, Social Security Administration: More 

Effort Needed to Assess Consistency of Disability Decisions (GAO–04–656), noted 

that SSA should proceed with caution in implementing e-DIB, to avoid rushing into 

practices that are not sufficiently tested. 

Meanwhile, OHA is facing a growing backlog of pending hearing cases which 

needs immediate attention. Over the past two years the hearing offices have made 

tremendous strides in improving the disposition rate and efficiency, and the Appeals 

Council has significantly reduced its pending workload. However, because of the 

aging of the American population, OHA is receiving more new cases than ever before, but we have not been given staff increases to keep up with the ever-growing 

workload. The rate of receipts is projected to continue to rise. At the end of Fiscal 

year 2003, we had 556,369 pending SSA cases at the hearing level. At the end of 

August, 2004, we had 625,587; an increase of more than 69,000 cases. The backlog 

will not decrease until staffing levels are increased. OHA desperately needs some 

short-term relief in the form of additional employees to deal with the current situation. 

In recent years, OHA has reached a number of milestones: 

• In FY 2002, we produced the largest number of dispositions in history, 532,106. 

• In FY 2003, OHA exceeded that performance with 571,928 dispositions. 

• This represents an increase of almost 40,000 cases. 

• In FY 2004, OHA piloted and then implemented nationwide the transition to 

CPMS, the case-management piece of Ae-Dib. 

• In FY 2004, despite the challenges of CPMS, OHA has produced 503,384 cases 

through August 2004 (final numbers for the FY are not yet available). 

98 

In spite of these accomplishments, we continue to fall behind because of the increasing receipts. The solution must be increased human resources as well as increased flexibility for managers to assign those resources. 

Meaningful Performance Measurement 

As we previously mentioned in testimony submitted to the Subcommittee in September 2003 the development of a meaningful performance management system 

should be a top priority for SSA and OHA. The success or failure of any initiatives 

will be directly related to management’s ability to hold all employees accountable 

for their work. Without meaningful performance measurements, we will achieve 

only limited success at best. 

Many of the problems within the disability process parallel the deterioration of 

our performance management system. Our performance management system began 

to decay in the late 1980s and has steadily regressed. Group-based accountability, 

introduced under HPI, only moved us further from individual accountability. The 

current Pass/Fail appraisal system does not provide incentives for high performance, 

and we continue to see the grave consequences of this failed structure. 

Each year the Social Security Administration presents its Government Performance and Results Act Annual Performance Plan. This plan describes specific levels 

of performance and outlines the means and strategies for achieving those objectives. 

The objectives are supported by indicators, which are used to measure the agency’s 

success in achieving the objectives. The performance indicators are translated into 

goals that are shared with SSA executives. These goals are then clearly presented 

to managers and supervisors as expectations for performance. At OHA, for example, 

the indicators are expressed in terms of dispositions per day per ALJ, processing 

time, percent of aged cases, etc. As noted above, SSA holds managers and supervisors responsible for communicating performance goals to agency employees. However, when the goals are communicated to the employees, managers are required to 

communicate in very generic terms due to the absence of numeric standards. 

Our current performance management system in SSA addresses these elements, 

but at an organizational level rather than an individual level. We certainly have set 

performance expectations (Planning), but these are agency goals, not individual 

goals. As directed by the system, progress reviews are held (Monitoring), but since 

there is no individual measurement, the discussions are generic. Ideally, we would 

spend time training (Developing) our employees, but in reality, most of our offices 

suffer from significant staffing imbalances and struggle just to accomplish our most 

basic missions. We rate (Rating) our employees on a Pass/Fail appraisal system, 

which fails to distinguish individual performance. Finally, our rewards (Rewarding) system is essentially a ‘‘do-it-yourself’’ process. Rewards are currently determined by regional and national panels, which make their decisions almost exclusively using written recommendations with little knowledge of the offices or the 

nominees. The recommendations—written by the employees themselves—do not always provide an accurate view of an employee’s workload or their ability. 

In a September 2003 poll conducted by FedNews Online, many Federal employees 

expressed their displeasure with the current Pass/Fail appraisal system that is used 

throughout the government. Seventy-six percent of the poll’s respondents do not believe that the Pass/Fail system is an improvement from the more traditional fivelevel performance appraisal system. Sixty-eight percent of respondents indicated the 

biggest problem with the Pass/Fail system was that outstanding employees were 

given the same performance rating as mediocre employees. 

Our current performance management system sends the message that performance does not need to be individualized. Because the standards are so generic, performance cannot be measured on an individual level. The labor-management contract requires that data focus on the process, not the individual. For all intents and 

purposes, the system is one of non-accountability. In spite of an employee’s best effort, the employee will simply ‘‘pass’’ under current criteria. Award money is distributed according to a formula based on the number of employees on the payroll. This 

distribution is completely devoid of any recognition for performance, even at the office level. Since we have no individually measurable standards (numerics) that can 

be taken into consideration, overtime/credit hours/flexiplace must be given to anyone 

interested. 

It is absolutely critical that our employees are provided with clear goals. These 

goals must be understandable, measurable, verifiable, equitable, and achievable. An 

Associated Press article dated May 27, 2002 describes how the Department of Veterans Affairs has succeeded in slashing their backlog of pending claims. VA Secretary Anthony Principi was quoted as saying, ‘‘We decided to really declare war on 

that backlog and took some rather bold steps to address it. We’re really getting this 

backlog under control, and we did it through sheer focus and discipline, performance 

99 

measurements and production goals.’’ When employees know what is expected of 

them, they are better able to focus their efforts. 

There is an old adage that states, ‘‘What gets measured gets done.’’ Implementing 

an effective performance plan within SSA given the current culture will be difficult. 

But if the Agency expects to meet its objectives it must be done. OPM has prepared 

A Handbook for Measuring Employee Performance. This Handbook outlines the 

guiding principles for performance measurement as follows: 1) performance management must be viewed as a valuable tool, not as an evil; 2) acceptance of the process 

is essential to its success; 3) we must measure what is important, not what is easy; 

4) the plan must be flexible enough to allow for changes in goals to keep the process 

credible; 5) we must rely on multiple measures; 6) employees must perceive that 

performance measurement is important; and, 7) management must demonstrate 

that performance is critical to organizational and individual success. These are the 

principles, which must guide efforts to reform the current system. 

In October 2003, a Human Resources Management Consortium of forty-six organizations—most of them Federal agencies—asked the National Academy of Public Administration to conduct a comprehensive review of the use of broadband pay in the 

public and private sectors. The Academy’s Human Resources Management Panel 

oversaw this important effort. Over a 19-month period, the Panel worked with a 

three-member Academy project team to produce four reports, culminating in Recommending Performance-Based Federal Pay in May 2004. The final report’s recommendations include: 

• Transition to the integrated band structure should be completed within five 

years. Individual agencies should be allowed to develop their own schedules 

based on their human capital plans, budgets and performance management systems. • Individual agencies should be accountable for planning and implementing performance management systems that identify outstanding performers, those who 

meet performance expectations and employees who fail to meet expectations. 

The systems should demonstrate a clear linkage or ‘‘line of sight’’ to the agency’s mission and operating goals. • Each agency should define a new position to provide support to managers in implementing new performance systems and dealing with day-to-day pay and performance issues. • Agencies should provide extensive performance training for managers who are 

responsible for the implementation and effectiveness of the new system. • OPM and agencies should both develop linked communications strategies, which 

are key to the system’s success. These strategies should delineate the process 

used to develop policies and practices. • New system rollouts should be managed as organizational change. 

A strong performance management system will go a long way in restoring the Social Security Disability Program to the status of a premier program. Our current 

leadership is committed to reforming our performance management system, but we 

realize it will take several years to have an effective system in place. Nonetheless, 

any initiative implemented prior to having a meaningful performance management 

system will have minimal impact. 

Staffing Imbalances 

In an April 18, 2003 letter sent to A. Jacy Thurmond Jr., Associate Commissioner 

of OHA, we outlined a number of issues related to the staffing of hearing offices. 

Since the late 1980s, OHA has used the employee-to-ALJ ratio of 4.5-to-1 to determine staffing. This ratio is basically applied to all hearing offices regardless of individual office dynamics. However, since the ratio was established, conditions have 

changed at OHA offices. Staffing of OHA offices should reflect the current needs of 

those offices. 

We at FMA fully recognize that there must be a general formula in place in order 

for a central office to be able to compare the regions’ staffing levels. However, a useful staffing formula must be derived by performing work studies on various positions to determine the amount of time that is required on average to support an 

ALJ. Since the current 4.5: 1 ratio was established, OHA’s technology capabilities 

have advanced significantly and these advancements have dramatically altered numerous work functions and, correspondingly, the time it takes to perform the functions. Furthermore, we feel that it is shortsighted to use such a formula in the 

strictest sense, regardless of how much effort was devoted to work-studies. Focusing 

only on the pre-set, ‘‘ideal’’ ratio—without considering other internal or external factors that impact an office’s ability to serve the public—will prevent OHA from placing itself in the best position to meet coming challenges. The formula needs to be 

100 

reviewed and updated as procedures, technologies, and dynamics change to ensure 

a true staffing picture. We believe that our actual staffing needs will be better realized with the following changes: 

• Regions should have the flexibility to staff based on ‘‘actual’’ needs and not just 

‘‘predetermined’’ ratios. 

• Position mix must be considered in any staffing determination. 

• Ratios or guidelines have their place, but must be reviewed and updated as advancements in technology are realized. In addition, the regions should have the 

flexibility to surpass the pre-determined ratio when office dynamics warrant additional staffing. 

• For purposes of a general guideline ratio, only ‘‘pure’’ production employees 

should be included. 

In order to be in a position to handle the anticipated increase in workload, we 

must have the flexibility to staff offices according to their actual needs. Should the 

agency move forward with its proposal to eliminate the reconsideration step, the 

workload of OHA will likely increase immediately. This is currently the experience 

in prototype states which operate with no reconsideration step. Reviewing officers 

should be in place and fully trained before the reconsideration step is eliminated 

nationwide. Consideration should be given to not restrictin the RO position to attorneys only. There are many qualified and knowledgeable paralegal analysts who 

would increase the pool of candidates available. If this does not occur, employees 

new to their positions will be faced with the inevitable increase in receipts that will 

follow the elimination of this step. In our view, this could create another backlog 

situation. It is critical that new staff is already on board, trained, and ready to meet 

the challenge of this anticipated spike in workload. 

Automation Initiatives 

Potentially, these initiatives—including eDIB, video-teleconferencing, and voice 

recognition software, will have the greatest impact on productivity and will significantly alter the way we do business. Sufficient resources need to be devoted to testing and implementing e-DIB, as it will ultimately eliminate manual case preparation, in addition to providing significant savings on mail & storage costs. As we 

move closer to this reality, we need to look at the entire structure of the hearing 

offices and the positions within. We cannot start too early on this project considering the impact on the senior case technicians (SCTs) and the potential to easily 

distribute work to where the resources are. The positive impact that eDIB can have 

on the SCTs who now spend much of their time preparing the cases for ALJ review 

would be substantial. The full implementation of eDIB will allow SCTs to spend 

time on other functions that will help to decrease the backlog OHA currently faces. 

We have been very pleased to see the advance of video hearings. This has been 

implemented in more locations, and more sites are slated. This initiative is already 

saving time and money in providing more timely hearings for claimants who live 

a distance from their servicing hearing office. We applaud the Commissioner’s actions in putting this important initiative on the fast track. 

Appeals Council 

We are very concerned with the Commissioner’s proposal to eliminate the Appeals 

Council and create Oversight Panels consisting of two ALJs and one Administrative 

Appeals Judge. As part of the plan outlined in her testimony a year ago, the Commissioner concluded that the Appeals Council level of the current process should be 

eliminated because it ‘‘—adds processing time and generally supports the ALJ decision.’’ We disagree with that conclusion, and submit rather that the Appeals Council 

level of the process contributes to the achievement of the Commissioner’s stated 

goals and provides important benefits to disability claimants. 

While it does require some time for the Appeals Council to consider requests for 

review, great strides have already been made in more effectively processing the Appeals Council workload. Pending requests for review have decreased dramatically 

and now number approximately 50,000 cases. Average processing time has been reduced significantly, standing at 251 days at the end of August 2004. At that time, 

nearly half the requests for review received by the Council were worked to completion within 105 days. Technological changes currently being developed (e.g., digital 

recording of hearings and the development of an electronic folder) and policy 

changes being considered (closing the administrative record after the hearing) will 

result in further significant improvements. 

101 

The benefits added to the disability adjudication process by Appeals Council review make a substantive positive contribution to achieving the goals stressed by the 

Commissioner: 

• Three to four percent of requests for review result in the issuance of a favorable 

decision without the necessity of the much longer appeal process to Federal 

court. The Council also remands about 24 percent of the request-for-review 

cases it considers, ultimately resulting in additional favorable decisions without 

court action or unfavorable decisions more likely to withstand court scrutiny on 

appeal. 

• Review by the Appeals Council is the only recourse available to claimants who 

have had their requests for hearing dismissed. The Council grants review in a 

large percentage of these cases, providing an avenue for these claimants to receive due process and a substantive decision. 

• Many claimants are not represented. The Appeals Council is the last recourse 

for those who lack the understanding or resources to pursue their case in Federal court. For them, the Council provides an avenue to appeal the Administrative Law Judge’s decision in a non-adversarial setting. 

• The Council’s workload also includes review of favorable hearing decisions that 

have not been appealed. Exercise of this function prevents payment of benefits 

in cases where an allowance is not warranted by the law and facts of the case. 

• The Council also plays a vital role in the preparation of cases for court review, 

processing requests for voluntary remand, preparing court remands, and reviewing final decisions after court remand. These functions are essential to the 

efficient processing of the civil action workload. 

In her testimony last year, the Commissioner stressed the need for disability 

claims to be better developed and indicated the need for consistency in disability adjudication. The Appeals Council contributes to the achievement of both these objectives. By remanding cases, the Council sets a higher standard for case development. 

The Council is the only body that reviews disability cases on a national basis. The 

Council has developed principles and guidelines that have insured consistent actions 

by Administrative Law Judges throughout the country. If national consistency is the 

objective, the Appeals Council is the logical body to be tasked with continuing oversight of this effort. 

Stakeholders in the disability process, including claimants’ representatives and 

advocacy groups, value the contribution of the Appeals Council and support retention of the request for review. Previous studies dealing with the elimination of the 

request for review indicated that the workload of the courts would increase dramatically if the Appeals Council review level were to be abolished. Reports by the Judicial Conference of the United States have indicated that most claimants do not seek 

judicial review after Appeals Council action, and that Appeals Council review 

lessens clogging of court dockets. The Conference viewed the prospect of eliminating 

Appeals Council review unfavorably. 

The Office of Hearings and Appeals Management Association (FMA Chapter 275) 

agrees that the disability adjudication process needs to foster fully developed case 

records to support accurate and timely decisions which are consistent and of high 

quality. For 64 years the Appeals Council has contributed to the achievement of 

these goals by providing a final level of appeal and review within the Social Security 

Administration. Such experience and public service are invaluable. The Council 

should continue to be a driving force in improving the disability adjudication process. 

Conclusion 

The Office of Hearings and Appeals within the Social Security Administration affects the lives of millions of Americans with its disability services. With increased 

staffing and funding, the Agency would be able to improve its service to its customers—the American public. The missions performed by OHA could be completed 

at an even higher level of proficiency if a meaningful performance management system were instituted within the Agency. These changes would allow OHA to provide 

to the public the level of service that is both expected and deserved by taxpayers. 

FMA has long served as a sounding board for the Legislative and Executive 

branches in an effort to ensure that policy decisions are made rationally and provide 

the best value for the American taxpayer, while recognizing the importance and 

value of a top-notch civil service for the future. We at FMA would welcome the opportunity to do the same for any initiatives that Congress, as well as SSA, would 

like to develop that would further enhance the mission of the Office of Hearings and 

Appeals. 

102 

We want to thank you again, Chairman Shaw, Ranking Member Matsui, Chairman Herger and Ranking Member Cardin, for providing FMA an opportunity to 

present our views and for the hard work and interest of the members of both Subcommittees on this very important topic. 

We look forward to working with Congress, the Commissioner, and other stakeholders in finding solutions to the challenges facing SSA in our collective pursuit 

of sustaining excellence in public service. 

f 

Chairman SHAW. Thank you, Ms. Zink. Mr. Bernoski, you are 

certainly no stranger to this Committee. Welcome back. 

STATEMENT OF RONALD G. BERNOSKI, PRESIDENT, ASSOCIATION OF ADMINISTRATIVE LAW JUDGES, MILWAUKEE, WISCONSIN 

Mr. BERNOSKI. Thank you, Mr. Chairman. Thank you for inviting us to testify. We commend the Commissioner for her attempt 

to reform the Social Security disability process. The plan is mostly 

simple and direct with some complex changes in eDIB. We are committed to working with the Commissioner to ensure that her program succeeds. The ALJ hearing remains at the center of the Social Security adjudication system, and we believe that the ALJ 

hearing should become more formal and developed. With appeals 

going directly to the Federal Court, it is imperative that we have 

an improved level of expert testimony at our hearings, and we will 

also need highly qualified decision writers to ensure that our written decisions pass the scrutiny of the Federal Courts. Also the 

staffing problems that we have talked about many times of HPI 

must be corrected. 

The plan eliminates the Appeals Council, with the appeal going 

directly to the Federal Courts. We agree with this change because 

the Appeals Council has lost its utility to the disability process. 

The plan also calls for three-judge quality control panels. It is not 

clear how these panels will function, but it appears that they will 

review live cases. A decision of the panel will become the decision 

of the Commissioner unless appealed. We have some concerns with 

this proposal. There is no indication that the claimants have a 

right to appear before these panels or that the claimants have a 

right to appeal their cases to a panel. A claimant has an interest 

in a favorable decision, and we suggest that any such quality review be done on closed files after the appeals time has lapsed. This 

is to protect the claimant’s right in the case. 

We suggest a quality review mechanism be built into the appeal 

to the Federal Court from the ALJ. This can be done by providing 

for a delay in the perfection of the appeal for a period such as 60 

days. During this period, the case could be reviewed by the Office 

of General Counsel to determine if the agency will defend the case. 

If the case is not defended, it would then be returned to the ALJ 

for further action. The plan also contains the new position of the 

RO. This person is an attorney who reviews the case on appeal 

from the DDS. The RO can either allow the claim or prepare a report for further action by the ALJ. We suggest that this report be 

a memorandum for the file and not a decisional document. 

It is also important that the RO be provided with sufficient support staff to fully develop the record. Mr. Daub spoke about that 

103 

earlier. The CPMS is a new case tracking system which has gotten 

off to a slow start, but we want to work with the Commissioner to 

cure its defects. The eDIB is a larger system that is more complex. 

We are encouraged by this concept but have some concern with the 

size of the project. Now, eDIB was recently implemented on a limited basis in the Charlotte, North Carolina Hearing Office, and the 

information that we have received indicates that the first hearing 

went very well. However, much remains to be done on that system, 

and we should look at things such as the utility of the system for 

handling large cases with many exhibits, the efficiency of inputting 

documents into the system, determining how the claimants will use 

this new electronic system for the review of their files, how the system will be used at remote hearing sites, the impact of the system 

on the size of the hearing room, the number of computers that will 

be required in the hearing rooms, the impact of this system on the 

office users, and whether there will be a continued need for paper 

files. 

Based on our experience with CPMS we have concern with ruling 

out eDIB too quickly, because we believe that there are going to be 

problems that can’t be anticipated, and that caution is advisable. 

However, we are committed to working with the Commissioner to 

make this reform a success. We also believe that the agency must 

adopt the rules of procedures that were recently recommended by 

a Joint Rules Committee. These rules are needed to implement the 

Commissioner’s reform plan. The agency should also deal with the 

use of Social Security numbers as case identifiers on documents 

that are electronically transmitted, as we explained in our written 

testimony. 

Last, on the persistent issue of the OPM’s lack of capacity to efficiently administer the ALJ system, we suggest that there be a joint 

hearing between this Subcommittee and the Subcommittee on Administrative Law in the Committee on the Judiciary. We recommend the adoption of a Conference of ALJs similar to the bill 

that was introduced by Congressman Gekas in the 106th Congress. 

Thank you very much. 

[The prepared statement of Mr. Bernoski follows:] 

Statement of Ronald G. Bernoski, President, Association of Administrative 

Law Judges, Milwaukee, Wisconsin 

I. INTRODUCTION 

Thank you for the opportunity to testify 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 administrative law 

judges employed in the SSA OHA and the Department of Health and Human Services (‘‘DHHS’’). One of the stated purposes 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. 

We commend Commissioner Barnhart for her plan to reform the Social Security 

disability process. During the past 15 years the agency has made several attempts 

to reform the disability process, but unfortunately each effort has failed. The Commissioner’s proposed plan has the advantage of being simple and direct, yet it includes a significant challenge on an unprecedented scale. E–Dib, or the electronic 

file, is an innovative and bold change in the agency’s collection, transmission, and 

retrieval of data. Smaller electronic systems are in existence. The SSA system will 

104 

include all of the components of the Social Security Administration as well as the 

fifty state agencies involved in initial disability determinations. The transition from 

paper files to electronic files will be a difficult, but not impossible test, for the judges 

who hear disability cases. However, it is vital that the Commissioner receive adequate funding to implement her entire reform plan. If only a portion of E-dib is completed, we will be left with a struggle of working with the confusion of two systems 

or face the dilemma of stepping back from an achievable technological advancement. 

II. THE ADMINISTRATIVE LAW JUDGE HEARING 

In September of last year, the Commissioner testified before this Subcommittee. 

She stated that claimant advocacy and claimant representative organizations 

strongly recommended retaining the de novo hearing before an administrative law 

judge. The Commissioner’s reform plan follows these recommendations and the administrative law judge hearing is retained as the center of the agency’s adjudicative 

process. We completely agree with this action. 

The Administrative Procedure Act was enacted by the Congress in 1946 to ensure 

fairness in the agency adjudication system in the Federal government. The Act left 

the hearing examiners (now administrative law judges) within the agencies as qualified employees, but provided them with additional protections to ensure full and fair 

hearings for the American public [see Ramspeck et. at. v. Federal Trial Examiners 

Conference, 345 U.S. 128 (1953)]. We recommend that the intent of Congress be 

fully implemented and that the SSA hearing process be made more formal. We urge 

the agency to adopt, by regulation, rules of practice and procedure for ALJ hearings. 

Practice and procedure rules have been proposed by a joint rules committee established by the Associate Commissioner of the Office of Hearings and Appeals. Also, 

with a high percentage of claimants represented by counsel at our hearings we recommend the establishment of an agency representative to balance the interests of 

what has become one-sided advocacy. If the claimant is not represented at the hearing, the agency representative would provide assistance to the claimant. 

Under the Commissioner’s reform plan, the administrative law judge hearing will 

be the last agency action for many claimants. We support the concept of closing the 

administrative record after the ALJ hearing. This makes it imperative that the administrative law judge hearing is full, fair and complete with all relevant evidence 

included in the hearing record. The hearing decision must be prepared in a manner 

that is legally sufficient and meets all agency and legal standards. ALJs need highly 

qualified, professional decision writers to insure that our decisions pass the scrutiny 

required of direct appeals to the Federal district courts. 

SSA actions alone will not make the ALJ hearing process more professional. Congress plays an important role. When creating the Administrative Procedure Act, the 

Congress vested considerable authority in the Civil Service Commission (now the 

United States Office of Personnel Management) and gave it the responsibility to regulate the administrative law judge function in the Federal government. The Office 

of Personnel Management (OPM) has the responsibility to maintain a testing system that qualifies applicants for entry upon a register that provides new administrative law judges to the agencies. Traditionally, OPM administered this responsibility through an Office of Administrative Law Judges. Regrettably, OPM has 

backed any from its responsibility for the administrative law judge function in the 

Federal government. It recently abolished its Office of Administrative Law Judges 

and dispersed the functions of this Office within OPM in an indefinable manner. For 

what we believe is the first time in its history, OPM does not have a test in place 

for applicants for the administrative law judge position. A new test has been promised for years. The ALJ register has been closed to new applicants for over 5 years. 

The lack of effective management of the administrative law judge program by OPM 

has made it extremely difficult for agencies, including SSA, to hire new judges. This 

problem must be addressed to allow the Social Security Administration and other 

agencies to hire the new administrative law judges needed to maintain the various 

programs in the Federal government. 

Rep. George Gekas (R–PA) attempted to address this problem in the 106th Congress by introducing the Administrative Law Judge Conference of the United States 

Act (H.R. 5177). This legislation would have moved the functions of the Office of Administrative Law Judges from OPM and placed them in an Administrative Law 

Judge Conference. The Conference was to be headed by a Chief Judge who reported 

annually to both the Congress and the President. The Chief Judge was to be responsible for regulating the Federal administrative law judge program and for promulgating a code of professional conduct for Federal administrative law judges modeled 

after the America Bar Association model code for administrative law judges. The administrative law judges remained as qualified employees of the agencies and the existing authority of the agencies and judges was not changed in any manner. The 

105 

concept was patterned after the Judicial Conference of the United States and it provided a needed organization and structure for the Federal administrative law judge 

system. We ask that legislation of this type be supported by each member of this 

joint Subcommittee. 

III. APPELLATE REVIEW 

The Commissioner’s reform plan eliminates the Appeals Council. We agree with 

this change. There have been many studies and comments on the utility of the Appeals Council to the Social Security disability process. In a prior report, the Administrative Conference of the United States recommended that the Appeals Council be 

either improved or abolished. The main weakness of the Appeals Council is that it 

has not developed a true appellate function in the Social Security disability process. 

Its decisions do not have any precedent and its authority has not been developed. 

As such, it merely serves as a ‘‘pass-through’’ area for the claimants on their way 

to the Federal courts and it adds no value to the process. 

The reform plan provides for a centralized quality control staff that would review 

administrative law judge decisions. If the quality control review disagrees with an 

administrative law judge decision, it will be referred to an oversight panel for review. This panel consists of two administrative law judges and one administrative 

appeals judge. The decision of the panel becomes the final decision of the Commissioner, unless it is appealed to the Federal court. We have considerable concern with 

this change. The claimant does not have any right of appeal to the panel, and it 

is not clear whether the claimant has any right to representation before the panel. 

If the claimant has received a favorable decision from the administrative law judge, 

he/she has a clear interest to protect in the decision before the panel. We recommend that any quality control review conducted by the agency be performed on 

closed files where the appeals time has lapsed. This will eliminate the problem of 

interfering with a ‘‘live’’ case where the claimant has an interest to protect. 

The reform plan provides that if the administrative law judge decision is not reviewed by the panel it will become the final decision of the Commissioner, unless 

it is appealed to the Federal court. As is currently the case, the claimant will continue to have a right of appeal to the Federal court under existing law. We agree 

that the Federal districts courts should continue to have jurisdiction of Social Security disability cases. To act as a filter for appealed cases, we recommend that SSA 

consider a procedure to return certain cases to the administrative law judges before 

jurisdiction is perfected in the Federal courts. This could be accomplished by establishing a time period (e.g. 60 days) before the appeal to Federal court is perfected. 

During this time period, the attorneys for the agency’s Office of General Counsel 

could review the cases and decide which cases, if any, the agency will not defend 

in court. The cases that the agency decides not to defend in court would be returned 

to the administrative law judge for further action. Jurisdiction in the Federal courts 

gives a safeguard to the claimant by providing a forum that is outside the agency 

and allows for independent judicial review of the case. In the 1980’s the Federal 

courts proved the value of this review by protecting the claimants from widespread 

agency abuse. 

IV. REVIEWING OFFICIAL 

The plan creates a new position in the Social Security disability system. This position is the SSA reviewing official (RO) and it a Federal position. If the claimant files 

a request for review of a DDS determination, the claim would be reviewed by the 

RO. This person will be an attorney, who will be authorized to review the case and 

to either issue an allowance decision in the case or concur with the DDS denial of 

the claim. This is a review of the file, and the claimant will not appear before the 

RO. If the claim is not allowed, the RO will prepare a written report on the recommended disallowance which discusses the evidence in the case. We believe that 

this report should not be an agency decisional document and it should instead be 

a memorandum for the file to assist the administrative law judge. If the report is 

a decisional document, the claimant will have a right to state his/her case to the 

RO in writing prior to the issuance of the report. This will add time to the process 

and require an appeal from the RO to the administrative law judge hearing. 

V. CENTRALIZED MEDICAL PANELS 

The reform plan provides for centralized medical panels that would be available 

to disability decision makers at all levels. These units would be organized around 

clinical specialties, such as, musculoskeletal, neurological, cardiac and psychiatric.We are encouraged by this proposal, because we believe that any method 

employed to improve the quality of the medical evidence at the administrative law 

106 

1 U.S. General Accounting Office, Electronic Disability Claims Processing: Social Security Administration Needs to Address Risks Associated with Its Accelerated Systems Development Strategy, GAO–04–466 (Washington, D.C.: March 26, 2004). 

2Managers are an exception to this policy. 

judge hearing is beneficial. The reform plan provides for a ‘‘quick decision’’ process 

which could use this expert medical resource. We support the quick decision process 

so that pay cases can be identified as early in the process as is possible. We suggest 

that the medical panels for the State DDS disability reviews and the administrative 

law judge hearings be separate to provide a ‘‘fresh look’’ of the case at each level 

of the administrative review. However, if a needed medical specialist is present on 

only one of the panels, this expert should be available to all adjudicators. Heretofore 

hard to obtain medical testimony could be obtained at our hearings by use of the 

video conference system that the agency is acquiring. This new technology allows 

administrative law judges access to needed medical experts not otherwise available. 

Video testimony also gives the claimant a better opportunity to cross examine the 

witness as well as providing for a more efficient use of the expert’s time. 

VI. CPMS 

Conversion to an electronic work environment needs to be well planned. The initial version of the Case Processing and Management System software did not live 

up to expectations. That version of CPMS made the change to this new system more 

difficult than it needed to be. The General Accounting Office forecast this result in 

a briefing and report submitted to the Subcommittee earlier this year.1 GAO presented four main points of concern. I will address only one: the failure to adequately 

consult with actual end-users at the field offices of the Office of Hearings and Appeals at each step of the software design process. The feedback we receive from the 

field is that no judge, staff member or field manager with knowledge of our process 

would plan CPMS the way it was designed. I will give you just two examples since 

they are symptomatic of many other problems with CPMS which actually impede 

the ability of an OHA to get the work done. The solutions we propose will cure these 

and many similar problems. 

The first example is: A clerk assigned to a judge cannot always run a listing of 

his or her assigned judge’s cases. 

This occurs because the Systems division at SSA, for reasons not entirely clear 

but seemingly in the interests of confidentiality of data, have limited access by individuals to only those cases actually assigned to those individuals.2 This excessive 

internal secrecy and limited access to data impedes getting the work done. We all 

need to be able to work together to accomplish our mission. We recommend that 

CPMS be transparent at the local office level. What we urge is that every individual 

at a local office have access to the status of all cases within an office. CPMS’ limited 

access policy blocked rapid responses when action was required and an employee 

was available to take such action except for an internal block. Such 

compartmentalization can also be destructive to local office morale. ALJs and members of our support staff are acutely aware of the long waits claimants endure before 

a disability hearing is held. When staff fields a phone call or mail inquiry for which 

immediate action can save a claimant days or weeks of wait but can’t act because 

they are blocked by artificial barriers it is extremely frustrating to them. 

The second example is: CPMS is unforgiving. 

It is imperative that even simple mistakes are not made in CPMS. Once a mistake is entered into the system there is no easy way to correct it. If a mistake is 

made an employee must delete all the work to that point and start that step from 

the beginning. For example, a judge in Miami decided to make his own entries in 

CPMS to assist the office in closing out as many cases as possible. He found in favor 

of a claimant and established an onset date in January. When he entered the date, 

he mistakenly typed 11 which is November, rather than 01 for January. He then 

saved and closed the case. A staff member at the office discovered the mistake before the case was mailed. However, he discovered that no one in the entire agency 

could correct his clerical error. An entirely new file had to be recreated with all the 

data having to be re-entered into this new file to correct this simple error. 

When the Group Supervisor in Miami complained about this problem to a Systems person, he was told the solution was simple: ‘‘Don’t make mistakes.’’ The agency must find a user friendly way to correct mistakes in CPMS. We urge greater emphasis on ongoing consultation with the employees in the field who actually use the 

new electronic process. This coordination and receipt of feedback from the field will 

become even more critical when we transition to work with electronic files. 

107 

3Statement of Patrick P. O’Carroll, Acting Inspector General, Social Security Administration 

Testimony Before the Subcommittee on Social Security of the House Committee on Ways and 

Means (June 15, 2004). 4 Under HOTS cases could be searched using the first four letters of the claimant’s last name 

and the last four digits of their SSN. The agency could easily use the entire last name of the 

claimant and the last four digits of the SSN to identify a claimant’s disability claim file and 

decision. 

VII. E–DIB 

Accelerated Electronic Disability Claims Processing (AeDib) is the foundation 

upon which the Commissioner intends to construct her Reform Plan. We know that 

a change of the magnitude contemplated by E-dib will not be perfectly smooth. As 

we have learned with the CPMS phase it is critical that there be flexibility within 

the agency to address problems that are highlighted by experiences in the field. The 

AALJ is encouraged by the efforts of SSA at its highest levels to consult with us 

on this monumental transformation. However, much of the nitty-gritty of implementation occurs at lower echelons of the agency as well as within hearings and appeals’ 

management. It is at these levels that we see a need for more open communication 

and a new found sense of cooperation. The vision and scope of the Commissioner’s 

plan requires more flexible and invigorating management to open effective lines of 

cooperation with all levels of the agency. 

We believe the Electronic Disability Collect System of E-dib has great potential 

to assist judges in rendering decisions and to speed up the overall process. The 

EDCS contains structured data that unlike the data in the Electronic Folder may 

be searched and manipulated easily by the judge. We recommended early that the 

agency not simply convert standard government forms to electronic format but that 

they take the time to revalidate the data collected in the old hardcopy forms to 

make sure the data is relevant today and actually helps a judge render a decision. 

We continue to urge the agency to fully act on this recommendation. 

The Document Management Architecture part of E-dib has not been piloted for 

a sufficient time to comment on its utility. However, the initial reports are promising. It is my understanding the first hearing involving a pure Electronic Folder 

has just taken place at the Charlotte, North Carolina OHA. However, based on our 

experience with CPMS, we have concerns about the rapidity of the roll-out of E-dib. 

VIII. Discontinue use of SSN as a Case Identifier 

Although this does not fit perfectly under any AeDib category, this issue should 

be addressed by the agency. First, Chairman Shaw we applaud you and your Subcommittee for your leadership role in introducing the Social Security Number Privacy and Identity Theft Prevention Act of 2003 (H.R, 2937) and holding hearings on 

this most important issue to all of us. At the hearing Mr. Patrick P. O’Carroll, the 

Acting Inspector General of the Social Security Administration, declared in his prepared statement: 

Perhaps the most important step we can take in preventing SSN misuse is to 

limit the SSN’s easy availability. We believe legislation designed to protect the SSN 

must strictly limit the number’s availability on public documents. As long as criminals can walk into the records room of a courthouse or local government building 

and walk out with names and SSNs culled from public records, it will be extremely 

difficult to reverse the trend.3

We have recommended to the agency during the AeDib process that it discontinue 

the use of SSNs as a disability decision and case identifier. It could be easily accomplished 4 Until this is done we might have an Electronic Folder but we cannot even 

e-mail the Exhibit List to an attorney because the case is identified by the claimant’s SSN and the agency rightfully has a prohibition on transmitting SSNs over 

the internet. We will instead need to print out the list and send it by regular mail. 

This is inefficient. 

IX. THE NEED FOR PROCEDURAL RULES 

In 1969 SSA ALJs issued about 20 to 30,000 dispositons. This year we will conduct over 500,000 hearings. In 1969 few claimants were represented. Presently 88% 

of claimants are represented at the hearing level. The old concept of an informal 

hearing made sense for un-represented claimants. But today very skilled and assertive representatives effectively advocate on behalf of their clients. We work in a different judicial environment. Yet judges conduct hearings today in exactly the same 

manner they did thirty years ago; without procedural rules. As one example where 

rules would greatly assist our judges, the agency does not have a rule which requires attorneys to submit evidence in a timely manner before a hearing. The orVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00111 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
108 

derly submission of evidence is a basic requirement of any other adjudication system. Presently, attorneys can and do show up at hearings with 100 or more pages 

of new evidence. An ALJ is then faced with two distasteful choices. The judge can 

either conduct a hearing without time to adequately review new evidence or add further delay to the process by postponing the hearing. It is a terribly inefficient system with the American public paying for this inefficiency. 

Adoption of procedural rules is needed to make new technologies more efficient. 

The video hearing system provides another example. A judge reports waiting while 

the attorney faxed seventy-five pages of new evidence to him which needed to be 

read before the hearing could proceed. We need updated procedural rules to provide 

the disability hearing process with an efficient system which can take full advantage of our new technology. 

Thank you. 

f 

Chairman SHAW. Thank you. Mr. Brady? 

Mr. BRADY. Thank you, Mr. Chairman. In the written testimony, because it shortens the time in the verbal discussion today, 

several of you cited what you would include in the good faith exception to closing the file after the ALJ case. Can each of you talk 

about sort of some key points that ought to be part of that exception? 

Mr. SUTTON. Yes. Congressman Brady, if I could address that. 

As a practitioner who has been doing these cases for years, I will 

give you some examples of what that would look like. For example, 

we had a client who appeared before an ALJ with orthopedic injuries that caused pain that was so severe that her doctors actually 

considered amputating her leg to stop it, but she had no attorney 

when she appeared before the judge, and she did not know to go 

and get that evidence. It wasn’t obtained until after the judge had 

denied her case. It was appealed to the Appeals Council by my 

firm. We obtained that evidence, submitted it to the Appeals Council. The Appeals Council remanded the case to the judge and said, 

‘‘Look at this evidence,’’ at which point of course the judge granted 

her benefits. That is a perfect example of the kind of good cause 

for new evidence coming in, unrepresented people who don’t understand what their burden is. 

There are also cases where diagnoses are unclear, people’s symptoms are very well documented in the medical records, but they do 

not know exactly what is causing them, and then perhaps 3 months 

or 6 months after a judge denies a case, you find out, well, it was 

MS, or it was Amyotrophic Lateral Sclerosis, or it was some terrible disease. At the time the judge had the case he or she saw it 

as, these are unexplained complaints of pain and there is no objective documentation to explain, and so it is denied. 

If you cut off the record and don’t allow that opportunity to bring 

the evidence before the agency, it doesn’t work. You really can’t 

bring it to court, by the way. There is a statutory provision for evidence to be brought to the court if a case gets that far, but it is 

an extremely stringent standard there that usually is not met. The 

courts, of course, don’t have doctors on their staffs to evaluate that 

new evidence. The Appeals Council does, and that is why it is so 

important, I think, to have that safety valve for new evidence that 

can come in after the point that the ALJ decides the case. 

Mr. BRADY. Thank you. Ms. Ford? 

109 

Ms. FORD. I would just echo what Tom has just explained. I 

think Mr. Becerra used an example earlier this afternoon about a 

person who has MS and the documentation of that does not come 

in until after the ALJ has made a decision. In that situation, you 

would not want to force someone to start over completely, and 

there could be some serious implications in whether or not they 

could get benefits if they were not allowed to continue this case, 

but instead, had to start over with a new claim. 

Mr. BRADY. In that case you stressed documentation. In a case 

like that, wouldn’t the issue of MS or the illness being raised to the 

ALJ, wouldn’t you as an ALJ want to obtain that document before 

you rendered a decision? There is a difference between an absence 

of any knowledge of an illness and the documentation that justifies 

it. 

Mr. SUTTON. Sometimes, Congressman, in my experience, 

judges are conscientious and they do make an effort to try to get 

that evidence for a claimant, let us say, particularly one who 

doesn’t have counsel at the hearing. There comes a point where the 

judge can become frustrated with the absence of certain tests, that 

kind of documentation. You know, if the treating physicians aren’t 

referring that claimant for the proper tests, MS is a perfect example. There are multiple tests that have to be done. It is a triangulation effect that the clinicians have to go through to actually diagnose the disease. Unfortunately, with many claimants having little 

or in some cases no health insurance, getting referrals to have that 

kind of expensive testing is easier said than done. The ALJ could 

order a consultative exam, but those usually aren’t going to pay for 

or do the kind of intensive testing or specialty referral that is really needed. 

So, those things happen. They happen sometimes not when they 

should and not as early as they should, and we have to have a 

process that at least allows claimants, who are in a position where 

they cannot just wave the magic wand and get the referral that 

they need, to be able to bring that evidence to the agency when 

they get it, show that they had good cause for not having it before, 

and that may allow them, as Marty said, to get benefits when they 

otherwise would be cut off. We have cutoff dates in this program. 

There are dates when insurance expires, when you have been out 

of work so long. Sometimes it is no answer to a claimant to just 

say, ‘‘File a new application.’’ They can never get benefits unless 

a decision is reconsidered and overturned, perhaps in light of new 

evidence. 

Mr. BRADY. Any other panel members want to comment? 

Judge BERNOSKI. Under the Commissioner’s plan, if the case 

goes directly from the ALJ to the Federal Court, the current Federal statute for that appeal from the agency to the Federal Court 

has a case closing aspect to it. So, as the Commissioner indicated 

during her testimony, the case is going to close as a matter of existing law. To answer your question directly as to what the new cause 

standard should be, we suggest there should probably be two tests, 

the first one would relate to evidence that is not in existence at the 

time of the hearing, that would be reason for allowing that evidence be received to the record subsequent to the hearing; or second, if the claimant could offer a good explanation why evidence 

110 

that was in existence at the time of the hearing was not offered at 

the hearing. It would be a two-prong test. 

Mr. BRADY. Thank you. I appreciate it. Mr. Chairman, I am just 

sort of at a point on this, it seems like our whole system is sort 

of a series of safety nets to catch the claimants that fall through 

the net in front of them in each step of the way. I think one thing 

the Commissioner is trying to do that I support is to tighten and 

strengthen those nets early on in the process, so we find and help 

as many claimants so that we don’t build in a series of five or six 

different steps, but try in fact to catch the claimants who need the 

help as early on I the process. I think as an idea and as an approach that is a good one to take. Thank you, Mr. Chairman. 

Chairman SHAW. Thank you, Mr. Brady. Mr. Sutton, you have 

made the argument as to the excessive litigation that would result 

if the Appeals Council was eliminated. Could I ask the other panel 

members to comment on that? Ms. Ford, you have an opinion on 

that? I would like to go to Judge Bernoski. 

Ms. FORD. Thank you. I think that is an important point, that 

the Federal Courts could be swamped with cases that really don’t 

belong there. I also fear that claimants won’t be able to take cases 

forward. Some won’t have the wherewithal to know how to get 

through the process. Making an appeal—or filing a case in the Federal Courts—is far more complicated and more costly to an individual, and if they haven’t had legal representation up until that 

point, it may be beyond their ability to even consider it. So, you 

would have a claimant who possibly should have been entitled to 

benefits who doesn’t get them. 

Chairman SHAW. Judge? 

Mr. BERNOSKI. Mr. Chairman, our suggestion does have that 

additional feature, it allows the agency to have the quality review 

system built into the appeals process. We suggest that there be a 

period of time between the time that the appeal is filed and the 

perfection of the appeal. I said 60 days, but it could be for any period that is determined, during which the agency can have another 

look at the case. The Office of General Counsel would look at the 

case and decide whether or not this is a case that should be defended. If it is, it would go on to the court. If not, it would be returned back to the ALJ for further action. This, I think, would keep 

a huge number of cases from moving to the Federal Courts. 

Now, with relationship to the claimants having the knowledge to 

bring the case to the Federal Court, most of the claimants are now 

represented at the ALJ hearing. I think Mr. Daub indicated 80 percent or 85 percent of the claimants are represented, so that knowledge currently exists in the system. They have an attorney, and 

these attorneys certainly know how to bring the cases to the Federal Courts. Also the Federal Courts provide a ‘‘pauper waiver’’ of 

the filing fee where the claimants, upon filing an affidavit, can file 

the case in the Federal Court at no charge. 

In the previous testimony there seemed to be some concern about 

the claimants and the complexity of the Federal Courts, and there 

seemed to be a belief that the case before the Federal Court is a 

trial. It is not. The case goes to Federal Court on certiorari, so it 

is simply at that point an argument before the magistrate or the 

Federal judge based on the record. It is not a complex hearing. The 

111 

hearing is before the ALJ, and that is why we recommend it be a 

more formal and complete hearing, so that the Federal Courts, if 

they do get the case, have a better record than is now being sent 

to them. 

Chairman SHAW. Mr. Sutton? 

Mr. SUTTON. If I could just briefly respond. I have great respect 

for Judge Bernoski. The problem with this proposal, as I see it, 

that the Commissioner has made to replace the Appeals Council 

with these review panels is twofold. First, as to that, claimants 

have no ability to request review. It is purely a matter of whether 

the Commissioner says, ‘‘We are going to review all claims’’ or a 

sample. It is totally at the Commissioner’s initiative. Claimants 

have no way to obtain review, to know whether their case is being 

reviewed or anything of the kind, and that is the fundamental 

problem with it as an idea for replacement of the Appeals Council. 

Judge Bernoski’s testimony has noted that problem. He has suggested and his association suggested that the Office of General 

Counsel review all these cases to somehow decide whether they 

really belonged in Federal Court or not. Is that all 200,000 ALJ denials a year? Is it 3 times the 17,000 filings you now have in District Court? You are going to have those cases filed because people 

who are not satisfied with the ALJ denial, believe there is really 

a wrong and a legal error there and they have no place else to go. 

The Office of General Counsel, I can tell you because I litigate 

against them every week, has a hard enough time defending the 

15,000 to 17,000 filings a year now; to tell them that they are going 

to essentially replace the Appeals Council to review the merits of 

these ALJ decisions I believe is completely untenable. 

Chairman SHAW. Thank you. Mr. Hill, in your testimony you 

talk about the lack of consistency in decisionmaking and note that 

the, and I am quoting you, ‘‘inconsistency of decisionmaking between the State agencies and the ALJs is undeniable.’’ That is the 

end of your quote. Given that it will take some time to implement 

aspects of the Commissioner’s plan. Do you have any suggestions 

for improving the consistency of decisions right away? 

Mr. HILL. Sir, that is a very difficult proposition, because I think 

when you hear, and we heard it earlier, the State agencies believe 

they are right 90 percent of the time, yet ALJs are overturning 61 

percent of the cases that come to them. Overturning is even a 

wrong word. The cases can be very fundamentally different when 

an ALJ finally makes a decision because it is a year or 2 years 

older. One easy way is obviously to truncate the process so we do 

not have such a huge period of time between them. The other one 

I think is probably more fundamental, and it comes down to the 

end, two factors, one, the quality assurance program. At the State 

agency level, because of statutory requirements, a preponderance of 

payments are reviewed. At the ALJ level, because of a system of 

appeals, very few people who are awarded benefits appeal the 

award. It is primarily review of denials, and there are built in factors. It is easier at the State agency to deny a case, to get it by 

quality assurance. It is easier at the ALJ level to pay a case if 

there is some problem with it. 

I think that is a very practical problem that exists, and that is 

something that the Commissioner is going to address by having a 

112 

process-wide quality assurance system. The other fundamental 

problem deals with the ALJs looking at the evidence and applying 

the rulings, the regulations and the statute. The State agency is 

applying, and the problems are much more specific and the agency 

will say that everybody is applying the same law, but one is very 

specific, the other is more general. We lawyers are used to dealing 

with generalities and applying facts of a specific circumstance to 

generalized law and regulations. That is what we do. I think that 

fundamental difference of what is being applied, they tried to address it with the PUTT, which was process unification. To some extent they did, but it has been very incomplete. I think it is another 

one of the failures that has plagued us for the past 10 years, and 

I really don’t have a quick solution that can be done out of hand. 

Chairman SHAW. Thank you very much. Thank all of you for 

being here and waiting. We have been in session now for 3 hours, 

and I appreciate your patience with us, but this is a most important subject and it is one that has plagued this Committee and I 

might say the Subcommittee on Social Security for many, many 

years. As long as I can remember looking at it, there has been a 

tremendous problem moving these cases along. I see from the two 

panels that there is quite a bit of disagreement, but I think that 

expediting these cases is tremendously important, and of course, at 

the same time maintaining fairness. Thank you for being here. The 

Hearing is adjourned. 

[Whereupon, at 4:08 p.m., the hearing was adjourned.] 

[Submissions for the record follow:] 

American Bar Association 

Washington, DC 20005 

October 14, 2004 

The Honorable E. Clay Shaw and the Honorable Wally Herger 

Chairmen, Subcommittee on Social Security and Subcommittee on Human Resources 

Committee on Ways and Means 

U.S. House of Representatives 

Washington, DC 20515–4315 

Dear Chair Shaw and Chair Herger: 

On behalf of the American Bar Association, I thank you and the members of your 

respective subcommittees for your interest in the Social Security Administration’s 

disability determination process. The American Bar Association is well aware of the 

myriad challenges that confront the Social Security Administration, and we agree 

that few are as pressing as the need to reduce unnecessary backlogs and delays in 

the processing of disability claims and appeals. We have long advocated increased 

efficiency and fairness in this system, and we have drawn upon the experience and 

expertise of our membership to develop a wide body of recommendations in this 

area. During the past year, we have carefully examined Commissioner Barnhart’s 

proposals, we have met with the Commissioner and her staff, and we have shared 

with her our positions on various elements of her plan. 

We support the Commissioner’s goal of making a correct decision as early in the 

process as possible. To accomplish this objective, the Social Security Administration 

must communicate with claimants at all levels of the determination process, and 

must provide them with the information they need to understand the process and 

their responsibilities as well as the availability of legal representation. We recommend that SSA increase its efforts to educate the medical community about eligibility criteria used in the disability program and the kind of evidence required to 

establish eligibility for benefits. In gathering medical evidence, SSA should consult 

a claimant’s health care providers and compensate them adequately for providing 

relevant medical information. SSA also should give special weight to reports from 

treating physicians and should hold consultative examiners to the highest medical 

standards. We are interested in the concept of using nurse consultants as case managers to collect medical evidence and coordinate the services of medical experts, but 

113 

we do caution against sole reliance on a nurse for medical assessments, particularly 

where a claimant has multiple impairments. 

We also support the proposal to eliminate reconsideration. We agree that the process and the claimant could be well served by a Reviewing Official (RO) whose job 

is to marshal all the evidence, prepare a report on the claim, and issue allowances 

when claims are clear. However, we do not support requiring a separate appeal to 

the Administrative Law Judge if the RO recommends disallowance. This requirement would simply replace reconsideration with another level of appeal. It is likely 

to discourage some claimants from pursuing legitimate claims, and to delay the 

scheduling of a hearing for others who do appeal. 

We commend the Commissioner’s decision to retain the claimant’s right to a de 

novo hearing before an administrative law judge. Hearings should be on the record, 

and the administrative law judges who conduct those hearings should be appointed 

pursuant to § 3105 of the Administrative Procedure Act, Title 5 U.S.C., and applying 

standards consistent with the law and with published regulations. We also support 

the Commissioner’s plan to preserve the non-adversarial nature of those hearings. 

We have cautioned against a return to the days of the ‘‘Government Representation 

Project,’’ about which we have expressed concerns related to cost, effectiveness, and 

fairness to claimants. On the issue of when to close the record, the ABA has not 

taken a specific position. We recently urged that Medicare beneficiaries be provided 

the opportunity to reopen the record after the ALJ hearing, upon a showing of good 

cause. We note that current law already restricts the circumstances under which 

evidence may be submitted after the ALJ has rendered a decision. 

The Commissioner’s proposal as currently articulated eliminates the Appeals 

Council and replaces it with an oversight panel that reviews ALJ decisions. Claimants who disagree with an ALJ decision would not be permitted to request such a 

review; they would be required to appeal directly to federal court. The ABA has not 

taken a specific position on whether to retain or eliminate the Appeals Council, or 

whether to replace it with another form of review panel. However, we have long 

been concerned about significant delays at this level as well as agency attempts to 

use own-motion review by the Appeals Council to compromise the independence and 

impartiality of ALJ decision-making. In 1986, we urged a complete study of Appeals 

Council procedures and functions to determine whether review by this body is necessary and to explore possible changes in the Council’s structure, methods of operation, delegation of authority, and its role as policy maker. We also recommended 

that if the Appeals Council fails to act upon a request for review within a specified 

period of time, claimants should be deemed to have exhausted their administrative 

remedies and permitted to seek federal court review. 

We have seen improvement in the processing of cases at the Appeals Council level 

in recent years, and we encourage the Commissioner to consider the consequences 

of eliminating this level of appeal. Witnesses at the September 30 hearing discussed 

such issues as the need for timeliness of decision making, for fair and adequate review of ALJ decisions, for due process safeguards for claimants, and for finality of 

the agency decision (for judicial review purposes). They also raised concerns about 

the cost of court appeals, the burden on unrepresented claimants, and the burden 

on federal courts. We caution also that changes to this level of appeal not create 

additional delays or compromise the independence and impartiality of administrative law judge decision making. 

Finally, mention has been made of creating Article I courts to hear Social Security 

appeals. The ABA has consistently opposed legislation to create Article I Social Security courts. We have observed that efforts to establish a separate court appear to 

be motivated by concerns over the volume of appeals and the need for uniformity 

of decision-making in these cases. At last week’s hearing, concern also was expressed about the likelihood of an increased burden on Article III courts if the Appeals Council is eliminated. We have posited in the past that Social Security appeals 

are not drains on federal court resources because they are on the record reviews 

that in many, if not all, jurisdictions are considered by magistrates. The more significant problem is the need for accurate determinations at the agency level, particularly in the early stages of the process. Fixing the system at the front end will 

reduce the need for appeals. Simply shifting such appeals to another court system 

is not a practical solution. 

We appreciate Commissioner Barnhart’s efforts to address these important issues 

and we commend you for your ongoing efforts in this area. We respectfully request 

that this letter be made a part of the record of the September 30, 2004 hearing. 

Sincerely, 

Robert D. Evans 

f 

Director 

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Statement of Witold Skwierczynski, American Federation of Government 

Employees, American Federation of Labor-Congress of Industrial Organizations 

Chairman Shaw, Chairman Herger, Ranking Members Matsui and Cardin, and 

members of the Social Security and Human Resource Subcommittees, I thank you 

for the opportunity to present this statement regarding the Commissioner 

Barnhart’s proposals to change the process for making determinations regarding application’s for Social Security disability benefits. 

As the President of the American Federation of Government Employee’s National 

Council of Social Security Field Operations Locals, I speak on behalf of approximately 50,000 Social Security Administration (SSA) employees in over 1500 facilities nationwide. The employees represented by our union work in Field Offices, Program Service Centers, TeleService Centers, Regional Offices of Quality Assurance, 

Offices of Hearings & Appeals, Regional Offices, Headquarters Offices, the WilkesBarre Data Operations Center, and other facilities throughout the country where retirement and disability benefit applications and appeal requests are received, processed, and reviewed. 

The primary message our union hopes to convey to the members of the Subcommittee is that Commissioner’s proposed changes to Social Security’s Disability 

Determination Process will undermine the rights of the disabled to gain access to 

benefits they have earned and that the Social Security system has a duty to provide. 

As employees of the Social Security Administration, we have devoted our lives and 

our careers to making the promises of Social Security a tangible reality for our fellow citizens. We care deeply about the elderly, the survivors of a breadwinner who 

has perished, and the disabled. We take our responsibility of making sure that all 

those who are eligible to receive Social Security benefits receive them, and that in 

their encounters with our agency, they find our processes helpful, fair, and efficient. 

Unfortunately, Commissioner Barnhart’s Disability Determination ‘‘Reform’’ undermines those goals. Ultimately, it sets up an adversarial relationship between the 

SSA and those whose disabilities have led them to seek access to Disability benefits 

under Social Security. To make matters worse, the impact of these proposed ‘‘reforms’’ will fall most heavily on those who are both poor and disabled, because they 

are the group least likely to be successful in navigating a ‘‘reformed’’ system designed to require them to jump through numerous and complex legal hoops in order 

to gain access to the Social Security Disability benefits they have earned and that 

they need. 

Not surprisingly, the occasion of having suffered an illness or injury that renders 

one disabled and in a position to apply for Social Security Disability Benefits often 

leaves our fellow citizens in an extremely weak position financially, physically, and 

emotionally. In many, if not most cases, their disabling condition inhibits their ability to seek or secure effective legal representation. The particulars of the Commissioner’s proposed ‘‘reform’’ to the Disability Determination process would appear to 

exploit this fact. The inevitable result will be denial of Disability Benefits to those 

who meet all the program’s explicit required criteria, but not the implicit required 

criteria of aggressive and competent legal counsel and the funds to pay for it. 

The Commissioner’s ‘‘Reform’’ the Disability Determination Process is Misguided 

As SSA employees who know first-hand how the agency’s policies and procedures 

affect beneficiaries, we can tell you that the Disability Determination Process has 

flaws and is thus in need of some reform. Yet the changes Commissioner Barnhart 

is pursuing do not address the areas that are actually in need of improvement. For 

example,the Commissioner’s plan does little to address the need for a new quality 

management system that will routinely produce information the Agency needs to 

properly guide disability policy. Equity and consistency in disability decision-making 

continues to be inconsistent and problematic. Because of wide variation from state 

to state among the Disability Determination Service (DDS) workforce, a claimant’s 

chances of being approved for disability benefits depends in large part on where he 

lives. There is also variation based upon whether a claimant has the resources to 

obtain medical attention. 

SSA records suggest that those who have the resources to obtain medical attention early and often have a better chance of being approved for benefits than those 

whose income or resources make this impossible. In addition, nationwide, those applying for Social Security disability have a much greater chance of being approved 

than those who may only apply for the Supplement Security Income (SSI) program. 

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Finally, SSA records clearly expose the inconsistencies among State DDS decisions. 

More than 65 percent of Social Security disability claims for benefits are approved 

in New Hampshire, while less than 32 percent of those who file for benefits in Texas 

are approved. This was recently addressed in the Government Accountability Office’s (GAO, formerly the General Accounting Office) report, GAO–04–552T. 

GAO found that the state DDS’s have: 

• Two times the turnover of the federal workforce that performs similar work, resulting in increased costs to SSA for hiring and training, as well as increased 

claims-processing times; 

• Difficulties in recruiting and hiring examiners due to state-imposed compensation limits, which has contributed to increases in claims-processing times, backlogs and turnovers; 

• Critical training needs that are not being met, which have a large impact upon 

their examiner’s ability to make disability decisions. 

It seems certain that the state DDS will continue to be plagued with problems, 

in spite of SSA’s efforts to provide additional resources. So long as inconsistent initial decisions are being made by state DDS’s, we believe that it is unethical to eliminate the reconsideration process as Commissioner Barnhart’s ‘‘reform’’ requires. 

AFGE Critique of Commissioner’s Plan 

If inconsistency as a result of the patchwork of state DDS decisions is a problem, 

how can eliminating a claimant’s opportunity to seek reconsideration of that decision be the solution? As preposterous as it is, taking away a claimant’s opportunity 

to have a DDS decision reconsidered is one of the key elements of the Commissioner’s anti-beneficiary ‘‘reforms.’’ The six main components of the Commissioner’s 

plan are as follows: 

• Elimination of the Reconsideration Process, 

• Creation of a ‘‘Quick Decision’’ Process 

• Creation of a ‘‘Reviewing Official (RO)’’ 

• Elimination of the Appeals Council Review 

• Closure of the record 

• Changes quality review to ‘‘end-of-line’’ 

Eliminating the Reconsideration Process 

The reconsideration process occurs after a DDS office makes an initial decision 

to deny a claim for disability benefits and marks the first level of appeal for a claimant. Currently, approximately one out of every five SSI recipients receives a favorable decision at the reconsideration level. Therefore, to eliminate the reconsideration 

process would take away opportunities for appeal at a less contentious stage and 

would eliminate the checks and balances of DDS examiner’s decisions. Eliminating 

an opportunity that now proves successful for 20 percent of disabled beneficiaries 

who access it is unconscionable. 

Creation of a ‘‘Quick Decision’’ Process 

The Commissioner’s plan to create a ‘‘Quick Decision’’ unit would mean that the 

DDS’s receive and make decisions on the most difficult disability claims—a task 

that many DDS examiners will not be able to accomplish easily, since examiners 

have been found to lack the knowledge and skills to make such decisions as determined in GAO’s January 2004 report on the ‘‘Strategic Workforce Planning Needed 

to Address Human Capital Challenges Facing the Disability Determination Services.’’ These ‘‘Quick Decisions’’ will relegate to the DDS all complex cases. They are 

a poor substitute for putting adequate resources into initial claim determination. 

The number of complex cases that will be sent to the state DDS offices will lead 

to backlogs and increased litigation as claimants who do not land in the ‘‘quick decision’’ category end up in the adversarial and litigious vortex described below. 

Creation of a ‘‘Reviewing Official’’ 

The Commissioner’s decision to implement a ‘‘Reviewing Official (RO)’’ for the purpose of evaluating and recommending decisions to Administrative Law Judges (ALJ) 

will forever change our relationship with the public. Under the Commissioner’s proposal, the Reviewing Official, who will be an attorney, will prepare a pre-hearing 

report. If the reviewing official recommends denial of the claim, the only way an 

ALJ can overturn the Reviewing Official’s decision will be through a written legal 

brief that refutes every point made by the Reviewing Official. 

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The brief must describe the supporting evidence and basis for his/her decision if 

that decision conflicts with that of the Reviewing Official. Not only will this procedure result in forcing already over-worked ALJs to spend more time and resources 

on each case, it will also create new delays, backlogs, and litigation. Even more disturbing from the perspective of those who view the role of SSA as facilitating—not 

impeding—the delivery of Social Security benefits to those who meet eligibility requirements is that it places the new and increased burdens upon claimants. They 

will now have not only to make the case that they meet eligibility requirements, 

but they will also have to disprove every argument a Reviewing Official has put 

forth against them. This change will require the claimant to hire an attorney to pursue his/her claim for benefits, and dramatically increase the likelihood of prolonged 

litigation that serves neither SSA nor the claimants. 

Elimination of Appeals Council Review 

The Commissioner’s plan is to deprive claimants of what was the last step in the 

appeal’s process, the Appeals Council Review. In its place would be a sample end 

of line review and ALJ oversight that would review only a few decisions made by 

the Office of Hearings and Appeals. This change represents a loss in due process 

rights for claimants and beneficiaries, as access to end of line review and ALJ oversight is at the agency’s discretion, and once a case is selected for end-of-line review, 

no testimony or other input on the part of the claimant is permitted. 

Under the current appeal review process, approximately 28 percent of the cases 

reviewed by the Appeals Council have resulted in a decision either to reverse a decision to deny benefits, or to remand the case back to the DDS for further development. Of the cases remanded to DDS, approximately 75 percent result in allowances, according to SSA’s own data. 

Replacing the Appeals Council with an oversight panel means that once a claim 

has been denied, either by the ALJ or the oversight panel, the claimant must appeal 

to the Federal District Court. Unfortunately, this process is too expensive for most 

SSI beneficiaries to pursue. Claimants who live in rural areas will also be disadvantaged by the fact that few attorneys who practice near them will have been admitted to practice in Federal District Court. Once again, the ability to achieve benefits 

will depend on the claimant’s financial resources and where he or she lives. 

Closure of the Record 

The Commissioner proposes closing the record after each claim has been processed. However, claimants who are disabled but do not have adequate health benefits or resources may not have sufficient medical evidence to support a claim. Under 

the Commissioner’s ‘‘reform’’ even if the claimant is eventually able to obtain the 

proper, official medical evidence to support the claim, if it is not submitted during 

the life of the claim, the claim cannot be reopened for consideration. This is blatantly unfair to claimants, and flies in the face of SSA’s long tradition of compassion 

and service. 

In addition, this policy will create massive increases in duplicative workload and 

increases in litigation. Claimants’ attorneys will recommend, prudently, that their 

clients file subsequent claims for benefits each and every time new medical evidence 

becomes available in order to protect their retroactivity. The problems that will be 

created by this ‘‘reform’’ will be enormous, as SSA’s does not have the capability to 

house or track multiple, corresponding claims. 

Changing Quality Review to ‘‘End of Line’’ 

The Commissioner proposes that the quality review of all disability claims be accomplished at the ‘‘end-of-line.’’ This means that after all decisions have been made, 

a quality review will be done, rather than the ‘‘in-line’’ review that has traditionally 

been performed. Therefore, if a decision were improperly rendered at any level, the 

errors will not be addressed in a timely manner. Additionally, the oversight panel 

responsible for conducting the ‘‘end-of-line’’ reviews will have the authority to overturn all decisions, approvals or denials, creating a breach of due process and a more 

hostile relationship with the disabled community. 

If the claim has been denied, either by the ALJ or the Oversight Panel, the claimant must appeal to the Federal District Court. Unfortunately, this process is too expensive for most SSI recipients to pursue. Claimants who live in rural areas will 

have less access to attorneys who practice law in Federal District Courts. Once 

again, the ability to achieve benefits will depend on the resources available to an 

individual and where that person lives. 

AFGE believes, based upon our long experience in serving the public, that when 

the disabled community begins to experience these harsh ‘‘reforms’’ the response 

117 

will be anger and resentment. The proposed changes by the Commissioner do nothing to improve the disability decision-making. They simply reduce processing time 

by eliminating steps and opportunities for claimants to make their case, and create 

an adversarial posture between the agency and those we should be serving. 

Does the Commissioner’s ‘‘Reform’’ Include Establishing Temporary Benefits? 

There is reason to believe that the Commissioner’s new approach, once fully implemented, will include an effort to introduce ‘‘time limited’’ or ‘‘temporary’’ disability benefits in Social Security. A radical move such as this is would have an 

enormous and detrimental impact Social Security’s disability programs. 

AFGE does not make this charge lightly. Earlier this year, union representatives 

became aware of SSA’s plans to implement temporary allowance demonstration 

projects that would provide immediate cash and medical benefits for a specified period (12–24 months) to disability applicants. AFGE has also learned from concerned 

members of management who are unwilling to come forward publicly that the use 

the of the demonstration project authority masks the agency’s intention to move directly to national implementation. 

In July, 2004 meetings with SSA officials, AFGE representatives explained that 

we had become aware of the plan to replace the current disability system with ‘‘time 

limited benefits.’’ Those officials did not deny such plans existed and seemed very 

concerned about the Union’s awareness of these plans. 

The introduction of ‘‘time-limited’’ disability benefits in Social Security will have 

far-reaching consequences for beneficiaries and the burdens and requirements that 

SSA places upon them in the context of the overall Social Security system. A determination by SSA regarding the length of time that an individual can be expected 

to remain disabled will inevitably be inaccurate for numerous beneficiaries. Further, 

the decision to experiment with the only source of income support that many who 

are both severely disabled and poor have appears to have been taken with virtually 

no public debate. 

AFGE urges Members of these Subcommittees to seek an assessment of the economic impact of ‘‘time limited benefits.’’ Given, the lack of clear guidelines for determining expected medical improvement, the time frames are determined at the discretion of the agency. If the Administration should follow through with plans to 

limit disability benefits to a 24-month period for recipients who are expected to 

medically recover in a 2–3 year period, it is possible that the vast majority of disabled recipients can be placed in this category. 

AFGE Recommendations 

AFGE believes that immediate attention needs to be given to three specific issues 

regarding the Social Security Disability Benefit program: 1) Provide proper staffing 

and resource allocations, 2) Ensure consistent disability decisions in a more expeditious manner, and 3) Maintain quality, face-to-face service and assistance at the 

field office level. 

SSA’s disability programs are at the heart of the Agency’s many challenges. 

AFGE is just one of many voices that have insisted that SSA’s disability structure 

has flaws that need to be addressed. The Commissioner’s proposals, unfortunately, 

fail to address or resolve any of the systems real problems. Institutional problems 

continue to be overlooked. Communication between headquarters and operations in 

the field remains poor. SSA’s approach of discouraging open discussion of problems 

continues to exist. Workgroups designed to address problem areas or workloads no 

longer include either the union or the employees who actually do the work. These 

employees in field offices and teleservice centers, who have been working at SSA’s 

frontlines serving the public, know what is wrong and what is needed to solve existing problems. Although there used to be an open door policy between the Commissioner and our union, it no longer exists. 

AFGE understands that long-lasting progress will only be achieved with the assistance of those who not only understand the problems, but who also have the institutional experience and knowledge to repair SSA’s disability programs. Certainly 

much more can be accomplished in a constructive manner with open, two-way, communications. The union remains committed to such a process. 

As I emphasized in previous testimony before the Social Security Subcommittee, 

the Disability Claims Manager (DCM) pilot (another SSA initiative) proved to be 

highly successful in addressing these problems in the disability program. Processing 

time was significantly better. In fact, the DCM processing time of 62 days was just 

over half of SSA’s initial disability claim processing time goal of 120 days. Customer 

118 

service improved dramatically. Claimants expressed record high satisfaction rates 

for the DCM. 

The public likes the DCM caseworker approach and wants it retained in the current process. Although SSA contended that the DCM would cost more than the current process, no valid data exists showing this conclusion. Also, the pilot was prematurely terminated, before valid statistical data could be compiled regarding full 

program costs. It is unfortunate that, since the last time I testified before the SSA 

Subcommittee, then Acting Commissioner, Larry Massanari, decided not to implement the most successful new disability initiative, the DCM. The DCM was a positive step to ensuring the public that consistent and equitable disability decisions are 

made. Unfortunately, no actions were taken to implement any of these successes, 

and the pilot was terminated. AFGE urges Congress to direct the SSA justify the 

elimination of this successful and innovative experiment. It is part of the answer 

to the disability problem. 

It seems apparent that the primary reason why SSA terminated the DCM pilot 

was due to State resistance. Such resistance certainly was not based on a poor pilot 

result. Instead the decision appears to have been based on political considerations 

and the fear of losing work. Congress should be very concerned when SSA spends 

millions of dollars for a process that demonstrably improves the disability processing 

time, yet is rejected for political reasons. The concerns of the states are understandable in view of their unacceptably poor performance regarding decision consistency 

from state to state and their poor processing time in comparison to the DCM. However, the only real criteria should be the level of service that is provided to the 

claimant. Using customer service as a measure, the DCM exceeds State DDS performance in virtually every category. 

AFGE recommended to Commissioner Barnhart that she reconsider former Acting 

Commissioner Massanari’s decision and implement the position of the DCM at SSA 

as soon as possible. However, the Commissioner refuses to act on the AFGE’s recommendation. AFGE is willing to work with the Commissioner in an incremental 

approach to achieving this goal. AFGE understands that there will need to be 

changes in policy, processes and institutional arrangements, as well as funding to 

implement this very valuable and successful position at SSA. 

Legislative amendments to the Social Security Act would be necessary to allow 

SSA workers to make disability decisions, however the crisis in disability processing 

requires immediate, as well as long-term changes. When trained to make medical 

decisions, SSA employees can provide immediate relief to backlogged Disability Determination Agencies, and provide faster and better service to the public by serving 

as a single point of contact. The pilot demonstrates that the public likes the DCM, 

employees enthusiastically support it and that it provides substantially better service than the current disability product. We hope that Members of this Subcommittee 

will take the necessary action to ensure the DCM is part of the solution to the disability problem. 

As a short term approach not requiring legislative change, AFGE is supportive of 

the ‘‘Technical Expert for Disability’’ position. This position would provide high quality, trained field office employees the tools to assist disability claimants in both programmatic and medical issues, provide professional, personalized, service to applicants, focus the disability interview, make or recommend disability decisions, and 

assist the DDS’s in their development and backlogs. 

Another tested initiative that would save considerable disability processing time 

is the Adjudicative Officer (AO). There is no question that the AO would better serve 

the public than the Commissioner’s proposed Reviewing Official position. The AO, 

who is not an attorney, was intended to assist Administrative Law Judges to reduce 

the number of hearings and to prepare cases for efficient and expeditious hearings. 

AO’s were empowered to gather additional evidence and to make favorable decisions 

without hearings when the evidence submitted indicated that such a decision was 

appropriate. The pilot indicated that many hearings requests were quickly adjudicated by AO’s. These workers reduced the processing time for hearing requests. 

The AO’s met the same fate as the DCM’s. SSA cancelled the initiative. When processing time can be legitimately reduced, why did SSA terminate a methodology that 

achieved their objective? SSA should reexamine its decision. 

The AO could be either a federal or state employee and, in fact, was located in 

DDS offices, ALJ Hearing offices, SSA Field Offices and Program Service Centers. 

By locating the position in multiple locations, the agency ensured the public more 

accessibility and individualized service in processing their hearing requests. In addition, by situating AO’s away from hearing offices, SSA was separating these employees from the bureaucratic OHA management structure. 

Although SSA never released any valid pilot results for the AO, preliminary data 

indicated that the AO’s were able to issue favorable decisions in 17% of the hearings 

119 

cases. These cases were decided based on the evidence of record and did not require 

hearings before an ALJ. For the remaining cases, the preliminary data indicated 

that AO’s did a good job of fully developing the record and preparing the case for 

hearing. 

Many hearings offices reported that the AO’s work resulted in significant time 

savings in cases decided by an ALJ. The preliminary data indicated that, midway 

through the pilot, the quality of the AO was approaching that of the ALJ’s. 

Unfortunately, SSA abolished the AO position in March 1999 despite the fact that 

AO’s were responsible for quicker decisions for some applicants and a streamlined, 

efficient, expeditious hearing for others. AFGE suspects that management resistance to this disability improvement was centered on OHA fears of losing institutional control of a portion of the hearings process. Such fears should not be accommodated. 

SSA will be unable to continue to process disability claims in a timely and efficient manner unless the Administration and Congress provide additional resources. 

Absent appropriate financing for additional staffing, SSA cannot guarantee provision of timely payment of benefits, correct administration of complex regulations or 

training and mentoring for either current employees or new workers. 

Unless Congress acts to increase SSA’s administrative budget, the agency’s service levels will continue to decline, as SSA will never be able to hire the FTE’s necessary to address its workloads. We believe that SSA’s administrative budget should 

be set at a level that fits the needs of Social Security’s taxpayers and beneficiaries 

rather than at an arbitrary level which fits within the government’s overall discretionary spending cap. If SSA’s administrative budget is not explicitly excluded from 

the cap on discretionary spending, SSA is forced to compete with other Federal 

agencies for scarce resources within the spending limits defined by law. The result 

will continue to erode SSA’s ability to provide adequate service to tens of millions 

of Americans in the next decade. 

Automated Electronic Disability Benefits (AeDIB) 

SSA initially decided direct Offices to implement the Electronic Disability Claims 

System (EDCS) gradually, beginning slowly and eventually achieving 100 percent 

use as the DDS’s gained access. Unfortunately, SSA management has been overzealous in the implementation of EDCS. This has caused tremendous problems for 

front line Claims Representatives (CR) throughout the country. Neither staffing nor 

interview appointment schedules has been adjusted to enable employees to produce 

the EDCS claims that management has been demanding from them. More and more 

employees are complaining of health and safety problems that are a direct result 

of excess keying involved in EDCS claims. 

The recent decision by SSA to accelerate the national rollout of its AeDib initiative has resulted in many problems across the nation. Our union has conducted a 

nationwide survey of SSA’s field office employees. Some of the problems identified 

include: 

• Lengthier interviews due to additional keying time; • Missed and delayed breaks and lunches; • Prolonged waits in the reception area/delayed or missed appointments; • Increased backlogs; • Additional staff needed; 

Lengthier interviews. Of those employees who responded to the Union’s survey, 

25% of offices overall reported spending an additional 30–45 minutes keying into the 

EDCS over the traditional paper process. 38% reported an additional 45–60 minutes. 24% reported more than an additional 60 minutes. The remaining 13% reported an additional 15–30 minutes. 

Missed and delayed lunches and breaks. Overall, 72% of the offices reported 

missed lunches and breaks because of EDCS claims. 

Prolonged waits in the reception area. 75% of the offices reported claimants were 

waiting longer in reception areas. 80% said appointments were frequently or sometimes delayed or missed because of EDCS, resulting in an angry public. 

Increased backlogs. Increased backlogs of work were reported universally in most 

post-entitlement areas: re-determinations, medical and work Continuing Disability 

Reviews (CDR), overpayments, and worker’s compensation were cited in virtually 

every response received. 

Additional staff needed. 90% of the respondents reported they need 20–40% more 

staff because of the EDCS process. 

While software enhancements may improve the EDCS process, they will not completely resolve the problems that are being experienced. As AFGE understands the 

EDCS process, the time saved will be at the back end of the disability process, not 

120 

the front end. Therefore, the time involved to input manually volumes of medical 

information that was once provided by the claimant in writing will always be a factor. Additionally, SSA is already moving forward to require other disability forms, 

such as the medical report form for appeals, to be manually input by Claims Representatives. This will only compound the problems already identified. 

Conclusion 

The Social Security system’s Disability programs are a crucial component of the 

social safety net, and AFGE’s Social Security members take great pride in providing 

service to disability beneficiaries. We are sincerely concerned about the wellbeing 

of disability beneficiaries, and consider our role as helping those who are unfortunate enough to have experienced a disability to obtain the Social Security benefits 

they have earned. We do not believe that it is proper for SSA to set up roadblocks 

to impede those with legitimate claims from obtaining their benefits. After careful 

study of the Commissioner’s Disability ‘‘reform’’ plan, however, we believe that it is 

impossible to characterize it in any other way. 

The Social Security Administration has a long and proud tradition of working constructively with its unionized workforce to make the Social Security system efficient, 

fair and ‘‘customer-friendly.’’ That is why Social Security remains so popular and 

successful. The public service ethos that SSA employees have embraced will inevitably be undermined if Commissioner Barnhart’s controversial Disability reforms 

are allowed to go forward. Instead of providing care and assistance to the disabled, 

the ‘‘reforms’’ will force us into an adversarial and litigious position against the disabled. We urge you to intervene and stop this ‘‘reform’’ from proceeding. 

This concludes my statement. I will be happy to answer any questions that Members of the Subcommittee may have. 

f 

Statement of Robin J. Arzt, New York, New York 

Mr. Chairmen and Members of the Subcommittees: 

I. INTRODUCTION 

Thank you for the opportunity to submit this statement. My name is Robin J. 

Arzt. I am an Administrative Law Judge (‘‘ALJ’’) who has been hearing Social Security disability and Medicare cases for over ten years at the Office of Hearings and 

Appeals (‘‘OHA’’) of the Social Security Administration (‘‘SSA’’) in New York, New 

York, and formerly in the Bronx, New York. This statement is presented in my individual capacity. 

My position as an Administrative Law Judge with the Social Security Administration is stated in this statement for identification purposes only. This statement was 

written in my private capacity and without the use of federal government resources 

or federal work time. No official support or endorsement by the Social Security Administration or the United States is or should be inferred. The views expressed in 

this statement are mine and do not necessarily represent the views of the Social 

Security Administration or the United States. 

II. COMMENTS ON COMMISSIONER BARNHART’S PROPOSAL TO IMPROVE THE DISABILITY PROCESS 

The Commissioner presented wide-ranging proposals to redesign the disability 

claims process from the initial determination stage through the final administrative 

decision step during her September 25, 2003, testimony before the Subcommittee on 

Social Security. At the hearing, the Commissioner proposed the elimination of the 

DDS reconsidered determination step. The Commissioner also proposed the creation 

of an SSA Reviewing Official (‘‘RO’’), who would be an attorney and would review 

a claimant’s claim file upon the claimant’s appeal from an adverse initial determination by the agency of a benefits application. The RO would have authority to grant 

a benefits claim but no authority to deny a claim outright If an RO does not fully 

grant a benefits claim, the claimant has a right to appeal for a de novo hearing before an ALJ appointed pursuant to APA. (On February 13, 2004, senior SSA officials 

publicly stated that the ROs essentially would replace the DDS reconsidered determination step and administratively are expected to be placed within the OHA but 

not in the OHA hearing offices.) The Commissioner also recommended the retention 

of a claimant’s due process right, upon appeal from the agency’s claim denial, to a 

de novo administrative hearing before an APA ALJ. In addition, the Commissioner 

also proposed to replace the Appeals Council with Oversight Panels that will include 

121 

ALJs. (The Commissioner since has stated publicly that the Oversight Panels are 

intended to be a quality review process, not the final administrative appellate step.) 

The Commissioner is encouraging input from a wide range of stakeholders to aid 

in developing the details of her proposals prior to issuing proposed regulations, as 

she stated during her September 25, 2003, and February 26, 2004, testimony before 

the Subcommittee on Social Security. The Commissioner’s bold proposals and inclusive process are appreciated. 

It is excellent that the Commissioner is recommending the retention of the claimants’ due process right, upon appeal from an RO’s disability claim denial, to a de 

novo administrative hearing before an APA ALJ, who is an independent decisionmaker. The Commissioner’s recognition that the APA provisions were enacted for 

the benefit of the claimants and to enhance the disability process should be commended. The Commissioner made her support of the ALJs and their role in the disability process clear during her September 25, 2003, testimony before the Subcommittee on Social Security. The Commissioner also reported that ALJ case ‘‘productivity rates [in FY 2003] were the highest in history’’ during her February 26, 

2004, testimony before the Subcommittee on Social Security. 

Only those proposals by the Commissioner that bear upon the SSA appellate administrative levels are commented upon in this statement. The remainder of this 

statement addresses the Commissioner’s proposals regarding the (1) treatment of an 

RO’s Recommended Disallowance or Pre-Hearing Report in an ALJ’s decision, (2) 

administrative placement of the RO within SSA, and (3) replacement of the Appeals 

Council with Oversight Panels. My comments are made in the context of how the 

proposals will impact upon the consistency of case outcomes at the different decision 

levels, and how these proposals may be modified and implemented to maximize the 

consistency of disability decisions between the administrative levels and between 

the administrative levels and initial court level. I also make comments that address 

concerns about preserving the de novo nature of the ALJ hearing and ALJ 

decisional independence, the timeliness of decisions at the final administrative level, 

reduction of appellate caseloads at the administrative and court levels, status and 

use of the Appeals Council Administrative Appeals Judges (‘‘AAJs’’) on the Oversight Panels, and wide acceptance of the SSA proposed regulations that may be 

issued to implement the proposals. I also raise APA and other due process issues 

that are presented. 

A. Treatment of a Reviewing Official’s Recommended Disallowance or PreHearing Report in an ALJ’S Decision 

The Commissioner proposes that, if an RO does not grant a disability claim, the 

RO will issue either (1) a Recommended Disallowance when the RO believes that 

the evidence shows the claimant is not disabled, or (2) a Pre-Hearing Report when 

the RO believes that the evidence is insufficient to determine eligibility for disability 

benefits. The Pre-Hearing Report will state what evidence is needed to successfully 

support the claim. The Commissioner also proposes that, only when an ALJ is 

granting disability benefits, an ALJ’s decision must either state in detail why the 

RO’s Recommended Disallowance is being rejected, or describe the new evidence 

added since the RO’s Pre-Hearing Report that corresponds to the list of evidence 

that the RO said is needed for a successful claim. 

There is no proposal that either requires details in the ALJ’s decision regarding 

why the ALJ is accepting an RO’s Recommended Disallowance, or requires a description of the new evidence supporting a denial of the claim in reference to an 

RO’s Pre-Hearing Report. Therefore, the Commissioner’s proposal would require 

that an ALJ provide a more extensive defense of granting benefits than denying 

benefits when discussing the RO’s Recommended Disallowance and Pre-Hearing Report in the ALJ’s decision. Accordingly, the proposal presumes the correctness of the 

RO’s assessment as to what evidence is sufficient to grant or deny a disability benefits claim, which may incorrectly be interpreted as a requirement that the RO’s assessment is entitled to some degree of deference. 

The Commissioner told AALJ officers on October 24, 2003, that her proposal regarding how an ALJ must address the RO’s Recommended Disallowance or PreHearing Report in the ALJ’s decision is not intended to interfere with the APA and 

Social Security Act requirements for an ALJ’s decision. However, despite the Commissioner’s good intentions for the proposal, the presumption of the correctness of 

the RO’s assessment of the evidence that is embodied in the proposed disparity in 

the required treatment of the RO’s documents by the ALJ that depends upon the 

122 

1The ALJ level of review is a de novo review. Mathews v. Eldridge, 424 U.S. 319, 339 n. 21 

(1976). 2 Ness v. Commissioner, 954 F.2d 1495, 1497 (9th Cir. 1992). 3Premier Communications Network, Inc. v. Fuentes, 880 F.2d 1096, 1102 (9th Cir. 1989). 4 ‘‘The Appeals Council will review a case if (1) There appears to be an abuse of discretion 

by the administrative law judge; (2) There is an error of law; (3) The action, findings or conclusions of the administrative law judge are not supported by substantial evidence; or (4) There 

is a broad policy or procedural issue that may affect the general public interest.’’ 20 C.F.R. 

§ 404.970(a). 5 5 U.S.C. § 557(c). 

6 42 U.S.C. § 405(b)(1) (emphasis added). 

7 42 U.S.C. §§ 1383(c)(1)(A), 1395ff(b)(1). 

outcome of the case does impinge upon the de novo, 1 independent nature of the 

ALJ’s hearing and decision process. Holding a de novo hearing means to hear a matter anew, as if it is being heard for the first time and no decision previously was 

rendered.2 De novo review is ‘‘independent’’ review.3 Accordingly, such an impingement will foster a perception of agency pressure to deny cases, unfairness, and improper deference to the RO documents in ALJ denials among claimants and their 

representatives that likely will result in an increase in the number of appeals from 

ALJ denials of benefits. 

Moreover, any specific regulatory requirement that that the ALJ address the RO’s 

documents would create the potential for erroneous arguments on appeal and appellate findings that an ALJ’s decision is deficient for a failure to adequately address 

or defer to the RO’s Recommended Disallowance or Pre-Hearing Report. The standard for a sufficient ALJ decision on appeal is whether there is substantial evidence 

in the record to support the decision, not whether the ALJ adequately addressed the 

contents of a prior decisionmaker’s recommended decision or report.4

Therefore, augmenting the Commissioner’s proposal to require such statements 

regarding the RO documents in all ALJ decisions, regardless of the outcome, does 

not cure all of the issues that the proposal raises. The creation of these issues by 

the proposal suggests that the proposal is not the most effective way to achieve 

greater consistency between the RO and ALJ decisions, since the likely increase in 

the number of appeals from ALJ denials and appellate error regarding how ALJs 

address the ROs’ documents will defeat any potential for an increase in decision consistency between the RO and ALJ levels that the proposal is intended to achieve. 

To preserve the independent, de novo nature of the ALJ hearing and decision, I 

respectfully submit that the Commissioner consider omitting a requirement that an 

ALJ address the RO’s documents from her proposed regulations. (Even if the proposal is not part of the Commissioner’s proposed regulations, the ROs’ documents 

still would be helpful in developing the cases for the ALJ level.) The APA and Social 

Security Act already require that an ALJ discuss the evidence in rendering the decision on a disability benefits claim without reference to the outcome of the ALJ’s decision or prior agency determinations. 

The APA requires that all agency administrative decisions, including ALJ ‘‘decisions . . . shall include a statement of (A) findings and conclusions, and the reasons 

or basis therefor, on all the material issues of fact, law, or discretion presented on 

the record; and (B) the appropriate rule, order, sanction, relief, or denial thereof.’’ 5

Title II of the Social Security Act sets forth the elements to be included in agency 

administrative decisions regarding eligibility for disability benefits: 

Any such decision by the Commissioner of Social Security which involves a determination of disability and which is in whole or in part unfavorable to such individual shall contain a statement of the case, in understandable language, setting 

forth a discussion of the evidence, and stating the Commissioner’s determination and the reason or reasons upon which it is based. Upon request by 

any such individual or upon request by a wife, divorced wife, surviving divorced 

mother, surviving divorced father husband, divorced husband, widower, surviving 

divorced husband, child, or parent who makes a showing in writing that his or her 

rights may be prejudiced by any decision the Commissioner of Social Security has 

rendered, the Commissioner shall give such applicant and such other individual reasonable notice and opportunity for a hearing with respect to such decision, and, if 

a hearing is held, shall, on the basis of evidence adduced at the hearing, affirm, 

modify, or reverse the Commissioner’s findings of fact and such decision.6

Decisions regarding supplemental security income eligibility under Title XVI and 

Medicare eligibility under Title XVIII of the Social Security Act must include the 

same elements as decisions regarding Title II disability eligibility.7

Instead of the proposal of a requirement that an ALJ address the RO’s documents, 

which places a higher burden on ALJs to justify granting benefits than denying 

them, I respectfully submit that an effective way to increase the consistency of deciVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00126 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
123 

8 5 U.S.C. § 554(a); 42 U.S.C. §§ 405(b)(1), 1383(c)(1)(A), 1395ff(a)-(b)(1). 

9 5 U.S.C. § 554(d)(2). 

10 Columbia Research Corporation v. Schaffer, 256 F.2d 677, 680 (2nd Cir. 1958). 

sionmaking between the RO and ALJ decision levels would be to require that the 

RO use the same legal standards for determining disability as those by which the 

ALJs are bound, rather than the current practice of having the initial agency decisionmakers use a different and primarily medical set of standards. Since the ROs 

will be attorneys, implementation of legal standards for their decisionmaking will 

be met with a success that demonstrably has not been possible with non-attorney 

decisionmakers, such as the failed Process Unification Training for DDS decisionmakers and Adjudication Officer initiatives in the 1990s. 

B. The Administrative Placement of the Reviewing Official within SSA 

As is stated above, senior SSA officials recently stated that the ROs essentially 

would replace the DDS reconsidered determination step and administratively are 

expected to be placed within the OHA but not in the OHA hearing offices. If an RO 

does not fully grant a benefits claim, the Commissioner’s proposal would provide a 

claimant the right to appeal for a de novo hearing before an ALJ. Accordingly, the 

RO’s action on a benefits claim would be the last step of the Commissioner’s initial 

decision of the benefits claim, an adverse decision from which the APA and Social 

Security Act provide for an appeal with reasonable notice and opportunity for a 

hearing on the record before an APA ALJ.8

Since the ROs would make the Commissioner’s initial decisions of benefits claims, 

I respectfully submit that the Commissioner is required by the APA to administratively place the ROs outside of OHA. The APA requires a separation of the adjudication function of a federal administrative agency from its investigative and prosecutorial functions to preserve the decisional independence of ALJs when conducting 

a hearing or deciding a case. ‘‘[An ALJ] is not responsible to, or subject to the supervision or direction of, employees or agents engaged in the performance of investigative or prosecution functions for the agency.9 ‘‘The APA separation of functions doctrine [set forth in 5 U.S.C. § 554(d)] requires only that the prosecutor and the adjudicator each be responsible to the agency head by a separate chain of authority.’’ 10

This provision safeguards against undue agency influence and ensures that claimants receive independent adjudications of their claims. Therefore, SSA may not 

place its ROs in the same chain of command to the Commissioner as the ALJs, since 

the ROs perform SSA’s investigative and prosecutorial functions in rendering initial 

determinations of benefits claims. 

C. Replacement of the Appeals Council with Oversight Panels 

The Commissioner’s proposals include replacing the Appeals Counsel with a ‘‘Centralized Quality Control Review’’ (‘‘CQCR’’) function within SSA with the final step 

of administrative review being by ‘‘Oversight Panels’’ of two ALJs and one Administrative Appeals Judge (‘‘AAJ’’) upon referral of cases by CQCR staff. The individual 

ALJ’s decision will be the final Commissioner’s decision, if it is not reviewed by the 

CQCR or if it is affirmed by an Oversight Panel. If an Oversight Panel changes the 

outcome of the decision, then the Oversight Panel decision becomes the final Commissioner’s decision. A claimant may appeal any final agency action to a United 

States District Court, but no claimant’s right of appeal from an ALJ’s decision to 

an Oversight Panel is stated. AAJs are subordinate employees who currently serve 

on the SSA Appeals Council. 

I offer the following information regarding the ALJ appellate panel concept as 

AALJ has been proposing it to explain the many demonstrated benefits that a fully 

developed appellate panel system will bring to increase consistency between the 

final SSA administrative decision and initial court decision. 

The Commissioner’s Oversight Panel proposal borrows from my proposal for local 

appellate panels of three ALJs as the final step to replace the Appeals Council in 

the Social Security Act claims administrative process. The appellate panel proposal 

is part of a detailed proposal by AALJ that I authored for an ALJ-administered 

independent adjudication agency for Social Security Act benefits cases with the exclusive jurisdiction to make the final administrative decisions of Social Security Act 

Title II, XVI and XVIII benefits claims. (The detailed adjudication agency proposal 

is embodied in an AALJ policy position paper and my below-mentioned forthcoming 

law review article, which are available upon request. A summary of the adjudication 

agency proposal was submitted to the Subcommittee on Social Security as AALJ 

President Ronald G. Bernoski’s statement for the record of the June 28, 2001, hearing on Social Security Disability Programs’ Challenges and Opportunities.) 

124 

11Paul Verkuil and Jeffrey Lubbers, Alternative Approaches to Judicial Review of Social Security Disability Cases 19–21, 56, 63–68 (March 2002), available at www.ssab.gov/ 

verkuillubbers.pdf. This article includes an exhaustive survey of the many recommendations 

over the last 20 years to abolish the Appeals Council and suggested replacement mechanisms, 

including the AALJ proposal. 

Under the AALJ proposal, the claimants and the SSA would have a right of appeal of an individual ALJ’s decision to an appellate panel staffed by ALJs that 

would consist of three ALJs who would review the cases regionally or locally. The 

appellate panels would be akin to the Bankruptcy Court appellate panels. Based 

upon the Bankruptcy Court experience, the appellate panel model (1) is an appellate 

system that can handle a large caseload, (2) results in higher quality decisions because of expertise, (3) results in substantially fewer appeals to the courts and a substantially lower reversal rate by the courts because of the bar’s and courts’ confidence in the high quality of the decisions, which reflects a higher degree of decision accuracy by three expert decisionmakers working together, (4) results in a substantially reduced federal court caseload, (5) results in a shorter disposition time because the large pool of about 1,000 SSA ALJs permits the timely determination of 

appeals that cannot take place with a small body such as the Appeals Council, and 

(6) affords the claimants access to a local appellate process. The elements and merits of the Bankruptcy Court appellate panel process are discussed in detail at the 

end of this statement. 

The AALJ proposal for local ALJ appellate panels to replace the Appeals Council 

was favorably and extensively commented upon and recommended for use within 

SSA OHA in a March 2002 report commissioned by the SSAB.11 It is the SSAB report that apparently brought the AALJ appellate panel proposal to the Commissioner’s attention, given the Commissioner’s reference to one of its authors, Professor Jeffrey Lubbers, as a source during her September 25, 2003, testimony before 

the Subcommittee on Social Security. 

I am gratified that the Commissioner is proposing the panel approach to replace 

the Appeals Council. However, so far, it does not appear from the Commissioner’s 

September 25, 2003, testimony and subsequent public statements that a claimant 

may appeal an individual ALJ’s decision to an Oversight Panel. This is a major departure from AALJ’s recommendation that would eliminate many of the benefits of 

the appellate panel concept, including much greater decisional consistency between 

the final administrative and initial court levels and fewer appeals to the federal 

courts. The Commissioner states that the CQCR and Oversight Panels are a quality 

review process, not an appellate step, as an explanation for why there is no claimant’s right of appeal to an Oversight Panel. Another departure from the AALJ proposal is the use of an AAJ, a subordinate SSA employee with no protections for 

decisional independence, as one member of the three-member Oversight Panels. 

Also, the Commissioner has not yet determined whether the Panels will be regional 

or local for better access to the claimants, as AALJ recommends. Finally, the Commissioner has not yet determined whether Panel membership will rotate among the 

SSA ALJ workforce. 

I respectfully submit that the quality review step posited by the Commissioner to 

the Oversight Panel level is an appeal, not only quality review, since the outcome 

of the case may change and, if it does, the Panel decision becomes the final decision 

of the Commissioner. Quality review usually involves a post mortem review of closed 

cases. The claimants must have a right to appeal to the Panels in order for the 

claimants, SSA, the courts, and the American public to receive the many demonstrated benefits to the Social Security disability process of an appellate panel 

process, including faster appellate decisions, increased consistency between the final 

SSA administrative decisions and initial court decisions, and fewer federal court appeals. 

Without claimant appeals to the Oversight Panels, the District Courts will be inundated with appeals from the individual ALJ decisions, and will not have the benefits of the higher quality decisions and reduction of caseloads that would result from 

the better decisions by the Panels. There are about 100,000 claimant appeals to the 

Appeals Council per year, which would be a burden for the District Courts. 

Also, permitting the agency appellate review of an ALJ’s decision by an Oversight 

Panel, which is relatively easier, faster and lower cost than a District Court appeal, 

but limiting the claimants to only a District Court review of an adverse ALJ decision, raises substantial fairness and due process issues. The omission of the claimants’ right to access the final administrative appellate step to review an ALJ’s decision increases the risk that erroneous denials of benefits will not be corrected because some claimants, particularly pro se claimants, who would be able to pursue 

125 

12 ‘‘In 1977, Congress enacted Public Law Number 95–216, containing a section entitled Appointment of Hearing Examiners, which deemed the temporary ALJs to be permanent ALJs appointed pursuant to 5 U.S.C. § 3105 of the APA.’’ Robin J. Arzt, Adjudications by Administrative 

Law Judges Pursuant to the Social Security Act are Adjudications Pursuant to the Administrative Procedure Act, 22 J. Nat’l Ass’n Admin. L. Judges 279, 304 & n. 96 (Fall 2002) (citing, Social 

Security Amendments of 1977, Pub. L. No. 95–216, 91 Stat.1509, 1559 (1977)). 13 Robin J. Arzt, ‘‘Recommendations for a New Independent Adjudication Agency to Make the 

Final Administrative Adjudications of Social Security Act Benefits Claims,’’ 23 J. Nat’l Ass’n 

Admin. L. Judges 267–386 (Fall 2003). 14 Id., at 356–361. 

a relatively simple administrative appeal will not have the wherewithal to bear the 

additional burden of prosecuting a court appeal. 

So that Social Security claimants, SSA, the federal courts, and the American public reap the benefits of a Bankruptcy Court appellate panel-style process, I respectfully submit that the Commissioner consider modifying her Oversight Panels proposal and issue regulations that provide that (1) a claimant has a right of appeal 

to the Oversight Panels, (2) the Oversight Panels is the final step of administrative 

review that must be taken by a claimant in order to seek judicial review of the Commissioner’s decision in the claimant’s case, (3) only independent decision makers 

may serve on the Oversight Panels, meaning ALJs who have the protections of the 

APA that have been put in place for the benefit of the claimants, (4) the Oversight 

Panels will be constituted regionally or locally for claimant access, (5) the Oversight 

Panels will be constituted from the full nationwide SSA ALJ workforce to ensure 

nationwide ALJ participation, and (6) there will be rotation of Oversight Panel duty 

among the ALJs in the SSA ALJ workforce to ensure that the Panel ALJs have recent line experience with hearing and deciding cases. All of these suggested modifications are the elements of the Bankruptcy Court appellate panel process that 

have made that process a demonstrated success. 

The 27 AAJs from the Appeals Council may be afforded protections for decisional 

independence for the benefit of the claimants by grandfathering the AAJs into ALJ 

status, as was done in the 1970s for the administrative judges who heard SSI 

cases.12

The appellate panel system should result in faster and much higher quality decisions than those produced by the Appeals Council, but only if it functions as an appellate step for both the claimants and agency. A fully developed appellate panel 

process greatly will enhance the consistency of outcome between the final administrative step and District Court step, and thus reduce the number of appeals, just 

as it has between the Bankruptcy Court appellate panels and next level of judicial 

review. 

My law review article, which is based upon the AALJ independent adjudication 

agency proposal,13 includes a detailed statement of the ALJ appellate panel proposal 

and description of the successful Bankruptcy Court experience with the appellate 

panel process that I reprint as follows for the Subcommittees’ reference as the remainder of my statement.14 (Minor edits have been made to make the footnote references internally consistent.) 

‘‘Final Administrative Appellate Review by the United States Office of Hearings and 

Appeals 

‘‘PROPOSED TERMS FOR: FINAL ADMINISTRATIVE APPELLATE REVIEW BY 

THE UNITED STATES OFFICE OF HEARINGS AND APPEALS 

‘‘The Chief Judge shall establish a Social Security Appellate Panel Service in each 

region composed only of ALJs in the hearing offices in each region who are appointed for a period of years by the Chief Judge to hear and determine appeals 

taken from ALJ decisions issued pursuant to 42 U.S.C. §§ 405(b), 1383(c), and 

1395(b). ALJs who are appointed to a Social Security Appellate Panel Service by the 

Chief Judge shall be appointed and may be reappointed. The Chief Judge shall designate a sufficient number of such panels so that appeals may be heard and disposed of expeditiously. Multi-region panels may be established to meet the needs of 

small regions. An appeal under this section shall be assigned to a panel of three 

members of a Social Security Appellate Panel Service, except that a member of such 

service may not hear an appeal originating in the hearing office which is the member’s permanent duty station or the hearing office where the member is on a temporary detail assignment. 

126 

15 28 U.S.C. § 158 (1993). 16Thalia L. Downing Carroll, Why Practicality Should Trump Technicality: A Brief Argument 

for the Precedential Value of Bankruptcy Appellate Panel Decisions, 33 Creighton L. Rev. 565 

(2000); Hon. Barbara B. Crabb, In Defense of Direct Appeals: A Further Reply to Professor 

Chemerinsky, 71 Am. Bankr. L.J. 137 (1997); Tisha Morris, The Establishment of Bankruptcy 

Panels Under the Bankruptcy Reform Act of 1994: Historical Background and Sixth Circuit 

Analysis, 26 U. Memphis L. Rev. 1501 (1996); Thomas A. Wiseman, Jr., The Case Against Bankruptcy Appellate Panels, 4 Geo. Mason L. Rev. 1 (1995). 17 28 U.S.C. § 152 (2003). 18See Social Security Online, available at http://ftp.ssa.gov/oha/hearinglprocess.html. 19Judicial Facts and Figures of the United States Courts: 1988–2002, Table 5.1, available at 

http://www.uscourts.gov/ judicialfactsfigures/table5.1.htm. 20Wiseman, supra note 17, at 7. 21Morris, supra note 17, at 1509, 1517–19 (citing, Final Report of the Federal Courts Study 

Committee, 74–76 (1990); Wiseman, supra note 17, at 7). 22 Id. 23 Id. 24Morris, supra note 17, at 1530. 

‘‘EXPLAINATION OF PROPOSED TERMS FOR: FINAL ADMINISTRATIVE APPELLATE REVIEW BY THE UNITED STATES OFFICE OF HEARINGS AND 

APPEALS 

‘‘The USOHA will have a two tier appellate process: first, a decision after a hearing by an ALJ, and then an appeal to a local panel of three ALJs akin to the Bankruptcy Court Appellate Panel model. The Appellate Panels will be required to give 

deference to the individual ALJs’ decisions, if they are supported by substantial evidence in the record. This proposal is modeled in p principle on the Bankruptcy 

Court Appellate Panel statute.15

‘‘The Bankruptcy Court Appellate Panels were made permissive, not mandatory, 

and thus are not used in all Circuits, because of a Constitutional issue whether the 

use of the Panels is an improper delegation of Article III court jurisdiction over private rights in bankruptcy from the District Courts. Bankruptcy Court Appellate 

Panel review is a substitute for District Court review only upon all parties’ consent 

and appeals go directly to the regional Circuit Courts of Appeals. Because there is 

no Constitutional jurisdiction issue for administrative cases involving entitlement to 

public rights that were created by statute, such as administrative determinations 

of entitlement to Social Security Act benefits, the Bankruptcy Court Appellate Panel 

model may be modified to make it mandatory for Social Security Act benefits 

cases.16

‘‘The appellate panel system is one of the key features that makes the self-governing ALJ model superior to the current structure and commission model in providing high quality service and decisions for the claimants. The Bankruptcy Court 

system is another nationwide network of tribunals that hears a high volume of cases 

in a specialized area that are generated mostly from individual petitioners. There 

are ninety-two Bankruptcy Courts situated in proximity to the District Courts.17

There are 140 Social Security hearing offices.18 Over 1,500,000 cases were filed in 

Bankruptcy Court in 2002.19 As is stated above, over 500,000 cases are brought before Social Security ALJs every year. Accordingly, Social Security claimants can 

benefit from the use of an appellate system that has proven to work on a large scale. 

‘‘In addition to being an appellate system that can handle a large caseload, the 

appellate panel system has several other benefits that would afford timely, high 

quality service to the Social Security claimants and Medicare beneficiaries and providers and likely reduce the requests for judicial review: 

1. First and foremost, appellate panel decisions result in higher quality decisions. 

A survey of bankruptcy practitioners revealed that two-thirds of them believed 

that the appellate panel decisions were ‘‘better products’’ than District Court 

decisions.20

2. The confidence in the high quality of the appellate panel decisions by the bankruptcy bar has resulted in less than half as many appeals to the Circuit Courts 

as there are from District Court decisions.21 In the Ninth Circuit in 1987, only 

10% of appellate panel decisions were appealed compared to 25% of the District 

Court decisions.22 Also, appellate panel decisions are reversed at the Circuit 

Court level less often than District Court decisions.23 Thus, appellate panels 

substantially reduce the federal courts caseload, which reflects a higher degree 

of decision accuracy. 

3. Appellate panels have a short average disposition time, which was only 75 days 

in the Ninth Circuit in 1994.24

4. Appellate panels afford access by the claimants, Medicare beneficiaries, and 

providers to a local appellate process. 

127 

25 Id. at 1509 (citing, Final Report of the Federal Courts Study Committee, 74–75 (1990)). 26 Id. (quoting, Federal Courts Study Commission, Working Papers and Subcommittee Reports, 

Vol. 1, 364 (1990)). 27 Id. at 1512–13, 1520–22. 28See Social Security Online, available at http://www.ssa.gov/oha/aboutlac.html. 29SSA Fiscal Year 2000 Annual Performance Plan 35, available at http://www.ssa.gov/budget/ 

app/00appfin.htm#WorldClass. 30Fiscal Year 2000 Annual Performance and Accountability Report 119, available at http:// 

www.ssa.gov/finance/fy00acctrep.pdf. 31 Id. 32Downing Carroll, supra note 17, at 571–77. 

5. The large pool of over 1,000 ALJs permits the timely determination of appeals, 

which has not occurred with the SSA Appeals Council, as stated above in part 

III(C). Timely and high quality review cannot occur with a commission, which 

likely will not have more than twelve members and would have to resort to 

hiring SSA Appeals Council-type reviewers to handle the caseload. 

6. Appellate panel work fosters the development of expertise by the panel members, which leads to better decisions.25

7. The opportunity for appellate work increases judges’ morale and is viewed by 

judges as an honor and an opportunity to ‘‘improve judicial service to the litigants.’’ 26

8. Although the panel work would increase the workload of the ALJs,and thus additional judges likely will be required and additional travel and other administrative costs incurred, 27 given the elimination of the Appeals Council,with its 

staff of 27 AAJs and over 800 support personnel and substantial facilities,28

and the elimination of the DHHS Medicare Appeals Council, the costs for the 

appellate panels, which can meet in already established local facilities, likely 

will be less than the cost of the two Appeals Councils. The SSA Fiscal Year 

2000 Annual Performance Plan states that the annual cost of the Office of Appellate Operations, which includes the SSA Appeals Council, was $575 million.29 The SSA Fiscal Year 2000 Performance and Accountability Report states 

that the unit cost for the SSA Appeals Council to hear a case is $440.30 Since 

the SSA Appeals Council processed 146,980 appeals in fiscal year 2000, the 

cost of the SSA Appeals Council process apparently was $64,671,200 in fiscal 

year 2000.31 Thus, unlike the Bankruptcy Court Appellate Panel Service, 

which was a new process in addition to the appellate step that already was 

available, the Social Security Appellate Panel Service is replacing a failed appellate review step that already exists and is funded. 

‘‘Thus, in summary, based upon the Bankruptcy Court experience, the appellate 

panel model (1) is an appellate system that can handle a large caseload, (2) results 

in higher quality decisions because of expertise, (3) results in substantially fewer 

appeals to the courts and a substantially lower reversal rate by the courts because 

of the bar’s and courts’ confidencein the high quality of the decisions, which reflects 

a higher degree of decision accuracy fromthree expert decisionmakers working together, (4) results in a substantially reduced federal court caseload, (5) results in 

a shorter disposition time because the large pool of about 1,000 ALJs permits the 

timely determination of appeals that cannot take place with a small body such as 

the SSA Appeals Council or a Commission, and (6) affords the claimants access to 

a local appellate process. 

‘‘A final point that should be considered is whether the appellate panel decisions 

should be given precedential value by the individual ALJs sitting in either the hearing office or entire region where the appeal originated.32 However, the policy-making authority of the SSA and DHHS cannot be usurped.’’ 

(My position as an Administrative Law Judge with the Social Security Administration is stated in this statement for identification purposes only.) 

f 

128 

Dothan, Alabama 36301 

September 28, 2004 

Congressman E. Clay Shaw, Jr. 

Chairman, Subcommittee on Social Security 

Congressman Wally Herger 

Chairman, Subcommittee on Human Resources 

United States House of Representatives 

Ways and Means Committee 

1100 Longworth House Office Building 

Washington, D.C. 

Dear Congressmen Shaw and Herger: 

This letter is to be placed in the record of the above-referenced hearing. I am an 

attorney in Dothan, Alabama. I represent numerous individuals with claims for social security disability. I have some concerns and comments regarding the proposed 

changes in the claims administration process. 

1. The record should be fully developed by a fully staffed Disability Determination Service. Currently, there is a great lack of uniformity in obtaining and 

reviewing claimant’s medical records. Regional Expert Review Units should be 

accessible to all claimants. 

2. Adequate compensation and information regarding the standards for assessing disability should be given to doctors who respond to requests for narrative 

letters. 

3. The eDIB should require the scanning and notation of all documents contained in the claimants file, and should be backed up off site. A copy should 

be transmitted to the claimant or representative free of charge, and a paper 

copy should be provided to unrepresented claimants. 

4. Digital recording of hearings should be required and available to the claimant 

or representative upon request. The use of video teleconferencing should be 

discouraged unless requested by the claimant. The lack of personal contact in 

assessing disability and inaccessibility of the judge, hearings officer (assistant) and experts to the claimant and counsel is simply too damaging to utilize 

this process. 

5. The reconsideration level should be omitted in all states, whether under the 

present designation or a Reviewing Officer. It has been very successful in Alabama and the other states in which it was eliminated. Very few cases are allowed on reconsideration. It is more feasible to proceed directly to the ALJ 

for a hearing. 

6. The hearing before the ALJ should be the next step after initial denial to expedite the process. 

7. There is no need for SSA to have staff attorneys at hearings or reviewing the 

record, such as a Reviewing Offical. However, staff attorneys could review 

cases for on the record decisions. 

8. Favorable decisions should be issued with a brief form stating the basis for 

the decision but without the great detail required when the claim is denied. 

This would allow approved claims to be issued more rapidly to people who 

desperately need the help. Issuance of decisions from the bench in appropriate 

cases would help as well. 

9. The record should be held open for evidence that could not be submitted prior 

to the hearing. 

10. Appeals council review upon request of the claimant should be retained as a 

useful buffer to the district court. Other review of determined cases is not appropriate barring an appeal. 

11. The Federal District court should be retained as the court of last resort, pending review by the normal means. 

Thank you very much. 

Very truly yours, 

f 

Bryan S. Blackwell 

129 

Statement of Emily Stover Derocco, Employment and Training 

Administration, U.S. Department of Labor 

Mr. Chairman, thank you for the opportunity to provide the Employment and 

Training Administration’s (ETA) perspective on ‘‘return to work’’ efforts for individuals with disabilities. 

ETA supports the return to work efforts carried out by the Social Security Administration (SSA), which has been a subject of this hearing. We also believe that the 

One-Stop Career Center system established under the Workforce Investment Act 

can play a vital role in helping individuals with disabilities enter jobs or return to 

work. 

Striving for Full Engagement in the Labor Market 

On February 1, 2001, President Bush announced his New Freedom Initiative, an 

effort to eliminate barriers to equality that many Americans with disabilities face. 

One of five key components of this initiative is ‘‘Integrating Americans with Disabilities into the Workforce.’’ This includes expanding educational and employment opportunities and promoting full access to community life for people with disabilities. 

ETA is committed to achieving this goal. 

Although it is critically important that individuals with disabilities have the opportunity to become fully engaged in the labor market, unfortunately, unemployment and underemployment remain unacceptably high for people with disabilities. 

According to the 2000 Census, among the civilian non-institutionalized population 

age 21–64, only 57% of individuals with disabilities are employed, compared with 

77% of individuals without disabilities. 

Meanwhile, the demand for skilled workers in our nation is outpacing supply, resulting in attractive high-paying jobs that go unfilled. It is necessary that we tap 

into new or previously untapped or underutilized skilled labor pools, such as individuals with disabilities, to help ensure that industries have the supply of skilled 

workers they need in order to successfully compete in today’s economy. Through our 

efforts surrounding the President Bush’s High Growth Job Training Initiative 

(HGJTI), we have been hearing directly from employers about the importance of this 

critical issue. 

The HGJTI is a strategic effort to prepare workers to take advantage of new and 

increasing job opportunities in high-growth/high-demand and in economically vital 

industries and sectors of the American economy. The foundation of this initiative 

is partnerships that include the workforce investment system, business and industry, training providers and economic development entities working collaboratively to 

develop solutions to workforce challenges facing industries and to develop maximum 

access for American workers to gain the competencies they need to obtain jobs and 

build successful careers in these industries. 

To date, ETA has focused on 12 ‘‘high-growth’’ industries. These industries have 

high growth in new jobs, a high rate of change in workforce skill needs, or are industries with new and emerging careers. The targeted industries include: automotive, advanced manufacturing, biotechnology, construction, energy, financial services, geospatial technology, health care, hospitality, information technology, retail, 

and transportation sectors. 

Through the HGJTI we have conducted executive forums to identify the challenges these industries face. Through these forums, I have personally had the opportunity to meet with these industry leaders and listen as they identify their greatest 

workforce challenges. Although different industries may face unique challenges, one 

clear, overarching challenge faced by these diverse industries is finding a sufficient 

pool of skilled labor. 

In response to the challenges that are identified, ETA holds ‘‘solution forums’’ to 

help these industries find solutions to the challenges they face. Representatives 

from all sectors have agreed with ETA that one ‘‘solution’’ to the shortage of skilled 

labor is finding access to new and/or previously untapped or underutilized labor 

pools, including individuals with disabilities. ETA believes that the One-Stop Career 

Center system can play a strong role in brokering relationships between these industries and the skilled labor they need, including individuals with disabilities, and 

helping individuals with disabilities obtain the current skills needed for gainful employment. 

Interagency Coordination 

In addition to our efforts under the HGJTI, we are also working closely with other 

federal agencies to develop coordinated strategies designed to move individuals with 

disabilities into competitive employment. These efforts support President Bush’s 

130 

New Freedom Initiative by addressing several policy issues surrounding integrating 

Americans with disabilities into the workforce. 

To enhance coordination across agencies, ETA has convened an Inter-Agency Coordinating Forum for Individuals with Disabilities and the Workforce. The forum offers an arena in which federal leaders can develop strategies, share information, 

and coordinate efforts around serving individuals with disabilities. Participants in 

this Forum include high-level participation from DOL’s Office of Disability Employment Policy (ODEP), Veterans Employment and Training Services (VETS) and ETA; 

the Department of Education’s Office of Special Education and Rehabilitative Service (OSERS); the Social Security Administration’s Office of Disability and Income 

Support Programs; and the White House Domestic Policy Council. 

At our most recent Forum, we had the opportunity to meet with employers to discuss strategies that the federal government can undertake to help employers hire 

individuals with disabilities. They identified challenges and activities, including: 

• Making the ‘‘business case’’ for hiring people with disabilities, and letting other 

businesses know the value of hiring individuals with disabilities. • Integrating information at the Federal level to provide tools, resources, and 

promising practices. • Not only making information available, but also conducting an awareness campaign around hiring individuals with disabilities. • Helping employers access and recruit individuals with disabilities, and, conversely, helping persons with disabilities understand the pathway through the 

public workforce system to employers with good jobs with career ladders and 

good benefits. 

ODEP, working with its DOL colleagues, is engaged in activities that address a 

number of these challenges. ODEP is currently compiling promising disability employment practices from both the federal and private sectors and providing the information and resources that employers need to successfully recruit, develop, retain, 

and return individuals with disabilities to work. Through its Employer Assistance 

Referral Network (EARN), ODEP is in the process of developing the ‘‘business case.’’ 

This work will help employers access, recruit and retain individuals with disabilities. Furthermore, ODEP’s Job Accommodation Network (JAN) provides free, nationwide technical assistance and training on accommodation strategies for new and 

returning workers. 

Moreover, over the past 18 months ODEP has partnered with HHS’ Office on Disability (OD) to address, with other federal partners (Education, Commerce, Justice, 

Transportation, HUD, SSA, and Interior), the comprehensive service needs, including employment, of young adults with disabilities between the ages of 16 to 30. 

ODEP, in conjunction with ETA, has also worked with the HHS Substance Abuse 

and Mental Health Services Administration (SAMHSA) as a key federal partner in 

helping to develop and implement SAMHSA’s mental health systems transformation 

plan pursuant to the report of the President’s New Freedom Commission on Mental 

Health. 

Efforts to Enhance the Capacity of One-Stop Career Centers 

In order for the One-Stop Career Center system to fully assist individuals with 

disabilities and the industries who seek to hire individuals with disabilities, OneStop Career Centers must be physically and programmatically accessible. Although 

there is still work to be done, the One-Stop Career Center system has become increasingly accessible through initiatives such as the Disability Program Navigator, 

Work Incentive Grants, and the issuance of the Workforce Investment Act (WIA) 

Section 188 Disability Checklist. 

First, the Disability Program Navigator (DPN) is a collaborative effort funded by 

DOL and SSA. The DPN is a position in the One-Stop Career Center that helps people with disabilities ‘‘navigate’’ through the enormous challenges of seeking work. 

Complex rules surrounding entitlement programs, along with fear of losing cash assistance and health benefits, can often discourage people with disabilities from 

working. DOL and SSA have established the DPN to better inform beneficiaries and 

other individuals with disabilities about the work support programs now available 

through One-Stop Career Centers, including facilitating access to counseling on the 

impact of employment on the individual’s cash assistance or health benefits. 

Navigators work closely with other programs funded by SSA. Examples include 

the Benefits Planning, Assistance, and Outreach (BPAO) program, which helps SSA 

beneficiaries make informed choices about work, and Area Work Incentives Coordinators (AWIC) whose duties include assisting with public outreach on work incentives, training on SSA’s employment support programs for personnel, and monitoring disability work-issue workloads in their areas. 

131 

Through grants to seventeen states, approximately 120 Navigator positions were 

established in One-Stops in program year 2003, with another 80–100 positions to 

be added in program year 2004. These navigators are building the capacity of the 

One-Stop Career Center system to serve individuals with disabilities and to help 

these individuals find and retain employment. 

Also, Work Incentive Grants have helped local areas increase the employability, 

employment and career advancement of people with disabilities through enhanced 

service delivery in the One-Stop Career Center system. These grants have been used 

to support physical access to services for people with disabilities. 

In addition, DOL’s Civil Rights Center (CRC), in cooperation with ETA and 

ODEP, developed a ‘‘WIA Section 188 Disability Checklist’’ to help ensure One-Stop 

Career Centers are accessible for individuals with disabilities. The Checklist is designed to ensure meaningful participation of people with disabilities in programs 

and activities operated by recipients of financial assistance under WIA. 

Finally, there is opportunity for One-Stop Career Centers to participate more fully 

as Employment Networks in the Ticket-to-Work program, authorized by the Ticket 

to Work and Work Incentives Improvement Act (TTWWIIA). Through this program, 

eligible individuals are given a ticket that can be voluntarily used to obtain employment-related services at Employment Networks (EN) or State Vocational Rehabilitation (VR) agencies. The purpose of the Ticket program is to give SSI and SSDI beneficiaries greater choice of service providers, beyond the traditional VR agencies. An 

EN or VR agency that accepts a ticket assumes responsibility for coordinating and 

delivering employment-related services to the beneficiary. 

To date, One-Stop Career Center participation as Employment Networks has been 

minimal. ETA is committed to continue working with SSA to maximize One-Stop 

Career Center participation in the Ticket-to-Work program. 

Conclusion: 

In conclusion, ETA is working to carry out the mandates of the President’s New 

Freedom Initiative, to meet the needs of employers and to help individuals with disabilities integrate into the labor force. As such, ETA strongly supports SSA in its 

return to work efforts. ETA and SSA continue to work collaboratively to help individuals with disabilities enter the workforce for the first time or return to work. 

Further, the One-Stop Career Center system can play a strong role in helping individuals with disabilities find or return to work, through community connections, 

connections to employers and the system’s pulse on the labor market. 

f 

Federal Bar Association 

Washington, DC 20037 

October 13, 2004 

The Honorable Clay Shaw, Jr. 

Chairman 

Subcommittee on Social Security 

U.S. House of Representatives 

Washington, D.C.20515 

Dear Chairman Shaw and Chairman Herger: 

The FBA Social Security Section appreciates your leadership in holding the joint 

hearing on September 30 on the Commissioner of Social Security’s proposal to improve the disability process. We request the inclusion of this correspondence in the 

record of that hearing. 

As you know, the Federal Bar Association is the foremost national association of 

private and government lawyers engaged in practice before the federal courts and 

federal agencies. Sixteen thousand members of the legal profession belong to the 

Federal Bar Association. There are also within the FBA over a dozen sections organized by substantive areas of practice, including the Social Security Section. The 

Federal Bar Association’s Social Security Section, unlike other organizations associated with Social Security disability practice and representing the narrow interests 

of one specific group, encompasses all attorneys involved in Social Security disability 

adjudication, including attorney representatives of claimants, administrative law 

judges, Appeals Council judges, staff attorneys in the SSA Office of Hearings and 

Appeals and Office of General Counsel, U.S. Attorneys and U.S. Magistrate Judges, 

District Court Judges and Circuit Court Judges. 

132 

The Social Security Section of the Federal Bar Association generally applauds the 

September 25, 2003 proposal of Jo Anne Barnhart, Commissioner of Social Security, 

to improve the disability adjudication process. The Commissioner is appropriately 

concerned about speeding up accurate determinations of disability. The FBA is hopeful that the Commissioner’s initiative can be implemented to achieve these goals 

while preserving the claimant’s right to a fair hearing. 

The Commissioner has documented what our experience has confirmed: the current system devotes excessive time to waiting for substantive administrative action. 

The elimination of review levels and the addition of procedural innovations like the 

Reviewing Official can enhance the prompt, accurate determination of disability. 

Our specific comments in this statement address the merits of five components 

of the Commissioner’s proposal: the elimination of the reconsideration level; the establishment of the reviewing official; preservation and improvement of the ALJ 

hearing; elimination of the Appeals Council; and the closing of the record. 

Elimination of Reconsideration Level 

The elimination of the reconsideration review level is a meritorious proposal to 

speed up the accurate adjudication of disability claims. As suggested by the Commissioner, in too few adjudications do reconsideration reviewers accurately distinguish obviously disabled claimants from unentitled applicants. The FBA supports 

the Commissioner’s proposal to save time and money by eliminating the reconsideration level and permitting claimants to proceed to the hearing level sooner. 

Establishment of the Reviewing Official 

The Reviewing Official (RO) concept is also a well-conceived improvement to speed 

up the adjudication process. Hopefully, the RO will be able to promptly identify 

claimants whose medical records establish that they are disabled, but were not 

awarded benefits at the initial level for whatever reason. The RO can approve these 

individuals’ claims without the necessity of a full hearing. The RO also may be able 

to obtain additional documentation either from treating medical professionals or 

from consultants to establish disability without the need for hearing. 

We believe the RO should be an attorney familiar with due process, who by legal 

training remains open to new evidence and legal persuasion. The incumbent of this 

important position must be sensitive to the rights of the claimant and the independence of the ALJs, as well as the administrative requirements of the Social Security 

system. We believe an attorney’s legal training will help to assure that the RO can 

administer these conflicting demands. 

However, we believe if the RO cannot allow the case, the RO should issue a prehearing report, rather than making some sort of ‘‘denial’’. This action will preserve 

the de novo review nature of the hearing process; a prehearing report will act as 

a road map to the claimant and the administrative law judge (ALJ) at the hearing. 

The Commissioner’s idea of a ‘‘recommended disposition’’ encroaches on the independence of the ALJ, and the claimant’s right to a fair hearing with full administrative due process. 

We believe the Commissioner’s proposal should make explicit that the RO’s decision is not entitled to more weight than any other evidence in the administrative 

record. There should be no presumption that the RO’s disposition is an adjudication, 

unless it is fully favorable to the claimant. Moreover, determinations that are not 

fully favorable to the claimant should be automatically reviewed by the ALJ. That 

is, the claimant would not need to file a second request for hearing after the RO’s 

denial in order to have his case heard by an ALJ. These modifications, as well as 

the RO’s issuance of a prehearing report, would serve to preserve the independence 

of the Administrative Law Judge and the claimant’s right to a fair hearing with full 

administrative due process. 

Preservation and Improvement of the ALJ Hearing 

We applaud the Commissioner’s preservation of the role of ALJs. The Federal Bar 

Association has consistently supported the role of the Administrative Law Judge in 

the adjudication of Social Security disability appeals. The ALJ presides over a nonadversarial process in which the claimant is present, but the government official 

who rejected the claim for benefits is not. The claimant may well be wary of such 

a system and may doubt that the ALJ will impartially and independently hear the 

claim for benefits. Yet that is exactly what is expected of the ALJ. It is for this reason that the FBA is gratified that the Commissioner’s plan preserves the independence of the ALJ in the adjudication process, and recognizes the pivotal role played 

by the ALJ in providing process due every American seeking fair and accurate deVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00136 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
133 

terminations of disability. The ALJs are key to the effectiveness of the adjudicatory 

process. 

We believe the independence and quality of both medical experts and consulting 

medical professionals utilized throughout the administrative system must also be 

assured. Such independence is essential to the success of the hearing process and 

will promote accurate determinations. Expert, impartial, professional examinations 

and testimony are crucial to the goal of accurate determinations of disability. The 

Commissioner should assure that medical professionals are truly independent, 

knowledgeable witnesses who testify to the claimant’s impairments and resulting 

abilities and limitations. Their examinations and testimony will permit the ALJ to 

accurately determine the entitlement of claimants to disability benefits. 

Elimination of the Appeals Council 

While we agree with the Commissioner that the abolition of the Appeals Council 

will result in a faster adjudicatory process, we fear there will be a significant loss 

to the administrative process without the Appeals Council determinations and an 

inundation of the Federal Courts with disability cases. According to the Social Security Administration, the Appeals Council receives about 77,000 requests for review 

each year. The Appeals Council remands 25% of the appeals back to the ALJ. That 

represents over 19,000 cases that are filtered out and do not reach federal court. 

According to Judge Frederick Stamp, chair of the Committee on Federal-State Jurisdiction of the Judicial Conference of the United States, 17,127 Social 

Security disability insurance and supplemental security income cases were filed 

in federal district courts during the last fiscal year. Without the Appeals Council 

filter, that number could well have doubled. In light of these caseload ramifications 

for the federal courts, we are concerned by the proposal to abolish the Appeals 

Council without knowing further details about the operation of the optional quality 

review stage. Without these details, it is difficult to criticize the Commissioner’s proposal. 

We foresee significant administrative difficulties by simply abolishing the Appeals 

Council and permitting dissatisfied claimants to proceed to District Court. The 

ALJs’ mistakes of law or fact will not significantly decline merely because of the 

new administrative process. The Commissioner’s proposed quality assurance Oversight Panels may correct some of these errors. However, we fear that in doing so, 

they may unintentionally interfere with or undermine ALJs’ authority and independence. (For example, it is unlikely that a quality Oversight Panel that did not 

see and hear a medical or lay witness would overrule an ALJ’s credibility finding.) 

Moreover, the Oversight Panels apparently do not provide claimants a procedure to 

correct or even raise gross errors contained in ALJ decisions. Timely submitted, definitive evidence that was not seen or considered by the ALJ, for example, could well 

change the administrative outcome. Under the Commissioner’s proposal, a claimant’s only recourse is to go to federal court. Unless administrative procedures ameliorate the likelihood of these probable outcomes, federal courts will be inundated 

with Social Security litigation. 

The Commissioner’s quality assurance program is intended to prevent a tidal 

wave of cases surging into the federal courts. Yet the Commissioner has not explained how the Oversight Panel will: select cases for review, how many cases will 

be reviewed; whether the claimant can request review (petition for certiorari); or 

whether the panels will consider new and material evidence. The devil is in the details, and the stakeholder community needs to know these details before we can adequately respond to the proposal of the Commissioner to abolish the Appeals Council. 

Closing the Record 

There should always be a ‘‘good cause’’ exception that authorizes a ‘‘late’’ submission of evidence to the administrative proceedings. Sometimes after a decision, a 

claimant further undergoes a medical test, responds to a new treatment, or sees a 

new specialistwho clarifies the claimant’s medical condition. Sometimes an ALJ’s decision transforms seemingly irrelevant information into relevant evidence. If the evidence is new and material, and there is good cause for the failure to produce it previously, then the evidence should be made part of the administrative record and 

considered. The federal courts regularly grapple with determining whether the evidence meets this standard. The meaning of the existing law, 42 U.S.C.§ 405(g), is 

clear. Such a ‘‘good cause’’ exception should similarly apply at the administrative 

level, just as it already does at the federal court level, and become part of the improved disability appeal process. 

134 

We appreciate the opportunity to offer these comments and continue to remain 

available to you and your staff in your conduct of oversight of these important matters. 

Very truly yours, 

Gary Flack 

Chairman 

f 

Social Security Section 

Statement of Sudhir Jaituni, Roseville, California 

Subject: Record for submission on DDS Medical Consultants (MC) 

I am a Physician who works as MC at Roseville branch DDS in CA for almost 

a year. Although I am relatively new in this position, I am very impressed by the 

high quality of my co-workers, both the MCs and Disability Examiners (DE). There 

is great amount of dedication and hard work by both these professionals to maintain 

the quality. Also a sense of helping disabled in our community pervades in the culture of work environment. 

I believe the team work between the MC and DEs has worked with enormous success to achieve outstanding quality both in terms of timeliness and accuracy. The 

contribution of MC towards both of these goals is invaluable and cannot be replaced 

by regional experts or by other professional such as Nurses on day by day basis or 

cost efficient manner.. This is because an MC provides timely, on-site consults to 

his/her team of DE, who he/she knows well. MC also acts as specialist in medical 

field of his/her training (e.g. I have in-depth knowledge of cancer). We have a broad 

mix of medical specialties at our branch and we regularly take advantage of each 

other’s expertise by informal consults. MCs also save money by judicious approach 

to the process, based on evaluation of objective medical findings both via review of 

medical records and consultation with treating doctors with whom we tend to reach 

great rapport. 

I spend anywhere from 15 minutes to an hour on each case for the MC component 

of disability determination so there is no delay or back log of work due to MC consultation. Instead it helps DE in avoiding over or under development of case in 

reaching favorable decision. Many cases are expedited by using presumptive disability or TERI route. 

I hope my comments will be helpful to the committee and I apologize for an informal way of writing. Thank you for allowing my input. 

f 

Edmonds, WA 98026 

September 28, 2004 

U.S. House Ways & Means Committee 

Joint Hearing on SSA Disability Determination Proposals 

1100 Longworth HOB 

Washington, DC, 20515 

Dear Committee Members, 

Thank you for this opportunity to comment on the issues before Ways & Means 

as you begin formal discussions of Commissioner Barnhart’s proposals. As a medical 

consultant to the DDDS offices here in Washington and a concerned citizen, I cannot 

overemphasize the importance of these proceedings. Primarily I would like to declare my support to the testimony you will hear from the National Council of Disability Determination Directors (NCDDD) and the National Assn of Disability Examiners (NADE). My own perspective is also shared here for the record. 

The Commissioner’s objectives are honorable and ambitious. Like most of my 

DDDS colleagues, I share her goals of improving service to our claimants and speeding up the application process. In documents available to you from NCDDD and 

NADE, we who serve on the front lines of the determination process have some 

areas of agreement with Commissioner Barnhart, and some areas of deep concern. 

These organizations represent those of us who do the daily work, making the complex decisions that provide disability benefits to the neediest of America’s needy. I 

urge you to consider their testimony. 

Following are some highlights of the issues before you. I direct these comments 

to you as a citizen, a family physician, a taxpayer, a cancer survivor, and as someVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00138 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
135 

one with three years of experience with DDDS; enough to know the system, but not 

long enough to lose my public perspective. 

1. NCDDD and NADE support the proposal to bring the disability determination 

process into the electronic age. I wholeheartedly concur. Implementation of 

‘eDib’ has already begun, and Commissioner Barnhart will speak highly of 

these efforts. However, 

• Rolling this system out to the states is, at least by some accounts, proving 

more difficult than expected, consuming significant time & resources. 

• The software and systems utilized are already behind the times. If we are 

to improve efficiency in the long run with this system, updates and improvements will be needed that may be more costly than anticipated, pulling 

money away from already strained areas. 

• Likewise, full implementation of eDib will be such a fundamental change for 

DDDS and SSA, it is unlikely our system will tolerate any other large-scale 

changes in the near future. 

Suggestion: The online/electronic conversion is the priority. If this is properly completed, many of the Commissioner’s goals will be met (reduced processing time, improved accuracy and better documentation). Almost everything else should be considered very low priority. 

2. NCDDD and NADE strongly oppose reorganization of the DDDS Medical Consultants (‘‘MCs’’). The Commissioner hopes to improve efficiency and accuracy 

by removing the MCs from the DDDS offices and placing a few of us in regional offices (Regional Expert Review Units), accessible for online or perhaps 

chart-based consultation in select cases. It may not be an exaggeration to say 

that this will paralyze the DDDS offices, though I don’t suspect NCDDD or 

NADE will use quite so strong a term in public. 

• Presently, DDDS MCs have several important roles—reviewing initial, reconsideration-level and continuing disability claims, improving documentation, 

mentoring both new and experienced adjudicators, providing quality assurance, and interacting directly with treating providers to get additional, often 

vital information for a claim. These services disappear under the current proposal for restructuring. 

• DDDS adjudicators are a well-trained, motivated, altruistic group, but their 

job is already difficult enough. Moving the MCs off site will be yanking the 

proverbial rug out from under their feet. Even the most experienced, welltrained adjudicators (15 years and counting) have difficulty with the depth 

of medical information MCs interpret every day. Our high staff turnover 

brings less experienced folks to my desk even more frequently. Even if our 

adjudicators are given more time to process each case, the fact is many cases 

hinge on careful medical review of the application. Asking our staff to bear 

this burden alone, with only nurse (one of the initial proposals) or occasional 

online specialist review is asking too much. Quality, accuracy, documentation 

and adjudicator retention will nosedive. 

• The Commissioner implies that only medical specialists will have a role in 

her new system, again with the hope of improved accuracy and efficiency. 

NCDDD, NADE and I instead support the continued involvement of primary 

care physicians. Rarely these days are applications based on one alleged condition. Generally we consider the combined impairment of things like heart 

disease, musculoskeletal conditions and neurologic findings. While we value 

the occasional input of an orthopedic or cardiac specialist, moving such cases 

from desk to desk hardly improves efficiency, especially when the great majority of cases fall within my expertise as a primary care MD well-trained 

in Social Security policies. 

• Keeping MCs on site not only preserves the fundamental service we provide 

with individual claims, it keeps us available for questions from QA staff, supervisors, trainers and managers. Removing us shifts the entire paradigm 

and will dismantle the support network within the DDDS offices. The resulting errors will further burden the review and appeal system, counter to one 

of the clear long-term goals of our process. For what little may be gained by 

centralizing the MCs, much will be lost. 

Suggestion: Leave the Medical Consultants, from both primary care and specialty 

backgrounds, on site at the DDDS offices. Establishment of the electronic determination process will provide unprecedented access to needed specialty and reviewer 

input, while maintaining the critical and complex role of on-site MCs. 

136 

3. NCDDD and NADE do not support the proposal to develop Quick Decision 

units. The Commissioner believes these new units, staffed by ‘medical experts’, 

will speed service for claimants who are obviously disabled. I am concerned 

that this expenditure of resources may actually fragment our process, and do 

little to speed up claims. 

• There are three steps to our process—gathering of information, decision, and 

review/appeal. Quick Decision units will not affect the first or the third. The 

second is not at all time consuming, and (as suggested by NCDDD & NADE) 

can be kept within the DDDS offices. Cases brought to an MC with adequate 

documentation of entities like widespread cancer, severe renal failure, and 

incapacitating stroke require only minutes to process. 

Suggestion: Improving our tools for evidence gathering will do far more to reduce 

processing time, and should receive priority. Quick Decision units are unnecessary. 

Consideration should also be given to improving training at SSA field offices, and 

even placing trained DDS adjudicators on site to identify and prioritize high probability claims. 

4. NCDDD and NADE generally support the elimination of the ‘recon’ step as it 

currently exists, as well as the number of appeals available to a claimant after 

an ALJ hearing. As an alternative to the reconsideration step, the Commissioner proposes review by an SSA Reviewing Official. NCDDD and NADE believe this step should be left to the more qualified DDDS staff, perhaps dedicating some of our most seasoned adjudicators with a broad knowledge of the 

medical, vocational and procedural aspects of our policies. Compared with the 

more narrow experience of a social security attorney, our staff is better qualified for this task. Currently, SSA regulations require a Medical Consultant 

(MD or psych PhD) signature for all reconsideration claims; are we prepared 

to modify that standard in the name of moving a minority of cases faster? 

Suggestion: If the ‘recon’ step is modified in the name of expediency, highly experienced DDDS adjudicators should be recruited to fill the ‘RO’ posts, rather than attorneys, and easy access to DDDS Medical Consultants should be maintained. 

NCDDD, NADE, the DDDS staff and consultants all share the same goals. We 

are dedicated to providing superb service to our claimants. And we welcome efforts 

to improve the complicated determination process, including those proposed by the 

Commissioner, yet we remain acutely aware of the risks of unnecessary reform and 

reorganization. 

Let us see how we are doing once the electronic conversion is fully in place. The 

additional, large-scale changes may have effects quite contrary to those predicted by 

the Commissioner. As our claims continue to increase in quantity and complexity, 

now is not the time to take apart the DDDS engine. Thank you for your time. 

Respectfully yours, 

f 

Jeff R. Merrill 

Statement of James R. Shaw, National Association of Disability 

Representatives, Framingham, Massachusetts 

The National Association of Disability Representatives, Inc. (NADR) is a not-forprofit organization comprised of attorneys and professional non-attorneys representatives who provide representative services for persons seeking to obtain or maintain 

disability benefits from the Social Security Administration. Our goal is to continually improve the quality of representation for impaired and disabled individuals before the Social Security Administration. 

We commend Commissioner Barnhart and the Social Security Administration for 

their hard work to redesign and improve the disability determination process. We 

believe that continued input from various entities whose constituents are impacted, 

as well as professional organizations, will provide Commissioner Barnhart with valuable ‘‘real world’’ information, allowing her to cultivate the original proposal into 

a very workable plan. 

In particular, we strongly agree with other advocacy groups on the primary importance of enacting changes that reduce unnecessary delays for claimants. All parties 

involved in the process must continue to make this system become as efficient as 

possible in order to obtain the correct decision as early in the process as possible. 

Efficiency, however, should not impact the fairness of someone’s entitlement to benefits. 

137 

Many of NADR’s members have worked in a professional position for various state 

agencies’ disability determination services or other tertiary positions such as vocational experts testifying in disability hearings. We understand the fundamental 

problems that exist within the programs but must stress the importance of removing claim backlogs, therefore eliminating or at least decreasing delays at the later 

stages of appeal. Standardization of much of the system for more consistent decisions as early as possible should be the methodology to attain this goal. 

Since its inception in March 2000, NADR has strongly disputed the philosophy 

propounded by other organizations such as NOSSCR that only persons who have 

passed the bar are qualified to perform representation services. We believe that the 

simple possession of a Juris Doctorate has little or no bearing upon successful representation. Skills and knowledge of the Social Security process, among other traits, 

distinguish a good representative from one who might not be competent. Those of 

us who are not attorneys but who have made this our profession continue to seek 

parity with our colleagues who are attorneys. We believe that knowledge and experience are more important than an educational degree in determining whether an individual is qualified to provide such specialized assistance to impaired persons. 

NADR is a member of the Consortium for Citizens with Disabilities (CCD) and 

agrees strongly with the position espoused in its Committee statement except for 

one issue found in Section I. Reviewing Official (RO). 

CCD maintains that the Reviewing Official should be an attorney. However, in 

keeping with our long held philosophical underpinnings of parity, NADR believes 

that the RO does not need to be an attorney, but should be anyone, attorney or not, 

who has sufficient knowledge of the Social Security disability system. We join other 

organizations like the National Council of Disability Determination Directors 

(NCDDD) and the National Association of Social Security Management Associations 

(NASSMA) in this view. 

Our belief is that any person who by training and education has the knowledge, 

expertise, and experience to understand the requirements of proper adjudication of 

claims and can formulate written opinions that can be substantiated at higher levels 

of review is qualified to be an effective Reviewing Official. This may include but not 

be limited to: 

1. Anyone who has significant expertise and experience in the representation of 

disability clients before the Social Security Administration; 

2. Anyone who has attained senior status in an adjudicatory position within Disability Determination Services; or, 

3. Anyone who has attained senior status in an adjudicatory and/or review/brief 

writing position within the Office of Hearings & Appeals. 

In order to ensure maximum protection of claimants’ rights, we vehemently stress 

that candidates for this position should not be exclusively limited to attorneys, as 

this may significantly limit the scope of the job and very well may deprive the system and clients of a better qualified person for said job. 

On behalf of the National Association of Disability Representatives, I am pleased 

to have provided the Subcommittee with our views. 

f 

Statement of Lawrence A. Plumlee, Dallas, Texas Introduction: 

I appreciate the House Subcommittee on Social Security’s holding this ‘‘Joint 

Hearing on Commissioner of Social Security’s Proposal to Improve the Disability 

Process’’. A wide range of suggestions have recently been made to improve the Social 

Security disability determination process, which at present is both slow in operation 

and non-uniform in its application. 

I testify here today on behalf of myself, a physician trained at Johns Hopkins University, and a former EPA health advisor, who is president or on the board of directors of several disability groups. I wish to discuss today the experience of the determination of disability under the direction of State Agency Consultants in Texas, and 

the lessons that it may provide to the consideration of some of the new proposals. 

I previously testified to this Subcommittee about the recent history of the Texas 

Rehabilitation Commission (TRC) Disability Determination Services (DDS) at the 

hearing of September 25, 2003. My testimony is now available at http:// 

waysandmeans.house.gov/hearings.asp?formmode=printfriendly &id=1847. 

TRC determines nearly a quarter million Social Security disability (SSDI and SSI) 

claims per year at the initial, reconsideration, and Continuing Disability Review 

(CDR) levels on behalf of SSA at a cost of approximately $300 each. There have 

been a number of problems in the determination of Social Security disability in 

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Texas in recent years. In my 2003 testimony, I cited about 45 newspaper articles 

on the subject published in the Houston Chronicle during 2001–3, mostly written 

by reporter Alan Bernstein. 

Since that time, TRC has been dissolved as an agency, with its functions taken 

over by the new Texas Department of Assistive and Rehabilitative Services (DARS) 

as a part of a reorganization of 12 agencies within the Texas Health and Human 

Services Commission (HHSC) into 5 departments. The centralized Texas DDS unit, 

however, operates under much the same external parameters as before. 

II. Problems at TRC–DDS during 1996–2002: 

Contributing to the problems at TRC–DDS during the late 1990’s and early 2000’s 

was the fact that SSA under-funded Texas DDS disability determinations during the 

period 1998–2001. (Notably, the cost of DDS disability determination is only about 

2–3% of total SSA disability program costs.) 

TRC Board minutes show these problems developing. The official approved minutes of the September 14, 2000 meeting of the TRC Board states on page 8: 

‘‘TRC Disability Determination Services Update: 

Chairman Kane called on Mr. Dave Ward, Deputy Commissioner for Disability Determination Services (DDS) to give the DDS Report. 

Mr. Ward updated the Board on DDS for Fiscal Year 2000 and on the Fiscal Year 2001 outlook, using a slide presentation (Attachment 3). He reported on the FY 2000 targets versus the FY 2000 forecasts, with respect to 

case receipts, case clearances, continuing Disability Review (CDR) cases, 

and Production Per Work Year (PPWY). He discussed hard targets (CDR 

cases) and soft cases. Mr. Ward noted that DDS was close to hitting its targets despite the federal government’s reduction of 20 positions, the hiring 

freeze, no overtime, and being restricted to only 1 Disability Examiner (DE) 

class. He reported that DDS was 30 production points above the rest of the 

nation. Mr. Ward also informed the Board that DDS had been assisting the 

region to reach its overall workload target. 

Mr. Ward discussed DDS’s FY 2000 profile. He reported that DDS has initiated a Program Operations Restructure Plan and start-up of Cooperative 

Disability Investigation Unit in Houston. He also reported that DDS is 

‘‘down’’ four operating units and has staged pending of 21,000 cases. Mr. 

Ward discussed the award structure. Persuant to Dr. Novy’s request, Mr. 

Ward explained that DEs and the technical support staff working with 

them are eligible for state incentive awards. Seventy-five awards were 

given out. Sixty percent of DDS staff received some type of incentive 

award. These included lump sum merit raises. 

Mr. Ward reported on DDS’s 2001 Outlook and discussed the numbers for 

Fiscal Year 2001 SSA Targets versus Fiscal Year 2001 DDS Proposals, with 

respect to case receipts, case clearances, CDR case, and PPWY. Mr. Ward 

stated that DDS would be in a rebuilding phase for the next 18–20 months 

and that the preceding year had hurt its infrastructure. He reported that 

he had informed the ‘‘feds’’ that DDS needed three DE classes. . . .’’ 

Three months later, the official approved minutes of the December 7, 2000 meeting of the TRC Board states on page 13: 

‘‘TRC Disability Determination Services Update: 

Chairman Kane called on Mr. Dave Ward, Deputy Commissioner for Disability Determination Services (DDS) to give the DDS Report. 

Mr. Ward updated the Board on DDS for fiscal year 2000 and on the fiscal 

year 2001 Profile, using a slide presentation (Attachment 9). He reported on 

the fiscal year 2000 targets versus the FY 2000 actual performance, with respect to case receipts, case clearances, continuing Disability Review (CDR) 

cases, and Production Per Work Year (PPWY). He reported that DDS exceeded all goals and targets despite the federal government’s reduction of 

20 positions, the hiring freeze, no overtime, and being restricted to only 

one Disability Examiner (DE) class. He noted specifically that DDS was 30 

production points above the rest of the nation. Mr. Ward explained, however, that without overtime, DDS will be hard pressed to continue on target, unless targets are reduced. He stated that budgeting probably will not 

get to DDS until January 2001. 

Mr. Ward discussed DDS’s fiscal year 2001 profile. He reported that, according to SSA OD, the ‘‘budget will not be sufficient to handle workload.’’ 

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He noted that CDRs are high priority and that a large Disability Examiners 

class is expected for January 2001. 

Questions/Comments from the Board 

Chairman Kane questioned whether this is the first time that Congress 

has said ‘‘we’’ won’t be able to make our targets. Mr. Ward stated that this 

was correct.’’ 

After TRC–DDS posted the lowest ‘‘initial approval rate’’ in the nation in 2000, 

and the ‘‘fake examiner’’ scandal broke on September 9, 2001, SSA Region VI Commissioner Horace Dickerson traveled from Dallas to Austin to give the TRC Board 

‘‘an update on SSA’s review of TRC’’. The official approved minutes of the TRC 

Board meeting of September 20, 2001 states on page 11–14: 

‘‘Commissioner Dickerson stated that over the last two and a half years, 

SSA has not been able to provide all the funding needed by DDSs to process all of the claims that they have received. He acknowledged that this has 

resulted in backlogs this fiscal year across the nation, as well as in Texas. 

He stated that the $83 million in funding to Texas DDS this fiscal year will 

allow it to process about 230,000 claims. . . .’’ 

‘‘Overtime. He explained that earlier in the year, the Dallas Region, including Texas, recognized that the Region did not receive its appropriate 

share of the national Disability Determination funding. As a result of input 

by the Dallas Region, SSA increased the spending authorizations for Texas 

twice this calendar year. He pointed out that Texas DDS has escalated its 

hiring plans, has added over eighty DEs and over eighty adjudicators, and 

has implemented an overtime plan to reduce backlogs.’’ 

The failure of SSA to fund the Texas DDS contributed to a number of problems 

during that era. The problems included: 

1. Texas had the lowest ‘‘initial approval rate’’ in the nation in 2000 for Social 

Security disability claims—29% in September 2000 compared to a national average of about 45%. (Houston Chronicle 3–18–01 C.2, 4–22–01 p4) A number 

of reasons have been suggested to explain the low rate, including that Texas 

examiners determined claims ‘‘reach different conclusions on cases that require 

certain judgments to be made on an individual’s capacity to work’’ than the 

rest of nation. (Houston Chronicle, 6–10–01 A.8.) 

The low approval rate in Texas raises issues of claimants’ rights to equal protection of the laws as compared to residents of other states. 

2. Texas DDS developed a backlog of about 75,000 claims in mid-2001—roughly 

3 months processing. (Houston Chronicle, 5–3-01 A.1) 

3. Texas DDS management responded to the backlog in 2000–1 by implementing 

a ‘‘waiting list’’ (using undisclosed selection criteria) for ‘‘overtime processing’’ 

(unequal treatment) by ‘‘fake examiners’’ (code name signature fraud) on about 

12,000 claims. (Houston Chronicle 9–9-01 A.1,A.20) ‘‘Waiting list’’ claims had 

no single examiner assigned who understood the entirety of the case or had 

responsibility for its outcome. The use of ‘‘fake examiners’’ was ostensibly 

stopped several weeks after the story was published by the Houston Chronicle. 

(Houston Chronicle 9–26–01 A.1) 

This two-tier processing raises issues of due process regarding quality of decision 

making and accountability, and issues of equal protection of the laws with respect 

to both claimants whose claims were processed differently, and Texas claimants as 

compared to residents of other states. 

Two tier processing additionally raises a due process concern about claim prejudgment. The criteria for selection of cases for ‘‘waiting list’’ processing has not 

been disclosed. The concern is that a first-glance decision made by a file clerk rather 

than a Disability Examiner (DE) or State Agency Consultant (SAC) as to the validity of a claim in the absence of medical evidence while determining whether to use 

‘‘waiting list’’ processing, and thus whether or not to process it with a single examiner, may determine the outcome of the claim irrespective of the merits of the case, 

which, for Pro Se claimants, may further prejudice the record subsequently submitted to an ALJ on appeal to SSA. The concern is thus that ‘‘first impressions’’ by 

a file clerk before development might have determined the ultimate outcome of the 

decision. 

4. A 2003 audit of Texas DDS by the SSA Office of Inspector General (OIG) found 

that between 1998 and 2001 Texas DDS made payments to selected hospitals 

for Consultative Examinations (CE’s) that were equal to those paid by TRC’s 

Vocational Rehabilitation program, but in excess of the SSA’s Maximum AlVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00143 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
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lowed Payment Schedule (MAPS) rate. (March 2004 A–15–02–12051 Audit Report.) TRC’s reimbursement rates were set from TRC’s creation in 1969 until 

2001 by TRC’s Medical Consultation Advisory Committee (MCAC), and were 

approved by the TRC Board. It is beyond doubt that any SSA Region VI Commissioner could fail to understand how TRC set its rates. SSA’s OIG audit 

found, however, no written documentation that a waiver was issued by SSA 

Region VI to TRC–DDS. The total excess payment to hospitals during those 

three years was about $3.6 million plus $359,000 in TRC overhead charges on 

about 49,000 claims, so the per-procedure overpayment to selected hospitals 

was significant. In response to this audit, the new TRC Interim Commissioner 

blamed the problem on their immediate predecessor who had just been reassigned to HHSC, and asked that reimbursement of the money be waived. This 

situation, however, must be considered to be a management failure by SSA Region VI to oversee the Texas DDS properly. 

5. In April 2001, Dallas Administrative Law Judge (ALJ) Christopher Lee Williams sued TRC–DDS and SSA for the failure of TRC–DDS to perform psychiatric CE’s on indigent claimants whose claims he remanded back to TRC– 

DDS for further development. (See Williams v. Massanari, et al., N.D. TX 

cause no. 03:01CV816, filed 04–30 2001.) The case was dismissed for lack of 

standing because ALJ Williams had not been harmed. 

Thus, TRC–DDS overpaid selected hospitals for CE’s performed, apparently without written approval from SSA Region VI, even while some indigent claimants could 

not get a CE exam even when DDS was ordered by a SSA ALJ to provide one, so 

that those claimant’s claims would necessarily be denied for lack of medical evidence 

of disability, which is required under the Social Security Act. Whether these claimants so denied CE’s could successfully sue the Texas DDS for violation of their 

rights to due process and equal protection of the laws, or SSA Region VI for failure 

to oversee TRC–DDS, when TRC–DDS, while overpaying selected hospitals for some 

examinations, refused to do an examination on an indigent claimant even after an 

ALJ indicated that a medical examination was necessary to determine their claim 

properly remains, apparently remains untested. 

6. ‘‘Kenneth S. Apfel, Commissioner of the Social Security Administration under 

President Clinton, spoke at a seminar where government officials and other experts said they were unable to completely explain the state’s relatively low approval rates in disability cases. ’Half the answer is known, half the answer is 

not known’, said Apfel, now a University of Texas professor. But Texas can 

start on increasing its approval rates by training case workers at the Texas 

Rehabilitation Commission to take a wider approach to whether disability applicants can no longer work, he said. Case workers in many other states grant 

disability benefits more often by looking beyond purely medical evidence to see 

whether people can continue to function at work, Apfel said. ‘I don’t think 

you’ve done enough in Texas’, he said.’’(Houston Chronicle, 10–18–01 A.29.) 

In evaluating disability claims on about $300 apiece, there is limited ability to do 

claimant evaluations. The inference from Kenneth S. Apfel’s statement is that few 

Vocational Evaluations (VE’s) were being done at TRC–DDS during this era. It 

seems logical that, on a limited disability determination budget with a total cost 

fixed to national rates, with TRC–DDS overpaying selected hospitals significantly 

for CE’s, DDS might at the same time reduce VE’s in order to balance their budget. 

1. Texas is said to have a lower Social Security disability approval rate for ‘‘psychiatric disorders’’ than other states. A letter to the editor by Leslie Gerber, 

director of public policy, Mental Health Association, Houston stated of Social 

Security disability recipients in Texas that ‘‘in 1999, only 22.8 percent had a 

psychiatric disability, compared to the national average of 32.1 percent, which 

is nearly one and a half times higher.’’(Houston Chronicle, 3–18–01 C.3.) 

It has been argued, that due to the above combination of factors, tens of thousands of otherwise legitimate Social Security claims in Texas were improperly denied during this era, with a total fiscal impact to claimants of hundreds of million 

dollars. 

In summary, while the problems at TRC–DDS during this era were multifactorial and complex, it would appear that SSA failed to properly fund disability determinations in Texas; backlogs occurred; claim documentation 

suffered while payment rates to large hospitals did not, yet SSA Region VI 

failed to oversee payments; claim denial rates went up; a stop-gap ‘‘waiting 

list’’ program with unspecified selection criteria was instituted; and indigent claimants unable to afford documentation, and those whose claims 

were selected for the ‘‘waiting list’’, were denied due process. This was subVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00144 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
141 

sequently followed by newspaper articles, pickets, hearings, audits, resignations, and reorganizations. 

III. Compensation of State Agency Medical Consultants at the Texas DDS: 

During the late 1990’s, TRC–DDS began compensating State Agency Medical Consultants (SAMC’s) and State Agency Psychiatric Consultants (SAPC’s) working as 

independent contractors to advise Disability Examiners determining Social Security 

disability claims on a ‘‘piece work’’ basis. 

Before TRC–DDS had the lowest ‘‘initial approval rate’’ in the nation, and two 

years before the ‘‘fake examiner’’ scandal broke, the minutes of the September 18, 

1999 meeting of the TRC Medical Consultation Advisory Committee (MCAC) record 

a presentation by Elizabeth Gregowicz reviewing the operation of DDS. After a presentation on the SSA’s ‘‘Redesign’’ pilot program for improving DDS operations and 

its rollout, the discussion, chronicled on page 4, turned to SAMC compensation: 

‘‘Commissioner Arrell raised the question about our payment of State 

Agency Medical Consultants (SAMC), indicating that TRC–DDS recently 

made a change in how we do that. Ms. Gregowicz noted that our budget 

from SSA has been shrinking in the last 10 or so years, and consequently, 

DDS’ have been looking for ways to enhance operational efficiencies. Texas 

implemented a ‘‘pay-per-case’’ concept versus ‘‘pay-per-hour’’ for SAMC 

services. It appears that productivity has increased and there is increased 

efficiency. Dr. Vickers said he initially thought quality would suffer, but 

notes this has not happened. The Disability Examiners are more thorough 

and quality has improved. The SAMCs are contract workers and pay their 

own social security and income tax. There are no ‘‘employee’’ benefits since 

the SAMCs are not employees.’’ 

The roughly 40 TRC–DDS SAMC’s and SAPC’s budgeted to earn more than 

$100,000 per year on SAC contracts in 2002–3 were listed as contractors on TRC’s 

web site at http://www.rehab.state.tx.us. 

Some of the SAC ‘‘piece work’’ consultants were budgeted to earn as much as 

$628,000 in a year on their DDS contracts. By comparison, typical salaries for physicians employees at Texas HHSC agencies are $7–10,500 per month. This suggests 

that some Texas DDS SAMC’s and SAPC’s are evaluating a LARGE number of 

claims each year, and that these high-volume examiners may disproportionately affecting DDS processing statistics and claims outcomes. 

Some of these consultants also held other contracts with TRC itself (e.g. perhaps 

with the Vocational Rehabilitation program), which are listed in the Historically 

Underutilized Business (HUB) database on the Texas Building and Procurement 

Commission web site at http://www.tbpc.state.tx.us. 

It seems arguable that a physician earning over $360,000 per year doing ‘‘piece 

work’’ disability evaluations may not be spending an appropriate amount of time to 

consider each individual claim, particularly if they also have other contracts with 

the state. 

Several example TRC–DDS SAMC and SAPC contracts are notable. The statistics 

that follow have been compiled from TRC prospective quarterly budget estimates 

and PBPC HUB retrospective historical data for the years 2002–3 without respect 

to fiscal versus calendar years, and thus the figures are somewhat approximate. 

(Note that some of these contracts might include a ‘‘supervisory’’ bonus.) These figures, however, outline the general issue: 

1. SAMC (‘‘S.S.’’) was budgeted to earn in both 2002 and 2003 about $550,000 a 

year on their DDS SAMC disability determination piece work contract, plus another $300,000 directly from TRC (e.g. which may be for examinations or other 

services, such as with the Vocational Rehabilitation program, which also might 

possibly require the services of a clinic and/or staff) in each of those years, and 

is budgeted to earn $628,000 on their DDS SAMC piece work contract alone 

in 2004. 

2. SAMC (‘‘M.D.’’) was budgeted to earn between $530,000 and $600,000 in 2003 

on their DDS SAMC piece work contract, in addition to about $320,000 directly 

from TRC for other work, although in 2002 they were budgeted to earn only 

$330,000 in DDS SAMC piece work, plus $178,000 directly from TRC for other 

work, and in 2004 are budgeted to earn only $270,000 in DDS SAMC piece 

work fees. 

3. SAMC (‘‘F.C.’’) is budgeted to earn $552,000 in DDS SAMC piece work fees in 

2004, although they were budgeted to earn only about $156,000 in DDS SAMC 

piece work fees, and $139,000 from TRC for other work, in 2003. 

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4. SAMC (‘‘J.B.’’) was budgeted to earn $429,000 in DDS SAMC piece work fees, in addition to $39,000 from TRC for other work in 2002, but is not listed as 

a TRC contractor in either 2003 or 2004. 

5. SAPC (‘‘S.D.’’), a ‘‘Chief or Emeritus SAPC’’, was budgeted to earn $311,000 in DDS SAPC piece work fees, plus another $190,000 from TRC for other work 

in 2003, but was not listed as a contractor in 2004, and has likely become a 

staff member at the Texas DDS agency. 6. SAPC (‘‘J.C.’’) was budgeted to earn $368,000 in DDS SAPC piece work fees, plus another $205,000 from TRC for other work in 2003, although they were 

budgeted to earn only $157,000 in DDS SAPC piece work fees in addition to 

$195,000 from TRC for other work in 2002, but are budgeted to earn $468,000 

in DDS SAPC fees 2004. 

There are concerns that the piece work compensation of State Agency Consultants 

may induce a bias in disability determinations against claimants with a) chronic 

conditions, b) complex conditions, c) conditions whose origin, diagnosis, or effects are 

obscure, d) conditions with a need to consider vocational factors in the evaluation 

of disability, and e) claimants who reopen claims, reapply for benefits, or have large 

files. 

‘‘Piece work’’ compensation may thus arguably result in unequal treatment both 

between claimants whose claims are evaluated by ‘‘high volume’’ as compared to 

‘‘low volume’’ SAMC’s, and claimants whose claims are evaluated by ‘‘high volume’’ 

SAMC’s in Texas as compared to claimants in other states. 

‘‘Piece work’’ compensation might also provide a financial incentive for a SAC to 

decide a claim on the spot based on the evidence already in the record, rather than 

to request a CE or VE which may delay the decision by many weeks. 

Thus, while in 2000–1 TRC–DDS management with limited funding used ‘‘fake 

examiner’’ document fraud to expedite Social Security disability claims processing— 

having had the lowest ‘‘initial approval rate’’ in the nation in 2000; Texas DDS 

began about 1999 to expedite disability claims by compensating State Agency Consultants on a ‘‘piece work’’ basis, some of whom now earn over a half million dollars 

per year in piece work fees. 

The ‘‘piece work’’ compensation policy has apparently helped solve the backlog 

problem at Texas DDS, but one must ask: is this due process in accordance with 

SSA national program standards, and does this afford claimants equal protection of 

the laws? 

The U.S. Constitution speaks directly on the issue a person’s rights to due process 

and equal protection of the laws with respect to the actions of state governments: 

‘‘No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of 

life, liberty, or property, without due process of law; nor deny to any person within 

its jurisdiction equal protection of the laws. ’’ (The Fourteenth Amendment to the 

Constitution of the United States, Section 1, sentence 2.) 

The U.S. Constitution also speaks directly on the issue a person’s rights to due 

process with respect to the actions of the U.S. Government: 

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the 

land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in 

jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness 

against himself, nor be deprived of life, liberty, or property, without due process of 

law; nor shall private property be taken for public use, without just compensation. 

(The Fifth Amendment to the Constitution of the United States.) 

IV. Lessons Learned From the Texas DDS Experience: 

It would appear that when SSA cut the Texas DDS disability determination budget, in a matter of time backlogs occurred as waiting claims began to be classified 

as ‘‘staged pending’’; claimant CE and VE documentation suffered; a ‘‘piece work’’ 

compensation program was instituted for the physician medical consultants; and as 

denial rates went to the highest in the nation, the waiting list went from one to 

three months, and management instituted a two tier ‘‘waiting list’’ processing 

scheme compromising quality and accountability. As a result, claimant rights to due 

process and equal protection of the laws suffered. 

Overall, a budget cut of perhaps on the order of $10–20 million from what Texas 

DDS ought to have been funded for operational costs for proper disability claim development and determination, arguably resulted an industrial-scale degradation in 

determination quality, and in the denial of tens of thousands of claimants to several 

hundreds of millions of dollars in benefits, including to SSDI disability benefits 

143 

which disabled workers had paid insurance premiums for to the District of Columbia over their entire working careers. 

In creating SSA, Congress delegated disability determinations to the states while 

the program was being developed during the 1930’s because at the time only the 

states had the institutional capability to assess disability at local locations throughout the nation. This historical decision has had consequences today. 

State DDS programs are subject to SSA budget constraints, while operating in 

virtual secrecy, a situation which can easily result in violation of claimants’ U.S. 

Constitutional and statutory rights. 

Further, state disability determination directors are often appointed by the state 

governor or by senior state agency officials, and are thus subject to internal state 

politics and domestic political agendas. 

It is in this context that we review current proposed changes to the national Social Security disability determination system. 

1. We believe that control of the ‘‘initial’’ levels of SSA disability determination by state officials at state DDS agencies will continue to 

present an ongoing problem of regional bias in what is purported to 

be a national social insurance program. 

2. We believe that SSA Regional Commissioners should have not only 

the authority but also the responsibility to manage the process of disability determination at state DDS agencies, including ensuring that 

cases are properly developed, and that CE’s and VE’s are properly 

performed. 

Claimants must be fully informed of their rights in the disability determination 

process, particularly as the process is being changed. 

3. We believe that claimants must be fully informed at every step in the 

SSA disability determination process, including their right to directly 

submit medical evidence to the state agency at the time of their initial 

application, and in notice of decisions of their rights to appeal versus 

reapply. 

We feel that a failure by a state DDS to properly develop claims constitutes a bias 

against claimants with complex medical conditions, who have limited financial resources, who file Pro Se without a lawyer, who are homeless, or who have mental 

conditions. Failure to properly develop cases further prejudices consideration of 

claims on appeal to the SSA Administrative Law level. This forces claimants denied 

proper development out of the ‘‘nonadversarial’’ system created by Congress, forcing 

them to either forfeit rights without recourse, or to litigate a case in Federal District 

Court. 

4. We believe that every disability claim where there is a colorable allegation of 

social insurance coverage ought to be fully developed by a state DDS Disability Examiner. 

5. We believe that SSA should fund state DDS agencies at sufficient levels to do CE examinations on the majority of claimants, and VE evaluations on a substantial fraction of claimants. 

6. We believe that every disability claim developed by state DDS agency ought 

to be reviewed by a physician consultant, rather than just a nurse or a lawyer. 

‘‘Piece work’’ compensation may improve State Agency Consultant efficiency, but 

efficient does not mean fair. 

7. We believe that while State Agency Consultants compensation may include 

production bonuses, it should not be entirely ‘‘piece work’’. We believe that 

‘‘piece work’’ compensation institutes a bias against several classes of disability claimants. 

In a complex disability claim, with medical records from multiple sources, and 

with continuing development of medical evidence, there may be problems with obtaining medical evidence in a timely manner. 

8. If the reconsideration step of the SSA disability determination process is eliminated, we believe that methods must be available to claimants to ensure that the entirety of their medical records are available 

for consideration by the decision maker before the initial decision is 

made. 

The development of an electronic case file system at SSA puts into the hands of 

senior DDS officials and their parent agencies—who are subject to budgetary and 

144 

political pressure—a tool which with they may do industrial-scale fraud, should they 

choose to use it in such a manner. 

At present, a Social Security disability claimant may walk into a SSA Office of 

Hearings and Appeals (OHA) office after filing an ALJ appeal of a DDS denial and 

obtain a photocopy of their case file as developed and determined by the state DDS, 

take it home, and spend months analyzing it. Often an ALJ appeal is a claimant’s 

first opportunity to review how the state DDS developed their claim. The claimant 

may find, for instance, that state DDS failed to request their medical records from 

all providers; requested medical records for the wrong dates; received and cited medical records subsequently found to be missing from the case file; and even culled 

medical records from the case file sent in directly by the claimant. They may also 

find that State Agency consultants evaluated their claim while the file was incomplete. 

Disability Determination fraud by a State Agency is particularly likely when a 

senior official at a state DDS under budgetary or political pressure is willing to institute an official policy of fraud. This occurred for example at TRC–DDS when an 

official assigned a ‘‘fake name’’ disability determination computer account for each 

of the agency’s 25 claims evaluation units, such as demonstrated in a memorandum 

published in the Houston Chronicle on September 9, 2001. 

Claim documentation is presently available in paper format in most states. In 

computer format the destruction and forging of records would be much less obvious, 

and the files would be much less accessible to claimants for verification. 

9. Safeguards must be built into any computerized claims system by which SSA 

can ensure the authenticity of medical records, provenance of documents, decision authority in determinations, and an audit record of all transactions, in 

order to ensure claimants due process, even should a state DDS agency head 

or SSA Regional Commissioner wish to officially sanction disability determination fraud for political or budgetary goals. 

Nothing but the ‘‘light of day’’ will change the back-room tactics of the ‘‘good ‘ol 

boys’’ in some state DDS agencies in trashing disability claims as their personal 

prejudices dictate. 

10. Claimants must be allowed to examine their computerized case file at any 

time, and to obtain a personal copy of the records in order to ascertain their 

completeness and accuracy. 

In a complex disability claim, with continuing development of medical evidence, 

not all medical evidence may be available within the first few years of the onset 

of disability. 

11. We believe that if the proposal to close the hearing record after the 

ALJ hearing is effected, there ought to be a good cause exception 

which allows the submission of additional medical records. 

Lack of proper appellate review of DDS denials exists in Texas because of the 

close relationship between the Texas DDS and the SSA Region VI office, the relatively small number of claims remanded by the SSA Appeals Council, and limitations on access to the Texas Federal District Courts for indigent and Pro Se persons, 

including limited access to legal resources due to the notoriety of the Texas Unauthorized Practice of Law Subcommittee. 

12. We believe that the SSA Appeals Council has a legitimate function, in that 

about 25% of appealed claims nationally are either remanded or reversed. At 

the same time, we believe that the one year backlog at the Appeals Council 

is too long. 

Texas DDS maintained one of the highest ‘‘accuracy’’ statistics in the nation, even 

during 1999–2001 while they had problems which included having the lowest ‘‘initial approval rate’’ in the nation, engaging in failure to do CE’s and VE’s while overpaying selected hospitals for those done, and using ‘‘fake examiners’’ and doing 

‘‘waiting list’’ processing. Obviously these ‘‘accuracy’’ statistics have an internal bias 

due to the self-fulfilling effect of a state DDS agency denial of a SSA disability 

claim, and do not reflect the true accuracy of claims determinations. 

13. We believe that the ‘‘accuracy’’ statistics for state DDS agencies should be revised to avoid the internal bias inherent in the current method. 

14. We believe that given the number of irregularities in Social Security disability 

determinations in Texas from 1996 to present, claims determined during that 

period should be reviewed, and claims with questionable handling (e.g. failure 

to do a CE or VE) should be redetermined. 

145 

Let me close with the following quote: 

‘‘‘It rings a very serious fire bell that the Social Security justice system 

is not treating all of the applicants equally or consistently’ said U.S. Rep. 

John Culberson, R-Houston. ‘And that is a recipe for disaster under our 

American system of law.’’’ From: ‘‘Judges Vary Sharply on Disability Approval: 

Social Security Rulings Concern Lawmakers’’, Alan Bernstein and Dan Feldstein, 

Houston Chronicle, 7–14–02 A.1. 

f 

Statement of Sheryl Schott, Los Angeles, California 

I am a Pediatric Medical Consultant with LA West, whose primary objective is 

to make the right decision the first time, in as timely a manner as possible, and 

with as little expenditure as possible. In my 10 years with the program, I have educated the DEAs to refer promptly to me any case in which phone calls to Treating 

doctors, hospitals, labs can allow me to make a proper determination rapidly and 

without additional cost. 

I routinely call treating doctors, getting essential information to avoid the purchase of consultative examinations, as well as Medical Record Departments and labs 

who did not respond to DEA efforts alone. Indeed, most Pediatricians and Pediatric 

specialists in this area are very well known to me, through my years of service, and 

VERY responsive to my phone calls and questions, again generally at no charge to 

the department. 

I know many of my colleagues, just as concerned, who perform the same actions 

daily. We end up saving the state and federal government significant funds as in 

the following situation which has occurred quite a number of times—Lost folder case 

on premature infants. The DEA wanted an automatic continuance on the basis of 

the lost folder, but I insisted on the reconstruction, not previously done, which documented the impairment of premie/growth—the basis for the comparative point decision, the child had no new impairments in interim, and thus this altered the determination dramatically to a cessation. 

Another situation which has arisen in my experience, is where the DEA incorrectly interpreted reports from Pediatric Cardiologist in the case of a child with 

complex cyanotic congenital heart disease, who had already undergone 2 surgical 

procedures. The 

TP Pediatric Cardiologist reported ‘‘doing well’’ but it could be determined from 

the physical exam findings that this was ‘‘comparatively speaking’’ to another child 

with complex cyanotic heart disease, as the child continued with findings of cyanotic 

heart disease. This was overlooked on the DEA’s review of the case. There are also 

many occasions where I find that the DEA has mistakenly identified different notes/ 

reports in the file, leading to errors in their assessment of the correct determination. 

While my colleagues and I strive to educate the DEAs in our division as to all 

the above, and routinely answer multiple daily informal questions on the full range 

of medical and pediatric impairments and syndromes, as well as the adequacy of 

medical evidence in a certain case or the necessity for multiple consultative exams 

on a case, we recognize the benefits of our ‘‘team’’ function in making the correct 

determination. The interposition of a RN is not only unnecessary, but would also 

place an expensive extra link into a newly broken chain. Nor could the RN serve 

all the functions of a Medical Consultant 

My colleagues and I are proud of the job that we do and our prime objective is 

to assist/ educate/expedite the right decision within our team. 

f 

Statement of Linda Fullerton, Social Security Disability Coalition, 

Rochester, New York 

Our group and experiences, are a very accurate reflection and microcosm of what 

is happening to millions of Social Security Disability applicants all over this nation. 

The current Social Security Disability program and the process that an applicant 

endures when filing for disability benefits, causes irreparable harm and has many 

serious side effects including unbearable stress, depression, and in some cases the 

depression is so severe that suicide seems to be the only option to get rid of the 

pain, of dealing with a system riddled with abuses against the disabled, already 

fragile citizens of this country. According to past GAO reports, the SSD system is 

at HIGH RISK but Congress keeps ignoring the problem. 

The Social Security Disability New Approach Program is a welcome change from 

what we have seen in decades past. Everyone that I have dealt with there has been 

146 

very courteous and responsive to our concerns and I am very grateful for that. We 

keep in constant communication with them as much as we are allowed to participate. But from what I can see the proposals that are being suggested so far, by the 

Disability New Approach Program, will not do very much to relieve this horrendous 

situation in the very near future. While they are doing their very best with the resources they have, they cannot do it alone, as many things needed to truly reform 

this system, must be legislated by Congress. In addition we ask that in future Congressional hearings, members of the Social Security Disability Coalition be allowed 

to actively participate instead of being forced to always submit testimony in writing, 

after the main hearing takes place. We are willing to testify in person before Congress and we should be permitted to do so. We want a major role in the Social Security Disability reformation process, since any changes that occur have a direct major 

impact on our lives and well being. 

The time it takes to process a Social Security Disability claim from the original 

filing date is now, in many cases, at least 1–3 years or longer. If claimants provide 

sufficient medical documents when they originally file for benefits they shouldn’t be 

denied at the initial stage, have to hire lawyers, wait years for hearings, go before 

administrative law judges and be treated like criminals on trial.The current SSD 

process seems to be structured in a way to be as difficult as possible in order to 

suck the life out of applicants in hope that they give up or die in the process, so 

that Social Security doesn’t have to pay them their benefits. To a population that 

is already compromised, this is unacceptable and this issue must be made a priority 

for every member of Congress since it is a life and death situation for millions. 

Many SSD applicants are losing EVERYTHING in the process of applying for benefits, their homes, all their financial resources, their healthcare and worse yet their 

lives. 

The current claims process is also set up to line the pockets of the legal system, 

since you are encouraged from the minute you apply to get a lawyer. Why should 

you need to pay a lawyer to get benefits that you have paid into all your working 

life? The SSD program is structured so that it is in a lawyer’s best interest for your 

case to drag on since they automatically get paid a percentage of a claimant’s retro 

pay—the longer it takes the more they get even if they do almost nothing. From 

the horror stories I hear from claimants many attorneys are definitely taking advantage of that situation. The stress and worry that applicants are forced to endure 

while applying for SSD benefits causes further irreparable damage to their already 

compromised health and is totally unacceptable. Many lose everything, and now in 

addition, are also forced into a level of poverty on top of their illnesses, which they 

will have to live with the rest of their lives since they can no longer earn a living. 

Due to the devastation on their lives and health, the Ticket to Work program, and 

any chance of possibly getting well enough to return to the workforce, even on a 

part time basis, is now out of the question. 

The SSA Customer service is extremely poor and in major need of improvement 

across the board. If any corporation in this country did business like the SSA, the 

majority of employees would be fired on the spot, and the company would be shut 

down within a year. Here is just a small sampling of the constant complaints we 

receive about the Social Security Disability system and its employees: 

Extraordinary wait times between the different phases of the disability 

claims process 

Employees being rude/insensitive to claimants 

Employees outright refusing to provide information toclaimants or do 

not have the knowledge to do so 

Employees not returning calls 

Employees greatly lacking in knowledge of and in some cases purposely 

violating Social Security and Federal Regulations (including Freedom of 

Information Act and SSD Pre-Hearing review process). 

Claimants getting conflicting/erroneous information depending on whom 

they happen to talk to at Social Security—causing confusion for claimants and in some cases major problems including improper payments 

Complaints of lack of attention or totally ignoring—medical records provided and claimants concerns by Field Officers, IME doctors and ALJ’s. 

Fraud on the part of DDS/OHA offices, ALJ’s, IME’s—purposely manipulating/ignoring information provided to deny claims. 

Complaints of lost files and files being purposely thrown in the trash 

147 

Complaints of having other claimants information improperly filed/mixed 

in where it doesn’t belong causing breach of security 

Poor/little coordination of information between the different departments and phases of the disability process 

These complaints refer to all phases of the SSD process including local 

office, Disability Determinations, Office of Hearings and Appeals and the 

Social Security main office in MD (800 number). 

SOCIAL SECURITY DISABILITY COALITION—SSD SYSTEM REFORM 

GOALS 

We want to have claimants who have actually gone through the SSD system themselves to be part of a group who actually participates in the Social Security Disability New Approach program and which has major input 

and influence on the decision making process before any final decisions/ 

changes/laws are instituted by the SSA Commissioner or members of Congress. This is absolutely necessary, since nobody knows better about the 

flaws in the system and possible solutions to the problems, then those who 

are forced to go through it and deal with the consequences when it does 

not function properly. 

We want disability benefits determinations to be based solely on the 

physical or mental disability of the applicant. Neither age, education or 

any other factors should ever be considered when evaluating whether or 

not a person is disabled. If a person cannot work due to their medical conditions—they CAN’T work no matter what their age, or how many degrees 

they have. This is blatant discrimination, and yet this is a standard practice when deciding Social Security Disability determinations and should be 

considered a violation of our Constitution. This practice should be addressed and eliminated immediately. 

All SSD case decisions must be determined within three months of original filing date. When it is impossible to do so a maximum of six months will 

be allowed for appeals, hearings etc—NO EXCEPTIONS. Failure to do so on 

the part of SSD will constitute a fine of $500 per week for every week over 

the six month period—payable to claimant in addition to their awarded 

benefit payments and due immediately along with their retro pay upon approval of their claim. SSD will also be held financially responsible for people who lose property, automobiles, IRA’s, pension funds, who incur a compromised credit rating or lose their health insurance as a result of any 

delay in processing of their claim, which may occur during or after (if 

there is failure to fully process claim within six months) the initial six 

month allotted processing period . 

Waiting period for initial payment of benefits should be reduced to two 

weeks after first date of filing instead of the current five month waiting period. 

Prime rate bank interest should be paid on all retro payments from first 

date of filing due to claimants as they are losing it while waiting for their 

benefits to be approved. 

Immediate eligibility for Medicare/Medicaid upon disability approval 

with NO waiting period instead of the current 2 years. 

SSD required medical exams should only be performed by board certified 

independent doctors who are specialists in the disease that claimant has 

(example—Rheumatologists for autoimmune disorders, Psychologists and 

Psychiatrists for mental disorders). Independent medical exams requested 

by Social Security must only be required to be performed by doctors who 

are located within a 15 mile radius of a claimants residence. If that is not 

possible—Social Security must provide for transportation or travel expenses incurred for this travel by the claimant. 

Too much weight at the initial time of filing, is put on the independent 

medical examiner’s and SS caseworker’s opinion of a claim. The independent medical examiner only sees you for a few minutes and has no idea 

how a patient’s medical problems affect their lives after only a brief visit 

with them. The caseworker at the DDS office never sees a claimant. The decisions should be based with much more weight on the claimant’s own 

treating physicians opinions and medical records. In cases where SSD required medical exams are necessary, they should only be performed by 

board certified independent doctors who are specialists in the disabling 

condition that a claimant has (example—Rheumatologists for autoimmune 

148 

disorders, Psychologists and Psychiatrists for mental disorders). Currently 

this is often not the case. 

All Americans should be entitled to easy access (unless it could be proven 

that it is detrimental to their health) and be given FREE copies of their 

medical records including doctor’s notes at all times. This is crucial information for all citizens to have to ensure that they are receiving proper 

healthcare and a major factor when a person applies for Social Security 

Disability. 

ALL doctors should be required by law, before they receive their medical 

license, and made a part of their continuing education program to keep 

their license, to attend seminars provided free of charge by the SSA, in 

proper procedures for writing medical reports and filling out forms for Social Security Disability and SSD claimants. 

More Federal funding is necessary to create a universal network between 

Social Security, SSD/SSI and all outlets that handle these cases so that 

claimant’s info is easily available to caseworkers handling claims no matter 

what level/stage they are at in the system. All SSA forms and reports 

should be made available online for claimants, medical professionals, SSD 

caseworkers and attorneys, and be uniform throughout the system. One 

universal form should be used by claimants, doctors, attorneys and SSD 

caseworkers, which will save time, create ease in tracking status, updating 

info and reduce duplication of paperwork. Forms should be revised to be 

more comprehensive for evaluating a claimant’s disability and better coordinated with the SS Doctor’s Bluebook Listing of Impairments. 

Institute a lost records fine—if Social Security loses a claimants records/ files an immediate $1000 fine must be paid to claimant. 

Review of records by claimant should be available at any time during all 

stages of the SSD determination process. Before a denial is issued at any 

stage, the applicant should be contacted as to ALL the sources being used 

to make the judgment. It must be accompanied by a detailed report as to 

why a denial might be imminent, who made the determination and a phone 

number or address where they could be contacted. In case info is missing 

or they were given inaccurate information the applicant can provide the 

corrected or missing information before a determination is made. This 

would eliminate many cases from having to advance to the hearing and appeals phase. 

The SSA ‘‘Bluebook’’ listing of diseases that qualify a person for disability 

should be updated more frequently to include newly discovered crippling 

diseases such as the many autoimmune disorders that are ravaging our 

citizens. SSD’s current 3 year earnings window calculation method fails to 

recognize slowly progressive conditions which force people to gradually 

work/earn less for periods longer than 3 years, thus those with such conditions never receive their ‘healthy’ earnings peak rate. 

A majority of SSD claimants are forced to file for welfare, food stamps 

and Medicaid, another horrendous process, after they have lost everything 

due to the inadequacies in the Social Security Disability offices and huge 

claims processing backlog. If a healthy person files for Social Service programs and then gets a job, they do not have to reimburse the state once 

they find a job, for the funds they were given while looking for work—why 

are disabled people being discriminated against? Claimants who file for Social Service programs while waiting to get SSD benefits, in many states 

have to pay back the state out of their meager SSD/SSI benefits once approved, which in most cases keeps them below the poverty level and forces 

them to continue to use state funded services. They are almost never able 

to better themselves and now have to rely on two funded programs instead 

of just one. This practice should be eliminated. In all states there should 

be immediate approval for social services (food stamps, cash assistance, 

medical assistance, etc) benefits for SSD claimants that does not have to be 

paid back out of their SSD benefits once approved. 

The claims process should be set up so there is no need whatsoever for 

claimant paid legal representation when filing for benefits and very little 

need for cases to advance to the hearing and appeal stage since that is 

where the major backlog and wait time exists. The need of lawyers/reps to 

navigate the system and file claims, and the high SSD cap on a lawyer’s 

retro commission is also a disincentive to expeditious claim processing, 

since purposely delaying the claims process will cause the cap to max out— 

more money to the lawyer/rep for dragging their feet adding another cost 

burden to claimants. Instead, SS should provide claimants with a listing in 

149 

every state, of FREE Social Security Disability advocates/reps when a claim 

is originally filed in case their services may be needed. 

Audio and/or videotaping of Social Security Disability ALJ hearings and 

during IME exams allowed at all times to avoid improper conduct by 

judges and doctors. A copy of court transcript should automatically be provided to claimant or their representative within one month of hearing date 

FREE of charge. 

Strict code of conduct for Administrative Law Judges in determining 

cases and in the courtroom. Fines to be imposed for inappropriate conduct 

towards claimants. 

We have heard that there is a proposal to give SSD recipients a limited 

amount of time to collect their benefits. We are very concerned with the 

changes that could take place. Since every patient is different and their 

disabilities are as well, this type of ‘‘cookie cutter’’ approach is out of the 

question. We especially feel that people with psychological injuries or illness would be a target for this type of action. Some medical plans pay 80% 

for treatment of biological mental heath conditions, but currently Medicare 

only pays 50% for an appointment with a psychiatrist. This often prohibits 

patients from getting proper treatment and comply with rules for continual 

care on disability. The current disability review process in itself is very 

detrimental to a patient’s health. Many people suffer from chronic conditions that have NO cures and over time these diseases grow progressively 

worse with no hope of recovery or returning to the workforce. The threat 

of possible benefits cut off, and stress of a review by Social Security again 

is very detrimental to a recipients health. This factor needs to be taken 

into consideration when reforming the CDR process. 

NOTE: The problems with the Federal Social Security Disability program cause 

an extra burden on state Social Service programs, which could be greatly reduced 

once this Federal program is fixed, and the states along with the claimants would 

reap the benefits in the long run. State politicians need to put pressure on congress 

to put more funds into the SS system to hire more qualified claim examiners and 

better educate employees, doctors and the claimants themselves to speed up the 

process. 

In closing, most of us were once hard working, tax paying citizens with hopes and 

‘‘American dreams’’ but due to an unfortunate accident or illness, have become disabled to a point where we can no longer work. Does that mean we are not valuable 

to our country, or give the government and politicians the right to ignore or even 

abuse us? Due to circumstances beyond our control, and on top of our disabilities, 

we now live the American nightmare with no hope of relief in sight! Contrary to 

popular opinion, nobody willingly chooses this type of existence. Politicians are supposed to work FOR us not ignore us. Anyone reading this, could suddenly find themselves dealing with these issues in the future, and we are holding you accountable 

to fix these problems now! Nobody thinks this horrible existence could ever happen 

to them, but there are millions of Americans who are suffering and dying due to 

this negligence, and our lives depend on your cleaning up this mess immediately! 

Currently we are considered ‘‘disposable’’ people by general and government standards, so our cries and screams are ignored, they would prefer that we just shut up 

or die. I am here to tell you those days are over now. We are watching, we are waiting, we are disabled and we vote! 

f 

Statement of Laurie L. York, Austin, Texas 

Thank you for this opportunity to provide comments to this hearing on the Commissioner’s proposal to improve the disability claims process. I am an attorney in 

private practice representing clients in the Social Security Disability claims process. 

I. Introduction: 

Texas Disability Determination Services (DDS) is a fully federally funded unit operating under federal law to evaluate Social Security disability (SSDI and SSI) 

claims filed at the ‘‘initial’’ (initial and reconsideration) level in Texas at its central 

office in Austin as agent for the Social Security Administration (SSA). It was operated from 1969 to March 1, 2004 under the management of the Texas Rehabilitation 

Commission (TRC) by Texas state employees. 

TRC–DDS had a number of problems during the past few years, ranging from 

having the lowest ‘‘initial approval rate’’ in the nation in 2000—a 31% approval rate 

compared to a 45% rate nationally, the use of two tier ‘‘waiting list’’ processing by 

150 

‘‘fake examiners’’ (code names with forged signatures) on about 12,000 claims during 

a period of backlog in 2001, a widespread failure to do Vocational Evaluations and 

consider vocational factors in the determination of disability, the payment in excess 

of SSA rates for Consultative Evaluations (CE’s) to selected providers, the refusal 

to do CE’s on indigent claimants in some cases even when ordered by a SSA Administrative Law Judge (ALJ), and a low overall combined DDS and SSA approval rate 

for psychiatric conditions within the state. 

A review of the recent history of TRC and its DDS agency may be found in the 

testimony of Lawrence A. Plumlee, M.D. to this Subcommittee at the hearing of September 25, 2003, which is now available at http://waysandmeans.house.gov/hearings.asp?formmode=printfriendly &id=1847. Notably, the roughly 45 newspaper articles on the determination of Social Security disability in Texas published in the 

Houston Chronicle during 2001–3 are cited, mostly written by reporter Alan Bernstein. 

There are also indications that TRC–DDS has demonstrated an historic bias 

against chemical injury claims, as described in the testimony of Stephen A. McFadden, M.S. to this Subcommittee at the hearing of September 26, 2003, which is now 

available at http://waysandmeans.house.gov/hearings.asp? formmode=view&id=1837. 

This bias against chemical injury and treatment inconsistent with SSA national 

program standards is supported by statements made by Wesley Davis, the Spokesman of SSA Region VI, to the Houston Chronicle while trying to explain Texas’ having the lowest ‘‘initial approval rate’’ in the nation in 2000, first, in March 2001, 

by citing a large number of disability claims by ‘‘under-educated manual laborers 

in the oil industry and elsewhere’’ who ‘‘commonly get injured on the job’’ as an explanation—thus admitting not only the bias against chemical injury claims at TRC 

but the significance of the size of the impacted group (Houston Chronicle 3–11–01 

A.1.), and second, in June 2001, by the statement that Texas disability examiners 

‘‘reach different conclusions on cases that require certain judgements to be made on 

an individual’s capacity to work’’ than those of the rest of the nation, thus admitting 

a lack of equal protection of the laws in TRC’s DDS operation. (Houston Chronicle 

6–10–01 A.8). 

The impact of these historic policies at TRC–DDS and SSA Region VI are significant. The testimony of Stephen A. McFadden, M.S. to this Subcommittee at the 

hearing of January 26, 2004, which is available at http://waysandmeans.house.gov/ 

hearings.asp?formmode=printfriendly&id=2125&keywords=, estimates that between 

the 12,000 ‘‘fake examiners’’ cases, the bias against chemical injury claims by ‘‘oil 

well firefighters’’ cases, the failure to do Vocational Evaluations, and the bias 

against psychiatric conditions and those ‘‘regarded as psychiatric’’, in the context of 

having the lowest ‘‘initial approval rate’’ in the nation in 2001, approximately 30– 

50,000 otherwise legitimate Social Security claims were denied during the period 

from 1996–2003, or about 7–10% of the total Social Security disability claimant pool 

of about a half million recipients in Texas, with a total fiscal impact of about half 

a billion dollars during those years. 

This gross failure of the Social Security disability determination process in Texas 

cannot be excused on grounds of budgetary constraint. Only about 2–3 percent of 

the total SSA disability program budget is spent on claims determination. The 

Texas DDS operation has a target total determination cost of under $300 per claim. 

Obviously, $300 will not even buy the average claimant a Consultative Evaluation 

by a licensed physician. 

For Social Security disability claims to be determined for under $300 in Texas apparently requires a reduction in the number of Consultative Examinations and Vocational Evaluations performed by DDS, impacting claim documentation, and thus 

limiting the ability of decision makers (DDS DE’s and SAMC’s and SSA ALJ’s) to 

make a finding of disability based on evidence of a ‘‘medically determinable impairment’’ as required by SSA national program standards. 

Former Commissioner of Social Security Kenneth Apfel referred to the failure of 

TRC–DDS to do Vocational Evaluations or to train Disability Examiners (DE’s) to 

consider vocational factors in the determination of disability in a speech at a September, 2001 conference sponsored by the Disability Policy Consortium. ‘‘I don’t 

think you’ve done enough’’, said Apfel of the TRC–DDS’ consideration of vocational 

factors (Houston Chronicle article 10–18–01 A.29). 

Dallas SSA Administrative Law Judge (ALJ) Christopher Lee Williams sued 

TRC–DDS, TRC, and SSA in April 2001 because TRC–DDS refused to perform Consultative Examinations on indigent claimants whose cases he remanded back to 

TRC for further development, e.g. as is allowed under SSR 97–2p Prehearing Case 

Review, documentation without which ALJ Williams would presumably be forced to 

deny those claims for lack of evidence, for example due to lack of evidence of a psychiatric medical diagnosis on indigent homeless persons applying for disability. (WilVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00154 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
151 

liams v. Massanari, et al.; N.D. Texas Case No. 03:01CV816, filed 04–30 2001) ALJ 

Williams’ suit was dismissed for lack of standing on the ground he had not been 

harmed. Subsequently, a SSA audit found that DDS was paying selected providers 

in excess of SSA approved rates (March 11, 2004 A–15–02–12051 Audit Report.). 

Since the above cited testimonies were submitted to the Subcommittee, a number 

of changes have occurred in the determination of disability in Texas. 

• The Commissioner of TRC was replaced on November 1, 2003 after over 22 

years. • The Emeritus Chief State Agency Medical Consultant (SAMC), who had held 

the position of DDS Medical Director or Chief SAMC for much of the period 

1974–2000, retired about that time. • On March 1, 2004, TRC and its board were dissolved after 35 years of operation, with its DDS, Vocational Rehabilitation, and Early Childhood Intervention functions being integrated into the new Texas Department of Assistive and 

Rehabilitative Services (DARS), along with programs for the blind, deaf, and 

hard of hearing from other agencies, while internal support functions were spun 

off to the Texas Health and Human Services Commission (HHSC). • The TRC Deputy Commissioner for DDS was replaced on March 4, 2004, and 

the new head of Texas DDS, Mary Sconci-Wolfe, was given the title of DARS 

Assistant Commissioner for DDS. 

This reorganization occurred as part of plan to reorganize 12 state agencies with a total budget of $7 Billion into 4 new HHSC departments. As a result of these 

changes, TRC thus effectively ceased to exist as a government entity on March 1, 

2004. 

The Texas DDS operation, however, continues under the name DARS–DDS, at the 

same centralized office located at 6101 Oltorf, Austin TX, 78741, in the same locked 

facility with armed guards not open to the public, still operating under federal rules 

with federal funding. 

As of October, 2004, the new 9-member DARS ‘‘Assistive and Rehabilitative Services Council’’ has yet to be appointed by the governor, and thus DARS is still operating without board oversight more than six months after its creation. The lack of 

board oversight is significant because the statutory authority of DARS and its Council must be reformulated from the prior state statutes governing the several agencies from which DARS was formed, minus functions which in the future will be 

shared with other HHSC agencies. More importantly, this means that DARS–DDS 

is also operating without board oversight. This is an important factor in managing 

an agency with a long history of claimant due process and equal protection problems. 

As of October, 2004, the new DARS–DDS—now seven months old—is being operated by Mary Sconci-Wolfe, a former TRC manager, under the direction of DARS 

Commissioner Terrell I. Murphy (previously of head of the Texas Commission for 

the Blind). DARS operates under the direction of the newly appointed Texas HHSC 

Deputy Executive Commissioner for Social Services Anne Heiligenstein, and HHSC 

Executive Commissioner Albert Hawkins, who has presided over the Texas HHSC 

reorganization, without board oversight by the proposed Assistive and Rehabilitative 

Services Council, and with an incomplete statutory mandate. 

In short, TRC, its Commissioner, and its Board have been dissolved, and with it 

accountability for the operation of the DDS agency has been compromised, yet it 

would appear that the Texas DDS agency continues to operate much as before. 

II. TRC–DDS and SSA Region VI Policy: Backlogs, Waiting Lists, and ‘‘Fake Examiners’’: 

In order to better understand this history, I recently obtained under the Texas 

Public Information Act the official approved minutes of the TRC Board meeting of 

September 20, 2001, which was held at DDS less than 2 weeks after the Houston 

Chronicle published a photocopy of an internal TRC email assigning passwords for 

computer accounts for 25 ‘‘fake’’ names of ‘‘overtime’’ examiners. 

The TRC Board was a volunteer oversight board which nominally had six members. The newly appointed Chairman A. Kent Waldrep presided at the meeting, his 

predecessor having been named to the HHS Board leaving a vacancy. Board member Doyle was absent. The Commissioner of TRC, who normally attends, and TRC 

Medical Director did not attend, while the Associate Commissioner for Human Resources had recently ‘‘terminated his employment with TRC to relocate out of state.’’ 

The four attending members of the TRC Board heard Social Security Administration Region VI Commissioner Horace Dickerson give ‘‘an update on SSA’s review of 

TRC.’’ The highlighted sections of the discussion below are quoted directly from the 

official minutes: 

152 

‘‘Commissioner Dickerson stated that over the last two and a half years, SSA has 

not been able to provide all the funding needed by DDSs to process all of the claims 

that they have received. He acknowledged that this has resulted in backlogs this 

fiscal year across the nation, as well as in Texas. He stated that the $83 million 

in funding to Texas DDS this fiscal year will allow it to process about 230,000 

claims.’’ 

[Thus, SSA Region VI Commissioner Dickerson admitted to the TRC Board that 

the cause of the processing backlogs at TRC–DDS during 1999–2001, which precipitated subsequent problems, was lack of funding of DDS disability determinations 

by SSA. Notably, the cost of DDS disability determination is only about 2–3% of 

total disability program costs.] 

‘‘. . . He pointed out that Texas DDS has been recognized nationally as one of 

the best DDSs in the country. He also noted that in May 2001, Texas DDS received 

a Commissioner’s Citation, which is the highest honor that the Commissioner of 

SSA can bestow on a DDS, and this was based on their outstanding performance.’’ 

[Notably, Larry G. Massanari was Acting Commissioner of Social Security from 

March to November 2001, and this award was given the year after TRC–DDS had 

posted the lowest ‘‘initial approval rate’’ in the nation, while it had a backlog of 

about 3 months claims, just 4 months before the ‘‘fake examiner’’ scandal broke— 

a situation which was stated to exist for about a ‘‘year’’.] 

Allowance Rate. He explained that allowance rates do not measure the quality of 

DDS decisions, rather they reflect the number of people who apply, as well as the 

type and severity of the disabilities alleged by applicants. He revealed that one out 

of every thirty-five Texans receive a disability check under the Social Security program. He addressed the Chronicle’s comparison of Texas’ allowance rate to that of 

New Hampshire. He explained that New Hampshire also has one in thirty-five ratio, 

so the comparison is not a valid comparison. Commissioner Dickerson also noted 

that last year, SSA published new rules for evaluating mental impairments, which 

were expected to increase the allowance rate. Beginning in September, the allowance rate for Texas DDS increased significantly and, except for a few months early 

in this calendar year, the initial allowance rate in Texas paralleled that of the national average.’’ 

[In fact, the population ratio of persons on Social Security disability reflects determinations made over many years, whereas the determinations in 2000 in Texas 

were lower than in previous years, and increased after the rate became a controversial political issue. It may also be that, due to the use of manual labor in agriculture 

and hazards in the oil industry, there are more people disabled on a per-capita basis 

in Texas than in New Hampshire.] 

Overtime. He explained that earlier in the year, the Dallas Region, including 

Texas, recognized that the Region did not receive its appropriate share of the national Disability Determination funding. As a result of input by the Dallas Region, 

SSA increased the spending authorizations for Texas twice this calendar year. He 

pointed out that Texas DDS has escalated its hiring plans, has added over eighty 

DEs and over eighty adjudicators, and has implemented an overtime plan to reduce 

backlogs. 

Commissioner Dickerson stated that, contrary to the media reports, SSA was 

aware of DDS’ overtime plan and remarked that the practices used by Texas DDS 

are neither unusual nor improper. These are internal tracking measures used to 

track the processing of work. He stated that SSA has no requirements that DDS 

identify examiners on correspondence to claimants or attorneys. He noted that some 

states choose not to include examiners’ names on correspondence, primarily for security reasons. 

In conclusion, Commissioner Dickerson stated that SSA recognizes that there are 

problems in its Social Security Disability program. He noted that these problems are 

national in scope, and, to be succinct, there is more work than resources. This is 

true in Texas and the country. He stated that Deputy Commissioner Dave Ward and 

his management staff have done and continue to do what SSA thinks is a tremendous job for SSA and for the people of Texas and that SSA [Dallas Region] looks 

forward to a long association with them. 

[By his testimony to the TRC Board, SSA Region VI Regional Commissioner Horace Dickerson thus admitted SSA knowledge of, and sanction of, the use of two tier 

‘‘overtime’’ processing and ‘‘fake examiners’’ by TRC–DDS, as described by articles 

in the Houston Chronicle.] 

SSA Region VI Commissioner Horace Dickerson thus sanctioned the use of these 

questionable techniques by TRC–DDS by claiming, in short, that DDS is an agent 

of SSA, SSA is authorized under the Social Security Act to do whatever it wants, 

and he, as Regional Commissioner, therefore authorizes their use. Given the ReVerDate Aug 04 2004 00:02 Aug 20, 2005 Jkt 993682 PO 00000 Frm 00156 Fmt 6633 Sfmt 6621 E:\HR\OC\99682A.XXX 99682A
153 

gional Commissioner’s sanction, TRC–DDS and SSA Region VI itself are arguably 

running rogue ‘‘cowboy’’ operations. 

[Note that the ‘‘fake examiner’’ issue is not simply an internal accounting tool at 

TRC–DDS. The effect of a claim being placed on the ‘‘waiting list’’ was that no single 

Disability Examiner processed it, and thus no examiner understood the entirety of 

the claim, no examiner was accountable for the outcome, that this was different 

than normal claims not on this overtime plan, and that the selection criteria for 

placing claims on the ‘‘waiting list’’ has not been disclosed. There are thus major 

due process and equal protection issues with this practice, impacting claimants’ U.S. 

Constitutional and statutory rights.] 

TRC Board Members’ Questions/Comments 

Chairman Waldrep expressed his and the Board’s appreciation for Commissioner 

Dickerson’s remarks. 

Chairman Waldrep asked, what is your reaction to recent newspaper articles 

about using coded names to assign claims on overtime? 

Commissioner Dickerson explained that the methodology employed by DDS to 

manage overtime is an internal process, which helps staff to effectively manage the 

overtime. While it is not done at the direction of SSA, it does occur in other DDS 

Social Security field offices. From SSA’s vantage point, it is not done to mislead the 

public or the recipient to whom the correspondence is being sent. He again pointed 

out that some states, in the interest of security, do not include a name or even a 

signature block on correspondence. Commissioner Dickerson reiterated that SSA 

does not have a problem with the overtime methodology used by Texas DDS. 

Board member Novy asked, when a customer calls and asks for the name that 

was on the letter [DDS correspondence], how is the call received? Is there a specific 

person who takes the call? Is it based on the last name? How does this work? 

Deputy Commissioner Dave Ward responded that the last name of the DDS staff 

noted on the correspondence is that of the person to whom the case is assigned. 

That named person or the person’s designee, if he/she is not available, takes the 

call. The caseload is attended and the telephone calls are answered. 

Board member Novy stated that the process, as explained by Deputy Commissioner Ward, is acceptable as long as someone is taking calls. She explained that 

she is from Houston and regrets the type of reporting that has been done. It was 

unbalanced and hurtful to the good people who are doing good work. Ms Novy expressed her appreciation to Commissioner Dickerson for his attendance and for his 

comments. 

Vice Chairman Wilkerson stated that State Representative Coleman has requested a study of the DDS’s procedures for determining who is disabled, and asked 

if Commissioner Dickerson is aware of any issues or any areas in which TRC–DDS 

does not adhere to SSA procedures? 

Commissioner Dickerson responded that he is not aware of any areas in which 

TRC–DDS is not adhering to SSA rules. He stated that he is aware of the legislative 

directives surrounding this, but from SSA’s vantage point the DDS is adhering to 

all procedures. SSA is in fact working with DDS to make sure that it is aware of 

the allowance rate, initial claims, and claims that are processed in DDS. SSA plans 

to be very vigilant in providing information to DDS so that it can share the information with the Board and with others relating to the allowance rate at the appeals 

level at Social Security to ensure that a full picture is in place. 

Board member Stribling asked, if any differences were attributable to interpretation or whether interpretations were standardized? 

Commissioner Dickerson stated that the rules are standard, but there is a great 

deal of room for interpretation. SSA is working to streamline the process and refine 

the rules so that there will be uniformity in terms of interpreting what is done at 

SSA, and in making the disability decisions. He explained that they are not yet 

where they need to be, but they are working closely with their Administrative Law 

Judges (ALJ), the DDSs, and all of those who make decisions on disability claims 

to ensure that all are following the same rules and can arrive at the same place 

and make the right decision. 

[This statement must be considered in the light of the quote in the Houston 

Chronicle of SSA Region VI Spokesman Wesley Davis saying in June 2001 that 

Texas disability examiners ‘‘reach different conclusions on cases that require certain 

judgments to be made on an individual’s capacity to work’’. Note that SSA Region 

VI Commissioner does not deny that there are such differences.] 

Acting Commissioner Mary Wolfe stated that Texas DDS’ accuracy rating should 

speak to this issue as SSA examines the accuracy of the case work that is being 

done. 

154 

Commissioner Dickerson agreed with Ms. Wolfe’s statement. He further stated 

than not only is SSA very diligent at looking at the accuracy, it also wants to make 

sure that those who apply for and are entitled to benefits receive benefits, as well 

as making sure that those who do not meet the requirements do not receive benefits. To ensure accuracy, DDS has internal procedures to review the work that is 

produced. Additionally, there are pre-effectuation reviews, which are conducted before the decision is effectuated to ensure that decisions are in compliance with SSA 

rules. He reported that Texas DDS has the highest accuracy rate among the large 

states and in comparison with all other states, it has a very good rate of accuracy 

in production. 

Chairman Waldrep thanked Commissioner Dickerson for his attendance and for 

the partnership that TRC has shared with SSA in carrying out the job of serving 

people with disabilities in Texas. He attributed Commissioner Dickerson’s leadership as making the difference in that partnership and stated that the Board/TRC 

is grateful to have him in that position. 

Commissioner Dickerson stated that he appreciates the support that SSA has long 

received from TRC. He also expressed his appreciation for the leadership of Chairman Waldrep and Dave Ward and his management team, his medical consultants, 

and all the adjudicators, of whom Texas should be proud for the way in which they 

daily perform their duties and responsibilities. 

Chairman Waldrep stated he is very proud of DDS and all of the men and women 

who work hard every day to ensure that people in the state who have disabilities 

and who are eligible and deserve benefits receive benefits. He stated that he was 

disappointed in the Houston Chronicle and its reporting on DDS, which misleads 

the public into thinking that the agency is not doing its job. He requested that elected officials work in partnership with the agency, as Commissioner Dickerson and 

his office does, to ensure that DDS/TRC does its job. He stated TRC is not perfect 

but the history, facts, and figures conveyed by Commissioner Dickerson back up the 

agency’s pride in trying to be the very best in delivering services to the state. He 

stated that it is very discouraging when someone prints non-truths. Chairman 

Waldrep stated that he has met with the Governor’s Office and TRC has his full 

support. 

Chairman Waldrep stated if anyone has an issue with this agency or any other 

agency, please go to the agency first and work with the agency to find out the facts. 

Chairman Waldrep stated that he intends to write a letter to the editor of the 

Houston Chronicle and informed Commissioner Dickerson that he and his office 

have TRC’s full cooperation and support. 

III. TRC–DDS and SSA Region VI Policies versus SSA National Program Standards: 

The TRC Board meeting of September 20, 2001 meeting was chaired by Mr. A. 

Kent Waldrep, author of the book ‘‘Fourth and Long: The Kent Waldrep Story’’, who 

had incurred a spinal cord injury while playing football in college, is wheelchairbound, had been on the TRC Board since 1990, but had just been appointed as TRC 

Board Chairman by the Governor. This was Mr. Waldrep’s first meeting as Chairman. His predecessor of 15 years had recently resigned to accept an appointment 

to the HHS board by the Governor just as the 2000 ‘‘initial approval rate’’ scandal 

broke at DDS. TRC Board members including the Chairman were volunteers, and 

had limited authority, acting only to direct the Commissioner—represented in this 

meeting by Acting Commissioner Mary Sconci-Wolfe. The absence of the TRC Commissioner, who had held that position for 20 years, and the TRC Medical Director 

from the meeting, during this controversial period is notable. Mr. Waldrep’s experience with DDS was in fact quite limited, in that as late as the prior quarterly meeting he demonstrated a lack of understanding of the basic fact that DDS is fully a 

federally funded agency that brings money into the state rather than a state funded 

assistance program that takes money out of the state budget. Some might wonder 

if such Chairmanship of the Board in the midst of this crisis might deflect criticism 

from the Board’s management of the agency. The effect of the letters that Mr. 

Waldrep speaks of writing in this passage in order to try to publicly justify TRC– 

DDS’s position and to create harmony may be found in the Houston Chronicle on 

October 14, 2001 A.39 and October 17, 2001 p28. 

The absence of senior TRC officials, and the effusive mutual praise lavished 

among the participants upon each other in the discussion of DDS operations, must 

both be considered in light of the seriousness of the charges that had been made. 

The Houston Chronicle had published copies of forged signatures by DDS examiners 

less than two weeks before, supporting a presumption of 12,000 counts of document 

fraud and Fourteenth Amendment violations of due process and equal protection of 

the laws by state TRC–DDS managers against Texas Social Security disability 

155 

claimants. These are acts which may arguably include civil liability under 42 U.S.C. 

1985 ‘‘Conspiracy to interfere with civil rights’’ and 42 U.S.C. 1986 ‘‘Action for neglect to prevent’’, not to mention criminal civil rights violations under 18 U.S.C. 

Part I Chapter 13, including conspiracy, against both DDS and TRC, and Fifth 

Amendment due process and statutory equal protection violations by SSA Region VI 

officials and their managers. 

Should there be any question whether these policies were in fact sanctioned by 

SSA, including 1) failure by SSA to properly fund the Texas DDS operation, 2) the 

use of two tier ‘‘overtime processing’’ (unequal treatment), and 3) ‘‘fake examiners’’ 

(document fraud and due process violations), 4) a bias against chemical injury 

claims, and 5) state disability determination standards ‘‘different’’ than in the rest 

of the nation, one need only observe that Social Security Region VI Commissioner 

Horace Dickerson—who stood before the TRC Board to admit the failure of SSA to 

adequately fund TRC–DDS determinations and to justify the use of ‘‘overtime processing’’ and ‘‘fake examiners’’, and Region VI Spokesman Wesley Davis, who admitted a bias against chemical injuries and ‘‘different’’ determination standards in 

Texas as compared to other states to a Houston Chronicle reporter, still hold those 

positions at SSA Region VI as of October, 2004, more than 3 years after the events 

described above occurred. 

The references to the high ‘‘accuracy’’ of TRC–DDS disability determinations must 

be considered in the context of the limited opportunity for appeal above the ALJ 

level or for judicial review in the SSA disability process, particularly for Pro Se 

claimants in Federal District Courts (FDC) of Texas. The SSA Region VI Commissioner backed the policies of TRC–DDS, which may include policies admitted by Regional Spokesman Wesley Davis in June 2001 to be ‘‘different’’ than in other states, 

so a significant number of reversals by Region VI ALJ’s acting under the direction 

of the Region VI Chief ALJ in Dallas would not be expected. The suit by ALJ Christopher Lee Williams might be seen as an example of this—not even a Dallas ALJ 

could challenge the TRC–DDS policy denying Consultative Examinations to indigent 

claimants in April 2001. ALJ denials may be appealed to the SSA Appeals Council 

(AC) in Falls Church, VA, however, as of 1995, the AC remanded cases back to the 

ALJ in about 24% of AC appeals nationally, and reversed decisions in only about 

3% of appeals—about 1,600 SSDI and SSI reversals in 1995. In 1995 only about 680 

claims were reversed in FDC reviews nationally. 

IV. TRC–DDS Allowed Reimbursement Rates for Consultative Examinations in Excess of SSA Rates for Selected Hospitals; SSA Region VI Did Not Manage DDS 

Appropriately: 

Recently, the SSA Office of Inspector General audited $247,350,859 in administrative costs that TRC reported for TX–DDS operations for the period October 1, 1998 

through September 30, 2001, including the rates that Texas DDS reimbursed hospitals for Consultative Examinations (CE’s), some of which were in excess of the 

Maximum Allowable Payment Schedule (MAPS)—although they were equal to that 

used in the TRC Vocational Rehabilitation program, and the management of these 

rates by SSA Region VI officials. (Office of the Inspector General, Social Security 

Administration, ‘‘The Administrative Costs Claimed by the Texas Disability Determination Services, March 2004 A–15–02–12051 Audit Report’’) The SSA OIG concluded, in summary, that TRC–DDS paid selected hospitals more than allowed by 

SSA for CE’s, and that TRC–DDS felt that they had been authorized by SSA Region 

VI to do so, but the OIG found no records of such an authorization. 

‘‘We attempted to find out if any special waiver or privilege was provided to hospitals with RCCs. According to the SSA Dallas RO, the RCC rates were implemented a number of years ago when different SSA and DDS employees were involved in overseeing these issues. The validity of their use had never been discussed. . . .’’ 

’’We believe that the RCC is not a part of the TX–DDS fee schedule. The SSA 

Regional Office and TX–DDS disagreed with us. We believe that SSA needs to obtain a formal determination from its Office of General Counsel to resolve this issue. 

We believe that SSA should recover the payments in excess of MAPS unless the Office of General Counsel makes a formal determination that the RCC is part of TX– 

DDS’ official fee schedule.’’ . . . 

‘‘We compared the amount that was authorized to be paid under MAPS to the 

amount actually paid the hospital using an RCC. We found of the 52,692 records 

paid using RCC, 49,071 exceeded MAPS. The amount paid to hospital providers exceeded the MAPS allowed amount by $3,611,678. . . .’’ 

‘‘Indirect costs for TX–DDS are determined under a negotiated annual indirect 

cost rate agreement. The TX DDS computes its indirect costs by multiplying the approved percentage rate to the direct costs of the TX–DDS. Some direct costs, such 

156 

as, (capital) equipment, building alterations, and renovations are not to be included 

as part of the base. The annual indirect cost rate is for a State FY (September 1st 

through August 31st). CE costs are included in the base for the computation of indirect costs. . . .’’ 

‘‘We believe the SSA Regional Commissioner should instruct the TX–DDS to conform to the POMS by adhering to MAPS, the authorized fee schedule, for paying 

hospital provider CEs. Lastly, the RO should more closely monitor TX–DDS fees 

paid for CEs. . . .’’ 

‘‘As a result of our audit, we recommend that: 

1. SSA require that TRC adhere to POMS DI 39545.210, 1.a., requiring CE payment amounts not to exceed the authorized fee schedule and specifically, discontinue selectively paying Texas hospitals higher amounts than the approved 

fee schedule. 

2. TRC, pending the SSA Office of General Counsel’s determination, reimburse SSA $3,611,679, resulting from CE payments in excess of the authorized fee 

schedule known as MAPS. The TX–DDS should adjust their financial reports, 

Forms SSA–4513, accordingly. 

3. TRC, pending the SSA Office of General Counsel’s determination, reimburse SSA $359,515 for indirect costs paid as a result of the overstated direct cost 

base (CEs in excess of MAPS.) The TX–DDS should adjust the financial reports, Forms SSA–4513, accordingly. 

4. SSA’s Dallas RO more closely monitor the fees paid by TRC for CEs. 

5. SSA seek a legal opinion as to whether the use of the RCC method, which allows the TX–DDS to pay hospital providers a percentage of their normal customary billing amount for CEs, constitutes a fee schedule in accordance with 

POMS and Federal regulations. SSA should then establish a clear policy on 

contracts with CE vendors and ensure that policy is implemented consistently 

across the DDSs. (This is a new recommendation added to our final report 

which was not included in the draft report provided to SSA and TRC for comments.)’’ 

‘‘. . . For Recommendations 2 and 3, both SSA and TRC disagreed with reimbursing the excess funds drawn by the DDS. In SSA’s response, the Regional Commissioner stated it is difficult to know what happened in the past since the staff making earlier decisions are no longer overseeing DDS operations and may have discussed the TX DDS’ RCC method. TRC indicated that before the RCC method was 

established, extensive research, study, and vendor negotiations were undertaken to 

arrive at rates that would assure clients received quality medical services at the 

best price. SSA’s comments, in and of themselves, do not provide sufficient evidence 

of whether the Regional Commissioner or his staff gave explicit or implicit approval 

of the TX–DDS’ use of the RCC methodology. . . .’’ 

‘‘With respect to our recommendations that SSA seek reimbursement, the Regional Commissioner continues to request that these recommendations be removed, 

or at least deferred until the legal issues have been resolved.’’ 

Notably, the above policies were undoubtedly effected during the 22 year tenure 

of TRC Commissioner Vernon Arrell 1981–2003, and at least continued under the 

tenure of TRC Deputy Commissioner for DDS Dave Ward 1996–2002. This clearly 

indicates that TRC–DDS engaged in purchasing expenditures in violation of SSA 

national program standards during 1998–2001, SSA Region VI did not either enforce the SSA standards or provide a waiver, and that Region VI and TRC–DDS 

have placed the blame on former managers and asked that reimbursement be 

waived. Note, however, that the overpayment to selected hospitals by DDS occurred 

even while DDS refused to do CE’s on indigent claimants whose claims were remanded to DDS by ALJ Christopher Lee Williams, and thus claimants’ rights to due 

process may have been affected. 

SSA Region VI Commissioner thus sanctioned after-the-fact the excess payments 

by TRC–DDS to selected hospitals performing CE’s in violation of SSA national program standards, against the opinion of the SSA Office of Inspector General, despite 

the fact that other claimants at the time were denied CE’s, thus arguably denying 

them their U.S. Constitutional and statutory rights to due process and equal protection of the laws. A review of operations 1998–2002 thus shows that SSA Region VI 

and TRC–DDS were rogue ‘‘cowboy’’ operations that failed to enforce claimants 

rights to due process and equal protection of the laws in accordance with SSA national program standards. 

V. Summary: 

The failure of SSA to adequately fund TRC–DDS to do disability determinations 

during 1999–2001 has been admitted by SSA Region VI Commissioner Horace 

157 

Dickerson. (Testimony to TRC Board, minutes 9/20/01.) An SSA OIG Audit has 

shown that TRC–DDS overpaid certain medical providers for Consultative Examinations during 1998–2001. (‘‘March 2004 A–15–02–12051 Audit Report’’) This occurred 

even while indigent claimants were denied CE’s in 2001. SSA Region VI Commissioner argued against repayment. The use of two-tier ‘‘waiting list’’ (unequal treatment) processing and ‘‘fake examiners’’ (document fraud) by TRC–DDS was also 

sanctioned by SSA Region VI Commissioner Horace Dickerson, who still holds that 

position. (Testimony to TRC Board, minutes 9/20/01.) 

A bias against chemical injury claims, e.g. of workers disabled ‘‘in the oil industry 

and elsewhere’’ who ‘‘commonly get injured on the job’’ but are not considered totally 

disabled by TRC–DDS was admitted in March 2001, as was the fact that Texas disability examiners ‘‘reach different conclusions’’ than those in other states was admitted in June 2001, by SSA Region VI Spokesman Wesley Davis, who still holds that 

position. (Houston Chronicle 3–11–01 A.1, 6–10–01 A.8.) 

SSA Region VI and Texas DDS have demonstrated a willingness to compromise 

claimant rights to due process and equal protection of the laws in order to meet 

budgetary targets and engage in improper bias. Several tens of thousands of Social 

Security disability claims were denied as a result, with a fiscal impact on the disabled of on the order of several hundred million dollars during that era. According 

to the OIG, $3.6 million was spent improperlybetween 1998 and 2001 due to lack 

of oversight of TRC–DDS by SSA Region VI. It is thus clear that TRC–DDS and 

SSA Region VI during this era were rogue ‘‘cowboy’’ operations. Such injustice demands timely remedy. 

Æ