[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
              OVERSIGHT OF THE DISABILITY APPEALS PROCESS

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 24, 1997

                               __________

                             Serial 105-11

                               __________

         Printed for the use of the Committee on Ways and Means



                               




                    U.S. GOVERNMENT PRINTING OFFICE
 43-586 CC                WASHINGTON : 1998
______________________________________________________________________________
              For sale by the U.S. Government Printing Office
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                      COMMITTEE ON WAYS AND MEANS

                      BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
BILL THOMAS, California              FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida           ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut        BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky                WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania      KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri

                     A.L. Singleton, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                    Subcommittee on Social Security

                    JIM BUNNING, Kentucky, Chairman

SAM JOHNSON, Texas                   BARBARA B. KENNELLY, Connecticut
MAC COLLINS, Georgia                 RICHARD E. NEAL, Massachusetts
ROB PORTMAN, Ohio                    SANDER M. LEVIN, Michigan
JON CHRISTENSEN, Nebraska            JOHN S. TANNER, Tennessee
J.D. HAYWORTH, Arizona               XAVIER BECERRA, California
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri


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. The electronic version of the hearing record does not 
include materials which were not submitted in an electronic format. 
These materials are kept on file in the official Committee records.


                            C O N T E N T S

                               __________

                                                                   Page

Advisory of April 17, 1997, announcing the hearing...............     2

                               WITNESSES

Social Security Administration, Carolyn W. Colvin, Deputy 
  Commissioner, Programs and Policy; accompanied by Rita Geier, 
  Associate Commissioner, Hearings and Appeals, and Arthur Fried, 
  General Counsel................................................     5
U.S. General Accounting Office, Jane L. Ross, Director, Income 
  Security Issues, Health, Education, and Human Services 
  Division; accompanied by Cynthia Bascetta, Assistant Director, 
  Income Security Issues, Health, Education, and Human Services 
  Division.......................................................    58

                                 ______

Association of Administrative Law Judges, Inc., Hon. Ronald G. 
  Bernoski.......................................................    80
National Association of Disability Examiners, Debi Gardiner, and 
  Tom Christopher................................................    95
National Council of Disability Determination Directors, Douglas 
  W. Willman.....................................................    74
National Organization of Social Security Claimants' 
  Representatives, Nancy G. Shor.................................   107
National Treasury Employees Union, James A. Hill.................    98

                       SUBMISSIONS FOR THE RECORD

Allsup, Inc., Belleville, IL, James F. Allsup, statement.........   130
American Bar Association, John H. Pickering, statement...........   131
Fusco, Victor, Scheine, Fusco, Brandenstein & Rada, P.C., 
  Woodbury, NY, letter...........................................   133
Mooney, Michael J., Mooney & Park, Cincinnati, OH, letter........   143
Public Employees Federation, New York, NY, Larry Jacks, statement   146



              OVERSIGHT OF THE DISABILITY APPEALS PROCESS

                              ----------                              


                        THURSDAY, APRIL 24, 1997

                  House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:04 a.m., in 
room 1100, Longworth House Office Building, Hon. Jim Bunning 
(Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

FOR IMMEDIATE RELEASE                      CONTACT: Ari Fleischer or  

April 17, 1997                             Scott Brenner (202) 225-8933


No. SS-3

                      Bunning Announces Hearing on
              Oversight of the Disability Appeals Process

    Congressman Jim Bunning (R-KY), Chairman, Subcommittee on Social 
Security of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing on oversight of the disability appeals 
process. The hearing will take place on Thursday, April 24, 1997, in 
the main Committee hearing room, 1100 Longworth House Office Building, 
beginning at 9:00 a.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 Committee and for 
inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    The Social Security Disability Insurance (DI) program provides cash 
benefits to insured, severely disabled workers. Applications for 
disability benefits are filed with one of the Social Security 
Administration's (SSA's) more than 1,300 field offices. Applications, 
along with supporting medical evidence, are then forwarded to State 
disability determination services (DDSs), which make the initial 
medical determination of disability according to SSA's policy and 
procedures. Applicants who are dissatisfied with an initial 
determination may request reconsideration by different staff at the 
DDS. Applicants who disagree with a reconsideration denial have the 
right to appeal the decision to the Office of Hearings and Appeals 
(OHA), where cases are heard by administrative law judges (ALJs).
      
    A steadily increasing number of appeals has caused workload 
pressures and processing delays, particularly for OHA. In the decade 
ending in 1995, the number of disability cases appealed to OHA had 
increased by about 140 percent. Despite SSA's attempts to manage this 
workload, between 1985 and 1995, its inventory of appealed cases 
increased from about 107,000 to almost 548,000. The case inventory was 
reduced to 511,000 at the end of 1996. However, some individuals who 
appeal their disability claims report unsatisfactory public service 
after waiting over a year for their appeal to be processed.
      
    In addition, decisional inconsistency between DDSs and ALJs 
continues to lower public confidence in the disability program. In 
1996, approximately 75 percent of individuals who were denied benefits 
by DDSs appealed their decisions to an ALJ. On average, ALJs are 
reversing DDS decisions 67 percent of the time. Last year, Chairman 
Bunning asked the General Accounting Office (GAO) to report on factors 
that contribute to differences between DDS and ALJ decisions and what 
actions SSA is taking to obtain greater consistency between the 
decisions in initial and appealed cases.
      
    Over the past few years, SSA has initiated both near-term and long-
term initiatives to improve public service. These initiatives include 
the Short-Term Disability Plan (an initiative to reduce case 
inventories at OHA) and SSA's Plan for a New Disability Claim Process, 
referred to as the ``redesign plan,'' to address systemic problems 
contributing to inefficiencies in the disability program.
      

FOCUS OF THE HEARING:

      
    During the hearing, the Subcommittee will: (1) review the current 
status of OHA workloads and their impact on service to the public; (2) 
examine the effects of SSA's short- and long-term initiatives to 
address those workloads, including what is working, what isn't working 
and what else needs to be done; and (3) consider the findings of the 
GAO regarding SSA's management of the timeliness and consistency of 
SSA's disability decisions.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Any person or organization wishing to submit a written statement 
for the printed record of the hearing should submit at least six (6) 
copies of their statement and a 3.5-inch diskette in WordPerfect or 
ASCII format, with their address and date of hearing noted, by the 
close of business, Thursday, May 8, 1997, to A.L. Singleton, Chief of 
Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 
Longworth House Office Building, Washington, D.C. 20515. If those 
filing written statements wish to have their statements distributed to 
the press and interested public at the hearing, they may deliver 200 
additional copies for this purpose to the Subcommittee on Social 
Security office, room B-316 Rayburn House Office Building, at least one 
hour before the hearing begins.
      

FORMATTING REQUIREMENTS:

      
    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit 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.
      
    1. All statements and any accompanying exhibits for printing must 
be typed in single space on legal-size paper and may not exceed a total 
of 10 pages including attachments. At the same time written statements 
are submitted to the Committee, witnesses are now requested to submit 
their statements on a 3.5-inch diskette in WordPerfect or ASCII format.
      
    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. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.
      
    4. A supplemental sheet must accompany each statement listing the 
name, full address, a telephone number where the witness or the 
designated representative may be reached and a topical outline or 
summary of the comments and recommendations in the full statement. This 
supplemental sheet will not be included in the printed record. The 
above restrictions and limitations apply only to material being 
submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press 
and the public during the course of a public hearing may be submitted 
in other forms.
      

    Note: All Committee advisories and news releases are available on 
the World Wide Web at `HTTP://WWW.HOUSE.GOV/WAYS__MEANS/'.
      

    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 202-225-1904 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.

                                

    Chairman Bunning. The Subcommittee will come to order.
    This morning, the Subcommittee picks up where it left off 
the last Congress examining the management of the disability 
program at SSA, the Social Security Administration. Today, as 
before, we will focus on, number one, the action SSA is taking 
to address the tremendous backlog of cases, waiting for a 
decision at the appeals level; and, number two, learn more 
about why there is a decisional inconsistency between the 
examiner physician teams who make decisions at the State 
disability determination agencies and ALJs, the administrative 
law judges.
    As I have stated before, my primary objective in looking 
into the disability program is to make sure that those who are 
truly disabled receive benefits quickly and relatively easily 
and that those who have recovered and are no longer eligible 
for benefits are removed from the rolls. Effective customer 
service and public confidence must be restored at SSA, 
especially in the disability program. It is still difficult for 
persons with disabilities to believe they are receiving 
adequate services when they are forced to wait 1 year or longer 
for a decision, and it is extremely disheartening to the 
American taxpayers to hear their hard-earned dollars are 
supporting disability benefits for people who are able to work.
    It is clear from testimony we will hear today that SSA is 
trying to make progress. I am pleased to hear about these 
efforts and look forward to hearing the details.
    During the 104th Congress, I asked GAO to investigate the 
reasons for the inconsistencies between the decisionmakers at 
different levels of the disability determination process at 
SSA. Today, they will share with us their findings.
    We will conclude with testimony from a panel of witnesses 
who work in the disability process every day. I believe they 
will be able to give us valuable insight into what is working, 
what isn't working, and offer their suggestions for 
improvement.
    In the interest of time, it is our practice to dispense 
with opening statements, except from the Ranking Democrat 
Member. All Members are welcome to submit statements for the 
record. I yield to Congresswoman Kennelly for any statement she 
wishes to make.
    Mrs. Kennelly. Thank you, Mr. Chairman.
    I venture to say most Americans don't spend a great deal of 
time thinking about the disability appeals process. If they do 
think about it, they are hoping they will never have to use it, 
but if misfortune comes their way and they are forced to apply 
for disability benefits, there are probably two things they 
will expect from the process--let it be speedy and let it be 
fair.
    They want to receive their benefits in a timely fashion. 
They want to be treated fairly by the Federal Government.
    The backlog of cases at the Office of Hearings and Appeals 
is currently nearly half a million cases. Moreover, applicants 
who appeal their cases wait well over 1 year, on average, 
before they receive a decision. Such a lengthy wait can cause 
severe financial hardship for many disabled people who are 
unable to support themselves through work.
    SSA has taken some positive steps to reduce these backlogs 
and has had some measures of success, but progress remains 
slow.
    I look forward today to hearing more from SSA about the 
effectiveness of its activities in this area. In addition to a 
swift decision, the public has a right to expect a fair 
hearing. Most people would expect to receive a hearing before 
an individual with some independence from the agency. This is 
the agency, after all, that has rejected the applicant's claim 
for benefits. If the public does not believe that SSA provides 
a fair and impartial hearing, then more people will appeal 
their decisions to the Federal courts. The result will be to 
clog the Federal court system and further delay decisions. I 
don't believe that is a result anyone desires.
    Clearly, a very high reversal rate for ALJs is in no one's 
best interest. It is slow, expensive, and undermines the 
integrity of the process. However, the public must be confident 
that when they have been inappropriately denied benefits, they 
will nevertheless receive a fair an impartial hearing on that 
denial.
    It was not so long ago in the early eighties that the 
public concluded that applicants were being unjustly denied 
benefits, and ALJs were applauded for their independence and 
willingness to buck the agency by reversing DDS, disability 
determination services, denials. We must be careful the 
administration plan which we put in place to streamline the 
process and speed decisions does not have the potential to 
strangle the fair hearing process. No one would be the winner 
in that case.
    Thank you, Mr. Chairman.
    Chairman Bunning. Thank you, Mrs. Kennelly.
    Today, we will begin with testimony from--if the first 
panel will be seated--Carolyn Colvin. Is that correct?
    Ms. Colvin. Yes.
    Chairman Bunning. From the Social Security Administration, 
Ms. Colvin is the Deputy Commissioner for Programs and Policy. 
She is accompanied by Rita Geier, Associate Commissioner for 
Hearings and Appeals; and Arthur Fried, General Counsel.
    Ms. Colvin, would you please begin.

 STATEMENT OF CAROLYN W. COLVIN, DEPUTY COMMISSIONER, PROGRAMS 
AND POLICY, SOCIAL SECURITY ADMINISTRATION; ACCOMPANIED BY RITA 
   GEIER, ASSOCIATE COMMISSIONER, HEARINGS AND APPEALS; AND  
                ARTHUR  FRIED,  GENERAL  COUNSEL

    Ms. Colvin. Good morning, Mr. Chairman, Members of the 
Subcommittee. I am very pleased to be here to discuss the 
Social Security disability appeals process today.
    To my right is Rita Geier, who is the Associate 
Commissioner of the Office of Hearings and Appeals, and to my 
left is Arthur Fried, who is our General Counsel.
    We appreciate the opportunity to submit a statement for the 
record. I will describe today many short-term and long-term 
initiatives designed to strengthen and streamline our appeals 
process.
    It is important to note that more than 70 percent of the 
beneficiaries awarded disability benefits in 1996 were allowed 
by the DDS. Fewer than 30 percent were allowed at the ALJ 
hearing level or at a higher appellate level.
    I also want to stress that there is one and only one 
standard for determining disability at all levels of the 
adjudicative process.
    A fundamental goal of SSA's effort to redesign its 
disability process is to make the correct decision as early in 
the process as possible. When developing our redesign strategy, 
we recognized that, in order to achieve this goal, we needed to 
minimize those factors within our control which contribute to 
the variance in allowance rates between the DDSs and ALJs. 
Collectively, we are calling these initiatives Process 
Unification. Our goal is to achieve similar results on similar 
cases at all stages of the process, through consistent 
application of laws, regulations, and rulings with minimal or 
no impact on program costs.
    I am proud to report that SSA has made significant strides 
toward this goal. One of the factors we have identified as 
contributing to the different allowance rates is the different 
approaches the DDSs and the ALJs take in evaluating claims 
which can lead to different conclusions in a particular case. 
These are areas which are highly complex.
    Last year, we published eight new Social Security rulings 
clarifying policy in these complex areas designed to assist all 
decisionmakers in applying the policy in the same way. To 
assure consistent application of these rulings, we conducted 
for the first time joint training for SSA's 15,000 disability 
adjudicators. The hearings level allowance rate declined to 59 
percent in fiscal year 1996, and data for the second quarter of 
fiscal year 1997 indicate an increase in the initial and 
reconsideration allowance rates at the DDS with an accompanying 
further decrease in the ALJ allowance rate.
    Some of this likely can be attributed to the new rulings 
and the training. Another initiative designed to improve 
consistency is the development of a single presentation of 
policy that is binding on all decisionmakers. This will ensure 
that different presentations of policies do not result in 
different outcomes.
    We are taking several other crucial steps, for instance, 
preparing revised regulations clarifying the ALJ's 
responsibility for considering the medical opinions of DDS 
physicians. It must be kept in mind, however, that because of 
the new information presented by the claimant as well as other 
factors, most ALJ allowances are based on a substantially 
different case than the case evaluated by the DDS. Therefore, 
as part of our Process Unification effort, we are trying to 
minimize this effect by permitting the ALJs to remand cases to 
the DDS for a review when new medical evidence is received 
prior to the hearing being scheduled. This will permit the DDS 
to change its denial to an allowance which will result in fewer 
cases going to hearing. For cases that the DDSs do not allow, 
the ALJ will benefit from the DDS' assessment of the new 
evidence.
    Additionally, SSA recently published a ruling reemphasizing 
its acquiescence policy, and one of the initiatives in Process 
Unification is to streamline the process for issuing these 
rulings.
    Under SSA's acquiescence policy, SSA issues a ruling in all 
cases where the final circuit court decision conflicts with SSA 
policy and SSA decides not to appeal the decision to the 
Supreme Court. Our adjudicators are not authorized to give 
precedential weight to the circuit court decision until these 
rulings are issued.
    Another key initiative in Process Unification is 
implementation of preeffectuation quality review of OHA 
allowances. Under this initiative, the Office of Program 
Integrity Review will screen approximately 10,000 favorable 
hearing decisions each year and forward the case to the Appeals 
Council if a possible error is detected.
    It is important to note, however, that the hearings process 
is different by design from the DDS process. Claims heard by 
the ALJ generally are the most complex and the toughest to 
evaluate. It is entirely appropriate for such cases to be heard 
in a more formal setting allowing presentation of testimony and 
questioning of witnesses.
    At the same time, we want accurate decisions and more 
consistency in our decisionmaking process. To achieve this 
goal, SSA is developing a clear vision of what the future of a 
quality review should be, a more comprehensive review program 
that better defines its quality standards, communicates more 
effectively to employees, and continually provides the 
employees with a means to achieve them.
    Mr. Chairman, I would like to very briefly address the 
increased disability workloads which have required us to 
evaluate ways to process cases more efficiently. SSA's short-
term disability project successfully achieved a substantial 
near-term reduction in both initial and appeals backlogs. From 
the inception of the project through the end of fiscal year 
1995, the number of initial claims pending in the DDS was 
reduced by more than 120,000. And, since its inception, SSA 
increased hearing dispositions by almost 100,000 cases.
    In another effort to reduce OHA pendings, over 300 ALJs 
were hired during the course of fiscal years 1994 and 1995.
    The plan for a new disability claim process represents a 
long-term initiative to provide world class service within 
available resource levels by redesigning SSA's disability 
process. The streamlined process is expected to significantly 
reduce the time and resources needed to process disability 
cases through the hearing stage.
    In closing, Mr. Chairman, I want to thank the Subcommittee 
for the opportunity to address these important issues. With the 
assistance of Ms. Geier and Mr. Fried, we would be very happy 
to answer any questions you may have.
    [The prepared statement follows:]

Statement of Carolyn W. Colvin, Deputy Commissioner, Programs and 
Policy, Social Security Administration

    Mr. Chairman and Members of the Subcommittee:
    I am pleased to be here today to discuss the workloads at 
our Office of Hearings and Appeals (OHA), and the General 
Accounting Office's (GAO) findings on inconsistencies in 
disability decisionmaking at different levels of the 
adjudicatory process. As described below SSA is working on 
myriad initiatives designed to improve and streamline the 
appeals process. These include short-term initiatives designed 
to improve our processing time, as well as long range 
initiatives such as the implementation and testing of several 
elements of our disability process redesign.

                       Disability Claims Process

    Mr. Chairman, a brief overview of the disability process 
might help put this statement in context. The Social Security 
Act broadly defines disability as the inability to engage in 
any substantial gainful activity. The Act requires the 
Commissioner of Social Security to prescribe rules for 
obtaining and evaluating evidence and making disability 
decisions. The law further requires that initial disability 
determinations be generally made by State Disability 
Determination Services (DDSs) following Federal rules and 
guidelines and financed by Federal funds.

State DDS Process

    In the State DDS, a team composed of a disability examiner 
and a physician (or sometimes a psychologist) makes the 
disability determination based on an evidentiary record. The 
State DDS requests medical evidence from the treating 
physician(s) and other sources identified by the claimant. If 
that evidence is incomplete or conflicting, the disability 
examiner may request a consultative examination from the 
claimant's treating physician or a physician under contract to 
the DDS to perform these examinations. If necessary, the 
examiner will also obtain evidence from the claimant's family, 
friends, or other third parties which will help explain how the 
individual's impairment(s) affects his or her ability to work. 
The team then considers all medical and other evidence to make 
the disability determination; if the claimant is not disabled, 
the DDS releases a denial notice to the claimant.

Appeals Process

    A person who is denied disability benefits may pursue an 
appeal through three administrative levels, one at the State 
DDS and two at SSA, and the Federal courts. The Act requires 
the Commissioner to provide a dissatisfied claimant the 
opportunity for a hearing before an SSA administrative law 
judge (ALJ), and allows for filing of a civil suit in Federal 
court after the Commissioner's final decision. SSA has also 
provided a reconsideration review at the State DDS prior to the 
hearing and a final review after the hearing by SSA's Appeals 
Council.
    Reconsideration is the first administrative review for 
claimants and is a de novo (fresh) review of the claims file 
(including any new evidence) by a State DDS doctor/examiner 
team who did not participate in the original decision. The new 
team considers all of the evidence and issues a reconsideration 
decision.
    The second level of administrative appeal is a de novo 
hearing before an administrative law judge (ALJ). The ALJ can 
call on medical and vocational experts to assist in evaluating 
the evidence. Usually the claimant will obtain legal 
representation at this point. Frequently new evidence is 
introduced by the claimant and his or her representative, often 
at the hearing itself. They are allowed to present testimony to 
the ALJ in person, to subpoena witnesses, and to obtain answers 
to interrogatory requests.
    The final administrative appeal level is the Appeals 
Council (a group of 24 administrative appeals judges), which 
may grant, deny, or dismiss a request for review of the ALJ 
decision. It will grant review if the ALJ decision contains an 
error of law, is not supported by substantial evidence, 
involves a broad policy issue, or there appears to be an abuse 
of discretion by the ALJ. After an unfavorable Appeals Council 
decision or an Appeals Council dismissal, if the claimant is 
still dissatisfied, the next step is filing a civil action in 
Federal court.

Allowance Rates

    Although there is one and only one standard for determining 
disability at all levels of the adjudicative process, there are 
some inconsistencies in disability decisionmaking at different 
levels of the adjudicatory process. Before I cite the 
statistics on the different allowance rates at the DDS and OHA 
levels, it is important to note that more than 70 percent of 
the beneficiaries awarded disability benefits in 1996 were 
allowed by the DDS. Fewer than 30 percent were allowed at the 
ALJ hearing level or higher levels of appeal.
    From the late 1970s and throughout the 1980s while the DDS 
allowance rates remained fairly stable at about 35 percent, the 
hearing level allowance rate fluctuated between about 48 to 59 
percent. From 1990 to 1992 both the DDS and hearing level 
allowance rates increased primarily because of the effects of 
the Zebley Supreme Court decision. Although the DDS allowance 
rate decreased in 1993, to about 39 percent, the hearing level 
allowance rate remained at 67 percent through 1995. In contrast 
the DDS allowance rates dropped to the low 30 percent range 
during those years. However, in FY 1996 the hearing level 
allowance rate decreased to about 59 percent and has declined 
even further in the second quarter of FY 1997. Additionally, 
the DDS allowance rate has risen slightly.

                          Process Unification

    A fundamental goal of SSA's effort to redesign our 
disability process is to make the correct decision as early in 
the process as possible. When developing our redesign strategy 
we recognized that in order to achieve this goal we needed to 
minimize those factors, within our control, which contribute to 
the variance in allowance rates between the DDSs and the ALJs. 
To that end, we are implementing several initiatives designed 
to do just that. Collectively, we are calling these initiatives 
Process Unification. Our goal is to achieve similar results on 
similar cases at all stages of the process, through consistent 
application of laws, regulations, and rulings with minimal or 
no impact on program costs.
    At the outset I want to stress that there is one and only 
one standard for determining disability at all levels of the 
adjudicative process. As I will explain below, the difference 
in the State DDSs and hearing level allowance rates is 
influenced by many different factors, including differences in 
the process, as described above. I am proud to report that 
through the Process Unification initiatives SSA is making 
significant strides toward minimizing these factors.
    As an initial step, we have convened a group of Agency 
experts to identify policy issues that are critical to process 
unification. In addition, we have established a senior level 
group to oversee all aspects of process unification 
implementation.

Consistent Application of Policy at all Levels

    A key element in process unification is consistent 
presentation of policy both in written instructions and in 
training. One of the factors we identified is the different 
approaches that the DDSs and ALJs take in evaluating claims 
which can lead to different conclusions in a particular case. 
These are areas which are highly complex, like how pain and 
related symptoms are evaluated, or what weight to give treating 
physician opinion, or deciding an individual's residual 
functional capacity.
    Last year we published eight new Social Security rulings 
clarifying policy in several complex areas of disability 
evaluation, designed to assist all decisionmakers in applying 
the policy in the same way. To ensure consistent application of 
these rulings, we conducted--for the first time--joint training 
for SSA's 15,000 disability adjudicators. This training 
included DDS examiners, quality reviewers, senior attorneys, 
and ALJs as well as members of the Appeals Council and their 
staffs. Training commenced in July 1996 and was completed in 
February 1997. Each training class was comprised of 
representatives from all levels of our disability 
decisionmakers. The training allowed the participants to 
benefit from the experience of adjudicators at every level, to 
hear the same information from the same instructors, and to 
discuss and resolve any differences in interpretation.
    Preliminary results are very favorable. Decisionmakers 
surveyed about the training generally praised the quality of 
the training and the substance of the new rulings. In fact, our 
internal stakeholders--DDS administrators, physicians, 
examiners and ALJs--think that process unification, besides 
being essential, is progressing positively.
    Additionally, we have seen a recent shift in the pattern of 
allowances both by the DDSs and the ALJs. As mentioned above, 
the hearing level allowance rate declined to 59 percent in FY 
1996, and data for the second quarter of FY 1997 indicate an 
increase in the initial and reconsideration allowance rates at 
the DDS with an accompanying further decrease in the hearing 
level allowance rate. Some of this likely reflects an impact 
from the process unification initiatives. The rulings published 
last summer and the joint training effort recently completed 
were expected to affect decision outcomes in these directions.
    We plan to have similar joint training sessions on other 
complex policy areas in the future. Quality assurance efforts 
are in place to support and evaluate the training objectives.
    Another initiative designed to improve consistency is the 
development of a single presentation of policy (the ``one 
book'') that is binding on all decisionmakers. This will ensure 
that different presentations of policies, although those 
differences may be slight, do not result in different outcomes.
    Additionally, the process unification workgroups are 
continually looking at ways to improve our guidance in the 
areas of policy identified by an intercomponent panel, 
described below, as ``problem areas'' . For example, we are in 
the process of preparing revised regulations clarifying 
residual functional capacity (RFC) assessments for less than a 
full range of sedentary work, a particularly difficult area of 
assessment.

Expanded Rationales at the DDS

    In the early 1990s, in response to workload pressures 
caused by the skyrocketing number of new applications for 
disability benefits, we allowed the DDSs to use simplified 
rationales to document their determinations. Since the DDS 
decision is considered evidence at the hearing level, the 
simplified rationale did not provide the ALJs with the 
information they needed to determine why the DDS denied a case. 
Therefore, in some cases, the ALJ was unable to give proper 
weight to the DDS determination while evaluating the evidence 
in file.
    We are now requiring that the DDSs fully rationalize all of 
their reconsideration denials so that this valuable expertise 
is fully utilized at the hearing level. We are also preparing 
revised regulations clarifying the ALJ's responsibility for 
considering the medical opinions of DDS physicians.

Remands of Cases to the DDS

    In reality, most ALJ allowances are based on a 
substantially different case. Thus, an ALJ decision may 
``allow'' benefits but it does not necessarily ``reverse'' the 
DDS determination. A substantial majority of ALJ decisions are 
based on additional and different evidence from that available 
to the DDSs.
    Also, the ALJ hearing is the first step of the claims 
process in which the claimants may appear in person before the 
decisionmaker to explain their impairments and present 
witnesses who can attest to the effects of their impairments. 
DDSs do not meet the claimant. In addition, more than 80 
percent of the claimants are represented by an attorney or 
other individual at the hearing. Because the representative 
assists the claimant in obtaining new evidence to support the 
case and explaining the effects of the impairments to the ALJ, 
representation can have a substantial impact on the hearing 
decision. There is also some anecdotal evidence that 
representatives wait until the hearing before submitting some 
of the evidence of disability.
    Additionally, in some cases the person's condition has 
worsened, or the person alleges an additional impairment. Other 
cases, denied by the DDS based on expected improvement in the 
claimant's condition within 12 months of the onset of the 
condition, are allowed by the ALJ because improvement has not 
occurred since the DDS determination.
    Therefore, as part of our Process Unification effort, the 
ALJ can remand to the DDS, for a new determination, those cases 
where new medical evidence is received prior to the hearing 
being scheduled. In many cases this will permit the DDS to 
change its denial to an allowance which will result in fewer 
cases going to hearing and decrease the time a claimant must 
wait for a favorable decision.
    Additionally, for cases that the DDS cannot allow, the ALJ 
will be reviewing the same claims file as the DDS and 
benefiting from the DDS's assessment of the new evidence.

Precedential Value to Court Cases

    Because ALJ decisions are reviewed directly by the district 
and appellate courts, ALJs are more inclined than DDSs to be 
sensitive to how the courts review disability law and policy. 
Under SSA's acquiescence policy, a ruling is issued in all 
cases where the final circuit court decision conflicts with SSA 
policy and SSA decides not to appeal the decision to the 
Supreme Court. Our adjudicators are not authorized to give 
precedential weight to the circuit court decision until these 
rulings are issued. SSA recently published a ruling 
reemphasizing our acquiescence policy, and one of the 
initiatives in Process Unification is to streamline the process 
for issuing these rulings.

Increased Review of ALJ Cases

    Another key initiative in Process Unification is 
implementation of pre-effectuation (PER) quality review of OHA 
allowances by the Appeals Council under its authority to 
conduct ``own motion'' reviews. The Office of Program Integrity 
Review (OPIR) (which is not a part of OHA) will screen 
approximately 10,000 favorable hearings decisions each year, in 
addition to the ongoing quality review of ALJ allowance and 
denial decisions, and forward these cases to the Appeals 
Council if a potential error is detected.
    While we are preparing a regulation describing this new 
process, we have begun a post-adjudicative ``dry run'' of 
OPIR's identification of cases for Appeals Council review. OPIR 
is providing feedback to the ALJs on cases when they detect a 
possible error and an intercomponent panel is being established 
to review a body of ``tough policy cases'' which can be used to 
identify problem areas between the DDSs and ALJs and then to 
develop policy solutions. We have put the staffing and 
processes in place so that the official reviews can begin 
immediately after the regulation is published.

Rewards of Success

    The benefits of successful process unification will be 
enormous. Obtaining the correct decision as early as possible 
in the process will greatly improve administrative efficiency, 
often avoiding an expensive hearing. If fewer claimants seek 
appeal, OHA workloads will decrease, and service to claimants 
will improve. Not the least benefit will be that DDS examiners 
and ALJs can work together more harmoniously, and each will be 
more effective in their roles as decisionmakers.
    Having said all this, however, it is important to note that 
the hearing process is different by design from the DDS 
process. In a program as important to the American public as 
this one is, it is imperative that the process not only be fair 
but also be seen as fair to those applying for benefits. 
Disability evaluation is a complex task requiring 
sophisticated, professional expertise. Claims appealed to the 
ALJ generally are the toughest to evaluate, the most complex 
and the most subjective. It is entirely appropriate for such 
cases to be heard in a more formal setting allowing 
presentation of testimony and questioning of witnesses.
    I want to emphasize that all of the SSA family (including 
the DDSs) is committed to Process Unification. We all recognize 
that the goals of process unification are important on their 
own, and they are essential for the success of our highest 
priority, a better and more efficient disability process.

                             Quality Review

Current Process

    At the same time that we want more consistency in our 
decisionmaking process, we also want accurate decisions. To achieve 
this goal, SSA's quality review activities comprise an integrated 
system designed to provide the Agency with a ``report card'' of 
management information (MI) about how different components within the 
disability decisionmaking process are doing in terms of well 
documented, policy-consistent correct decisions. At the State level, 
each DDS conducts inline quality reviews on samples of determinations 
before they are returned to SSA's field offices. Subsequently, SSA 
reviews, at the regional level, DDS determinations issued at the 
initial and reconsideration steps. When appropriate, determinations are 
returned to the DDS to either change the decision or obtain additional 
documentation. Some of the cases which are sampled at the DDS level and 
regionally also receive a review by a component at SSA Headquarters. 
Known as a consistency review, this assessment enables SSA to check on 
the consistency with which the regional review components are applying 
Agency policy. All of these reviews of DDS determinations are 
integrated in that there is a sharing of findings so that any 
adjustments in the reviews resulting from this data can be coordinated 
to achieve greater efficiency and an improved product through the 
planning and scheduling of DDS/SSA training initiatives.
    At the hearing level, the history of quality review is more recent. 
Prior to 1993, there was no ongoing quality review of hearing decisions 
per se, and as a result, the Agency lacked a basic source of ongoing MI 
with respect to that level. To some extent, the Appeals Council was 
viewed as a quasi-quality review component because of its review of 
hearing decisions. However, its formal position as the last step in the 
administrative appeals process is separate and distinct from that of a 
quality review component.
    In 1993, SSA began its first ongoing quality review of ALJ 
allowance and denial decisions. This sample is stratified 50 percent 
allowances and 50 percent denials. Valuable MI has been obtained which 
has resulted in both ALJ training and process unification initiatives. 
Moreover, this review also includes a review of the initial and 
reconsideration denial determinations which preceded each ALJ decision. 
This unique aspect of the review enables the Agency, for the first 
time, to obtain a multilevel longitudinal assessment of each case. In 
addition to identifying process unification issues arising between the 
DDS and the hearing level, this review enables SSA to ascertain whether 
hearing allowances were allowed at the earliest possible point in the 
adjudicative process, which is a fundamental goal of policy 
unification.

Transitioning to a New Quality Review Vision

    With respect to the future of quality review within a redesigned 
process, SSA is developing a clear vision of what the future of quality 
review should be--a more comprehensive quality review program that 
better defines its quality standards, more effectively communicates 
them to employees in a consistent manner and continually provides 
employees with the means to achieve them.
    SSA's existing quality review system has always demonstrated the 
flexibility necessary to adapt to the new concerns and many changes 
which have occurred in the disability program over the years. The 
enhancement of the hearing-level reviews is just one example of that 
flexibility. As SSA continues forward with its redesign activities, its 
quality review system will continue to be adaptable and meet the 
growing needs of the new processes which SSA introduces.

                            Workload Issues

    The enormous demands confronting SSA in the form of 
increasing disability workloads required us to evaluate 
policies and procedures which might be streamlined or altered 
to process the workload more efficiently. Record numbers of 
disability applications were received in the early 1990s, 
leading to skyrocketing hearing requests and ever larger OHA 
pendings. Additionally, we expect more than 125,000 additional 
hearings from now through FY 1998 relating to the legislation 
passed last year affecting individuals disabled due to drug 
addiction and alcoholism and children and non-citizens 
receiving Supplemental Security Income payments. SSA has sought 
both short-term and long-term solutions to manage the 
unprecedented workload increases.

Short-Term Disability Project

    SSA's Short-Term Disability Project was designed to achieve 
a substantial near-term reduction in both initial and appeals 
backlogs. From the inception of the Project in October 1994 
through the end of FY 1995, the number of initial claims 
pending in the DDS was reduced by more than 120,000. Project 
initiatives designed for OHA had to await completion of hiring, 
redeployment, and training of staff, as well as approval of a 
new regulation. This initiative allowed us to increase hearings 
dispositions by almost 100,000 cases (and doubled the number of 
CDRs processed), while maintaining most of the progress made in 
basic DDS initial claims pendings.
    Some of the more successful elements are being continued, 
including:
     expanding the prehearing conference procedures to 
ensure claimants' files are complete;
     granting temporary authority to experienced staff 
attorneys and paralegal specialists to make allowances in 
certain prehearing cases; and
     establishing screening units to identify appealed 
reconsideration decisions which can be allowed based solely on 
the record without additional development or a hearing.
    In addition, SSA increased decision drafting capacity by 
detailing employees to decision drafting functions. Through 
September 1996, these employees produced nearly 58,000 decision 
drafts.

New ALJ Hires

    In another effort to help reduce OHA pendings, over 300 
ALJs were hired during the course of fiscal years 1994 and 
1995, increasing the total number of ALJs on duty by over 25 
percent to about 1050. New ALJ hires in FY 1996 essentially 
covered attrition, which is also the plan for FY 1997. In order 
to help with the new ``welfare reform'' legislation workloads, 
60 ALJs are being hired this year in anticipation of FY 1998 
attrition and will report in June.
    Additionally, SSA is exploring ways to hire ALJs with 
subject matter-specific experience. These ALJs would be able to 
become proficient immediately and would help address the short-
term need of ``welfare reform'' legislation.

Disability Redesign

    The Plan for a New Disability Claim Process represents a 
long-term initiative to provide world-class service within 
available resource levels by redesigning SSA's disability 
process. It is expected to significantly reduce the time and 
resources needed to process disability cases, and is the 
Agency's highest priority. We are concentrating most of our 
redesign efforts on several key elements and have begun testing 
an integrated redesign process that incorporates many of these 
elements. While redesign's project life is expected to run over 
many years, SSA is moving to implement those aspects of the new 
process that can be implemented in the nearer-term.
    Two of these projects are of particular pertinence to the 
appellate process. First is the Adjudication Officer (AO), 
currently being piloted in 25 sites nationwide. The AO will 
serve as the focal point for claimants who request a hearing 
and will have full authority to issue a favorable decision, if 
the evidence so warrants. Of the over 20,000 AO cases processed 
since testing began in November 1995, about 30 percent have 
been allowances, with the remainder being fully developed by 
the AO and forwarded to the ALJ for hearing. At slightly less 
than one case per day, productivity is lower than expected but 
improvements are anticipated. While quality review of 
allowances has found some problem areas that need work, the 
quality of the information being forwarded to ALJs is high.
    Second is the Full Process Model, which tests several 
redesign features working together, including the AO, a pre-
decision interview similar to the face-to-face interaction of a 
hearing, and elimination of the reconsideration step prior to 
the ALJ hearing. Testing began in eight states this month. 
Testing of an additional feature--elimination of mandatory 
Appeals Council review prior to the filing of a civil suit in 
Federal court--will begin after publication of a revised 
testing regulation.

                               Conclusion

    In closing Mr. Chairman, I would like to thank the 
subcommittee for the opportunity to address these important 
issues. We expect, based on the short-term efforts mentioned 
earlier and followed by improvements related to implementing 
the redesigned disability process, to increase hearings 
dispositions significantly.
    While process unification has already accomplished a great 
deal, much still remains to be done. You may rest assured that 
SSA is fully committed to obtaining correct, similar results in 
similar cases at all stages of the disability claims process. 
Although all indicators suggest that our initial efforts are 
succeeding, SSA will continue to monitor carefully the results 
of all our initiatives.

                                

    Chairman Bunning. Thank you.
    First, let me say that I am pleased to see there has been 
some progress made and I commend the agency for its work. I 
know you would be disappointed if I didn't get to ask you some 
questions, so let me begin.
    There is no question that these issues are complex and DDS 
and ALJ processes are different by design. Nevertheless, many 
of the reasons for differences between DDS and ALJ 
determinations have been around for a long time.
    For example, let me quote, ``The council believes that the 
lack of uniformity in application of eligibility standards stem 
from: One, a lack of specificity in the rules for determining 
disability; two, an inadequately controlled, Federal-State 
arrangement for administering DI and SSI Programs; and three, 
an appeals process which fails to encourage the development of 
complete and correct evidence early in the process.'' This 
quote is from the report of the Disability Advisory Council, 
March 11, 1988.
    There is another statement, ``The high reversal rates after 
the initial decisions have been attributed to: One, inadequate 
documentation of the initial claim; two, the progressive nature 
of an applicant's medical condition; three, the nature of 
disability; and four, different sets of rules governing 
different levels of disability decisionmaking processes.'' This 
quote is from the final report of the National Commission on 
Social Security, March 12, 1981.
    These issues have been around for a long time, and 
certainly, the American people deserve better from its Federal 
Government. Clearly, you are trying to make a number of 
improvements in your disability process, but what about the 
legislative changes? Certainly, as a fully independent agency 
which operates two of the largest disability programs in the 
country, you must have some suggestions for improvements that 
could be made into law. None have been submitted since I have 
been Chairman of this Subcommittee, not one.
    There are many positive comments in testimony received 
today about the benefits of training ALJs and DDS personnel 
together. Did this job training occur regarding the legislation 
ending eligibility for drug addicts and alcoholics or for the 
SSI children provision?
    Ms. Colvin. Let me address your last question first. The 
training we recently provided to the 15,000 adjudicators, which 
includes both OHA staff as well as DDS staff, our quality 
review staff and our Appeals Council staff, was designed to 
review the eight new rulings that were recently developed to 
ensure consistency of application of the laws and regulations 
at all levels of the adjudicative process. This would certainly 
impact on all of the disability reviews, the childhood 
disability cases, or the noncitizen cases that we have 
processed will be coming forth, as well as, of course, the many 
DA&A, drug addicts and alcoholics, cases.
    Chairman Bunning. Will you answer my question? Did this job 
training occur because of the legislation ending eligibility 
for drug addicts and alcoholics or for the SSI children's 
provisions? Is that why you did it, or did you do it for some 
other reason?
    Ms. Colvin. We did it because it was recognized that we 
needed to unify the process for disability determinations to 
try to ensure that we would get the correct decision as early 
in the process as possible. Certainly, Mr. Chairman, this will 
impact implementation of the legislation on the DA&A and SSI 
children.
    Chairman Bunning. In other words, that wasn't the initial 
or main purpose for your joint training? You just decided to do 
it on your own?
    Ms. Colvin. We decided to do it as part of the Process 
Unification Initiative, which is a part of our overall 
disability redesign initiative.
    Chairman Bunning. The reason I push that is because SSA 
must pay attention to the Congress when it passes laws, so that 
as an independent agency, you can fully implement those laws. 
The American people and the Congress are interested in knowing 
that you are complying with the new laws that we pass.
    Ms. Colvin. Let me be clear, Mr. Chairman, that we are, in 
fact, complying with the new laws. The Process Unification 
training will enable us to comply more thoroughly with those 
laws because by unifying the process we can ensure that the 
decisions we have to make about the DA&A workload, under the 
new law, are adjudicated in a fair and accurate manner early in 
the process. So, clearly, the Process Unification training will 
allow us to comply with the DA&A law.
    Chairman Bunning. I will inquire later.
    Barbara, would you like to question?
    Mrs. Kennelly. Thank you, Mr. Chairman.
    Thank you for coming.
    Ms. Colvin, are you aware of an article that was in the New 
York Times, Monday, April 21, 1997, the United States 
challenges courts on disability?
    Ms. Colvin. Yes, we are.
    Mrs. Kennelly. So I can ask you a few questions about it. 
For people who are interested, the New York Times asserted that 
SSA has told its administrative law judges that they could 
disregard Federal court decisions if these decisions are in 
conflict with agency policy. ``An ALJ is bound to follow agency 
policy even if in the ALJ's opinion on that policy is contrary 
to law. The Federal courts seem to disagree with SSA's 
pronouncement that ALJs should ignore the law. In the Hutchison 
charter case, the court said, regardless of whether the 
Commissioner formally announces her acquisition, she is still 
bound by the law of this circuit and does not have the 
discretion to decide whether to adhere to it. The Congressional 
Research arm also agreed saying whether SSA issues an 
acquisition ruling or not, the agency must follow the court's 
decision that is binding on SSA.'' Yet, from reading this 
article, I think there is a disagreement from SSA. It appears 
SSA is asking the ALJs to ignore the Federal courts. Is that 
correct?
    Mr. Fried. No, it is not correct. The SSA's policy is to 
follow circuit court decisions, and that has been the SSA's 
policy since the late eighties, and it is pursuant to 
regulations that were issued by Social Security on January 11, 
1990.
    The most recent issuance was on July 2, 1996, and it was a 
ruling that merely restated the policy reflected in the 1990 
regulations.
    Mrs. Kennelly. Thank you, Mr. Fried.
    Well, is SSA providing DDSs and ALJs with timely 
interpretations of these court decisions, of the Federal court 
decisions?
    Mr. Fried. Unfortunately, in the past, there have been some 
extensive delays in providing what are called acquiescence 
rulings. However, we have recently committed to issuing 
acquiescence rulings as fast as possible. The goal of the 
agency is to issue them within 120 days.
    Mrs. Kennelly. What is the backlog now?
    Mr. Fried. Currently, SSA has four circuit court decisions 
under serious consideration for publication of an acquiescence 
ruling.
    Mrs. Kennelly. OK. My problem is, as a Member of Congress, 
we get numerous constituents who don't have the decisions they 
are seeking, and then they come to us to see if we can help 
them, and sometimes we can, and obviously, as you well know, 
sometimes we can't. But another problem we are constantly 
dealing with is the clogged courts. If SSA ignores the Federal 
court decision, I am afraid the courts could get even more 
clogged, and here, we have got this huge agency that has 
everything set up to do what should be done, and then it ends 
up in a court situation at the highest level. So I will 
continue to follow this situation.
    Let me ask you another question, Ms. Colvin. As one 
possible reason for differences in DDS and ALJ decisions, you 
have cited the type of cases we viewed at each level; that is, 
allowances are reviewed at the DDS level and denials are 
reviewed at the ALJ level. This would tend to make DDS--or I 
would think, maybe, this would tend to make DDS reluctant to 
award cases and ALJs reluctant to deny cases. So your solution 
is to review more allowances at the ALJ level.
    DDS has immediate review of their allowances by quality 
assurance personnel, but there is no immediate review of 
denials. Doesn't it make sense, also, to review more denials at 
the DDS level?
    Ms. Colvin. Let me say, first, that there is review of 
denials at the DDS level. As part of our Quality Assurance 
Program, we review a sample of both denials and allowances from 
each DDS. In addition, by law, we are required to perform a 
preeffectuation review of 50 percent of all title II concurrent 
allowances by the DDSs.
    Also, in 1993, we began reviewing a small percentage, about 
1 percent, of all ALJ decisions split between approvals and 
denials.
    Mrs. Kennelly. Thank you.
    I am new to this Subcommittee, and I am doing a great deal 
of reviewing and reading. Last night, reading about this 
situation and looking at, obviously, the problems. To a 
layperson, it just jumps out to you that the first step is 
dealing with paper, and there is a certain percentage of 
dissatisfaction. Then, you go to the second step, and you get 
medical opinions. You get a person. Is there any thought that 
maybe we should be looking at the person or getting a doctor 
who knows the case earlier in the process?
    I am not going to try to do your business this morning. As 
I said, I am new to this, but it jumps out at me that we are 
dealing totally in a paper fashion. Denials are happening, and 
then, when we get to the level where you have individual and 
the medical opinions, then we see things change. Obviously, you 
have thought about this.
    Ms. Colvin. In fact, we have looked at those issues that 
you raise, and the full process model under our disability 
redesign plan will test a number of those issues, including an 
early opportunity for the claimant to actually appear before 
the decisionmaker.
    We have recognized that some of the differences result from 
the fact that the first opportunity for the claimant to 
actually appear before the person making the decision is at the 
ALJ level. So one of the models we are testing is designed to 
see what difference would exist if the appearance were earlier.
    Mrs. Kennelly. Thank you.
    Thank you, Mr. Chairman.
    Chairman Bunning. Mr. Collins will inquire.
    Mr. Collins. Thank you, Mr. Chairman.
    Ms. Colvin, this is one of the areas in the district 
offices back in Georgia that we have more inquiries and 
complaints about, I think, than most any other area of 
constituent work. What is the procedure for a person to apply 
for disability, and what is the criteria?
    Ms. Colvin. The procedure to apply for disability would be 
to make application at one of our field offices where there is 
a nonmedical determination made, and then, the medical 
determination of disability is made at the State DDS level. 
Individuals would submit or SSA would obtain evidence that is 
used to evaluate their disability. A review would be made of 
that evidence, and a decision would be made by the DDS team 
composed of a disability examiner and a medical consultant.
    Mr. Collins. It seems like it is just an automatic denial 
on the largest percentage of the applicants that submit 
application. Is this common across the country?
    Ms. Colvin. Your second question that you raised, Mr. 
Collins, is what is the definition of disability. The person 
has to demonstrate they are unable to perform substantial 
gainful activity for at least a 12-month period or which will 
result in death. If the evidence does not substantiate that, 
then, more than likely, the person is going to receive a 
denial.
    Mr. Collins. OK.
    Ms. Colvin. We believe the application of the definition is 
consistent throughout the country, regardless of the region, 
and we do have quality reviews to take a look at the accuracy 
of the decisions that are made.
    Mr. Collins. Like I say, though, it just seems like it is 
an automatic denial on the first go-around, and then, with the 
appeal for reconsideration or ask for reconsideration by other 
staff, then it seems to be, again, a denial, and then, when you 
get to the administrative law judge step in the process, there 
are a lot of reversals. It looks like the first approach to 
this thing is what is bottlenecking the whole system. Why do we 
have such a large denial rate to begin with, denial again, and 
reversing the denials?
    Ms. Colvin. Let me----
    Mr. Collins. Are we all working off the same page and the 
same criteria, the same requirements, or is this different 
somewhere?
    Ms. Colvin. You are describing many of the issues that we 
have identified and which resulted in our implementation of 
Process Unification.
    Let me just say that we have a 30-percent award rate at the 
initial DDS level, so about 70 percent are initially denied.
    By the time the case gets to the ALJ level, in many 
instances, it is not the same body of evidence. You will recall 
we mentioned additional evidence can be presented at the ALJ 
level. This is the first time the individual appears before the 
person making the decision. Substantial time has often passed, 
which may mean the medical problems have increased.
    What Process Unification is designed to do is to identify 
those problems that prevent an early decision so that we will 
get the correct decision earlier in the process and fewer cases 
go to the ALJ level. About two-thirds of the cases that are 
heard at the ALJ level are not the same cases that were heard 
at the DDS level.
    Mr. Collins. Well, we don't have a way of handling this 
without going to the ALJ level when this new evidence is 
submitted, this medical documentation?
    Ms. Colvin. I understand your question. You are asking do 
we have a way of handling new evidence----
    Mr. Collins. This is a long, drawn-out process for the 
individual that has replied.
    Ms. Colvin. One of the things we are testing under the 
Process Unification Initiative is having cases where new 
evidence is presented at the hearing level, returned to the DDS 
level, so that the evidence can be reviewed and any revised 
decisions can be made at the DDS level and will not, in fact, 
be heard at the ALJ level.
    Mr. Collins. OK.
    Ms. Colvin. So that is an area of concern we have 
identified and are attempting to address with the Process 
Unification Initiative.
    Mr. Collins. We thank you, and with the long list of 
panelists we have today, we have to move on.
    Thank you.
    Chairman Bunning. First of all, I am going to take the 
privilege of the Chair and say that, since 1981, these same 
problems have been around, as I reviewed for you. Only since 
1991 have we made significant progress. At that time, 40 
percent of the initial DDS claims were being allowed. That 
meant 60 percent were being denied in 1991.
    The reversal rate at that time was 66 percent at the ALJ 
levels. So, of the 60 percent that had been denied and 
appealed, 66 percent were being allowed on appeal to ALJs.
    Now, over 1991, 1992, 1993, 1994, 1995, and 1996, 30 
percent of initial claims are allowed at the DDS level. So 70 
percent are being denied. Of those 70 percent, approximately 60 
percent are now being reversed at the ALJ level.
    Now, what Mr. Collins is getting at and what everybody up 
here wants to know, Why can't we do a better job on the initial 
claim and make sure there isn't a running evidence trail from 
the time the process begins until the time of the ALJ 
pronouncement? Wouldn't it be much easier for everyone, 
including the applicant, on overall program costs, if we did it 
right in one decision? I think that is what we are trying to 
get at here, because it is acceptable for applicants to wait 
for over 1 year.
    In Kentucky, the waiting times are not that bad. It 
averages 4 or 5 months, but in other States, additional 
evidence often prolongs the disability application process to 
over 1 year. Considering the 30 percent DDS initial allowance 
rate in 1996, with ALJs overturning 60 percent of those 70 
percent that are denied by the DDS who appeal, suggests there 
ought to be a better way of handling evidence.
    Ms. Colvin. I am going to ask Rita Geier to help me with 
this question, but I want to emphasize that we are looking at 
ways to improve. We are expecting through our Process 
Unification Initiatives to be able to address those problems 
you have just identified, the problem of getting all of the 
evidence earlier, so that the case can be decided correctly at 
the DDS level.
    This is the problem I spoke about earlier; there is often 
additional information at the ALJ level, and there is a 
personal----
    Chairman Bunning. We are familiar with that. We are 
familiar. We don't think that is acceptable. We think all the 
information should be on the original application, and we are 
going to explore doing something about it legislatively 
because, obviously, it is not satisfactory if people have to 
wait over 1 year for their initial claim to be decided. They 
die. People actually die while waiting for the benefits, and 
that is not acceptable to me.
    Mr. Hayworth will inquire.
    Mr. Hayworth. I thank the Chairman, Ms. Colvin, and those 
with us on the panel. I thank you for joining us today.
    Part of the frustration expressed by those of us in the 
Congress has already been outlined, I think, quite eloquently 
by the Chairman, and we are going to hear from a lot of 
different people today who will testify in support of SSA's 
initiative to develop one book where all decisionmakers are 
following the same set of instructions. To reasonable people, 
that makes immanently good sense.
    So I am interested today, Ms. Colvin, in getting your 
assessment of just where SSA is on its development of the one 
book and when will it be made available to all decisionmakers.
    Ms. Colvin. We are making significant progress in that 
direction, Mr. Hayworth.
    We have just recently, as I mentioned, trained the 15,000 
disability adjudicators on the same rulings. This is the first 
time in our history we have actually had training together for 
all of those individuals who adjudicate disability cases on the 
same laws, regulations, and rulings.
    The one book will pull that together even more. I am not 
prepared today to give you an exact date of when that one book 
will be available, but we will be very happy to provide that to 
you for the record.
    Mr. Hayworth. That would be good.
    It is my understanding that in the discussions with staff, 
we have been told the one book is still at least 2 years away, 
and that is very disturbing when you consider the fact that 
this notion was first put forth in October 1994.
    Certainly, since we are dealing with such a critical need, 
even understanding the complexities, I am a bit miffed with the 
notion of waiting an additional 2 years.
    Ms. Colvin. I am not prepared to respond to that at this 
point. This is an area we recognize will have a significant 
impact on the process. This is a very high priority for us. It 
is very complex with the various rulings and regulations, but 
as I said before, I would be very happy to provide you more 
specific detail for the record.
    Mr. Hayworth. Well, we appreciate that, and we look forward 
to getting your assessment of the timeline to complete this 
work, and we will wait with great interest on that.
    [The following was subsequently received:]

    Compilation of the ``one book'' is an iterative process. As 
an interim measure, we have been putting the exact text of 
regulations and Social Security rulings into the POMS so that 
decisionmakers at all levels will have the identical 
presentation of policy. Decisionmakers at the administrative 
appeals level already use the regulations and rulings directly.
    As part of our strategy to build a single presentation of 
policy, which is what the ``one book'' is designed to be, we 
are also maximizing the use of Social Security rulings as a 
means of conveying policy clarification rather than providing 
such guidance in operating instructions that apply to only one 
level of the process. Rulings are binding on all levels of 
decisionmaking and review in our process and are thus ideally 
suited to enhancing uniformity of appilication of policy. As 
you know, regulations are also binding on all decisionmakers 
and reviewers.
    SSA began this effort by placing the text of the 
regulations on symptoms including pain in the POMS in early 
1995; eight rulings on the areas of symptoms, residual 
functional capacity, and weighing of evidence were put into the 
POMS in July 1996 and the recently published childhood 
regulations were put into the POMS in March of this year.
    This process will continue with the ultimate goal being the 
presentation of all substantive disability policy identically 
at all decisionmaking through use of regulations and rulings.

                                


    Mr. Hayworth. Ms. Colvin, you mentioned training for folks 
involved in the adjudication process. How much medical training 
do the ALJs receive?
    Ms. Geier. I will answer that, Congressman Hayworth. When 
the ALJs come on board, they are initially involved in a 5-week 
training program. This involves medical training, as well as 
training on the conduct of a hearing and full training in the 
specifics of the disability statute, regulations, and rulings.
    About 1 year after they are on board, we bring them back 
for supplementary medical training geared to reinforce the 
earlier training.
    There are also ongoing means of medical training through 
seminars and participation of ALJs in CLE-type training.
    Mr. Hayworth. So, Ms. Geier, you are saying the initial 
training process is about 5 weeks in duration, but if you had 
to isolate the specific medical training, are we not, in fact, 
looking at about 1 week, initially?
    Ms. Geier. Well, it is difficult to say. In terms of only 
medical training, that may be accurate, but medical training 
involves casework, too. So, as we train through casework, we 
are also teaching the application of medical standards and 
evaluation.
    Mr. Hayworth. And then, in the refresher course, for lack 
of a better term, you mention after people have been in the 
field when they come back, how long does that medical training 
run?
    Ms. Geier. That is about 1 week.
    Mr. Hayworth. About 1 week. I thank you, ma'am.
    Mr. Chairman, my time is up, so I yield back.
    Chairman Bunning. Mr. Portman.
    Mr. Portman. I have to do a little followup on that 
questioning. That is how much training the ALJs get. Clearly, 
we have an issue with the ALJs reversing these decisions from 
the earlier decisionmakers. How much training do the earlier 
decisionmakers get? What does the DDS get in terms of medical 
training as compared to the--roughly, it sounds like 1 week of 
medical training, initially, and then some refresher training 
throughout the year. Obviously, those folks aren't looking at 
these individual cases in the same way the initial 
decisionmakers are. How much medical training do the initial 
decisionmakers receive?
    Ms. Geier. It is my understanding that that is about 5 or 6 
weeks for the initial level at DDS.
    Mr. Portman. But DDS only gets 5 or 6 weeks----
    Ms. Geier. Weeks.
    Mr. Portman [continuing]. Of training, 5 or 6 weeks of 
training? Is that initial training?
    Ms. Colvin. Yes, that is my understanding.
    Mr. Portman. Five or six weeks----
    Ms. Colvin. Yes.
    Mr. Portman [continuing]. Of medical training?
    Ms. Colvin. Yes.
    Mr. Portman. OK.
    Mr. Fried. That is just for the disability examiner. At the 
initial level, there are also medical advisers who participate 
in the decisionmaking process, and they are doctors with 
specialties in various areas.
    Mr. Portman. Well, in fact, every initial decision has to 
be signed off by a physician. Isn't that correct?
    Mr. Fried. Currently, that is correct. There are tests Ms. 
Colvin referred to before of what is called the single 
decisionmaker, and we are also looking at early decision lists 
which may, in appropriate cases, depart from that, but 
currently, the standard is for a doctor to sign off----
    Mr. Portman. To sign off.
    Mr. Fried [continuing]. The initial decision.
    Mr. Portman. So give me a generalized comment here, if you 
would. Where is the medical expertise located in the system? Is 
it more at the outset? Mr. Bunning told us that 70 percent of 
the initial applications are being denied at the initial level, 
and then, about 67 percent are being appealed later on in the 
process once you go through the two steps. Where is more of the 
medical exper- 
tise, at the beginning of the process or at the ALJ part of the 
process?
    Ms. Colvin. I would----
    Mr. Fried. The----
    Ms. Colvin. Go ahead.
    Mr. Fried. The ALJs, if they determine it is necessary, can 
bring a medical adviser to testify at the hearing or can 
submit----
    Mr. Portman. That is not really answering my question, 
though. Do they do that on a typical----
    Ms. Colvin. It is really throughout.
    Mr. Portman. Do more than----
    Mr. Fried. The answer is it is throughout the process.
    Mr. Portman [continuing]. One-half of the ALJs do that, Mr. 
Fried?
    Ms. Colvin. They do----
    Mr. Portman. Do the majority of the ALJs do that?
    Mr. Fried. The ALJs have significant medical evidence in 
the file. They have the medical evidence that was developed at 
the----
    Mr. Portman. But answer my question. Do they bring in 
medical experts or a doctor?
    Ms. Geier. They do, Congressman Portman.
    Mr. Portman. They do in more than one-half of the cases?
    Ms. Geier. Yes, 40 percent or so have medical expert or 
consultative medical input.
    Mr. Portman. Forty percent or so?
    So, in every instance at the outset--I am just trying to 
figure out. This is such a bizarre system we have, and one must 
wonder to the extent this is a medical determination, which it 
really is, where does that expertise lie, and you are telling 
me that in roughly 40 percent of the cases with regard to the 
ALJs, they actually bring in some medical professional to help 
them analyze the case, and in every case at the outset with the 
DDS examiner, there is a doctor that signs off on the initial 
decision?
    Mr. Fried. In every case, the ALJ has the expertise of 
medical professionals and evidence in the file.
    Mr. Portman. Has evidence in the file.
    Mr. Fried. In addition to 40 percent, they actually 
specifically get medical advice for----
    Mr. Portman. That evidence in the file comes from the 
applicant?
    Ms. Colvin. What was your question, the last one?
    Mr. Portman. Well, Mr. Fried is indicating there might be 
some objective medical expertise at the ALJ level, and my time 
is almost up, but it sounds as though that is more evidence 
that is in the file that clearly would be available to them in 
rendering their decision, but not something that they would be 
receiving independently.
    My only point, because I have got--unfortunately, the 
Chairman is good at keeping these sessions going. So I am not 
going to go overtime. Otherwise, I will never get another 
question.
    I think part of the issue Mr. Collins alluded to, and the 
Chairman alluded to it, is to determine how we can get more of 
that medical expertise at the front end of the process, or if 
it is already there, maybe rely more on that end of the process 
and have all that information provided initially, to the extent 
it is possible. I know new information might arrive, conditions 
change, so that we don't have this kind of--as I said earlier, 
a bizarre situation where you have got all of these denials 
initially and then go through this long process and then have 
them reversed, two-thirds of them being reversed.
    One other comment I need to make, and that is, I was very 
supportive of the independent agency. I think it is a great 
idea, and the reason I think it is such a good idea is, in 
large measure, because it allows you to have independent 
judgment with regard to tough issues like this.
    You have got to give us your thinking on this, independent 
of HHS, independent of the administration, what really makes 
sense. Give us legislative recommendations. I don't think you 
have given us any in 3 or 4 years, and I would just encourage 
you to do that, look at it objectively, how you can do your job 
best, and tell us how we can help you do that.
    Thank you, Mr. Chairman.
    Chairman Bunning. Thank you, Rob.
    Let me ask--who hires the ALJs?
    Ms. Geier. Congressman, the----
    Chairman Bunning. Would you please bring your microphone a 
little closer. I am having an awful time hearing you.
    Ms. Geier. Is that better?
    Chairman Bunning. Go ahead.
    Ms. Geier. The process of selection----
    Chairman Bunning. That mike is not working. Would you try 
another one?
    Ms. Geier. The SSA actually hires the ALJs, but it hires 
the ALJs from a certificate of eligible candidates that is 
provided by OPM.
    OPM maintains a register of eligibles, of persons who 
satisfy the basic threshold qualifications for ALJ positions 
throughout all of the government. The agencies request the 
number of ALJs they need to hire from that register, and OPM 
provides a certificate.
    Chairman Bunning. Who pays them?
    Ms. Geier. The agency pays.
    Chairman Bunning. The SSA?
    Ms. Geier. Yes, sir.
    Chairman Bunning. OK. Who hires the DDSs?
    Ms. Geier. That would be the States. They are State----
    Chairman Bunning. They are State-determined employees----
    Ms. Geier. That is correct.
    Chairman Bunning [continuing]. Hired by each individual 
State. Who pays them?
    Ms. Colvin. They receive Federal funding from SSA for their 
staff. So, we do. The SSA pays them.
    Chairman Bunning. Pays them. So you pay both the DDSs and 
the ALJs?
    Ms. Colvin. Yes.
    Mr. Fried. If I may just clarify to make sure it is 
accurate, we provide funds to the DDSs. The DDS employees 
receive State agency checks. They don't receive a Federal 
check, but the funds are funds provided by SSA through a 
regulatory arrangement. We have no direct relationship with an 
employee of the State DDSs.
    Chairman Bunning. In other words, you don't hire the DDS 
personnel, they are hired by the State.
    Ms. Colvin. That is correct.
    Chairman Bunning. But you pay them.
    Mr. Fried. We pay the State.
    Chairman Bunning. Which pays them.
    Mr. Fried. We reimburse the State for its expenses in 
operating the DDS----
    Chairman Bunning. But what I am getting at is the 
decisionmaking process and who is paying for it and why people 
are losing confidence in the decisionmaking process. If SSA 
pays the ALJs and the DDSs, and people are coming to SSA for 
disability benefits, there is always the possibility of the 
applicants thinking the reason they are not getting 
satisfaction or the reason they are not getting a fair hearing, 
so to speak, is because the decisionmakers are employees of 
SSA.
    There have been bills introduced to make the ALJs 
independent, and I am not really happy with that bill. I never 
liked that bill, but the fact of the matter is, unless we can 
solve this problem of credibility, particularly at the initial 
decisionmaking process, and then have a reasonable appellate or 
appeal process, we are not going to build the confidence we 
need in this program. People should not think we are trying to 
rip them off and keep them out of the program. We, on this 
Subcommittee, need your assistance in order to help you do your 
job better. We haven't had any assistance from the SSA in 
trying to solve this problem, other than efforts from within 
SSA, which you are doing on your own. We think we can assist 
you by writing a better disability law and making sure all the 
evidence is up front and that there can't be a different set of 
evidence for the DDSs and the ALJs. Then SSA can make the 
decision without 60 percent being reversed as in 1996.
    Ms. Colvin. Mr. Chairman, we appreciate that offer, and we 
are, in fact, continuing to evaluate what legislative proposals 
might be desirable under the Process Unification Initiatives.
    [The questions of Chairman Bunning to Acting Commissioner 
John J. Callahan and Mr. Callahan's answers follow:]

    Question.1A. In their testimony, GAO discussed the fact 
that should an applicant be determined to have a functional 
capacity of less than the full range of sedentary work, this 
classification is likely to lead to an award. GAO reports that 
decisionmakers in the State DDSs make this classification in 
less than 6% of the allowed cases. ALJs, however, utilize this 
classification in 63% of allowed cases. How does this happen?
    Answer. We are continuing to study functional capacity 
assessment at all levels of the process to determine the 
reasons for differences and have taken steps to address this 
issue, including recent issuance of Social Security Ruling 96-
9p which explains SSA policy on assessing functional capacity 
for less than a full range of sedentary work. This ruling is 
part of a broad array of Process Unification activities, 
designed to reduce decisional inconsistencies between OHA and 
the DDSs. Much of our efforts at process unification are 
directed at the issue of assessing functional capacity, 
especially in the more difficult cases involving pain and other 
symptoms and evaluating treating physician opinion. As 
mentioned in our testimony, we have recently completed a large, 
national training effort in which we trained more than 15,000 
individuals involved in assessing disability. This included 
disability examiners, State agency medical consultants, 
Administrative Law Judges (ALJs), agency attorneys, and quality 
review personnel from all levels. In that training, we specifi- 

cally discussed the issue of use of a functional capacity for 
less than a full range of sedentary work.
    Question.1B. ALJs may ask independent medical experts to 
testify, yet they do so in only 11% of the hearings. How are 
they, then, making what must be very difficult judgment calls 
regarding how long a person can stand or walk or how much a 
person can lift?
    Answer. Although ALJs use the testimony of medical experts 
in 11% of the hearings, the ALJ has an extensive case record 
before a hearing is held. At the very least, there has been an 
initial determination by the State agency followed by a 
reconsideration determination by the State agency. At both 
levels, the DDS is expected to document all known alleged 
impairments and limitations. In addition, we have begun testing 
the use of an Adjudication Officer (AO) who serves as the focal 
point for all prehearing activities when a claimant requests a 
hearing before an ALJ. The AO has the responsibility for 
assisting the claimant and claimant's representative, as well 
as ensuring that the case record is ready for a hearing.
    Therefore, the ALJ has, in most cases, extensive medical 
evidence which must be weighed according to SSA regulations and 
rulings in order to make a disability decision. The file 
includes evidence from the claimant's treating sources, as well 
as the assessment of that evidence by a State agency medical 
consultant.
    Question. 1C. I understand that, in the long term, you are 
planning to develop a simplified decision-making process which 
will expand the role of functional capacity assessments. Since 
differences in functional assessments are the primary reason 
for inconsistent decisions, how do you justify expanding the 
use of these assessments?
    Answer. The adjudicator's findings, based on his or her 
review of the medical and other evidence, are called a 
``residual functional capacity,'' or RFC assessment. Our plans 
do not call for expanding use of RFC assessments. Rather, they 
call for investigating alternative ways of assessing 
functioning.
    As a part of its Disability Process Redesign, SSA is 
engaged in a long-term research project to develop a simpler, 
more efficient disability decisionmaking process. Conceptually, 
this new process is expected to be based, in part, on a more 
objective assessment of the functional consequences of an 
individual's impairment, i.e., by using standardized measures 
of functional ability. In the medical field, these standardized 
measures are called functional capacity assessments or 
functional capacity evaluations. We believe that reliance on 
more objective functional measures will have many advantages, 
including greater decisional consistency. However, we will not 
use any functional assessment tool until extensive research has 
been conducted and testing has been completed.
    2. SSA's testimony states that the agency is also planning 
to implement quality review of 10,000 favorable ALJ decisions 
each year. Will these cases be reviewed by the same group of 
people who review State DDS decisions? How was this number 
determined and is it a valid sample?
    At this time, we have not determined exactly how we will 
implement the quality review nor which group will be 
responsible for the review. We will advise you when the 
implementation strategy is finalized.
    3. A number of witnesses testified in support of SSA's 
initiative to develop a ``one book'' approach, where all 
decisionmakers are following the same instructions. Exactly 
where is SSA on their development of ``one book'' and when will 
it be made available to all decisionmakers?
    Compilation of the ``one book'' is an iterative process. As 
an interim measure, we have been putting the exact text of 
regulations and Social Security Rulings into the POMS so that 
decisionmakers at all levels will have the identical 
presentation of policy. (Decisionmakers at the administrative 
appeals level already use the regulations and rulings 
directly.) As part of our strategy to build a single 
presentation of policy, which is what the ``one book'' is 
designed to be, we are also maximizing the use of Social 
Security Rulings as a means of conveying policy clarification, 
rather than providing such guidance in operating instructions 
that apply to only one level of the process. Rulings are 
binding on all levels of decisionmaking and review in our 
process and are thus ideally suited to enhancing uniformity of 
application of policy.
    SSA began this effort by placing the text of the 
regulations on symptoms, including pain, in the POMS in early 
1995. Eight Rulings on the areas of symptoms, residual 
functional capacity, and weighing of evidence were put into the 
POMS in July 1996 and the recently published childhood 
regulations were put into the POMS in March, 1997.
    This process will continue with the ultimate goal being the 
presentation of all substantive disability policy identically 
at all levels of decisionmaking through use of regulations and 
rulings.
    4. In SSA's testimony, it mentioned that as part of the 
Process Unification, the ALJ can remand, or return a case of 
the State DDS, those cases where new medical evidence is 
received prior to the hearing. This permits the DDS to allow 
the case, if warranted, or to provide an explanation why the 
evidence doesn't change the decision. Is this an option for the 
ALJs? Isn't the public better served if the DDS can go ahead 
and allow the claim, rather than have the claimant wait well 
over a year for a hearing? How exactly does this process work?
    Our regulations include the authority to have cases 
returned to the DDS by an ALJ after the claimant has requested 
a hearing and before it is held for the purpose of deciding 
whether the determination may be revised. However, the case 
review that is being established under process unification is 
not solely to identify favorable decisions that can be 
expedited (although the DDSs will have the opportunity to 
prepare favorable determinations, when appropriate.) Most of 
the cases that are being identified for this review are ones in 
which the claimant has provided new medical evidence since the 
reconsideration determination.
    One purpose for sending the case to the DDS is to obtain a 
review and explanation of the new medical evidence by a State 
agency medical consultant. Of course, if the evidence supports 
a favorable determination, the DDS will revise its 
determination.
    5. According to SSA testimony, the State DDSs are now being 
asked to fully rationalize all of their decisions so that the 
ALJ will give the DDS decision proper weight. ALJs have been 
described as wearing three hats; one representing the claimant, 
one representing SSA, and one as the independent decisionmaker. 
It was stated that more than 80% of claimants are represented 
by an attorney or other individual at the hearing, so the 
claimant and their representative provide evidence in support 
of their claim. How do the ALJs represent the Administration? 
Do they develop evidence from other medical sources? Do they 
order consultative examinations? Do you have objective data and 
have you studied cases to know the degree to which this is 
done?
    It is the policy of the Social Security Administration that 
its ALJs will fairly and fully develop any claim for benefits 
which reaches the Office of Hearings and Appeals. Social 
Security hearings are non-adversarial and not all claimants are 
represented or capable of representing themselves. Therefore, 
the ALJs have the duty to assist these claimants in getting the 
evidence to perfect their claims.
    There is case law in some Federal circuits holding that the 
ALJs are responsible for developing the record even if the 
claimant is represented. If the ALJ concludes that the evidence 
is insufficient to make a decision, the ALJ can order a 
consultative examination of the claimant. The ALJs may order 
these examinations on their own motion or on the recommendation 
of staff or medical advisors. The ALJs can also order the 
examination based on a request from the claimant or 
representative.
    When the record is complete, the ALJs act as fact finders 
and decide the case. The role of the ALJs in securing evidence, 
both favorable and unfavorable to the claimant, and then 
deciding the case, has led to the three hat analogy. However, 
as the Supreme Court stated in Richardson v. Perales, 402 U.S. 
389 (Supreme Court, 1971): ``Neither are we persuaded by the 
advocate-judge-multiple-hat suggestion .... The social security 
hearing examiner, furthermore, does not act as counsel. He acts 
as an examiner charged with developing the facts.''
    ALJs must order the consultative examination through the 
State Disability Determination Services. The ALJs ordered 
consultative exams for 59,168 cases in FY 1996 and 26,494 cases 
for the first 6 months in 1997.
    6. Do all of the ALJs write their own decisions? If not, 
how many do? Why aren't the ALJs asked to write their own 
decisions?
    ALJs draft their own decisions when by doing so, the ALJ 
would be providing better service to the public. Such a 
situation would arise when the time required to draft the 
decision is the same or less than the time required for the ALJ 
to prepare decision draft instructions. However, when a 
particular decision draft may be more time consuming, the 
public is better served by having the draft prepared by an 
attorney advisor or paralegal specialist. This permits the ALJ 
to focus on those activities which are uniquely the province of 
the ALJ, i.e., hearing and deciding cases.
    During FY 1996, ALJs drafted about 66,000 decisions. During 
the first half of FY 1997, ALJs have drafted about 30,000 
decisions. Although some ALJs dictate or handwrite decision 
drafts, the majority of ALJs who prepare drafts do so on 
personal computers.
    7. In his testimony, Judge Bernoski raised a series of 
questions regarding the relationship of any quality assurance 
system to the constitutional due process rights of claimants, 
as follows. Will the rights of the claimants be protected? Will 
the claimant have notice of review? Will the claimant have the 
right to appear and defend their interests? How do you plan to 
protect the rights of the claimants through- 
out the quality review process you are establishing? Please 
respond to these questions.
    SSA has always ensured that the due process rights of the 
claimants who file for benefits are protected. The quality 
assurance review of ALJ decisions is designed to ensure 
accurate and equal treatment in the decisionmaking process. 
This review will be conducted under the existing regulatory 
authority of the Appeals Council. Every claimant whose case is 
selected for review by the Appeals Council will be notified 
within the 60 day timeframe provided for by the regulation. 
Where the case is remanded and corrective action is taken by 
the presiding ALJ--including conducting another hearing where 
needed--the claimant and/or representative will have full 
access to the appropriate files, including the Appeals Council 
basis for remand; and the opportunity to raise objections or 
concerns. If the decision is reversed, we will provide proper 
notification and the claimants appeal rights will be further 
protected.
    8. One of the witnesses, Senior Attorney Mr. Hill, 
recommends that subject matter expertise should be included in 
the ALJ selection criteria. Is it not part of the selection 
criteria now? What criteria are used and how are the judges 
selected?
    The Office of Personnel Management (OPM) retains the 
responsibility for administering the merit selection and pay 
systems for ALJs government-wide. The basic qualifying 
experience for ALJs includes 7 years as a practicing attorney, 
preparing for, participating in, and/or reviewing formal 
hearings or trials, involving administrative law and/or 
litigation at the Federal, State or local level. The current 
process administered by OPM for the selection of ALJs involves 
OPM certifying candidates for appointment consideration from 
the top of the register (i.e., those with the highest score) 
without reference to a particular subject matter area or 
experience in the program of the agency that requested a list 
of eligibles. Under the current process, it has been OPM's 
policy that if agencies can justify by empirical data gathered 
through job analysis that agency-specific subject matter 
expertise enhances performance on the job, OPM will give 
special consideration to those applicants in certifying them to 
agencies.
    SSA had requested OPM to enter into an agreement to conduct 
a pilot study to determine the effect that subject-matter-
specific experience has on the productivity of recently hired 
ALJs at SSA. We requested that OPM consider subject-matter-
specific experience in certifying ALJ applicants because our 
productivity data have shown that new ALJs with SSA disability 
program experience have significantly higher productivity 
during the first 9 months on the job than those ALJs without 
this experience. We also found that new ALJs with such 
experience can be trained more quickly and require less 
mentoring from experienced ALJs. OPM had agreed to participate 
in the pilot; however, we recently learned that OPM no longer 
agrees to conduct the pilot. SSA considers the pilot to be 
particularly important to SSA given our current disability 
workload and the additional workloads projected from Welfare 
Reform legislation.
    The pilot study would not involve a permanent change in the 
hiring process for ALJs. At the conclusion of the study, which 
would last for 1 year, a determination will be made concerning 
the need for change to the policy and regulation, if any, for 
selection of ALJ candidates. In addition, as part of the study 
requirements, SSA would continue to hire some ALJs from regular 
ALJ certificates. On June 8, 1997, 31 new ALJs, who were hired 
from the regular ALJ certificate, reported for duty. We have 
made no selections thus far from a subject-matter-specific ALJ 
certificate.
    SSA has legal authority to select candidates from 
certificates, including subject-matter-specific certificates, 
provided to it by OPM. Furthermore, OPM has determined its own 
legal authority to provide certificates to agencies requesting 
them. In addition, the subject-matter-specific certificate does 
not violate the intent of Congress with respect to merit 
selection.
    9. The National Council of Disability Determination 
Directors recommends that SSA develop a shared vision of the 
program among all components: quality, policy, operations and 
budget. They seem to feel they are getting different messages 
from each component. What are your views?
    SSA works very hard on communication. The State-Federal 
relationship, while very effective, provides additional 
challenges in communications. The disability program has many 
complex factors affecting day-to-day program administration. 
Over the last several years, program administration has been 
particularly complex for DDSs because of special one-time 
legislated workloads they have been asked to handle in tight 
timeframes, efforts to assist the Office of Hearings and 
Appeals, and the various disability redesign initiatives 
underway. Through all of this, DDSs have responded to the 
challenges, focusing on providing the best possible service.
    It is understandable that DDSs may feel they are getting 
different messages from time to time as SSA strives to provide 
management direction that is responsive to the workload 
pressures that we face, while we continue to make needed 
refinements to our processes. In addition to our ongoing daily 
contacts with DDSs, SSA executives make special efforts to 
communicate frequently and openly with the officers of the 
National Council of Disability Determination Directors during 
quarterly meetings of the National Disability Issues Group, and 
with all DDS administrators twice a year during DDS Management 
Forums. We will continue to do all that we can to provide 
coordinated, clear direction to DDSs as we balance all of the 
various facets of disability program administration.
    10. Over the years, a number of questions have been raised 
regarding the scope of SSA's management authority over its 
ALJs. I understand that in January 1997, the Office of the 
General Counsel provided a memorandum to the Commissioner which 
provided clarification to this matter. Would you please comment 
on the primary contents of the memorandum?
    The purpose of the memorandum (attached at Tab A) was to 
review the scope of management authority that SSA may exercise 
over its ALJs, considering the factors that led to the passage 
of the Administrative Procedure Act (APA), the protections 
afforded by the APA to both ALJs and to those utilizing the 
administrative process, and the often misunderstood concept of 
the ALJ's ``decisional independence.''
    The memorandum's primary message is that the agency has the 
right and duty to ensure that its ALJs, like any other agency 
adjudicators, perform their jobs with appropriate demeanor and 
decorum and without bias, and that the decisions they issue on 
behalf of the Commissioner be made timely, be of the highest 
quality, supported by the evidence found in the record, and 
consistent with the agency's procedures and interpretations of 
law. The memorandum also states that, to achieve these goals, 
the agency can ask ALJs to follow reasonable administrative 
practices and programmatic policies as long as these do not 
interfere, either directly or indirectly, with the duty of 
impartiality that ALJs owe to claimants when hearing and 
deciding cases. Specifically, the memorandum discusses the 
agency's responsibility to ensure that its ALJs are well versed 
in its interpretations of the law, and reinforces the agency's 
ability to use a number of tools to guarantee that its hearing 
process is operated efficiently and effectively, including the 
use of reasonable production targets and quality assurance 
programs.

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    11. In his testimony, Judge Bernoski indicated that the 
Office of General Counsel memo appears to be an attempt to 
provide a legal basis to require ALJs to follow SSA policy that 
is not consistent with the law. What is your reaction?
    SSA's policy is to acquiesce in final circuit court 
decisions which conflict with SSA's interpretation of the 
Social Security Act or regulations regardless of our 
disagreement with the holding. This policy has not changed 
since SSA's current regulations (20 C.F.R. Sec.  Sec.  404.985 
and 416.1485) on acquiescence were published on January 11, 
1990 (55 Fed. Reg. 1012). (See May 21, 1997, letter to you from 
Acting Commissioner John J. Callahan, attached at Tab B). The 
Office of the General Counsel memorandum makes no changes to 
the acquiescence policy. It merely restates well-established 
law that an ALJ is not free to apply his or her own 
interpretation of the law, but, instead, is bound to apply the 
law as enacted by the Congress as set forth by the Commissioner 
through regulations and rulings.
    As explained by the General Counsel in his testimony before 
the Subcommittee on Commercial and Administrative Law Committee 
on the Judiciary on May 22, 1997: ``Circuit court decisions are 
written to decide individual cases, not to provide adjudicatory 
instructions to decisionmakers, and are therefore often subject 
to disparate interpretations, particularly when the myriad 
possible situations to which they may apply are considered. If 
each of SSA's thousands of decisionmakers were responsible for 
interpreting circuit court holdings, it could result in 
conflicting decisions by different decisionmakers, even within 
the same circuit. SSA would have no way to ensure uniform 
application of eligibility standards as required by law, 
leading to further litigation. Indeed, SSA would have no 
mechanism to ensure that agency rules are consistently applied, 
since under this approach, it would be the adjudicator's role 
to interpret circuit court decisions for him or herself. 
Instead, the interpretation of a circuit court's decision and 
its consistency with SSA policy is appropriately made with 
careful scrutiny by SSA officials who have a broad 
understanding of national policy and who work closely with 
Department of Justice attorneys in this effort. If an ALJ or 
other decisionmaker believes that a particular circuit court 
decision conflicts with SSA policy, the decisionmaker can 
provide input to the Office of General Counsel through the 
appropriate channels about either appealing the case or issuing 
an Acquiescence Ruling.''

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    12. Judge Bernoski also asked the question ``how does an 
agency `manage' the administrative hearing process and not 
trample on the rights of the claimants?'' How do you respond?
    As the January 28, 1997, Office of the General Counsel 
memorandum makes clear, part of the agency's responsibility in 
managing the administrative hearing process is to ensure that 
the rights of the claimants are protected, and that the 
agency's adjudicators are conducting themselves appropriately 
through the hearing process, including issuing fair and legally 
sufficient decisions. If a claimant believes that the hearing 
process used to decide the case did not comport with legal 
requirements, he or she can appeal the decision through the 
administrative appeals process and seek review in federal 
court. It would be far more likely that the rights of 
individual claimants would be ``trampled'' if each ALJ were 
free to determine for himself or herself what the proper 
procedures and policy should be, than under the current system 
in which it is the agency which promulgates rules and 
regulations, in accordance with statute, to protect claimants' 
rights and can be held accountable for ensuring that such rules 
and regulations are properly administered.
    13. In his testimony, Judge Bernoski indicated that the 
largest distinguishing factor for difference in results between 
DDSs and ALJs is the use of the legal standard at the appellate 
level which provides the claimant with the benefit of the full 
scope of the law for the adjudication of the claim. The DDS 
standard is set forth in instructions used only by DDS 
decisionmakers and not the judges (these are referred to as 
POMS). What are your views?
    For the past two years, SSA has had a workgroup of senior 
SSA and DDS officials studying the disability process at both 
the DDS and ALJ levels. This included looking at the so-called 
``medical'' versus ``legal'' model. We have concluded that 
disability is now, and always has been, a medical-legal issue, 
and we disagree with Judge Bernoski that the largest 
distinguishing factor for difference in results is ``the use of 
the legal standard at the appellate level.''
    SSA has also looked extensively at the regulations, 
rulings, and POMS that provide instructional guidance to our 
adjudicators and concluded that there is no substantive 
difference between the regulations and rulings used by the ALJs 
and the POMS used by the DDSs. In other words, there is not a 
different substantive legal standard applied at the appellate 
level. However, we are aware that there is a perception by some 
(such as Judge Bernoski) that the different instructional 
materials result in differences. That is why we are preparing a 
single presentation of policy that will be used by all 
decisionmakers.
    Finally, there are some differences between the DDS and ALJ 
levels that are intentional. The ALJ conducts a formal hearing 
in which the claimant can appear before an ALJ and has due 
process rights, such as the right to request subpoenas and to 
cross-examine witnesses. These procedural differences naturally 
have some affect on the ALJ decisions; however, the policies 
for determining disability are the same for all adjudicative 
levels.

                                

    Chairman Bunning. Thank you. Thank you all for your 
testimony. We appreciate it very much.
    If the next panel would come forward.
    GAO, the General Accounting Office, at my request, has been 
investigating SSA's management of the disability program with 
particular focus on the reasons for differences in DDS and ALJ 
decisions. Presenting the GAO findings are Jane Ross, the 
Director, and Cynthia Bascetta, Assistant Director of Income 
Security Issues of the Health, Education, and Human Services 
Division.
    Ms. Ross, would you please begin, once you get settled.

 STATEMENT OF JANE L. ROSS, DIRECTOR, INCOME SECURITY ISSUES, 
 HEALTH, EDUCATION, AND HUMAN SERVICES DIVISION, U.S. GENERAL 
 ACCOUNTING OFFICE; ACCOMPANIED BY CYNTHIA BASCETTA, ASSISTANT 
 DIRECTOR, INCOME SECURITY  ISSUES,  HEALTH,  EDUCATION,  AND  
                    HUMAN SERVICES  DIVISION

    Ms. Ross. Good morning, Mr. Chairman. Thank you for 
inviting me to testify on SSA's management of its disability 
programs.
    My testimony is based on our reports and ongoing study 
which we are conducting for you. As you know and as you have 
just heard, SSA set out in 1994 to redesign disability 
decisionmaking to improve its timeliness, efficiency, and 
consistency. It undertook redesign because the lengthy and 
complicated decisionmaking process and the inconsistent 
decisions between adjudicative levels compromise the integrity 
of disability determinations and result in poor service for 
people applying for benefits.
    SSA has an opportunity now if it follows through on its 
plans to finally address some of the longstanding problems with 
disability decisionmaking.
    I want to talk briefly about the number of cases awaiting 
ALJ hearings. This backlog began to grow dramatically in 1987. 
By 1996 the backlog had reached 475,000 cases. The huge 
increases in the number of appeals contributed to a rise in 
averaging processing time which now exceeds 375 days.
    SSA acted to try and reduce this backlog by developing 
their short-term disability project, and under this project, 
SSA staff review and attempt to resolve appealed cases before 
they are actually assigned to ALJs, but despite this short-term 
initiative, the agency wasn't able to reach its goal, so the 
current backlog is now about 491,000 cases.
    The point we would like to make here is, even though the 
goal hasn't been reached, about 98,000 more cases would have 
been added to the backlog without this short-term initiative. 
So we urge SSA to continue its short-term effort while it is 
moving ahead to more fundamentally change their disability 
determination process.
    Besides the backlog, high ALJ allowances have been a 
subject of concern for many years, as you have said. Because 
ALJs allow about two-thirds of all the cases they decide, there 
is a real incentive for claimants to appeal, and indeed, for 
several years, about three-quarters of everyone whose claim has 
been denied at the DDS reconsideration level has appealed their 
claims.
    Under Process Unification, which is a part of SSA's 
redesign plan, several initiatives were developed specifically 
with the objective of achieving similar decisions on similar 
cases regardless of whether the case was decided at the DDS or 
ALJ level.
    SSA expects that improving the consistency of decisions 
will result in a substantial reduction in the proportion of 
appealed cases and a reduction of ALJ allowance rates as well.
    You can observe in table 1 of the written testimony you may 
have before you the current high rate of inconsistency between 
DDSs and ALJs. You can notice that DDS award rates vary by 
impairment type from 11 percent for back impairments to 54 
percent for mental retardation.
    In contrast, ALJ award rates are uniformly high, with much 
smaller amounts of variation. For physical impairments, as you 
can see on the table, ALJs award about 74 percent of their 
claims, and for mental impairments, about 87 percent.
    We were able to determine three major reasons for these 
inconsistencies. Briefly, it has to do with the differences in 
approach between ALJs and DDSs, the difference in their 
procedures, and the difference in their quality assurance 
reviews.
    Let me just summarize my conclusion. SSA is on the verge of 
implementing several initiatives to reduce these three sources 
of inconsistency and issued rulings last July to remind DDSs 
and ALJs of agency policies related to evaluating evidence and 
following the Commissioner's guidance.
    They also plan to return to DDSs about 100,000 cases a year 
for further consideration when new evidence is introduced at 
the ALJ level and to review about 10,000 ALJ awards per year to 
assure the ALJ allowances are appropriate, but here is our 
major point we would like to emphasize.
    There are other high priority issues that are causing 
workload pressures for SSA, for all of their adjudicators. For 
instance, SSA is required to conduct hundreds of thousands more 
continuing disability reviews to ensure that beneficiaries are 
still eligible for benefits. They are required to readjudicate 
over 300,000 childhood disability cases by February 1998. Our 
concern is how they are going to be able to manage all of these 
initiatives at the same time, along with keeping a high 
priority on Process Unification.
    To follow through on its initiatives to address the 
longstanding problem of decisional inconsistency, we believe 
that SSA, in consultation with this Subcommittee and others, 
will need to sort through its many priorities and do a better 
job of holding itself accountable for meeting its deadlines. 
Otherwise, plans and target dates will remain elusive goals and 
may never yield the benefits of helping to restore public 
confidence in decisionmaking and improving service to the 
public.
    Mr. Chairman, this concludes my prepared statement. I would 
be glad to answer your questions.
    [The prepared statement follows:]

Statement of Jane L. Ross, Director, Income Security Issues, Health, 
Education, and Human Services Division, U.S. General Accounting Office

 SSA Actions to Reduce Backlogs and Achieve More Consistent Decisions 
                         Deserve High Priority

    Mr. Chairman and Members of the Subcommittee:
    Thank you for inviting me to testify on the Social Security 
Administration's (SSA) management of the Disability Insurance 
(DI) and Supplemental Security Income (SSI) programs. In 1995, 
these programs paid benefits approaching $60 billion a year and 
served nearly 7 million working-age adults. As you are aware, 
SSA's process has been overwhelmed with a large number of 
appealed cases, which grew from about 225,000 in fiscal year 
1986 to about 498,000 in fiscal year 1996.
    Today I will discuss actions that SSA undertook, beginning 
in 1994, to improve the timeliness, efficiency, and consistency 
of disability decisions. Its actions resulted from a 
realization that the lengthy and complicated decision-making 
process and the inconsistency of decisions between adjudicative 
levels compromise the integrity of disability determinations. 
More specifically, I will describe SSA's actions to reduce the 
current backlog of cases appealed to the agency's 
administrative law judges (ALJ). Then I will discuss how 
functional assessments, differences in procedures, and quality 
review contribute to inconsistent results between different 
decisionmakers and describe SSA's strategy to obtain greater 
decisional consistency. My testimony is based on our reports 
and our ongoing studies of SSA's disability programs being 
conducted for the Chairman of the Subcommittee. (See the list 
of related GAO products.)
    In summary, our work shows that while SSA has developed 
broad-based plans to improve the management of its disability 
programs, many initiatives are just beginning and their 
effectiveness can be assessed only after a period of full-scale 
implementation. For example, in the short term, SSA has taken 
action to try to deal with the backlog crisis, but it is still 
about 116,000 cases over its December 1996 goal of 375,000 
cases. In the longer term, SSA needs to come to grips with the 
systemic factors causing inconsistent decisions, which underlie 
the current high level of appealed cases and, in turn, the 
backlog crisis. For example, we found that differences in 
assessments of functional capacity, different procedures, and 
weaknesses in quality reviews contribute to inconsistent 
decisions. Although SSA is on the verge of implementing 
initiatives to deal with these factors, we are concerned that 
other congressionally mandated workload pressures, such as 
significantly increasing the number of continuing disability 
reviews and readjudicating childhood cases, could jeopardize 
the agency's ability to move ahead with its initiatives to 
reduce inconsistent decisions.

                               Background

    SSA's disability programs provide cash benefits to people 
with long-term disabilities. The DI program provides monthly 
cash benefits and Medicare eligibility to severely disabled 
workers; SSI is an income assistance program for blind and 
disabled people. The law defines disability for both programs 
as the inability to engage in substantial gainful activity 
because of a severe physical or mental impairment that is 
expected to last at least 1 year or result in death.
    Both DI and SSI are administered by SSA and state 
disability determination services (DDS). SSA field offices 
determine whether applicants meet the nonmedical criteria for 
eligibility and at the DDSs, a disability examiner and a 
medical consultant (physician or psychologist) make the initial 
determination of whether the applicant meets the definition of 
disability. Denied claimants may ask the DDS to reconsider its 
finding and, if denied again, may appeal to an ALJ within SSA's 
Office of Hearings and Appeals (OHA). The ALJ usually conducts 
a hearing at which applicants and medical or vocational experts 
may testify and submit new evidence. Applicants whose appeals 
are denied may request review by SSA's Appeals Council and may 
further appeal the Council's decision in federal court.
    Between fiscal years 1986 and 1996, the increasing number 
of appealed cases has caused workload pressures and processing 
delays. During that time, appealed cases increased more than 
120 percent. In the last 3 years alone, average processing time 
for appealed cases rose from 305 days in fiscal year 1994 to 
378 days in fiscal year 1996 and remained essentially the same 
for the first quarter of fiscal year 1997. In addition, 
``aged'' cases (those taking 270 days or more for a decision) 
increased from 32 percent to almost 43 percent of the 
backlog.\1\
---------------------------------------------------------------------------
    \1\ Processing time represents total OHA workloads, which include 
appealed Medicare cases.
---------------------------------------------------------------------------
    In addition to the backlog, high ALJ allowances (in effect, 
``reversals'' of DDS decisions to deny benefits \2\) have been 
a subject of concern for many years. Although the current ALJ 
allowance rate has dropped from 75 percent in fiscal year 1994, 
ALJs still allow about two-thirds of all disability claims they 
decide. Because chances for award at the appeals level are so 
favorable, there is an incentive for claimants to appeal. For 
several years, about three-quarters of all claimants denied at 
the DDS reconsideration level have appealed their claims to the 
ALJ level.\3\
---------------------------------------------------------------------------
    \2\ ALJ decisions are said to be de novo, or ``afresh.''
    \3\ About one-third of claimants denied at the initial DDS-level 
appeal, while the rest abandon their cases.
---------------------------------------------------------------------------
    In 1994, SSA adopted a long-term plan to redesign the 
disability decision-making process to improve its efficiency 
and timeliness. As a key part of this plan, SSA developed 
initiatives to achieve similar decisions on similar cases 
regardless of whether the decisions are made at the DDS or the 
ALJ level. In July 1996, several of these initiatives, called 
``process unification,'' were approved for implementation by 
SSA's Commissioner. SSA expects that process unification will 
result in correct decisions being made at the earliest point 
possible, substantially reducing the proportion of appealed 
cases and ALJ allowance rates as well.
    Because SSA expects that implementation of its redesigned 
disability decision-making process will not be completed until 
after the year 2000, SSA developed a Short Term Disability 
Project Plan (STDP) to reduce the existing backlog by intro- 
ducing new procedures and reallocating staff. STDP is designed 
to expedite processing of claims in a way that will support 
redesign and achieve some near-term results in reducing the 
backlog. SSA expects that STDP's major effect will come 
primarily from two initiatives--regional screening unit and 
prehearing conferencing activities. In the screening units, DDS 
staff and OHA attorneys work together to identify claims that 
could be allowed earlier in the appeals process. Prehearing 
conferencing shortens processing time for appealed cases by 
assigning OHA attorneys to perform limited case development and 
review cases to identify those that could potentially be 
allowed without a formal hearing. The plan called for reducing 
the backlog to 375,000 appealed cases by December 31, 1996.

         Despite SSA's Efforts, SSA Still Faces a High BAcklog

    Despite SSA attempts to reduce the backlog through its STDP 
initiatives, the agency did not reach its goal of reducing this 
backlog to 375,000 by December 1996.\4\ SSA attributes its 
difficulties in meeting its backlog target to start-up delays, 
overly optimistic projections of the number of appealed cases 
that would be processed, and an unexpected increase in the 
number of appealed cases. The actual backlog in December was 
about 486,000 cases and has risen in the last few months to 
491,000 cases, still about 116,000 over its goal. Although SSA 
did not reach its backlog goal, about 98,000 more cases may 
have been added to the backlog if STDP steps had not been 
undertaken. The contribution made by STDP underscores the need 
for SSA to continue its short-term effort while moving ahead to 
address the disability determination process in a more 
fundamental way in the long term.
---------------------------------------------------------------------------
    \4\ SSA's goal included Medicare claims, which ALJs also decide. 
However, the STDP initiatives focused only on disability claims, which 
represented about 94 percent of the backlog in fiscal year 1996.
---------------------------------------------------------------------------

  Decision-Making Process Yields High Degree of Inconsistency Between 
                             DDSs and ALJs

    In addition to the backlog problem, SSA's decision-making 
process has produced a high degree of inconsistency between DDS 
and ALJ awards, as shown in table 1. Although award rates 
representing DDS decision-making vary by impairment, ALJ award 
rates are high regardless of the type of impairment. For 
example, sample data showed that DDS award rates ranged from 11 
percent for back impairments to 54 percent for mental 
retardation. In contrast, ALJ award rates averaged 77 percent 
for all impairment types with only a smaller amount of 
variation among impairment types.

      Table 1: Award Rates at DDS and ALJ Levels by Impairment Type     
------------------------------------------------------------------------
                                             DDS award       ALJ award  
                                               rates           rates    
                                             (percent)       (percent)  
------------------------------------------------------------------------
Physical................................              29              74
Musculoskeletal.........................              16              75
Back cases..............................              11              75
Other musculoskeletal...................              23              76
Other physical..........................              36              74
Mental..................................              42              87
Illness.................................              39              87
Retardation.............................              54              84
All impairments.........................              30              77
------------------------------------------------------------------------
Note: ALJ data are from an ongoing SSA study. Data include ALJ cases    
  decided from September 1, 1992, through April 30, 1995. Study samples 
  excluded certain types of cases, such as children's cases. DDS data   
  for the same period and types of cases were obtained from SSA's       
  administrative database.                                              


 Disability Determinations Require Complex Judgment

    SSA's process requires adjudicators to use a five-step 
sequential evaluation process in making their disability 
decisions (see table 2). Although this process provides a 
standard approach to decision-making, determining disability 
often requires that a number of complex judgments be made by 
adjudicators at both the DDS and ALJ levels.

                   Table 2: Five-Step Sequential Evaluation Process for Determining Disability                  
----------------------------------------------------------------------------------------------------------------
                                                                 Action or decision taken if answer to question 
                                        Questions asked in the                         is:                      
                 Step                     sequential process   -------------------------------------------------
                                                                          Yes                       No          
----------------------------------------------------------------------------------------------------------------
1....................................  Is the claimant          Stop--claimant is not    Go to step 2           
                                        engaging in              disabled.                                      
                                        substantial gainful                                                     
                                        activity?.                                                              
2....................................  Does the claimant have   Go to step 3...........  Stop--claimant is not  
                                        an impairment that has                            disabled              
                                        more than a minimal                                                     
                                        effect on the                                                           
                                        claimant's ability to                                                   
                                        perform basic work                                                      
                                        tasks and is expected                                                   
                                        to last at least 12                                                     
                                        months?.                                                                
3....................................  Do the medical facts     Stop--claimant is        Go to step 4           
                                        alone show that the      disabled.                                      
                                        claimant's impairment                                                   
                                        meets or equals the                                                     
                                        medical criteria for                                                    
                                        an impairment in SSA's                                                  
                                        Listing of                                                              
                                        Impairments?.                                                           
4....................................  Comparing the            Stop--claimant is not    Go to step 5           
                                        claimant's residual      disabled.                                      
                                        functional capacity                                                     
                                        with the physical and                                                   
                                        mental demands of the                                                   
                                        claimant's past work,                                                   
                                        can the claimant                                                        
                                        perform his or her                                                      
                                        past work?.                                                             
5....................................  Based on the claimant's  Claimant is not          Claimant is disabled   
                                        residual functional      disabled.                                      
                                        capacity and any                                                        
                                        limitations that may                                                    
                                        be imposed by the                                                       
                                        claimant's age,                                                         
                                        education, and skill                                                    
                                        level, can the                                                          
                                        claimant do work other                                                  
                                        than his or her past                                                    
                                        work?.                                                                  
----------------------------------------------------------------------------------------------------------------


    As the application proceeds through the five-step process, 
claimants may be denied benefits at any step, ending the 
process. Steps 1 and 2 ask questions about the claimant's work 
activity and the severity of the claimant's impairment. If the 
reported impairment is judged to be severe, adjudicators move 
to step 3. At this step, they compare the claimant's condition 
to a listing of medical impairments developed by SSA. Claimants 
whose conditions meet or are medically equivalent to the 
listings are presumed by SSA to be unable to work and are 
awarded benefits. Claimants whose conditions do not meet or 
equal the listings are then assessed at steps 4 and 5, where 
decisions must be made about the claimant's ability to perform 
prior work and any other work that exists in the national 
economy. To do this, adjudicators assess the claimant's 
capacity to function in the workplace.
    DDS and ALJ adjudicators exercise considerable judgment 
when making these functional assessments. They must consider 
and weigh all available evidence, including physician opinions 
and reported symptoms, such as pain. Mental impairment 
assessments include judgments about the claimant's ability to 
understand, remember, and respond appropriately to supervision 
and normal work pressures. For physical impairments, 
adjudicators judge the claimant's ability to walk, sit, stand, 
and lift. To facilitate this, SSA has defined five levels of 
physical exertion ranging from very heavy to sedentary. 
However, for those claimants unable to perform even sedentary 
activities, adjudicators may determine that a claimant can 
perform ``less than a full range of sedentary'' activities, a 
classification that often results in a benefit award.

  DDSs and ALJs Differ Primarily Over Claimant's Functional Abilities

    Our analysis found that differing functional assessments by 
DDSs and ALJs are the primary reason for most ALJ awards. Since 
most DDS decisions use all five steps of the sequential 
evaluation process before denying a claim, almost all DDS 
denial decisions appealed to ALJs included such a functional 
assessment. On appeal, the ALJ also follows the same sequential 
evaluation process as the DDS and also assesses the claimant's 
functional abilities in most awards they make.
    Data from SSA's ongoing ALJ study indicate that ALJs are 
much more likely than DDSs to find that claimants have severe 
limitations in functioning in the workplace (see table 3).

        Table 3: DDS and ALJ Differences in Functional Assessment       
             Classifications for Physical Impairment Awards             
------------------------------------------------------------------------
                                               Percentage of awards     
                                         -------------------------------
Level of physical exertion determined by      Quality                   
          functional assessment              reviewers       Original   
                                             using DDS     awarding ALJs
                                             approach                   
------------------------------------------------------------------------
Heavy work (or no limiting effect on                                    
 physical effort).......................               0               0
Medium work.............................              22               1
Light work..............................              56               8
Sedentary work..........................              15              25
Less than the full range of sedentary                                   
 work...................................               6              66
------------------------------------------------------------------------
Note: Data are for ALJ awards made from September 1992 through April    
  1995.                                                                 


    Most notably, in the view of the awarding ALJs, 66 percent 
of the cases merited a functional capacity assessment of ``less 
than the full range of sedentary'' work--a classification that 
is likely to lead to an award. In contrast, reviewers, using 
the DDS approach, found that less than 6 percent of the cases 
merited this classification.
    Functional assessment also played a key role in a 1982 SSA 
study, which controlled for differences in evidence. This study 
indicated that DDS and ALJ decisionmakers reached different 
results even when presented with the same evidence.\5\ As part 
of the study, selected cases were reviewed by two groups of 
reviewers--one group reviewing the cases as ALJs would and the 
other reviewing the cases as DDSs would. Reviewers using the 
ALJ approach concluded that 48 percent of the cases should have 
received awards, while reviewers using the DDS approach 
concluded that only 13 percent of those same cases should have 
received awards.
---------------------------------------------------------------------------
    \5\ Implementation of Section 304 (g) of Public Law 96-265, Social 
Security Disability Amendments of 1980: Report to the Congress by the 
Secretary of Health and Human Services, SSA, Department of Health and 
Human Services (Jan. 1982). This report is commonly known as the 
``Bellmon Report.''
---------------------------------------------------------------------------
    The use of medical expertise appears to influence the 
decisional differences at the DDS and ALJ levels. At the DDS 
level, medical consultants are responsible for making 
functional assessments. In contrast, ALJs have the sole 
authority to determine functional capacity and often rely on 
claimant testimony and the opinions of treating physicians. 
Although ALJs may call on independent medical experts to 
testify, our analysis shows that they do so in only 8 percent 
of the cases resulting in awards.
    To help reduce inconsistency, SSA issued nine rulings on 
July 2, 1996, which were written to address pain and other 
subjective symptoms, treating source opinions, and assessing 
functional capacity.\6\ SSA also plans to issue a regulation to 
provide additional guidance on assessing functional capacity at 
both the DDS and ALJ levels, specifically clarifying when a 
``less than sedentary'' classification is appropriate.\7\ In 
addition, based on the nine rulings, SSA completed nationwide 
process unification training of over 15,000 adjudicators and 
quality reviewers between July 10, 1996, and February 26, 1997. 
In the training, SSA emphasized that it expects the ``less than 
sedentary'' classification would be used rarely. In the longer 
term, SSA plans to develop a simplified decision-making 
process, which will expand the role of functional capacity 
assessments. Because differences in functional capacity 
assessments are the primary reason for inconsistent decisions, 
SSA should proceed cautiously with its plan to expand the use 
of such assessments.
---------------------------------------------------------------------------
    \6\ Federal Register, 61 F.R. 34466-34492 (July 2, 1996).
    \7\ SSA told us that the notice of proposed rulemaking on the 
``less than sedentary'' regulations is ready for release but did not 
provide the date when it would be issued.
---------------------------------------------------------------------------

Procedures Limit Use of DDS Decisions as a Foundation for ALJ Decisions

    Procedures at the DDS and ALJ levels limit the usefulness 
of the DDS decision as a foundation for the ALJ decision. 
Often, ALJs are unable to rely on DDS decisions because they 
lack supporting evidence and explanations of the reasons for 
denial, laying a weak foundation for the ALJ decision if the 
case is appealed. Moreover, although SSA requires ALJs to 
consider the DDS medical consultant's assessment of functional 
capacity, procedures at the DDS level do not ensure that such 
assessments are clearly explained. In a 1994 study, SSA found 
that written explanations of critical issues at the DDS level 
were inadequate in about half of the ap- 
pealed cases that turned on complex issues.\8\ Without a clear 
explanation of the DDS decision, the ALJ could neither 
effectively consider it nor give it much weight.
---------------------------------------------------------------------------
    \8\ Findings of the Disability Hearings Quality Review Process, 
Office of Program and Integrity Reviews, Social Security Administration 
(Sept. 1994).
---------------------------------------------------------------------------
    At the ALJ level, claimants are allowed to claim new 
impairments and submit new or additional evidence, which also 
affects consistency between the two levels. Moreover, in about 
10 percent of cases appealed to the ALJ level, claimants switch 
their primary impairment from a physical claim to a mental 
claim. In addition, data from a 1994 SSA study show that 
claimants submit additional evidence to the ALJ in about three-
quarters of the sampled cases, and that additional evidence was 
an important factor in 27 percent of ALJ allowances.
    To address the documentation issues, SSA plans to take 
steps to ensure that DDS decisions are better explained and are 
based on a more complete record so that they are more useful if 
appealed. On the basis of feedback during the process 
unification training, SSA plans further instructions and 
training in May 1997 for the DDSs on how and where in the case 
files they should explain how they reached their decisions. SSA 
also plans to issue a regulation clarifying the weight given to 
the DDS medical consultants' opinions at the ALJ level.\9\
---------------------------------------------------------------------------
    \9\ SSA told us that the notice of proposed rulemaking on the DDS 
medical consultants' opinions is in final clearance within SSA.
---------------------------------------------------------------------------
    To deal with the potential effect of new evidence, SSA 
plans to return to the DDSs about 100,000 selected cases a year 
for further consideration when new evidence is introduced at 
the ALJ level. In cases where the DDS would award benefits, the 
need for a more time-consuming and costly ALJ decision would be 
avoided. SSA plans to implement this project in May 1997. 
Moreover, SSA's decision to limit such returns to about 100,000 
cases may need to be reassessed in light of the potential 
benefits that could accrue from this initiative.

  Quality Reviews do not Focus on Inconsistency Between DDSs and ALJs

    Although SSA has several quality review systems to examine 
disability decisions, none is designed to identify and 
reconcile factors that contribute to differences between DDS 
and ALJ decisions. For example, although ALJs are required to 
consider the opinion of the DDS medical consultant when making 
their own assessment of a claimant's functional capacity, such 
written DDS opinions are often lacking in the case files. 
Quality reviews at the DDS level do not focus effectively on 
whether or how well these opinions are explained in the record, 
despite the potential importance of such medical opinion 
evidence at the ALJ level. Moreover, SSA reviews too few ALJ 
awards to ensure that ALJs give appropriate consideration to 
the medical consultants' opinions or to identify means to make 
them more useful to the ALJs. Feedback on these issues could 
help improve consistency by making the DDS decision a more 
useful part of the overall adjudication process.
    To improve consistency, SSA is completing work on a notice 
of proposed rulemaking, with a target issue date of August 1997 
for a final regulation, to establish the basis for reviewing 
ALJ awards, which would require ALJs to take corrective action 
on remand orders from the Appeals Council before benefits are 
paid. SSA has just started conducting preliminary reviews of 
ALJ awards, beginning with 200 cases a month. After the 
regulation is issued, they plan to increase the number of cases 
per month. SSA has set a first-year target of 10,000 cases to 
be reviewed, but this reflects only about 3 percent of 
approximately 350,000 award decisions made by ALJs in 1996. 
Ultimately, SSA plans to implement quality review measures to 
provide consistent feedback on the application of policy. By 
doing this, the agency hopes to ensure that the correct 
decision is made at the earliest point in the process.

Competing Workloads Could Jeopardize Initiatives to Improve Consistency 
                              of Decisions

    At the same time that SSA is trying to begin implementation 
of its process unification initiatives, it faces significantly 
increasing workloads at all levels of adjudication. In 
particular, efforts to improve decisional consistency will 
compete with specific congressional mandates for time and 
resources. For example, the Social Security Independence and 
Program Improvements Act of 1994 and the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 
require hundreds of thousands of more continuing disability 
reviews (CDR) to ensure that beneficiaries are still eligible 
for benefits. By law, SSA will be required to conduct CDRs for 
at least 100,000 more SSI beneficiaries annually through fiscal 
year 1998. Last year, the Congress increased CDR requirements 
for children on SSI, requiring them at least every 3 years for 
children under age 18 who are likely to improve and for all 
low-birthweight babies within the first year of life. In 
addition, SSA is required to redetermine, using adult criteria, 
the eligibility of all 18-year-olds on SSI beginning on their 
18th birthdays and to readjudicate 332,000 childhood disability 
cases by August 1997. Finally, thousands of noncitizens and 
drug addicts and alcoholics could appeal their benefit 
terminations, further increasing workload pressures.

                        Concluding Observations

    Despite SSA's Short Term Disability Project Plan, the 
appealed case backlog is still high. Nevertheless, because the 
backlog would have been even higher without STDP, SSA will need 
to continue its effort to reduce the backlog to a manageable 
level until the agency, as a part of its long-term redesign 
effort, institutes a permanent process to ensure timely and 
expeditious disposition of appeals.
    In addition, SSA is beginning to move ahead with more 
systemwide changes in its redesign of the disability claims 
process. In particular, it is on the verge of implementing 
initiatives to redesign the process, including ones for 
improving decisional consistency and the timeliness of overall 
claims processing. However, competing workload demands could 
jeopardize SSA's ability to make progress in reducing 
inconsistent decisions.
    We urge the agency to follow through on its initiatives to 
address the long-standing problem of decisional inconsistency 
with the sustained attention required for this difficult task. 
To do so, SSA, in consultation with this Subcommittee and 
others, will need to sort through its many priorities and do a 
better job of holding itself accountable for meeting its 
deadlines. Otherwise, plans and target dates will remain 
elusive goals and may never yield the dual benefits of helping 
to restore public confidence in the decision-making process and 
contributing to permanent reductions in backlog.
    Mr. Chairman, this concludes my prepared statement. At this 
time, I will be happy to answer any questions you or the other 
Subcommittee members may have.

For more information on this testimony, please call Cynthia 
Bascetta, Assistant Director, at (202) 512-7207. Other major 
contributors are William Hutchinson, Senior Evaluator; Carol 
Dawn Petersen, Senior Economist; and David Fiske, Ellen 
Habenicht, and Carlos Evora, Senior Evaluators.

                          Related GAO Products

    Appealed Disability Claims: Despite SSA's Efforts, It Will Not 
Reach Backlog Reduction Goal (GAO/HEHS-97-28, Nov. 21, 1996).
    Social Security Disability: Backlog Reduction Efforts Under Way; 
Significant Challenges Remain (GAO/HEHS-96-87, July 11, 1996).
    Social Security Disability: Management Action and Program Redesign 
Needed to Address Long-Standing Problems (GAO/T-HEHS-95-233, Aug. 3, 
1995).
    Disability Insurance: Broader Management Focus Needed to Better 
Control Caseload (GAO/T-HEHS-95-233, May 23, 1995).
    Social Security: Federal Disability Programs Face Major Issues 
(GAO/T-HEHS-95-97, Mar. 2, 1995).
    Social Security Disability: SSA Quality Assurance Improvements Can 
Produce More Accurate Payments (GAO/HEHS-94-107, June 3, 1994).
    Social Security: Most of Gender Difference Explained (GAO/HEHS-94-
94, May 27, 1994).
    Social Security: Disability Rolls Keep Growing, While Explanations 
Remain Elusive (GAO/HEHS-94-34, Feb. 8, 1994).
    Social Security: Increasing Number of Disability Claims and 
Deteriorating Service (GAO/HRD-94-11, Nov. 10, 1993).
    Social Security: Rising Disability Rolls Raise Questions That Must 
Be Answered (GAO/T-HRD-93-15, Apr. 22, 1993).
    Social Security Disability: Growing Funding and Administrative 
Problems (GAO/T-HRD-92-28, Apr. 27, 1992).
    Social Security: Racial Difference in Disability Decisions Warrants 
Further Investigation (GAO/HRD-92-56, Apr. 21, 1992).
    Social Security: Results of Required Reviews of Administrative Law 
Judge Decisions (GAO/HRD-89-48BR, June 13, 1989).

                                

    Chairman Bunning. Thank you, Ms. Ross.
    In reading your testimony, it is clear the ALJ association 
has a number of disagreements with many of your findings. Did 
GAO talk to the ALJs in conducting its work for this study?
    Ms. Ross. First of all, let me just say that our study 
hasn't been released yet. So I am not sure what it is the ALJ 
association is actually objecting to, except, perhaps, a one-
page summary that went out with your hearing notice, but more 
specifically to the point of whom we talked to, we talked to 
the current acting president of the ALJ association, as well as 
the former president. In addition, we talked to 20 
administrative law judges and some regional chief judges and 
hearing office judges. So we think we have done a very good job 
of making the ALJ context at the whole range of the ALJ level, 
but let me also say the major focus of the work we are doing 
for you is a data analysis. We are looking at the data on how 
these inconsistencies occur, where and why. We are using our 
interviews to confirm what we find, but the major thing is a 
solid analysis from data that SSA has shared with us.
    Chairman Bunning. In looking at that data, as you say GAO 
is doing, do you find the disability determination being done 
on a medical or legal basis?
    Ms. Ross. I think the appropriate answer is that disability 
determination is a mix of the two. On the medical dimension, 
both the DDSs and the ALJs are required to go through a fairly 
extensive sequential evaluation of a person's impairment. Is it 
severe? Does it meet medical listings? Does it allow people to 
continue to function in the workplace? So both the ALJ and the 
DDS examiner are supposed to use that same set of criteria.
    The way in which they evaluate that is different, and that 
is part of the issue, but they both are supposed to have a 
medical dimension, and obviously, they are both supposed to do 
their evaluation within the law, the regulations, and the 
rulings of the SSA. So I think it is both legal and medical, 
and it ought to be consistent for both levels.
    Chairman Bunning. Would it help for a more consistent 
ruling if, when the applicant applies, nothing could be added 
to the record from that point forward? Do you think that that 
would help or hinder the ALJs and the DDSs in being more 
consistent in their determinations and reduce this high rate of 
overturning at the ALJ level?
    Ms. Ross. You have put your finger on something important 
because the ALJs say that in 27 percent of the cases they 
allow, new evidence has been an important factor. So we have to 
be aware that for over one-quarter of the cases, new evidence 
was not only added, but was quite relevant.
    Under Process Unification, what Social Security is 
contemplating doing is taking 100,000 of those cases with new 
evidence and shipping them back for the DDSs to look at again. 
I think there, the idea behind that is, if people understand 
that they ought to get their evidence in earlier, perhaps they 
will.
    Chairman Bunning. But what if we just cut it off? In other 
words, what if a new law said that once you start the process, 
if you have significant new evidence, you have to go back to 
the starting line? In other words, you can't just add to the 
process as you move to the ALJ and the appellate level because, 
obviously, with different evidence, the ALJs are going to rule 
differently than the DDSs did at the beginning. That is the 
problem we are having, or at least a major portion of the 
problem.
    Ms. Ross. That is a piece of the problem.
    Let me tell you what GAO's major concern is, and I alluded 
to it at the end of my testimony. From a management 
perspective, we are concerned about how many things SSA can 
take on all at the same time, and I would put this closing the 
record in that category. It may very well be a good idea.
    When we testified before you a year and a half ago, we said 
it may well be a good idea, but I have some concerns about how 
many things SSA can undertake at the same time, and so I would 
just put it into that category of let's be cautious about how 
many more things we ask SSA to do.
    Chairman Bunning. This will be the last question because I 
had given myself 5 minutes and I am over 5 minutes, but the 
fact of the matter is, by law, SSA, as an independent agency, 
is supposed to do CDR reviews. They are supposed to do 
disability determinations. They are supposed to do all of these 
things you are concerned about.
    You have yet to make a recommendation to us, if you want 
to, on how SSA might do things so that they can process all of 
the workloads they are expected to.
    So, if you want to make some recommendations to this 
Subcommittee on how to alleviate SSA's problems in their 
workload processing that by law they are required to do, we are 
willing to listen to anything you might suggest because we want 
them to do their job more efficiently and effectively.
    Ms. Ross. I would suggest that that is SSA's business and 
SSA's responsibility.
    As you suggested earlier on when you were speaking with 
them, you asked them for legislative proposals, and I think one 
of the things that might be appropriate to come forward with is 
some balancing of a set of things. If, in fact, they don't have 
the resources to do all of these requirements at the same time, 
I think it behooves them to come back to you and say, We want 
to do them all, we don't have the resources, or we need to make 
some adjustments.
    GAO has the concern, but they have the expertise to tell 
you whether they can get these all done.
    Chairman Bunning. Ms. Ross, we did put an awful lot of 
money in CDR reviews, and when given good cause to do things 
like that, we have tried to cooperate with the SSA.
    Ms. Ross. Absolutely.
    Chairman Bunning. So, when they come with proposals, we 
will examine them, but yet, they didn't come to us with the CDR 
proposal. We did that on our own.
    Ms. Ross. I am urging that they think about coming because 
we have heard some concerns about their workload. So I think it 
behooves them to come and discuss it with you.
    Chairman Bunning. Thank you.
    Mrs. Kennelly.
    Mrs. Kennelly. Thank you.
    I would like to go back to the medical piece. The DDSs get 
a medical decision very often from a doctor who hasn't seen the 
patient. Then you get to the point where you appeal to the 
judge, and the judge has a physician there, often, the treating 
physician.
    So I would, once again, assume that this is part of the 
problem, and I will take that a step further, asking your 
opinion. If the Chairman suggests no new information, God 
forbid we would start with the DDS and not be able to get the 
medical information from the doctor who understands the case.
    I wonder if you would comment on this process of, first, 
having a doctor who doesn't know the patient personally, then 
when appeals come, the doctor who somewhat knows the patient 
gets more involved. Obviously, that is setting you up for 
somewhat of a different opinion.
    Does it make sense to give weight to a medical finding when 
the physician has never seen the applicant, as the DDSs do?
    Ms. Ross. The DDSs have available to them the medical 
evidence from the treating physician. They have or can have 
available evidence from the treating physician and all of their 
medical records. That is the sort of thing that is supposed to 
be shipped to the DDS initially.
    Mrs. Kennelly. But I believe the figures that some of the 
information we have show that they very often don't ask for 
that doctor. I believe the Federal Government pays for it. Who 
pays for that? Does anybody know who pays? SSA pays the doctor 
if they require the doctor to come in at the DDS level?
    Ms. Ross. I don't know, but I would be glad to find out for 
you. I am talking about getting the medical records, the 
medical history, which is available at the DDS level, and then 
every case at the DDS level has an expert, a medical expert 
look at that paperwork.
    You contrasted--so the treating physician has an 
opportunity to make their records available at the DDS level. 
That is the only point I am trying to make.
    At the administrative law judge----
    Mrs. Kennelly. Well, I just want to put on the record that 
I will be asking for that breakdown, and I will have that put 
on the record because we should know that there is a difference 
of opinion even up here.
    Ms. Ross. At the administrative law judge level, I don't 
know, but I would be glad to find out what proportion of the 
treating physicians actually make appearances.
    What information I do have is that in 8 percent of the 
cases, there is a medical person who testifies at the ALJ 
level. So I don't know how many of the 8 percent are treating 
physicians, but it is in only a small proportion of the cases 
there are physicians present to testify in ALJ hearings.
    [The following was subsequently received:]

    As to who pays a treating physician at the DDS if a 
personal appearance is requested, DDSs, like ALJs, are required 
to assure complete medical evidence development, including 
evidence from a claimant's treating physician. At both the DDS 
and ALJ levels, SSA pays for requested written medical 
evidence. DDS decisions are based almost exclusively on a paper 
review of the case file, and no provision exists to pay for the 
in-person appearance of the treating physician. For claimants 
who do not have a treating physician, SSA will send the 
applicant to a physician for a consultative examination and 
will pay for it.
    As to what proportion of the treating physicians actually 
make appearances at the ALJ level, data on the proportion of 
treating physicians who made an appearance to testify at 
hearings is not readily available, although OHA officials told 
us it is a rare occurrence. In almost all appeals, ALJs rely on 
treating physicians' written medical reports rather than their 
testimony at a hearing. However, at the claimant's request and 
with the agreement of the treating physician, the treating 
physician may be asked to testify. When this occurs, SSA does 
not pay for the treating physician's appearance. However, if 
the ALJ requests the treating physician to testify when it is 
believed that a more fully inquiry is needed, SSA will pay the 
treating physician. If the treating physician will not testify 
voluntarily, the ALJ may issue a subpoena.

                                

    Mrs. Kennelly. Thank you, and I will pursue this, but 
before you finish--or I finish asking you questions, Ms. Ross, 
there are those that argue, one sitting right next to me, if 
his--well, I shouldn't say that because the Chairman has a 
suggestion I really haven't studied.
    Mr. Chairman, you have a one-step type of----
    Chairman Bunning. Appeal. An appeal.
    Mrs. Kennelly. OK, with an appeal.
    Chairman Bunning. Surely.
    Mrs. Kennelly. OK, but I have heard people argue that there 
should be no ALJs at all. What do you think of the idea that it 
just be the SSA? And my worry is that there would be no 
independent review of the DDS which, obviously, there is some 
need for review of the DDS.
    Have you looked at eliminating the judges?
    Ms. Ross. We haven't looked at that at all. It would seem 
really quite surprising to think of some sort of a benefit 
determination process that didn't have some level of appeal, 
short of the Federal court system. So whatever it is you want 
to make of it, it would seem like a pretty unsatisfactory way 
for beneficiaries.
    Mrs. Kennelly. And I would never want to eliminate the 
appeal either. But it just seems to me the way it is set up 
now, it is setting itself up to have these two very different 
systems looking at the same situation with different 
information. We would like to figure out how to make this more 
efficient, and I will read your report again, and thank you for 
the good work you have done.
    Ms. Ross. Thank you.
    Chairman Bunning. Mr. Collins.
    Mr. Collins. Thank you, Mr. Chairman.
    Sitting here listening and reading and trying to understand 
this whole process, it is no wonder folks back home are very 
confused about this whole matter when they apply for the 
disability.
    I find with interest that the ALJ--all of these acronyms 
get me--SSA, DDS, OHA, ALJ, and most people think that they are 
just OL, and that is out of luck, but I find that interesting, 
too, that the ALJs don't give much weight to the DDS decisions. 
Why is that? Is the record just not complete enough, or has it 
just gotten to be a formality that these things are denied and 
reconsidered and denied and wind up on their desk and so they 
just take it anew and try to start all over with it without 
much weight from the previous considerations that were given? 
What is the problem here?
    Ms. Ross. One of the problems that we identified as part of 
our study was that the record that comes from a disability 
determination service examiner explaining why they have denied 
the case isn't really sufficient in a great many cases. There 
is not enough analysis of how they came to their decision for 
the ALJ to really understand what went on.
    So I briefly stated that I think there is inadequate 
documentation. That is something this Process Unification 
effort is trying to work with DDSs on in order to improve 
because you can't expect the ALJ to take seriously something 
that isn't in the record. So improvement of the analysis of 
what is in the record seems really important.
    Mr. Collins. In your table 2, step 3, am I reading that 
right? Do the medical facts alone show that the claimant's 
impairment meets or equals the medical criteria for an 
impairment in SSA's listing of impairments? If the answer is, 
Yes, stop, the claimant is disabled. Is that accurate? If it 
is, No, go to step 4, or do you just do steps 4 and 5, 
regardless of the answer to step 3?
    Ms. Ross. If your impairment meets or equals the medical 
listings which were designed to suggest if you could--if you 
had a listed impairment or one in the medical listings that was 
sufficient evidence that you were disabled, so if you get to 
step 3 and your impairment is exactly like this one in the 
listing, you are considered disabled. There isn't any further 
evaluation of your condition.
    Mr. Collins. So you don't just go on to steps 4 and 5?
    Ms. Ross. No, you don't.
    Mr. Collins. OK. In your study, how much training do these 
people at step 3 have in determining these medical facts?
    Ms. Ross. Well, both the DDS level and the ALJ level go 
through this same sequence or they are supposed to. And, as Ms. 
Geier suggested earlier, and I don't have any different 
information, there is much more extensive medical training in 
DDSs than there is for ALJs, although she is in a better 
position than I to tell you exactly how much training is given 
at each level. Clearly, there is more at the DDS level.
    Mr. Collins. OK. That is all.
    Thank you.
    Chairman Bunning. Mr. Portman.
    Mr. Portman. Thank you, Ms. Ross, and for GAO's work on 
this.
    I said earlier, it is sort of a bizarre situation. Let me 
just look at of your report. You talk about a specific example 
which is back-related problems. Something seems a little off 
here when the DDSs are approving back-related problems for 
disability benefits, 10 percent of the time, and then at the 
ALJ level, 75 percent of the time.
    So I think we have got some real problems in the system, 
and again, I get back to I think what you are saying, and let 
me see if I am properly characterizing it. The problem is there 
are different approaches at different levels. There is 
different training, and until we have some consistency in the 
approach, we will continue to have the backlogs and the 
problems associated with this illustration of the back 
problems. Is it accurate that consistency is the key?
    Ms. Ross. Consistency is at least the first step. Then we 
can figure out if there are other issues, but I agree, that is 
first.
    Mr. Portman. Let me follow up, then, on two specific ones. 
You talked about training. How about training the ALJs and 
their staff--I assume that that is part of the issue here, is 
that they are not always writing these decisions--at the same 
time that you are training the State folks, the DDS personnel, 
train them together, give them the same training? Does that 
make sense?
    Ms. Ross. It makes a lot of sense, and there is precedent 
that occurred during the past year when SSA took nine rulings 
on the very toughest kinds of cases to decide, like back pain--
--
    Mr. Portman. Yes.
    Ms. Ross [continuing]. And trained these folks together. I 
hope they will do that in the future.
    Mr. Portman. OK. So training--getting the same training and 
training together makes sense.
    Let me ask you about the different approaches. In response 
to Mr. Collins, you paraphrased what SSA had said previously as 
being that there is much more extensive training at the DDS 
level than at the ALJ level. I didn't hear her say that, but 
that is how you paraphrase what she said previously, and I 
think the record probably sustains that. Certainly, your report 
would indicate that.
    Let me just give you one example. I asked SSA the extent to 
which medical advisers were used at the ALJ level, and I asked 
whether it was more than half because I was told that that is 
an option, and I was told it is about 40 percent.
    Your report tells us, I am just reading, and I will read 
your report, ``Although ALJs may call on independent medical 
experts to testify, our analysis shows that they do so in only 
8 percent,'' 8 percent of the cases resulting in awards. Why is 
there that discrepancy between 40 percent and 8 percent? Did I 
ask the question wrong, or is there a difference in opinion 
between you and SSA on this?
    I get at this because of this larger question of the 
different approaches, and I am not sure whether one approach is 
right or another, frankly, but I do think it is very clear that 
different approaches are one of the main problems that we have 
here. Why is there this discrepancy between the 40 percent that 
is now on the record and the 8 percent?
    Ms. Ross. Our analysis of the 8 percent comes from Social 
Security data, and it refers to the proportion of cases where a 
medical expert came to testify at an ALJ hearing.
    It is also possible that ALJs asked for medical experts to 
give them written documentation, and maybe that explains the 
difference. I don't know, but if you are asking how many times 
a medical expert came to the hearing, our data show that it was 
8 percent of the time.
    Mr. Portman. Again, let me just read one thing, and then I 
will end my questioning, Mr. Chairman.
    In your report, you state, ``The use of medical expertise 
appears to influence the decisional differences at the DDS and 
ALJ levels. At the DDS level, medical consultants are 
responsible for making functional assessments. In contrast, the 
ALJs have the sole authority to determine functional capacity 
and often rely on claimant testimony and the opinions of 
treating physicians. Although the ALJs may call on these 
experts, they only do so in 8 percent of the time.''
    So I think, again, we can't lose sight of the focus here, 
which I think is consistency in the different approaches and 
the medical training and the medical expertise involved. 
Clearly, it is different at the different levels, and I think 
that seems to be one of our issues.
    Thank you, Mr. Chairman.
    Chairman Bunning. Mr. Levin.
    Mr. Levin. Thank you, Mr. Chairman.
    Let me just pursue this a bit further, and I am sorry I am 
going to have to go to another hearing. So I won't hear the 
further testimony that may address our frustrations and I think 
your natural frustration and all of ours about the difficulties 
with this process, but there has been reference here to closing 
a record, but let me just be clear. The DDS determination is 
done without any hearing. Isn't that correct?
    Ms. Ross. That is correct.
    Mr. Levin. They do it strictly on the basis of paper that 
flows into their office?
    Ms. Ross. That is correct.
    Mr. Levin. And so they don't meet either the claimant or 
anybody else before they make their determination, right?
    Ms. Ross. That is right.
    Mr. Levin. I may be wrong, but I don't know of a process 
within the U.S. system where we close a record when there has 
been no hearing. I guess it is not fair to ask you that, but I 
don't see--as we look for improvements, I don't know how you 
prevent new evidence if it is the first procedure, formal 
procedure. It would seem to me, the focus has to be on 
improving the processes before that to try to have a more 
effective disposition and perhaps to improve the formal 
procedure, but I don't see how you close off testimony when 
there has been no hearing.
    Are there many more--is there much more legal 
representation at the ALJ level than at the earlier procedure, 
the DDS level? Do you know?
    Ms. Ross. Yes, I do know, and there are very few 
individuals who are represented with legal counsel at the DDS 
level, and about 80 percent are represented, as I understand 
it, at the ALJ level, at the hearing level.
    May I add one thing to amplify what I said earlier about no 
in-person review at the DDS level? That is certainly true now, 
but one of the initiatives that Social Security is pursuing as 
part of its Process Unification or as part of its reengineering 
proposal is to have an interview with the claimant at the DDS 
level.
    So, before they would deny a client, they would see this 
person and make sure they had all the evidence and the person 
understood what they needed and so on. I am not speaking 
specifically to the closing-the-record issue, but there would 
be this opportunity much earlier on to have the client have an 
in-person interview.
    Mr. Levin. I would think that might very much improve the 
process. I don't think it would turn it into a hearing, but it 
might mean there would be a much greater parallelism between 
what is done at the DDS level and at the hearing level.
    Thank you very much, Mr. Chairman.
    Chairman Bunning. Ms. Ross, Mr. Hill, a senior attorney who 
is president of the union chapter which represents attorney/
advisers in the hearing offices around the country, says in his 
testimony that the redesign has had no meaningful, measurable 
effect upon the workload of OHA, except consuming resources, 
both human and material, that could have been put to better 
use.
    Have GAO findings been consistent with this statement?
    Ms. Ross. I would like to give you a two-part answer. First 
of all, most of the reengineering proposals are still in their 
developmental stages. So you wouldn't expect to have much 
overall effect on the process. That is not surprising.
    In work we did for you, which we issued in December, we 
said that we thought SSA's reengineering work was much too 
extensive and much too lengthy and that they ought to try and 
reduce the scope of what they had in mind and get on with it, 
and in response to us and I think to their own sense of it, 
they have cut back on the scope of their reengineering 
proposals, but it is still quite a long process. So I can 
sympathize with Mr. Hill, but I think these major things in any 
case take a lot of time.
    Chairman Bunning. In his testimony, it appears Mr. Hill 
points out that as is often the case with major initiatives, 
senior officials who conceive major initiatives are never 
around long enough to take responsibility for the problems 
caused by their creations. Aren't these views consistent with 
testimony GAO has provided this Subcommittee in the past?
    Ms. Ross. Yes, sir, they are. Our concern about this 
massive project and the very long timeframe they had in mind 
was that you lose senior people and you lose the enthusiasm of 
your work force, and I think that is a risk.
    Chairman Bunning. In fact, the reengineering that has been 
designed was done by the former Acting Commissioner of SSA, and 
she is no longer there. So somebody else has to pick up the 
ball, sometimes with less enthusiasm than the prior person 
because it is not their initiative, and therefore, they lose 
something in the picking up of the ball to carry it forward?
    Ms. Ross. There is that risk any time you have a major 
initiative that the people who start it won't be there, and 
that is a problem SSA is dealing with now.
    Chairman Bunning. I hope the new Commissioner designee will 
be there as long as the term of office that we put in the new 
legislation, so that there can be a more consistent outlook at 
SSA over a 6-year window. Then SSA can become more independent 
and do things in SSA's and the people's best interest rather 
than what HHS and the administration might think is in the best 
interest of SSA. That is why we designed the new independent 
agency bill.
    I thank you for your testimony.
    Mrs. Kennelly, do you have anything else?
    Mrs. Kennelly. No, I don't.
    Chairman Bunning. Thank you very much.
    Now, we conclude with a panel of professionals who work 
with the disability process every day, some of whom have 
previously testified before this Subcommittee: Douglas Willman, 
president of the National Council of DDS Directors; Hon. Ronald 
Bernoski, acting president of the Association of ALJs; Debi 
Gardiner, president-elect of the National Association of 
Disability Examiners, accompanied by the past president, Tom 
Christopher; James Hill, president of the National Treasury 
Employees Union, chapter 224; and Nancy Shor, executive 
director of the National Organization of Social Security 
Claimants' Representatives.
    Mr. Willman, will you please begin.

STATEMENT OF DOUGLAS W. WILLMAN, PRESIDENT, NATIONAL COUNCIL OF 
               DISABILITY DETERMINATION DIRECTORS

    Mr. Willman. Chairman Bunning and Members of the 
Subcommittee, thank you for the opportunity to appear here 
today to present the views of State directors on the 
differences and decisional outcomes between the State DDSs and 
the SSA Office of Hearings and Appeals.
    We believe that presently the disability program is simply 
failing the reasonable minimum expectations of the American 
public because too many persons who receive benefits are not 
allowed until they reach the appeals level.
    Even though SSA quality assurance reviews of our work tell 
us that at the DDSs, our decisional error rate is only about 4 
percent, about 60 percent of the persons who appeal their State 
decisions are awarded benefits by OHA. But first, they must 
ensure an unreasonably long and anxiety-producing delay and 
usually hire an attorney to represent them.
    According to a statement by the Association of 
Administrative Law Judges, there is no other appellate system 
in the entire world with such a consistently high reversal 
rate. If these reversals are appropriate allowances, they 
should be allowed earlier in the process. If they are not good 
allowances, and many are not, they should not be allowed at 
all.
    The decisional outcomes between the two components are so 
different because the two components have developed along 
separate tracks with historically inadequate coordination by 
higher management.
    Examples of the ways the components differ would include 
the following. Each component has its own separate manual of 
policy and procedural instructions, and the two components 
conduct entirely separate training in the application of these 
different policies and procedures.
    There are separate and conflicting systems for reviewing 
decisions to detect and correct errors. Most of the DDS 
decisions selected for review are allowances, and almost all 
reviews of ALJ decisions are on denials. There is a vast 
difference in the relative weight given to different types of 
medical evidence. DDSs tend to focus more on objective medical 
facts, while OHA gives more weight to subjective symptoms and 
to the opinions of the claimant's treating physicians, and DDSs 
function strictly as part of the executive branch of 
government, while OHA tends to behave as though it were part of 
the judicial branch. This results in DDSs adhering strictly to 
SSA policies while ALJs compromise those policies by, instead, 
following court decisions that they regard as precedential.
    In view of these differences and others, it is no wonder 
that the two levels fail to produce similar results. In some 
important ways, things are beginning to get better. Today's top 
managers in SSA deserve credit and recognition for having taken 
some important first steps toward bringing the processes closer 
together.
    Under an initiative known as Process Unification, SSA has 
recently completed the remarkable achievement of training all 
of its adjudicators in the application of a new set of rulings. 
The rulings were explained locally by trained traveling 
facilitators who were supported by a live interactive video 
presentation originating at SSA headquarters.
    Last week, I personally had the opportunity to observe a 
meeting in which top SSA managers gave careful attention to the 
recommendations of frontline workers who delivered the 
training. The SSA managers received information which can be 
extremely helpful in bringing the two processes together, and I 
can tell you that in over 20 years as a manager in the 
disability program, I have never before seen such a rich 
presentation of useful ideas from frontline workers to top 
managers, but much more needs to be done.
    Some improvements can be made by SSA, and in some other 
ways, statutory changes will be needed. For SSA, it should 
accelerate the development of the single policy manual or the 
``one book'' for use by adjudicators in all components. It 
should develop a quality assurance case review system complete 
with enforcement power over all components because without 
enforcement, the very finest policies may be simply 
inconsequential.
    SSA should greatly increase the training of ALJs on medical 
issues, and it should balance its demands for high productivity 
with concerns that similar decisional outcomes be produced at 
all levels of adjudication.
    Congress can help both with continued oversight and with 
legislation. Statutory changes could support SSA's authority to 
conduct and enforce quality assurance case reviews, could 
clarify the extent of management control over ALJs, establish 
SSA's recent acquiescence ruling in the law, and set statutory 
guides for the weight to be given to the opinions of treating 
physicians and close the record.
    Continued monitoring such as today's hearing, a sort of 
high inside fast ball, can also help assure that SSA management 
contains the motivation and the organizational will to continue 
to address this serious problem in service delivery to the 
American public.
    Thank you.
    [The prepared statement follows:]

Statement of Douglas W. Willman, President, National Council of 
Disability Determination Directors

    Chairman Bunning and members of the subcommittee, on behalf 
of the NCDDD, thank you for the opportunity to appear here 
today to present our views regarding the differences in 
decisional outcomes between the state Disability Determination 
Services (DDSs) and SSA's Office of Hearings and Appeals (OHA).
    The NCDDD is a professional organization of the directors 
and other management staff of the state Disability 
Determination Services agencies. The DDSs participate in the 
disability program by making the initial determinations of 
eligibility for disability benefits. We appear here today 
experiencing great concern about the public's loss of 
confidence in the disability program resulting from the huge 
difference in decision making between the initial and appeal 
levels of eligibility determinations. We desire a program that 
produces correct and consistent determinations of eligibility, 
that makes these determinations in the shortest possible time, 
and that operates at the least reasonable cost to the tax 
payer. By ``correct'' decisions, we mean that benefits are 
received by persons who are unable to work because of a medical 
impairment. By ``consistent'' decisions, we mean that decision 
making should not substantially vary between the initial and 
appellate levels of determination. We know that the current 
process can be and must be improved in terms of its ability to 
achieve these objectives. We want to work with SSA, with other 
representatives of the DDS community and with Congress to 
increase the accuracy of the process, to reduce processing 
time, and to control costs.
    We believe that presently the disability program is failing 
the reasonable minimum expectations of the American public. We 
are failing primarily because too many of the allowed 
applications are not allowed until they reach the appeals 
level. Even though SSA quality assurance reviews show a 
decisional accuracy of more than 96% at the DDS level, the OHA 
reversal rate for applicants whose cases have been twice denied 
at the DDS level has, until very recently, been above 65%. 
According to a statement by the Association of Administrative 
Law Judges, there is no other appellate system in the entire 
world with such a consistently high reversal rate. Since about 
75% of all denied reconsideration cases are appealed to OHA, 
the net effect is that about half of all reconsideration 
denials are subsequently allowed at the OHA level. But first 
the claimants must endure the hardship of a delay which is 
usually around eighteen months, and most such applicants feel 
that they need to hire an attorney or other representative for 
help in the appeals process. Claimants pay their 
representatives, collectively, about $500 million a year which 
is about half of the total cost of operating all the DDSs.
    Claimants who successfully appeal their reconsideration 
denials often ask, ``If my case was going to be allowed anyway, 
why did I have to endure two denials, wait 18 months, and then 
pay 25% of my back benefits to an attorney?'' The disability 
examiners who process the denials are fully aware of the 
reversal rate and wonder why they can't save the claimants time 
and money by making at the beginning of the process the 
decisions they know will be made at the end. As managers of the 
state eligibility determination programs, we know that if cases 
allowed at the OHA level are good allowances, they should have 
been paid earlier in the process, and if they are not good 
allowances, they should not be paid at all.
    For many years, SSA has been less than completely 
forthright about the existence, extent, and causes of this 
service delivery problem. In previous public statements, 
including those to Congress, SSA has attempted to focus 
attention on a few minor causes of the decisional differences 
while attempting to divert attention from comparatively more 
important causes which a better management system could 
control. SSA has treated the phenomena of vastly different 
decision making as a public relations problem that could be 
finessed with carefully contrived explanations rather than as a 
serious service delivery problem which could be solved with 
better management. Recently, as part of disability redesign, 
SSA has acknowledged the reality, seriousness, and extent of 
the problem, has formulated and begun to develop some 
components of a long range plan, and has taken some 
constructive initial actions toward a solution. SSA's plans and 
actions in this regard have come to be known as the Process 
Unification portion of disability redesign. Although NCDDD has 
very serious reservations about many aspects of disability 
redesign, we certainly agree with the emphasis that SSA is 
placing on Process Unification. In the long term, if Process 
Unification succeeds, and all other Redesign experiments fail, 
reengineering of the disability process will still be viewed as 
a success. On the other hand, if Process Unification fails, and 
other parts of redesign succeed, SSA will have tinkered at the 
margins of the program, but will have redesigned the disability 
process on a foundation of sand.
    The testimony that follows will focus on the causes of the 
present decisional disparity, the components of the Process 
Unification approach, the adequacy of that approach, and on 
what else needs to be done.

  I--Causes of the Present Decisional Differences Between DDSs and OHA

    SSA has historically emphasized factors such as the passage 
of time, worsening of claimants' conditions, availability of 
new evidence, attorney representation, and face-to-face 
hearings as the explanations for such a high reversal rate at 
OHA. While all these factors are present, they account for a 
minority of the differences between DDS and OHA decision 
making. The more causative reasons are listed and explained 
below.

There has historically been an absence of uniformly stated 
policy instructions for adjudicators at the two levels.

    Decision makers at both levels must apply the statutory 
definition of disability and the regulations. However, the 
language of the statute and the regulations is far less 
specific than that of the separate vehicles used to convey 
policy to DDSs and to OHA. For DDSs there is manual called the 
POMS (Program Operational Manual System). Adherence to POMS 
directives is required at the DDS level and ignored at OHA 
which has its own separate manual. These manuals substantially 
differ from each other in content.

There has historically been no common training for personnel at 
the two levels.

    Both in the initial orientation of new employees and in 
communicating program changes, DDS and OHA conduct their 
training on entirely separate tracks. DDSs have a much stronger 
emphasis on providing training in medical concepts while OHA 
provides almost no medical training to its decision makers.

Separate and opposite quality assurance and case review systems 
tend to drive the two components apart rather than to bring 
them together.

    For DDS decision makers, the majority of cases reviewed and 
returned as errors by the quality assurance system are 
allowances. For OHA decision makers, nearly all cases reviewed, 
either by the Appeals Council or the federal courts, are 
denials. The feedback tends to focus the attention of the DDS 
decision maker on not making errors on allowances while the OHA 
decision maker knows that errors are almost impossible on 
allowances since almost none are reviewed.

SSA management has permitted the development of an inaccurate 
view of the immunity from management control of Administrative 
Law Judges under the Administrative Procedures Act.

    ALJs have successfully asserted broad decisional 
independence and freedom from management control, and the 
assertion has gone largely unchallenged by management. This 
accounts not only for the difference in decision making between 
DDSs and OHS, but also for the extreme differences in allowance 
rates among individual ALJs. SSA has recently obtained an 
opinion from its General Counsel that declares management 
authority for requiring ALJs to attend training, apply the 
agency policy, conform to administrative rules, etc. Hopefully, 
exercise of the authority that has existed all along will 
mitigate the problems that flow from the perception of ALJs 
that they are free from control.

There is a vast difference in the weight the components give to 
detailed medical analysis.

    At the DDS, decision makers have broad access to physicians 
and psychologists and a medical or psychological review is 
completed on each case. At OHA, medical experts participate in 
the analysis of only about 10% of the cases. The analysis of 
DDS physicians and psychologists seems to be largely ignored at 
the OHA level.

Different approaches to the assessment of residual functional 
capacity are largely responsible for the differences in 
decisional outcomes.

    According to the law and the regulations, decision makers 
must consider the effect of the medical impairment(s) on the 
applicant's ability to perform work related tasks. The 
resulting conclusion is called the claimant's 'residual 
functional capacity'. This finding is based on the medical 
facts and any opinions that may have been provided by a 
claimant's treating physicians. OHA decision makers tend to 
place much greater weight on the conclusionary statements of 
treating physicians while DDS decision makers tend to place 
more weight on objective medical findings.
    An extreme difference in decisional outcomes emerges from 
the conclusions reached about claimants' remaining ability to 
work. One classification of residual functional capacity is 
known as the ability to perform less than the full range of 
sedentary work which has been the subject of careful inquiry by 
SSA. This finding almost always results in allowance. At the 
DDS initial level, this finding is reached on about 1% of all 
cases. At the reconsideration level, the finding is reached on 
about 3% of the cases. Based on the evidence available at the 
time of a hearing, the medical reviewers at SSA have concluded 
that the finding is appropriate in about 7% of the cases. But 
ALJs, based on the same evidence, find claimants limited to 
less than the full range of sedentary work in more than 50% of 
the cases. More than any other quantifiable factor, this 
difference is responsible for the high reversal rate at OHA.

SSA has permitted what could be called the ``judicialization'' 
of OHA, that is the transformation from an administrative to a 
judicial entity.

    Although Administrative Law Judges are employees of the 
executive branch of government, in many ways they behave as 
though they were part of the judicial branch. This tends to 
result in a loss of consistency of decision making among ALJs 
and in a compromise of the extent to which agency policy is 
applied correctly. This is especially true when ALJs exercise 
individual interpretations of federal court decisions and apply 
them as precedents even if they run contrary to policy.

                II--SSA'S Process Unification Initiative

    After a long history of failing to address the problem of 
the disparity in decision making between DDS and OHA, SSA has, 
at last, taken some positive steps under a project known as 
Process Unification. This project consists of a set of rulings 
by the Commissioner, an ambitious attempt to train more than 
14,000 adjudicators at all levels in the application of these 
rulings, a very limited quality review process for some 
allowance decisions of ALJs, and a process for remanding to the 
DDSs some cases awaiting hearing on which new evidence has been 
received.
    With regard to the rulings, many of the historical problems 
described above have been addressed. If the rulings are 
correctly applied, they can reasonably be expected to reduce 
the decisional disparities. The training is a remarkable 
accomplishment which has now been completed. In addition to 
acquainting all decision makers with relevant program 
instructions, the training was valuable just for having brought 
together case analysts from all components to experience the 
same training in the same setting at the same time. But the 
plan for a quality review process of ALJ allowances is 
disappointingly modest both in scope and in nature. Such a 
review will be useful only if its intent is to determine if 
ALJs have applied the rulings correctly and to enforce 
corrective action on cases found to be in error. Without a 
means of enforcement of the rulings on ALJ decision making, all 
other actions will be ineffective. Yet SSA plans to review only 
about 10,000 OHA cases per year and the nature of the review 
process will exclude many erroneous cases from being identified 
as errors and returned.
    The number of cases to be reviewed is only about one case 
per ALJ each month. Even presuming an error rate of, say, 33%, 
this would result in only about one piece of feedback per ALJ 
each calendar quarter. This number is not high enough to 
provide meaningful feedback to ALJs, nor to establish useful 
enforcement in cases in which ALJs are not correctly applying 
agency policy, nor to create a quality review system which is 
reasonably consistent between components.
    The standard to be applied for determining errors in this 
review process is even more discouraging that the size of the 
case review. While DDS case completions are reviewed under the 
``preponderance of evidence'' rule (meaning that the decision 
supported by the greater weight of the evidence must be made) 
the ALJ allowances would be reviewed under a ``substantial 
evidence'' rule (meaning that a decision is correct if it is 
supported by any substantial evidence even if greater and more 
substantial evidence would support an opposite decision). We 
understand the definition of the word ``substantial'' will be 
``more than a scintilla.'' Under this case review scenario, a 
DDS could twice deny a case because most of the evidence 
supports a denial, the claimant could wait a year for a 
hearing, an ALJ could allow the case because some evidence 
supports an allowance, and both decisions would be considered 
by SSA to be correct.
    This is not our idea of Process Unification. We feel that 
Process Unification must mean that every SSA component will 
arrive at similar decisions on similar cases. Process 
Unification must result in one program with similar decisional 
outcomes across all levels of appeal. Process Unification means 
a focus on a single SSA Disability program, rather than on 
differing appearances that applicant due process can take at 
the different steps in the adjudicatory process.
    SSA does report modest but promising changes in the 
allowance rates at the two levels over the last several months. 
An increase in the DDS allowance rate in the neighborhood of 
two or three percent and a decrease in the OHA allowance rate 
of six to eight percent is reported. While these data are very 
preliminary and could result from factors other than process 
unification, this is an encouraging sign.
    Any review of the rulings issued under Process Unification 
would not be complete without comment on the labor intensive 
nature of some of the requirements and the consequent impact on 
the resources needed for implementation. Most of the rulings 
will require additional direct time for obtaining the required 
evidence, analyzing the evidence, and explaining how the 
decision was made. DDSs, at their current staffing levels and 
with their current caseloads, cannot apply these rulings and 
still process all the cases coming in the door. Hopefully, 
additional resources invested at the DDS will pay off in the 
form of a greater number of cases being decided at the DDS 
level and therefore not being appealed to OHA where a lesser 
need for personnel and resources should be the result.

                      III--What Else Must Be Done

    SSA has taken some encouraging first steps toward bringing 
consistency to the program, but we are not where we need to be 
yet, and we are not even close. Some of the necessary actions 
can be taken by SSA, but in other areas, Congress could help.

Recommendations for SSA:

    1) SSA should accelerate the development of a single 
presentation of policy for use by all decision makers at all 
levels. The ``one book'' approach was a cornerstone of the SSA 
plan to redesign the disability program released in October of 
1994. Now, more than two and half years later, we are told that 
the ``one book'' is still about two years away from being a 
reality. Until all decision makers are following the same 
instructions, we cannot reasonably expect their decisions to 
comport with one another.
    2) The ``one book'' approach must be enforced with a 
quality assurance system which applies the same policy and 
review criteria to decision makers at all levels.
    3) SSA should find ways to sharply increase the medical 
training provided to ALJs.
    4) SSA should develop a shared vision of the program among 
all components. SSA must insure that the Office of Disability 
(SSAs component that sets policy), the Office of Program and 
Integrity Review (SSAs component that checks quality), 
Operations, and Budget are reasonably consistent with their 
expectations as to how the program will operate. The point is 
that while we often think of Process Unification as being 
necessary only between DDSs and OHA, in reality, Process 
Unification also must bring together the many disparate voices 
among the varied components of SSA as well. We cannot attain 
real Unification until every component focuses on doing cases 
accurately, quickly, and cost effectively rather than having 
one component focus only on accuracy, another only on 
processing time, and another only on cost.
    5) SSA must place its primary emphasis on quality and 
reallocate resources so that the time is available to apply the 
rulings as they are written. For at least the last decade the 
driving force within SSA (as far as the DDSs were concerned) 
has been productivity improvements. This must change. While we 
must always strive to improve administrative efficiencies, we 
must insure that no corners are cut in our efforts to do each 
case correctly, quickly and cost efficiently and in that order. 
Process Unification will be neither easy nor cheap. It is, 
however, critical if we ever expect to build a truly unified 
SSA disability process that the public will trust.

Considerations for the Congress:

    Legislative support for the following changes would help 
clear the way for reasonable consistency in decision making 
between the two levels.
    1) The evidentiary record should be formally closed at some 
time between the reconsideration decision and a stated number 
of days following the hearing.
    2) SSA should be authorized and required to conduct a 
formal quality assurance review of ALJ allowances and denials 
using the law, regulations, and SSA rulings as the review 
criteria. SSA should be authorized, in addition to a random 
sample, to conduct 'high risk' quality assurance reviews of 
individual ALJs or OHA offices based on any accuracy, 
productivity, timeliness, or efficiency criteria established by 
SSA. The quality assurance review must be consistent across all 
levels of appeal, must use the same standard (preponderance of 
evidence or substantial evidence), must include a reasonably 
equal mix of allowances and denials for all levels, and must 
include enforcement power.
    3) The program needs a statutory clarification of the 
extent of independence of ALJs from management control. 
Statutory language should more clearly state that ALJs are 
``independent'' decision makers only insofar as the ALJ 
decision comports with SSA law, regulations, and rulings. The 
law should make clear that SSA has the full responsibility and 
authority to set performance standards, workload requirements, 
work processes and workflows for ALJs and OHA.
    4) SSA's ``acquiescence ruling'' promulgated in July 1997, 
should be given the force of law. This ruling requires ALJs to 
use only SSA law, regulations, and rulings as adjudicative 
standards and prohibits individual ALJ interpretation of court 
decisions, absent an Acquiescence Ruling by SSA. SSA should be 
required to publish Acquiescence and Non-acquiescence Rulings 
in all Circuit Court decisions without unreasonable delay, such 
as 90 days.
    5) Congress should establish by law the adjudicative weight 
to be given to the statements of treating, examining, and 
reviewing physicians. The determination of what functional 
abilities are retained by the applicant after considering the 
claimant's medical history, nature of the impairment, severity, 
prognosis, and medical contraindications should be a decision 
reserved to the Commissioner rather than being placed in the 
hands of the treating physician.
    Because of the very substantial extent to which this single 
aspect contributes to the variance in allowance rates, some 
additional perspective in support of a legislated solution is 
necessary. Please see the attachment which contains a more de- 
tailed explanation of the nature of the problem and the need 
for a legislative solution.
    6) SSA's history on this issue shows that it likely will 
need continued monitoring from the Congress. SSA's history has 
been to understate the problem, to find creative ways to 
rationalize why the DDS and OHA outcomes were not really all 
that different, and to divert attention from problems that 
ought to have been managed rather than to manage them. While 
SSA's recent approach is refreshingly different from its 
history, the comparative ease of denying the problem to fixing 
it may persuade SSA to return to its old ways.
    Mr. Chairman and members of the committee, NCDDD offers the 
above observations and suggestions in the hope that the 
disability process can be improved so that claimants who are 
due benefits can obtain them without unreasonable delay and so 
that ineligible persons are not added to the disability roles. 
Presently, the DDSs are probably denying benefits to 
significant numbers of persons who should be allowed, and OHA 
is probably allowing benefits to significant numbers of persons 
who are not disabled. With SSA's continued efforts to bring the 
processes closer together and with continued Congressional 
oversight, we hope that consistency will be established to the 
advantage of both persons applying for benefits and to the tax 
payers.
    Thank you for the opportunity to present our views on this 
important subject.

                                

    Chairman Bunning. Judge Bernoski.

    STATEMENT OF HON. RONALD G. BERNOSKI, ACTING PRESIDENT, 
        ASSOCIATION OF ADMINISTRATIVE LAW JUDGES,  INC.

    Judge Bernoski. Thank you, Mr. Chairman.
    The major focus of this hearing is to examine the dual 
adjudication standards that are employed at the DDS and OHA 
levels of the disability process. These systems are based upon 
a procedure that has been developed by the Social Security 
Administration, the so-called POMS standard that is used at the 
DDS, while a more legal-based standard is used by OHA.
    We are not here to judge which standard is the best, but we 
do know that if the claim gets to the Federal courts that the 
legal standard will be employed to adjudicate the case.
    We also know the reversal rate of DDS decisions by ALJs has 
been declining. In fiscal year 1995, the reversal rate was 65 
percent. By fiscal year 1997, it dropped to 54.8 percent.
    The GAO has prepared a report for this hearing, and with 
deep regret, we question the reliability of that report. The 
GAO did not interview any officer or director of our 
association for their preparation of this report.
    The report does not analyze the reasons for the differences 
in the approach in assessing the RFC, residual functional 
capacity, at each level. It does not consider the impact on the 
RFC of the treating physician rules that may vary between the 
Federal circuits.
    The GAO does not consider that the ALJ hearing is de novo 
and not certiorari to the DDS determination. The GAO places 
great weight on the SSA quality assurance systems, but it does 
not consider the impact of these systems on the constitutional 
peering. The hearings of this system, the quality assurance 
system, has considerable potential to abuse the constitutional 
due process rights of the claimant.
    Any attempt to ``manage'' the ALJ decision process has the 
potential to lead to the type of undue agency influence that 
led to the passage of the Administrative Procedures Act.
    The GAO fails to acknowledge the agency program of Process 
Unification. While we do not agree with all aspects of that 
program, we believe the best solution for the problems raised 
by the GAO is to develop a single standard of adjudication for 
all levels. This standard must be based upon the legal model 
because this is the standard that the claim will ultimately be 
judged by when he gets to the court system. This single 
standard will allow the claim to be awarded at the earliest 
point in the adjudication system and thereby reduce the case 
backlog for the ALJs at the OHA level.
    Now, in summary, GAO has completely failed to consider the 
relationship between agency policy and the judicial function. 
The words ``due process,'' ``law,'' ``courts,'' or 
``constitution'' are not mentioned anywhere in that report. 
Yet, when you consider the Zebley case, the Hyatt case, the 
Samuels case, and the Minnesota Mental Health case, we see the 
tremendous impact the court system has on the disability 
process, and until this relationship is understood by both the 
GAO and the agency, many of these problems in the disability 
system will not be corrected.
    As ALJs, we take an oath to uphold the law and the 
constitution, and that we understand our responsibility to 
follow the constitution and apply the law, and we will enforce 
the law.
    On the other hand, we have considerable difficulty applying 
agency policy that is inconsistent with the law. If Congress 
were to change the statutory law to achieve the results of the 
DDS process, we as ALJs would enforce the new law.
    Mr. Chairman, we are neither proclaimant nor proagency. It 
is our duty to decide each case based on the law and the facts 
of that particular case.
    Thank you for the opportunity to appear here.
    Mr. Chairman, I just have one thing that I would like to 
introduce into evidence, and that is a report. It is called an 
SSA tracking report, and it sets forth the reversal rate of 
ALJs and is the reference for my statement. It is 54.8 percent. 
There have been three or four different numbers cast on it.
    Chairman Bunning. Without objection, it will be put into 
the record.
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    Mr. Bernoski. OK. Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Hon. Ronald G. Bernoski, Acting President, Association of 
Administrative Law Judges, Inc.

    Mr. Chairman:

                            I. Introduction

    My name is Ronald G. Bernoski, I am an administrative law 
judge (ALJ) assigned to the Office of Hearings and Appeals of 
the Social Security Administration in Milwaukee, Wisconsin.
    This statement is presented in my capacity as the Acting 
President of the Association of Administrative Law Judges, Inc. 
(Association), a professional organization whose purpose is to 
promote judicial education and full due process hearings for 
those individuals seeking adjudication of controversies within 
the Social Security Administration (SSA).
    The subject matter of this hearing is to review the effect 
of reversals of DDS determinations at the SSA appellate level. 
This is an area of Social Security disability process that has 
been examined repeatedly over the past years. The Congress 
expressed concern with this issue when it enacted the 
Disability Benefits Reform Act of 1984 which provided that 
``[t]he Secretary shall establish by regulation uniform 
standards which shall be applied at all levels of 
determination, review and adjudication in determining whether 
individuals are under disabilities as defined in section 216(i) 
of 223(d).'' Since SSA has had a long established policy of 
evaluating disability claims by different standards at both the 
DDS and appellate levels, it should not be a surprise that a 
potential exists for a different finding for a single case at 
each level of review. It probably should be repeated that a 
Social Security Disability claim at the DDS level is decided 
under the Program Operations Manual System (POMS). This is less 
than a full legal review of the claim and it is a system that 
has been created by the agency for this purpose. At the 
appellate level the disability claim is adjudicated under the 
full scope of the legal standard which consists of the 
statutory law, case law, SSA regulations and SSA rules. Many 
reasons have been advanced for the difference in results 
between cases determined at the DDS level and those adjudicated 
at the administrative law judge level. These reasons have 
included the following differences at the administrative 
hearing; the appearance and testimony of the claimant, the use 
of expert testimony (medical and vocational), attorney 
representation, additional and different medical evidence, and 
a more advanced medical impairment. However, the largest 
distinguishing factor is the use of the legal standard at the 
appellate level which provides the claimant with the benefit of 
the full scope of the law for the adjudication of the claim. 
This factor clearly shows that the SSA disability adjudication 
system is a ``top down'' process. The standard to be used to 
adjudicate SSA disability claims must be the legal standard 
(which is based upon the Constitution, statutory law and case 
law) which is established by the courts because ``it is, 
emphatically, the province and duty of the judicial department, 
to say what the law is'' Marbury v. Madison, 1 Cranch 137, 177, 
2 L.Ed. 60 (1803). The Association has long recommended a 
single standard at each level for deciding SSA disability 
claims which is based upon the law.

                            II. GAO Findings

    The GAO findings, that have been presented by the 
Subcommittee, appear to be the anchor upon which the major 
thrust of the hearing in based. It is with deep regret and even 
dismay that we question the reliability of the GAO findings. 
The methodology used in creating the report is deficient. No 
officer or director of the Association was interviewed by the 
GAO during the preparation of the report. The report fails to 
develop the history of the dual standards of SSA; it does not 
analyze the constitutional basis of the due process 
administrative hearing and it does not describe the agency 
policy addressing this issue.
    The GAO states that the percentage of ALJ reversals of DDS 
disability determinations has been a long-standing problem for 
SSA. The report does not state that the dual standards for SSA 
disability determinations is based upon a long-standing policy 
of the agency. Within this system the DDS claims are decided by 
a standard set forth in the POMS while the disability claims at 
the appellate level are adjudicated under the legal standard. 
The major defect in the GAO report is that it does not grasp 
that if the same fact situation is analyzed under two different 
standards that two different results can be achieved. The 
report also fails to acknowledge that the ALJ reversal rate of 
DDS determinations is declining. SSA records indicate that the 
ALJ allowance rate was 65% in FY 1995 and that by FY 1997 it 
had dropped to 54.8%. The GAO report also fails to explain the 
difference in DDS allowance rates while all DDSs are using the 
same standard. SSA records show that in FY 1997 differences in 
DDS allowance rates ranged from 22.2% TO 49.6%.
    The GAO states that the ALJs and DDSs each employ a 
different approach in assessing the residual function capacity 
of the claimant. The GAO apparently is unaware that this 
difference in approach is based upon the fact that the ALJs 
follow the legal standard; may review a more complete medical 
record; hear the testimony of the claimant and other expert 
witnesses; and depending on the Federal circuit, may be 
required to follow a more demanding treating physician when 
weighing the medical evidence. The agency has been challenged 
in court for applying a different standard of review at the DDS 
and the Federal administrative level. These challenges are 
generally based upon the theory that the DDS does not provide a 
legally sufficient review of the claim (see Bentley et al. v. 
Sellars Case No. 92-40-Civ-J-20 Middle Dist. of Florida). We 
understand that several class actions are pending against the 
agency which raise this issue.
    The GAO places considerable emphasis on the SSA quality 
assurance system, and claims that the use of this process could 
``minimize'' the inconsistency in the current SSA dual 
disability system. This contention fails to acknowledge that 
SSA has by design created a dual process for disability claims, 
and that the only way to address this issue is to go to the 
root cause of the problem and adopt a single standard that is 
to be used by all SSA components. The allegation of the GAO 
also fails to consider the relationship of any quality 
assurance system to the constitutional due process rights of 
the claimants. If the case is to be reviewed by a quality 
assurance examiner, and the interest of the claimant has the 
potential of being adversely effected, how will the rights of 
the claimant be protected? Will the claimant have notice of the 
review? Will the claimant have a right to be heard? Will the 
claimant have an opportunity to appear and defend his/her 
interests? These are complex constitutional issues that were 
not adequately addressed in the GAO report. The GAO should be 
requested to address these constitutional issues and present a 
comprehensive explanation of the impact of any quality 
assurance system on the due process rights of the claimant.
    On January 28, 1997 the Office of General Counsel of Social 
Security prepared a memorandum entitled Legal Foundations of 
the Duty of Impartiality in the Hearing Process and its 
Applicability to Administrative Law Judges. The memorandum 
appears to be an attempt to provide a legal basis to require 
administrative law judges to follow SSA policy that is not 
consistent with the law. The threat of disciplinary action 
before the Merit Systems Protection Board is the enforcement 
tool for the same. We are concerned that this hearing is an 
attempt to strengthen the hand of the agency to enforce this 
disciplinary action on SSA administrative law judges and the 
endorsement of the promulgation of agency policy that is not 
consistent with the law. This policy is contrary to the 
recommendations of the Judicial Conference of the United 
States, which is set forth in the Long Range Plan For The 
Federal Courts (December 1995), which includes recommendations 
that the Congress and the agencies concerned should be 
encouraged to take measures to broaden and strengthen the 
administrative hearing and review process for disputes assigned 
to agency jurisdiction and to generally prohibit agencies from 
adopting a policy of nonacquiescence to the precedent 
established in a particular federal circuit.
    The GAO report stated that the SSA procedures contribute to 
inconsistent results because they limit the usefulness of the 
DDS decision as a foundation for the administrative law judge 
decision. The GAO fails to consider that the administrative law 
judge hearing is de novo and not certiorari to the DDS 
determination. It is thereby a completely new hearing and is 
not a continuation of the DDS process. The GAO report also 
fails to mention that the new SSA policy of Process Unification 
requires the administrative law judge to give the DDS medical 
evidence consideration when weighing the medical evidence in 
the case.
    The GAO report stated that SSA must take decisive action to 
improve management of the decisionmaking process, but the 
report failed to describe how this is to be accomplished. How 
does an agency ``manage'' the administrative hearing process 
and not trample on the constitutional rights of the claimants? 
The GAO fails to recognize that the administrative hearing is 
based upon the due process clause of the 5th and 14th 
amendments of the U.S. Constitution which provides the claimant 
with certain guaranteed fundamental rights. The U.S. Supreme 
Court has held that ``a fair trial in a fair tribunal is a 
basic requirement of due process, In re Murchinson, 349 U.S. 
133 (1955). That ``when governmental agencies adjudicate or 
make binding determinations which directly affect the legal 
rights of individuals, it is imperative that those agencies use 
the procedures which have traditionally been associated with 
the judicial process,'' Hannah v. Larche, 363 U.S. 420 (1960). 
The due process requirement of a fair trial in a fair tribunal 
``applies to administrative agencies which adjudicate as well 
as to courts,'' Withrow v. Larkin, 421 U.S. 35 (1975).
    In the late 1930's the Congress became aware of the 
criticism that many agencies were interfering with the function 
of hearing examiners (now administrative law judges) and 
thereby denying the litigants their constitutionally protected 
right of a due process hearing. The Congress enacted the 
Administrative Procedure Act to correct this problem, Ramspeck 
et al. v. Federal Trial Examiners Conference et al., 345 U.S. 
128 (1953). The legislation elevated the status of the 
administrative law judge by making them semi-independent agency 
employees and it further created a procedure which ensured that 
the constitutionally protected due process hearing was provided 
to the litigants by the agencies. The U.S. Supreme Court then 
defined the function of the administrative law judge within 
this due process hearing system. In the case of Universal 
Camera Corp. v. National Labor Relations Board, 340 U.S. 474 
(1950) the Court stated that one of the important purposes of 
the Administrative Procedure Act was the ``enhancement of the 
status and function of the trial examiner'' in the 
administrative process. The Court then went further and held 
that the findings of the hearing examiner would be considered 
as part of the record when applying the ``substantial 
evidence'' standard even if the agency disagreed with the 
findings of the administrative law judge. In Butz et al. v. 
Economou et al., 438 U.S. 478 (1978), the Court found that: 
``There can be little doubt that the role of the modern federal 
hearing examiner or administrative law judge within this 
framework is ``functionally comparable'' to that of a judge. 
His powers are often, if not generally comparable to those of a 
trial judge: He may issue subpoenas, rule on proffers of 
evidence, regulate the course of the hearing, and make or 
recommend decisions. More importantly, the process of agency 
adjudication is currently structured so as to assure that the 
hearing examiner exercises his independent judgment on the 
evidence before him, free from pressures by the parties or 
other officials within the agency.''
    This law clearly establishes that the administrative law 
judge is to render a decision that is based upon the facts and 
the law and which is free from undue agency influence. How can 
the agency ``manage'' the decisionmaking process without 
violating this basic constitutional principle? The GAO should 
be requested to describe the content of its proposal that SSA 
should manage ``the decisionmaking process'' and further 
explain how it is compatible with the U.S. Constitution. If the 
agency attempts to manage or interfere with the function of the 
administrative law judge it will be engaging in the very 
conduct that the Administrative Procedure Act was enacted to 
correct.

                         III. New Agency Policy

    In 1996 SSA promulgated a policy which addressed many of 
the issues raised by the GAO report. The agency policy of 
Process Unification created a single standard for deciding SSA 
disability claims at all levels in the process which is based 
upon the legal standard. It mandates a more comprehensive 
review of the claim at the DDS reconsideration level and 
requires consideration of the DDS medical review at the hearing 
level. At a recent SSA Redesign meeting a SSA representative 
stated that the single standard will be based upon the SSA 
regulations with certain elements of the POMS incorporated into 
the regulations. The GAO report did not acknowledge this new 
agency policy or consider its impact on the SSA disability 
process.

                           IV. Recommendation

    In 1975 the average number of monthly case dispositions was 
16 per administrative law judge. By FY 1996 the administrative 
law judges in SSA achieved a new high mark of 531,536 case 
dispositions. This computes to over 44 cases a month per judge. 
This is a commendable performance in view of the fact that the 
cases have become complex, more voluminous, require the use of 
more expert witnesses, have more attorney representation and 
are more time consuming. Our judges are accustomed to working 
hard, and we ask only to be permitted to function within the 
scope of the law.
    The Association has long recommended that a single standard 
be used for the determination of SSA disability claims at all 
levels of the process. This single standard must be based upon 
the legal standard, because this is the standard upon which the 
claim will be decided should the case be appealed to the 
Federal courts. The Association has expressed concern with 
certain aspects of the agency policy of Process Unification. We 
have raised issue with the failure to develop a policy for 
compelling the presence of DDS medical authorities at the 
administrative law judge hearing should the claimants decide to 
insist upon the production of this evidence with subpoena power 
using the case of Lidy v. Sullivan, 911 F.2d 1075 (5th Cir. 
1990) as authority. We are most concerned with the policy of 
nonacquiescence which is part of Process Unification. This is a 
separation of powers issue which caused the agency considerable 
stress in the 1980's. Our concerns have been expressed to the 
Commissioner in writing.
    Our judges take an oath to uphold the law and the U.S. 
Constitution which we have a duty to follow. We understand our 
responsibility to follow the Constitution and apply the law, 
agency regulations and agency policy which we take very 
seriously. But we believe that it is beyond the scope of our 
oath of office to apply agency policy that is inconsistent with 
the law. It is the rule of law that protects against the abuses 
of power. This can only be accomplished by respecting the due 
process of law.

            Respectfully submitted,

                                         Ronald G. Bernoski
                                                   Acting President

                                

    Chairman Bunning. Ms. Gardiner.

     STATEMENT OF DEBI GARDINER, PRESIDENT-ELECT, NATIONAL 
  ASSOCIATION OF DISABILITY EXAMINERS; ACCOMPANIED  BY  TOM  
                 CHRISTOPHER,  PAST  PRESIDENT

    Ms. Gardiner. Chairman Bunning and Members of the 
Subcommittee, my name is Debi Gardiner. I am a hearing officer 
with the Baton Rouge, Louisiana, Disability Hearing Unit, and I 
am also president-elect of NADE, the National Association of 
Disability Examiners.
    On behalf of the membership of NADE, I would like to thank 
you for the opportunity to present our views on the differences 
in the DDS and OHA disability decisions.
    NADE is a professional association whose membership 
includes disability examiners and other professionals in State 
agencies where Social Security disability decisions are made, 
as well as within SSA. We also have attorneys, physicians, 
ALJs, program advocates, and other individuals with interest in 
the disability program.
    Because of the experience our members have in adjudicating 
Social Security and SSI disability claims, NADE has a keen 
interest in the issues before this Subcommittee. We believe 
this is an important hearing. Until now, few within SSA would 
acknowledge that we do have two different disability programs, 
one in DDS and one in OHA.
    Now that there is more acknowledgement that the problem 
exists, how do we fix it? NADE believes that SSA took an 
important first step with the cross component, Process 
Unification training, which stressed selected critical policy 
to every individual making or reviewing disability decisions. 
We understand that preliminary data suggests that following 
Process Unification, the ALJ allowances have somewhat 
decreased.
    Expansion on this initiative by SSA is a must. Additional 
training for the ALJs, especially medical training, is 
essential if the discrepancy is to be resolved. SSA needs to 
take advantage of new pol- 
icy issues to provide consistent training on key policy issues 
to all decisionmakers within the DDSs and the OHAs.
    The general counsel has issued an opinion asserting SSA's 
authority to establish programmatic policies that ALJs must 
follow. This should assure their authority over the 
programmatic policy to all components involved in disability 
adjudication.
    Currently, there is limited review of ALJ allowances. This 
is an important first step. However, a significant number of 
reviews must be done prior to effectuation so that 
inappropriate allowances can be readily corrected. We suggest 
that this number be sufficient to provide meaningful data and 
feedback regarding the accuracy of the ALJ decisions, as is 
currently done in the DDS.
    We continue to have concerns that the DDS decisions will be 
reviewed by SSA's Office of Program and Integrity Review, while 
the ALJ decisions are reviewed by the appeals counsel. Also, 
the same evidentiary standards must apply to DDS and ALJ 
decisions.
    The congressionally mandated 50-percent preeffectuation 
review of DDS allowances lends itself to the perception that 
DDS are sanctioned with error citations for predominantly 
favorable decisions. This perception is reversed for the ALJ 
decisions since there is only very minimal review of ALJ 
allowances. Thus, the two bodies, the DDSs and the ALJs, are 
sanctioned with error citations for completely opposite 
decisions. As a result, NADE recommends Congress require SSA to 
initiate steps to ensure that a greater percentage of ALJ 
allowances be subjected to preeffectuation review. We feel this 
would be an additional step toward resolving this discrepancy.
    Reducing OHA backlog is essential. Because of delays, some 
claimants are much more impaired by the time they receive their 
hearing than when they were denied at DDS. This further serves 
to create the perception of discrepancy between the two 
components and, more importantly, is a hardship on the 
individual who is deserving of disability benefits.
    The ultimate goal for SSA within the umbrella of Process 
Unification is to create the single book of program policy for 
decisionmakers. Currently, the DDSs have their procedure and 
policy vehicles and OHA has theirs. Obviously, we must all be 
working from the same book in order to have a more uniform 
system. NADE is very concerned that the delivery date for this 
critical piece keeps slipping away, and we would encourage SSA 
to make this a top priority.
    One policy area which is being applied differently between 
the DDSs and the ALJs is proper adjudicative weight being given 
to the training source opinion. This is a policy area SSA has 
tried to address, and this is one policy area in which a 
congressional fix might be in the program's best interest. We 
would be delighted to work with you on this.
    I would like to reiterate that SSA has taken the first 
tentative steps toward meaningful reform to narrow the gap 
between the DDS and ALJ allowance rates. We appreciate the 
Subcommittee's interest in and attention to this critical issue 
facing the disability program and for the opportunity to appear 
before you.
    [The prepared statement follows:]

Statement of Debi Gardiner, President-Elect, National Association of 
Disability Examiners; Accompanied by Tom Christopher, Past President

    Chairman Bunning and members of the Subcommittee, on behalf 
of the National Association of Disability Examiners (NADE) I 
wish to thank you for the opportunity to present our views on 
the differences in DDS and OHA disability decisions, 
emphasizing possible remedies to this situation.
    NADE is a professional association whose membership 
includes disability examiners and other professionals in State 
Agencies where Social Security Disability Decisions are made, 
and within SSA, as well as physicians, attorneys, 
administrative law judges, program advocates, and other 
individuals with interest in the disability program.
    Our interest in the issues before this committee today goes 
back many years and has been the subject of extensive writing 
by many of our members some of which has been designated as 
official position papers by the Association. On September 12th 
of last year we presented testimony to you addressing the 
discrepancy between DDS and ALJ decisions. These comments were 
subsequently expanded, to include an analysis of the causes of 
the discrepancy, and submitted for the hearings record at your 
request. Today, we would like to review recent initiatives by 
SSA to confront this problem and, finally, to suggest 
additional administrative and legislative remedies.
    We continue to believe that SSA took an important first 
step with the cross-component process unification training 
which emphasized selected critical policy to every individual 
involved in making or reviewing disability decisions, e.g, 
restating the requirement that ALJs give appropriate weight, as 
the opinion of a nonexamining physician or psychologist, to 
findings of residual functional capacity, and other findings, 
by DDS medical consultants. Following up on the unification 
initiative by expanding quality review of ALJ allowances will, 
we trust, reinforce the positive messages of the training. We 
understand from SSA officials that very preliminary data 
suggests that ALJ allowance rates have decreased somewhat 
following the process unification training. I will make 
suggestions for additional revisions to the review process 
later on in my comments.
    Also, SSA has, though, perhaps, somewhat belatedly, 
obtained an opinion from General Counsel that asserts the 
Agency's authority to establish programmatic policies that ALJs 
must follow, require ALJs to attend training on the Agency's 
policy interpretations, and to follow them, while safeguarding 
the duty of impartiality owed to claimants. We are hopeful that 
this finding will remove any ambiguity that may remain 
regarding SSA's authority in matters involving programmatic 
policy at all levels of adjudication.
    SSA must continue and expand each of these initiatives. 
Additional training for ALJs, particularly medical training, is 
essential if that part of decisional discrepancy comprised of 
unsupported allowances by ALJs is to be corrected. I would 
cite, by way of example, the requirement to afford controlling 
weight to the opinion evidence of treating physicians when that 
opinion is well-supported by medically acceptable clinical and 
laboratory diagnostic techniques. This requirement becomes an 
empty one if ALJs are not sufficiently grounded in knowledge of 
medically acceptable diagnostic techniques to make supportable 
determinations in this regard. The alternative is uncritical 
acceptance of medical opinion.
    Initiatives already undertaken to include review of ALJ 
allowances must be expanded and revised. The current limited 
review for data gathering and advisory purposes is an important 
first step; however, without a statistically significant number 
of reviews, done prior to effectuation so that inappropriate 
allowances can be readily corrected, true unification will not 
occur. We applaud SSAs plan to write a regulation requiring a 
``live'' preeffectuation review of ALJ allowances. We suggest 
to them that the number of such reviews comport with the number 
of reviews of DDS allowances. We continue to be concerned, 
however, that DDS determinations will be reviewed by SSA's 
Office of Program and Integrity Reviews (OPIR) while ALJ 
decisions will be reviewed by the Appeals Council. We have 
spoken frequently of the differences that exist between the 
various regional OPIRs that militate against consistency. We 
believe that the same kinds of differences, perhaps magnitudes 
greater, will exist between OPIR and the Appeals Council. 
Finally, the same evidentiary standards must apply in review of 
DDS and ALJ decisions.
    Full resolution of the quality review-based aspect of 
discrepant decisions may require legislative remedies. It has 
become a commonplace to cite the fact that the congressionally 
mandated 50% preeffectuation review of DDS allowances, in 
conjunction with the historical fact that the vast 
preponderance of reviews of ALJ decisions were of denials by 
the courts has led to the perception that DDSs are sanctioned 
with error citation predominantly for favorable decisions while 
ALJs are sanctioned by court reversals of unfavorable 
decisions. In that context, we once again recommend creation of 
a Social Security Court. Additionally, we support closing the 
record after a hearing by an ALJ.
    We also recommend legislative review of the mandated 
preeffectuation review. Congress might consider requiring the 
same percentage of DDS and ALJ allowances to correct the 
discrepant signals these components receive from the review of 
favorable decisions.
    Finally, I would offer a brief comment on OHA backlogs. 
Efforts to reduce these are absolutely essential. It is well-
known that ALJs often decide cases on individuals who, because 
of delays, are much more impaired than when they were denied by 
the DDS. This creates a perception that the discrepancy between 
these two components is greater than it actually is. More 
importantly, however, it causes an inordinate amount of 
hardship to individuals deserving of disability benefits. We 
urge close administrative and legislative scrutiny of this 
issue.
    In closing, I would like to reiterate that SSA has 
undertaken several important initiatives to narrow the gap 
between DDS and ALJ allowance rates. These tentative first 
steps lay the groundwork for meaningful reform. We appreciate 
the Committee's interest in and attention to these critical 
issues facing the disability program and the opportunity to 
appear before you to present our views.

                                

    Chairman Bunning. Mr. Hill, please.

   STATEMENT OF JAMES A. HILL, PRESIDENT, NATIONAL TREASURY 
                  EMPLOYEES UNION, CHAPTER 224

    Mr. Hill. Good morning, Mr. Chairman. My name is James 
Hill. I am employed by the Office of Hearings and Appeals of 
the Social Security Administration as a senior attorney in its 
Cleveland, Ohio, hearing office. I am also the president of the 
National Treasury Employees Union, chapter 224, which 
represents attorney-advisers in 96 hearing offices across the 
United States. I wish to thank the Subcommittee for inviting me 
to testify this morning.
    The massive increase in the disability backlog that OHA 
experienced from 1992 to 1996 has been contained. There has 
been no significant change in that backlog since July 1996. 
While no one at OHA is satisfied with the status quo, we are at 
least moving in the right direction.
    This stabilization of the backlog is due in great part to 
the senior attorney program which, if continued, will permit 
significant reductions in case backlog, processing times, and 
even in the reversal rate, thereby providing greatly improved 
service to the public.
    For some time, the disability program has been beleaguered 
by two intractable problems, the lack of an effective CDR 
Program and the OHA backlog. SSA decided to create an entirely 
new disability adjudication system, the disability process 
redesign. However, at the outset of the redesign, SSA admitted 
that it was not intended to deal with either of the 
aforementioned problems.
    In order to cover this somewhat embarrassing oversight, SSA 
subsequently claimed that one goal of AO, the adjudication 
officer, initiative was to reduce that backlog.
    Testing for the AO project began in November 1995, and 
despite the highest level of priority, carefully selected 
personnel, and the establishment of closely controlled ideal 
test conditions, AO productivity remains at less than one-half 
of the level predicted by the redesign model.
    Through February 21, 1997, despite the resources lavished 
upon it, the AO had produced only 5,689 decisions. Further, the 
quality of those decisions, based on agency quality assurance 
evaluations, is considerably less than that of similar ALJ and 
senior attorney decisions. To date, the redesign has had no 
measurable impact on the workload at OHA except consuming 
resources, both human and material that could have been put to 
much better use.
    The primary short-term initiative directed at OHA workload 
is a senior attorney program which is also known as Action 7 of 
the Short-Term Disability Project. This program produced 
approximately 47,000 decisions in fiscal year 1996. Recent 
management initiatives have significantly improved the 
operational efficiency of this program. During the first 3 
months of 1997, nearly 16,000 Action 7 decisions were issued. 
This is an annual rate of over 62,000 cases.
    Quality assurance studies have demonstrated that the 
accuracy rate of senior attorney decisions significantly 
exceeds that of adjudication officers and is slightly higher 
than ALJ on-the-record decisions. The accuracy of the senior 
attorney decisions, combined with their 22-percent payment 
rate, refutes any allegation that the program is designed to 
pay down the backlog.
    Additionally, the implementation of Action 7 has not 
resulted in an unacceptable increase in the number of ALJ 
decisions awaiting drafting. Action 7 has resulted in deserving 
claimants receiving favorable decisions with an average 
processing time of only 120 days.
    The prime factors in achieving both decisional accuracy and 
consistency are expertise, experience, accountability, and 
decisional independence. A considered effort must be made to 
ensure that all decisionmakers meet these criteria.
    A consistent quality assurance process at all levels and 
vigorous enforcement of the Process Unification rulings will 
significantly improve decisional consistency.
    The lower payment rate of senior attorneys who are applying 
the same standards and considering the same factors as ALJs as 
compared to the payment rates of ALJs is documented, but has 
not been analyzed. Such an analysis could prove instrumental in 
achieving a higher level of decisional accuracy and consistency 
inasmuch as senior attorney decisional behavior seems to fall 
between the decisional behaviors of the State agencies and the 
ALJs.
    Thank you.
    [The prepared statement follows:]

Statement of James A. Hill, President, National Treasury Employees 
Union, Chapter 224

    My name is James A. Hill. I am employed by the Office of 
Hearings and Appeals (OHA) of the Social Security 
Administration (SSA) as a Senior Attorney. I am also the 
President of National Treasury Employees Union (NTEU) Chapter 
224 which represents Attorney-Advisors in 96 Hearing Offices 
across the United States. I served as a member of the 
Reengineering Social Security Steering Committee and am 
presently a member of the Disability Process Redesign Advisory 
Committee. I also served on the original Short Term Disability 
Project Committee which formulated the Short Term Disability 
Project and am a member on the committee that oversaw the 
implementation of the Project. I wish to thank the Subcommittee 
for inviting me to testify regarding the state of the Social 
Security disability insurance program.

                                Summary

The Current Status of OHA Workloads and Their Impact on Service 
to the Public

    The massive increase in the disability backlog at OHA 
experienced from 1994 to 1996 has been contained; there has 
been no significant change in the backlog from July 1996 
(529,113 cases) to March 1997 (527,125 cases). This 
stabilization of the backlog affords OHA the opportunity to 
effect incremental changes in its processes within its current 
structure, such as the Senior Attorney Program, which will 
permit a significant reduction in the case backlog, in 
processing times, in the average age of pending cases, and in 
the reversal rate during the next two years.

The Effects of Long-Term Initiatives on OHA Workloads

    The primary Long-Term Initiative purporting to improve the 
OHA workload situation is the Redesigned Disability Process 
(Redesign). However, at the outset of the Redesign SSA admitted 
that the Redesign was not intended to deal with the two largest 
problems plaguing the Social Security disability system: The 
lack of an effective Continuing Disability Review (CDR) and the 
backlog at OHA. The Redesign consists of 83 separate 
initiatives of which GAO recently noted none had been 
completed. The initiative with the most potential to impact the 
workload situation of OHA is the Adjudication Officer (AO) 
Initiative which began testing in November 1995. Despite the 
highest level of priority, carefully selected personnel, a 
priority on data processing equipment, and the establishment of 
closely controlled, ideal test conditions, AO productivity 
remains at less than half the level predicted by the Redesign 
model. Through February 21, 1997, despite the resources 
lavished upon it, the AO test had produced only 5,689 decisions 
and 12,985 certifications to ALJs. Further, the quality of 
those decisions, based on Agency quality assurance evaluations, 
is less than that of similar ALJ and Senior Attorney decisions. 
The Redesign has had no measurable effect upon the workload of 
OHA except consuming resources, both human and material, that 
could have been put to much better use. Furthermore, a full 
roll out of this initiative would almost certainly require re-
assignment of substantial numbers of OHA personnel rendering 
OHA incapable of performing its mission.

The Effects of Short-Term Initiatives on OHA Workloads

    The primary short-term initiative directed at the OHA 
workload was the Short Term Disability Project (STDP) which 
except for Action # 6 (screening units) and Action #7 (the 
Senior Attorney Program) ended December 31, 1996. Senior 
Attorneys spend approximately 25-50% of their time performing 
Action #7 work and most of the remaining 50-75% of their time 
drafting ALJ decisions. The ability of Senior Attorneys to 
perform both tasks significantly increases managerial 
flexibility allowing human assets to be directed to the highest 
priority tasks. Action #7 was hindered by a variety of ``start-
up'' problems and fierce resistence from ALJs, including many 
Hearing Office Chief Administrative Law Judges. Despite this 
resistence nearly 47,000 Action #7 decisions were produced in 
FY 1996. However, recent management initiatives have 
significantly improved the operational efficiency of Action #7 
resulting in a significant increase in production. During the 
first three calendar months of 1997 nearly 16,000 Action #7 
decisions were issued; this is an annual rate of over 62,000 
cases. Quality Assurance studies have demonstrated that the 
accuracy rate of Senior Attorney decisions significantly 
exceeds that of Adjudication Officers and is somewhat higher 
than that of on-the-record ALJ decisions. During FY 1997 Senior 
Attorney decisions have been significantly more accurate than 
ALJ on-the-record decisions. The accuracy of the Senior 
Attorney decisions combined with the significantly lower 
payment rate of Senior Attorneys (approximately 22%) than the 
payment rate of ALJ on the Senior Attorney cases that were not 
paid by Senior Attorneys (approximately 57.1%) demonstrate that 
Action #7 is not an effort to ``pay down the backlog.'' 
Additionally, the implementation of Action #7 has not resulted 
in an unacceptable increase in the number of ALJ decisions 
awaiting drafting. Action #7 has resulted in deserving 
claimants receiving a favorable decision with an average 
processing time of approximately 120 days as compared to the 
over 1 year average processing time for a case requiring an ALJ 
hearing. Finally, Action #7 has caused a decrease of nearly a 
month and a half in processing time even for those Action #7 
cases which were not paid by Senior Attorneys and which still 
required an ALJ hearing as compared with non-Action #7 cases.

SSA Decisional Inconsistency

    A number of well known factors contribute to the decisional 
inconsistencies between the various adjudicatory levels. A 
quality assurance process that concentrates upon favorable 
decisions at the DDS level with insufficient control regarding 
the quality of the adverse decisions, and the exact opposite 
situation at the appellate level is a prime factor in producing 
decisional inconsistency. However, the failure of the State 
Agencies to provide adequate written explanations for their 
decisions, their failure to adequately develop cases, and their 
failure to consider the effect of the claimant's symptoms not 
only limits the usefulness of their determinations at the OHA 
level, but contributes to incorrect determinations. Vigorous 
enforcement of the Process Unification Rulings at the State 
Agency level will significantly improve decisional accuracy. In 
evaluating the situation at the OHA level, and indeed in 
evaluating the entire matter of decisional consistency, the old 
paradigm of two levels of decision making (DDS and OHA which 
really meant ALJ) must be replaced by a paradigm consisting of 
three levels of decision making (DDS, Senior Attorney, and 
ALJ). The payment rates of the screening units demonstrate that 
even using DDS standards, DDS decisions are wrong a significant 
amount of time. The lower payment rate of Senior Attorneys, who 
are applying the same standards and considering the same 
factors as ALJs, as compared to the payment rate of ALJs has 
been documented but not sufficiently analyzed. Such an analysis 
could prove enlightening in as much as Senior Attorney payments 
rates seem to fall between those of the screening units which 
apply ``DDS standards'' and ALJ. Inclusion of subject matter 
expertise in the ALJ selection criteria would ensure a more 
consistent level of expertise at all decisional levels thereby 
increasing decisional accuracy. Finally, increasing ALJ and DDS 
accountability for producing accurate decisions.

                            Recommendations

     The Adjudication Officer Program should be 
discontinued and the Senior Attorney Program made permanent.
     The State Agencies must place greater emphasis 
upon compliance with the Process Unification Rulings and fully 
developing the medical record.
     A study of the factors affecting the decision 
making process at the DDS, Senior Attorney, and ALJ level 
should be conducted to establish best practices which could be 
applied at all levels.
     Include subject matter expertise in the ALJ 
selection criteria.
     Increasing the accountability of decision as 
appropriate.

The Current Status of OHA Workloads and Their Impact on Service 
to the Public

    At the beginning of July 1996 OHA had 529,113 cases 
pending; at the end of March 1997 OHA had 527,125 cases 
pending. At the end of July 1996 there were 22,445 cases 
pending drafting; at the end on March 1997 there were 23,906 
cases pending drafting. OHA receipts during that period were at 
an annualized rate of 562,010 cases. In July 1996 average 
processing time at OHA was 379.84 days; at the end of March 
1997 average processing time at OHA was 369.67 days. In July 
1996 average age of pending cases at OHA was 275.00 days; at 
the end of March 1997 average age of pending cases at OHA was 
274.99 days. During the period in question the 
number of ALJs increased from 1024 to 1064 while the number of 
decision writers declined from 1703 to 1546. While NTEU is not 
satisfied by the current status of OHA workloads, the record 
clearly demonstrates that the days of massive increases in the 
OHA backlog are finally behind us. This is particularly 
impressive given the fact that OHA receipts continue to 
increase, albeit at a significantly slower rate than during 
1994-1996. This stabilization of the OHA backlog affords OHA 
the opportunity to effect incremental changes in its processes 
within the current structure which will permit a significant 
reduction in the backlog, in processing times, in the average 
age of pending cases, and in the reversal rate during the next 
two years. Action #7 of the Short Term Disability Project, 
which empowers Senior Attorneys to review, develop and issue 
fully favorable decisions has demonstrated its ability to 
increase OHA dispositions without adversely affecting 
decisional accuracy, payment rate, program costs, and the 
number of ALJ cases awaiting decision drafting.

Effects of Long-Term Initiatives

    The primary long term initiative through which SSA is 
attempting to modify the disability adjudication system is the 
Disability Process Redesign (Redesign). During the past several 
years SSA has had two major problems with its disability 
program which have significantly reduced the quality of the 
service provided to the public--the disability case backlog at 
OHA and the lack of an effective Continuing Disability Review 
(CDR) program. Amazingly, the Redesign as announced by then 
Commissioner Shirley Chater specifically excluded 
rehabilitation or continuing disability issues from 
consideration, and explicitly stated that Redesign was not 
designed to reduce the hearings backlog. In order to divert 
some of the criticism regarding this oversight, sometime after 
its inception, SSA officials decided to present one part of the 
Redesign, the Adjudication Officer, as a vehicle to assist in 
reducing the current backlog at the Office of Hearings and 
Appeals. Of course, the Adjudication Officer initiative was not 
designed for the purpose of reducing the pre-existing backlog.
    The Redesign is a prime example of a typical response of a 
governmental bureaucracy which entails solving a problem by 
instituting a massive and expensive program which is more 
responsive to the needs of the bureaucracy that created it than 
to the needs of the people it purports to serve. SSA is 
currently involved in an extensive review of its customer 
service program. To that end a Customer Service Executive Team 
(CSET) has been charged with the responsibility of reviewing 
the current plan and suggesting improvements. In a meeting on 
April 16, 1997 the CSET proposed that the Agency conduct focus 
groups and surveys of its ``disability customers'' to update 
its understanding of the service desired by these customers. At 
that time a senior SSA executive informed the CSET that such 
activities would make those managing the Redesign very uneasy 
because the customers might indicate desires not consistent 
with the Agency's current plans. This is a clear indication 
that the driving force behind the Redesign is not improved 
service to the public, but advantage in the ongoing power 
struggle at the upper echelon of SSA management. As is often 
the case with major initiatives in the federal government, 
those senior officials who conceived the initiative and began 
its implementation are no longer with the Agency, thereby 
relieving those individuals from the responsibility of dealing 
with the problems caused by their creation. I have often 
wondered how many of the seemingly endless number of projects 
and initiatives proposed and implemented by senior management 
would have been commenced had those administrators expected to 
be employed by the Agency when the inevitable problems 
developed.
    Distilled to its essence, the Disability Process Redesign, 
as conceived by Rhoda Davis and championed by Shirley Chater 
and Larry Thompson, is a grandiose scheme whose primary goal is 
to centralize control of the disability determination process 
in the hands of an isolated bureaucracy in Baltimore more 
concerned with its own desire for power than the needs of the 
public. Indeed, the primary purpose of implementing the 
aforementioned Adjudication Officer is to effectively eliminate 
the Office of Hearings and Appeals and further centralize 
control of the disability process in the hands of the 
bureaucracy in Baltimore. Unfortunately, this bureaucracy has 
on countless occasions revealed its lack of understanding and 
contempt for the concept of due process in the adjudication 
process.\1\ At the time the pilot for the Adjudication Officer 
began, SSA tried repeatedly to secure an enabling regulation 
which provided for a full roll out of the position several 
months after the pilot began. At that time, SSA insisted that 
the concept of the Adjudication Officer had been confirmed, and 
that only minimal testing was needed for fine tuning. 
Fortunately, OMB averted disaster by authorizing only a testing 
regulation.
---------------------------------------------------------------------------
    \1\ Similar disregard for the legal system including the role of 
the courts in that system underlies the Agency's developing controversy 
with the Federal Courts regarding Agency acquiescence to Circit Court 
decision.
---------------------------------------------------------------------------
    Testing of the AO began in November 1995 with the opening 
of test facilities in 9 state sites. Sixteen additional federal 
sites were opened in the following several months. 
Approximately 120 Adjudication Officers have been involved in 
the test. The initial test period expired in November 1996, but 
the results of the test were so discouraging that SSA concluded 
that further testing was needed. Therefore testing has been 
continued while ``modifying/adjusting policies and procedures'' 
Currently, SSA plans to commence a full roll out of the AO 
process beginning in January 1998.
    A review of the results of the test so far demonstrates the 
magnitude of the Agency's capacity for understatement. A more 
disinterested observer would likely characterize the AO test as 
an unmitigated disaster. Productivity for the AO was originally 
projected to be at least 2 clearances per AO per day. Actual 
test data demonstrates that productivity has peaked at a 
production of 0.8 to 0.9 per AO per day. Furthermore, quality 
assurances reviews have revealed significant deficiencies in 
areas vital to disability determinations including onset, 
duration, activities of daily living, past relevant work, 
transferability of skills, the existence of others jobs, and 
the effects of symptoms upon an individual's ability to work. 
The decisions of AOs have consistently had a lower effectuation 
rate after review by the Appeals Council than either Senior 
Attorney decisions or ALJ on-the-record decisions. While SSA 
claims that it is too early to ascertain what the impact of the 
AO on program costs is, current indications are that it will 
result in a significant increase in those costs. Finally it 
should be noted that from its onset in November 1995 through 
February 21, 1997, the last date for which NTEU has data, the 
AO test had produced only 5,689 deci- 
sions and 12,985 certifications to ALJs. For comparison, in the 
month of March 1997 alone, Senior Attorneys produced 5,297 
decisions and reviewed 21,474 cases.
    SSA has provided a number of excuses for the poor 
performance of the AO test, but has not yet seriously addressed 
the question of whether the problem is with the program itself 
rather than its execution. SSA states that training and start 
up times have adversely affected production. While this is 
undoubtedly true at the outset, the learning curve has long 
since stabilized and production has remained essentially 
unchanged for many months. Interestingly enough, the most 
successful sites have involved staff attorneys from OHA 
detailed to the AO test. These individuals, many of whom have 
years of experience dealing with cases at the appellate level 
and are far more comfortable dealing with the claimants' 
attorneys, have provided more efficient service than their non-
professional, less experienced colleagues.\2\ SSA also 
attributes reduced production to creating a new hearing level 
``culture,'' varying levels of local-site managerial support, 
and a ``lack of traditional organizational ownership which has 
affected the overall support the AO test has received.''
---------------------------------------------------------------------------
    \2\ Some of these attorneys received temporary promotions to the 
GS-13 Senior Attorney position. These individuals were permitted to 
retain the GS-13 temporary grade despite the fact they were detailed to 
a GS-12 non-attorney position.
---------------------------------------------------------------------------
    If true, this would be a stunning admission of the 
ineptitude of SSA management given the fact that the Redesign 
has the highest priority and the AO test itself has the highest 
priority on both human and material resources. Many of the AOs 
and much of the support clerical staff in AO sites are, in the 
eyes of the DPRT, ``the best of the best'' and have been 
recruited from across the country and detailed to the AO test 
site locations, thereby incurring a considerable cost in 
lodging and per diem expenses. It is demonstrative of the level 
of priority given to the Redesign that the Agency is willing to 
pay lodging and per diem costs to bring AOs and clerical 
workers to the AO tests sites including areas such as New York 
City for a ``test'' that began in some offices in November 1995 
and has no end in sight.\3\ NTEU believes it would be a far 
better use of the taxpayers' money to use AOs and clerical 
support indigenous to the AO work site areas rather than incur 
the additional lodging and per diem costs. This is a prime 
example of the high priority given to the AO test by SSA. To 
solve the ``managerial problems'' SSA has shifted operational 
control from DPRT to the Deputy Commissioner for Operations 
(DCO).\4\ In as much as less than half of the AO test sites 
report to DCO, this change seems more cosmetic than functional. 
More to the point is a statement made at the Redesign 
Disability Process Advisory Council meeting in February 1997 
when SSA officials stated that the productivity discrepancy is 
due to a faulty model. Of course it was the results of these 
flawed models upon which the decision to implement the Redesign 
was justified.
---------------------------------------------------------------------------
    \3\ It is rumored that some of these individuals actually receive 
lodging and per diem payments greater than their salary.
    \4\ At the same time the DPRT was substantially downsized and its 
Director, Charles Jones, left the Agency.
---------------------------------------------------------------------------
    The anemic level of AO productivity is a matter of grave 
concern. Based upon the model which predicted that productivity 
would be in the range of two a day, staffing, material and 
physical plant estimates were made. It is clear that SSA cannot 
tolerate any program that causes a significant increase in the 
disability backlog. Throughout the test cycle, when the AO 
sites were incapable of handling even the limited number of 
cases assigned to them, intake to them was diverted to the 
hearing offices for processing through the current process. 
These diversions assured that the Agency would be spared the 
embarrassment of the AO creating yet another backlog in the 
disability adjudication system, and did little to enhance the 
viability of the AO process in a ``real world'' setting. 
Diverting intake to hearing offices will not be possible if and 
when the AO roll out is commenced. As conceived by the 
Redesign, an AO was projected to produce two decisions a day; 
currently, long after the learning  curve  has  expired,  the  
AO  test  has  demonstrated  a  productivity  of  only 0.8-0.9 
clearances per day. Such a low level of productivity would 
require more than doubling the 1250 AOs originally projected. 
In fact, processing the more than 600,000 cases appealed to OHA 
a year at the rate of one case a day will require at least 
2500-2800 AOs. Additionally, supporting staff, office space and 
equipment would also have to be more than doubled.
    However, that relative lack of productivity is not the only 
failing of the AO pilot. Decisional accuracy by AOs is less 
than that of Senior Attorneys or ALJs involving on-the-record 
cases. Both the productivity and accuracy problems are at least 
in part traceable to the Agency's choice of personnel to staff 
the AO position. While SSA loudly, but quite inaccurately, 
characterizes the AO as a professional adjudicator, the fact of 
the matter is most AOs had little previous experience in 
dealing di- 
rectly with claimant's and their representatives, medical 
issues, legal issues, or preparing legally defensible 
decisions. In short, not only are these individuals not 
``professionals'' as that term is normally used, but many, if 
not most, lacked the necessary education, training, and 
experience to function successfully as an independent 
adjudicator. SSA in the form of staff attorneys in OHA has 
hundreds of true professionals that had the necessary 
education, training and experience to become successful 
adjudicators.

Effects of Short-Term Initiatives

    The Short Term Disability Project was designed as a short 
term solution to growing backlogs at the DDS level and the far 
more serious backlog at the hearings level. STDP formally ended 
as intended on December 31, 1996 except that Action # 6 and 
Action #7 have continued. While the backlog at OHA was not 
significantly diminished during the course of STDP, it did 
cease to grow. Considering that it had grown at an annual rate 
of approximately 100,000 cases during the two years preceding 
the effective implementation of the STDP programs intended to 
deal with the OHA situation, STDP can be considered to be an 
unqualified success. The most important initiative in the STDP 
package regarding backlog reduction at the hearing level was 
Action #7 which involves Senior Attorneys at OHA reviewing, 
developing and paying on-the-record, if appropriate, cases 
determined by a profile to be the most likely payments. Senior 
Attorneys spend approximately 25-50% of their time performing 
Action #7 work and most of the remaining 50-75% of their time 
drafting ALJ decisions. The ability of Senior Attorneys to 
perform both tasks significantly increases managerial 
flexibility allowing human assets to be directed to the highest 
priority tasks. Those cases that could not be paid on-the-
record by Senior Attorneys are forwarded to an ALJ for 
processing consistent with normal OHA procedures.\5\ By Senior 
Attorneys finding, developing and paying appropriate cases, 
deserving claimants received a favorable decision within months 
of their filing an appeal and were spared the one to two year 
wait for a hearing. It should be noted that further development 
of the medical and non-medical record is an integral part of 
Action #7; it is this development that both demonstrates that 
an individual is in fact disabled and measurably improves the 
quality of the decisions rendered. Despite this development, 
average processing time for favorable Senior Attorney decisions 
(August 1995 through the end of March 1997) is only 124 days. 
This places a favorable decision in the hands of deserving 
claimants only four months after they file their Request for a 
Hearing. Current processing time at OHA for cases that go 
through the hearing process for the same time period is 414 
days for non Action #7 cases and 376 days for Action #7 cases. 
The decrease in processing time of Action #7 cases at the ALJ 
level can be attributed to the effects of the case development 
performed by Senior Attorneys on those cases that they forward 
to the ALJs. Action #7 clearly provides improved service to 
claimants.
---------------------------------------------------------------------------
    \5\ In many ways the Senior Attorney and the Adjudication Officer 
perform similar functions; however the Senior Attorney program has been 
the far more effective of the two programs.
---------------------------------------------------------------------------
    Despite it obvious success, the Senior Attorney program has 
been unjustly criticized ever since its proposal. It was 
fiercely opposed by the Association of ALJs, Inc., many of the 
state agencies and many in the Redesign bureaucracy, who 
objected to any intrusion onto their ``turf.'' Nonetheless, 
through the vision and labors of OHA, NTEU, and the STDP Team, 
the Senior Attorney program came into being. A key element in 
implementing the program was the creation of regulatory 
authority. Although the states had the authority to permit 
Action #7 to be launched without formal regulatory authority, 
except for the states in the Southeast United States, very few 
did. Therefore, full implementation of Action #7 had to wait 
until the end of the rule making process. In July 1995 the 
necessary regulatory language was finally in place, so in 
August 1995 the program was commenced in the face of continued 
hostility. In fact opposition by local hearing office 
management, usually by Hearing Office Chief Administrative Law 
Judges, continues to be a major factor in limiting the 
effectiveness of Act. This opposition takes many forms 
including lower performance evaluations for individual Senior 
Attorneys who issue a substantial number of Action #7 cases, 
failure to provide even minimal staff assistance, failure to 
conform to Agency policy directives, and return to the ``unit 
system.'' In fact it was not until late 1996 that OHA 
management made a concerted attempt to overcome hearing office 
obstructionism to Action #7. The result of that effort was 
gratifying. In the first 3 months of 1997 nearly 16,000 fully 
favorable decisions were released pursuant to Action #7. The 
record clearly demonstrates that Action #7 has significantly 
increased the number of dispositions at OHA thereby materially 
reducing the number of cases which would be awaiting decision.
    If current trends continue, Action #7 will produce more 
than 50,000 decisions in FY 1997 and over 100,000 decisions for 
FY 1996-1997 without significantly impairing any area of OHA 
decisional productivity. It is these decisions, when added to 
the decisions of the ALJs which have stopped the increase in 
the OHA backlog and which if allowed to further develop, 
provide the mechanism by which the OHA backlog will be 
eliminated. The following table shows the breakdown by Region 
of the number of Senior Attorney decisions made and the Senior 
Attorney payment rate since Action #7 commenced.

                                Senior Attorney Decisions--August 1995-March 1997                               
----------------------------------------------------------------------------------------------------------------
                             Region                                  Reviewed         Allowed      Payment Rate 
----------------------------------------------------------------------------------------------------------------
I...............................................................           9,253           2,384           25.8%
II..............................................................          42,131          12,567           29.8%
III.............................................................          37,739           7,638           20.2%
IV..............................................................          70,891          19,133           27.0%
V...............................................................          56,252           9,160           16.3%
VI..............................................................          46,519           7,893           17.0%
VII.............................................................          11,777           1,914           16.2%
VIII............................................................           8,394           1,781           21.2%
IX..............................................................          38,256           7,023           18.6%
X...............................................................          11,680           2,710           23.2%
  Total.........................................................         332,892          72,203          21.69%
----------------------------------------------------------------------------------------------------------------


    There are a number of concerns regarding Action #7 which 
have been expressed. Some claimed that it was merely an attempt 
to ``pay down the backlog''; some feared that Senior Attorneys 
would be subject to coercion by SSA to expedite these cases; 
many feared a significant increase in the number of ALJ 
decisions awaiting drafting; and some feared that the quality 
of the decisions made by Senior Attorneys would be 
unacceptable. Many in the state agencies, who bitterly resent 
any review of their work product and who were already 
distressed by the high payment rate at OHA, believed that 
Action #7 would result in reversal rates embarrassing to the 
state agencies. Experience has demonstrated that none of these 
fears have come to pass.

    Number of Favorable Decisions From August 1995 Through March 1997   
------------------------------------------------------------------------
                                                                  Non-  
                              Action #7  Action #7     Non-    Action #7
                                 OTR       After    Action #7    After  
                                          Hearing      OTR      Hearing 
------------------------------------------------------------------------
Senior Attorneys............     72,203         NA         NA         NA
ALJs........................     23,657     69,985     71,170    281,098
------------------------------------------------------------------------


    Action #7 was designed to assure that deserving claimants 
were awarded disability benefits as quickly as possible. 
However, as with any such program there is the danger that 
those who are not truly disabled would be found disabled. Many, 
the Association of ALJ, Inc. most notably, constantly 
proclaimed that the purpose of Action #7 was to ``pay down the 
backlog.'' To assure that such was not the case, a 
comprehensive quality assurance program has been put in place 
to monitor on-the-record decisions of Senior Attorneys, ALJs 
and Adjudication Officers. The most reliable of the quality 
assurance reviews is performed by the Appeals Council. The 
Appeals Council has reviewed a sample of on-the-record cases 
from Senior Attorneys, Administrative Law Judges, and 
Adjudication Officers and determined which cases can be 
effectuated, which cases must be remanded, and which cases the 
Appeals Council itself would issue a decision. As demonstrated 
by the Tables below, this review has resulted in a finding that 
the quality of the decisions made by Senior Attorneys is better 
than that of the AOs and the on-the-record decisions of ALJs. 
The tables also reveal that the accuracy of the Senior Attorney 
decisions has increased as Senior Attorneys have become more 
experienced.

                           Appeals Council Review of Unappealed on-the-Record Decisions                         
                                         Cumulative from August 8, 1995                                         
----------------------------------------------------------------------------------------------------------------
                                                                                         AC                TOTAL
                                           Effectuation   Percent   Remand   Percent  Decision   Percent   CASES
----------------------------------------------------------------------------------------------------------------
Senior Attorneys.........................         787      85.92%      123    13.43%        6       .66%     916
ALJs OTR.................................         662      85.64%      101    13.07%       10     1.29 %     773
Adjudication Officers....................          60      73.17%       20    24.39%        2      2.44%      82
----------------------------------------------------------------------------------------------------------------



                          Appeals Council Review of Unappealed on-the-Record Decisions                          
                                        October 1, 1996 to March 12, 1997                                       
----------------------------------------------------------------------------------------------------------------
                                                                                         AC                TOTAL
                                           Effectuation   Percent   Remand   Percent  Decision   Percent   CASES
----------------------------------------------------------------------------------------------------------------
Senior Attorneys.........................         196      89.09%       23    10.45%        1      0.45%     220
ALJs OTR.................................         163      85.79%       26    13.68%        1      0.53%     190
Adjudication Officers....................          22      81.48%        4     14.81        1      3.70%      27
----------------------------------------------------------------------------------------------------------------


    Perhaps even more devastating to the arguments of those who 
argue that Action #7 is merely a vehicle to pay down the 
backlog, is the results of a review of the ``payment rate'' of 
the Senior Attorneys and the ``payment rate'' of ALJs on the 
very cases that Senior Attorneys concluded they could not pay 
on-the-record. As previously noted, the Action #7 favorable 
rate on a national basis since the beginning of the program is 
21.69%.

                           ALJ Favorable Rates                          
------------------------------------------------------------------------
                                                            August 1995-
                                  March 1997     FY 1997     March 1997 
                                                                        
------------------------------------------------------------------------
Cases Reviewed Under Action #7         55.6%         54.8%         57.1%
Cases not Reviewed Under                                                
 Action #7....................         47.8%         47.7%         51.4%
------------------------------------------------------------------------


    The record demonstrates that the ALJs have a higher pay 
rate on Action #7 cases than those that do not go through the 
Action #7 process which gives some level of validity to the 
profile by which those cases are selected. However, the 
statistics clearly demonstrate a consistent payment rate by 
Senior Attorneys which is well below that payment rate of ALJs 
on the Action #7 cases initially reviewed and not paid by 
Senior Attorneys. The unmistakable conclusion is that Senior 
Attorneys have a more conservative payment rate than ALJs, but 
that they nonetheless identify and render favorable decisions 
to a large number of deserving claimants in considerably less 
time than is required for the hearing process. Clearly, Action 
#7 has not resulted in ``paying down the backlog.'' Indeed, the 
overall payment rate in OHA has actually declined since the 
onset of Action #7, an occurrence which is not coincidental.
    There is no qualitative or quantitative evidence of 
coercion by the Agency on Senior Attorneys. However, those 
advancing the concern, primarily ALJs and to a lesser extent 
the state agencies, were concerned that Action #7 was an 
attempt to pay down the backlog. Given the payment rate, it is 
readily apparent that the feared coercion has simply not 
occurred. From my personal knowledge, based upon my 
conversations with Senior Attorneys and the conversations 
reported to me by other Chapter officials, it is readily 
apparent that there has been no effort to affect the individual 
decisions of Senior Attorneys. In those areas in which the 
payment rate is unusually low, statistical reviews have 
revealed systemic problems (e.g., lack of effective 
development) which have been addressed on a a systemic basis. 
Lack of decisional independence has not been a problem for 
Action #7 adjudicators.

SSA Decisional Inconsistency

    The prime factors in achieving both decisional accuracy and 
consistency are expertise, experience and accountability. A 
number of well known factors contribute to the difference 
between the various adjudicatory levels. A quality assurance 
process that concentrates upon favorable decisions at the DDS 
level with insufficient control regarding the quality of the 
adverse decisions, and the exact opposite situation at the 
appellate level is a prime factor in producing decisional 
inconsistency. However, the failure of the State Agencies to 
provide adequate written explanations for their decisions, 
their failure to adequately develop cases, and their failure to 
consider the effect of the claimant's symptoms not only limits 
the usefulness of their determinations at the OHA level, but 
contributes to incorrect determinations. Vigorous enforcement 
of the Process Unification Rulings at the State Agency level 
will significantly improve decisional accuracy. In evaluating 
the situation at the OHA level, and indeed in evaluating the 
entire matter of decisional consistency, the old paradigm of 
two levels of decision making (DDS and OHA which really meant 
ALJ) must be replaced by a paradigm consisting of three levels 
of decision making (DDS, Senior Attorney, and ALJ). The payment 
rates of the screening units demonstrate that even using DDS 
standards, DDS decisions are incorrect a significant amount of 
time. The lower payment rate of Senior Attorneys, who are 
applying the same standards and considering the same factors as 
ALJs, as compared to the payment rate of ALJs has been 
documented but not sufficiently analyzed. Such an analysis 
could prove enlightening in as much as Senior Attorney payments 
rates seem to fall between those of the screening units and 
ALJ. While three years experience as a staff attorney at OHA is 
the minimum requirement to become a Senior Attorney, more than 
half of the Senior Attorneys have over 10 years experience as 
OHA staff attorneys. During that time a primary duty was 
drafting the detailed and highly technical denial decisions 
required to pass muster at the U.S. District Courts. Their work 
as Staff Attorneys has provided Senior Attorneys with a level 
expertise unmatched in the Agency. While Senior Attorneys have 
the decisional independence necessary to render decisions, they 
have exacting performance standards against which their work 
activities must be measured insuring a high degree of 
accountability. Quality assurance and Appeals Council review 
ensure Senior Attorney decisional accuracy.

                                

    Chairman Bunning. Thank you all for your testimony, and I 
will start out--Ms. Shor, excuse me. I beg your pardon.

   STATEMENT OF NANCY G. SHOR, EXECUTIVE DIRECTOR, NATIONAL 
  ORGANIZATION OF SOCIAL SECURITY CLAIMANTS'  REPRESENTATIVES

    Ms. Shor. Thank you.
    Mr. Chairman, I am delighted to be here today to talk about 
the disability appeals process. The hearings and appeals system 
is a critical component of the Social Security Disability 
Program and certainly warrants your attention. We very much 
appreciate your extending the invitation to us to testify.
    I used to represent Social Security disability claimants, 
and for the past 17 years, I have been executive director of 
the National Organization of Social Security Claimants' 
Representatives. This is an organization of approximately 3,300 
attorneys and others who represent both Social Security and 
Supplemental Security Income disability claimants. We have many 
years of experience at every level of the process. We know how 
the process looks to claimants. Often, our members are the 
first person a claimant has come to bewildered as to why they 
are encountering difficulty with getting disability benefits 
they believe they are entitled to.
    We welcome this opportunity to share some observations and 
recommendations with you today.
    Certainly, your hearing is properly focused on ensuring the 
process of determining which claimant is entitled to benefits 
and which claimant is not. We know it is extremely important to 
today's claimant to know that the process of adjudication is 
fair, but it is also important to today's taxpayers, some of 
whom will become to- 
morrow's claimants. If we are going to try to instill 
confidence in the system in the American public, it is 
important they have confidence that the disability adjudication 
system is producing fair results.
    We share SSA's goal in their reengineering and redesign 
plan of providing accurate decisions for claimants as early in 
the process as possible. I want to stress that changes made at 
the front end can have significant beneficial impact on the 
hearings and appeals backlog situation. To focus only on the 
hearings and appeals process may show us too much of the back 
end of the dog and not enough of the front.
    Fundamentally, the hearings and appeals system is sound. A 
claimant has several levels of appeal from the initial 
application, the reconsideration, the administrative hearing, 
the Appeals Council, and subsequently access to the Federal 
district court. I think it is important to keep in mind that 
the Social Security Administration has the capacity to step in 
at any one of those levels and stop effectuation of a favorable 
decision if the agency believes that that decision is wrong and 
require it to be readjudicated.
    We want to emphasize that the right of a claimant to file a 
request before an ALJ is central to the fairness of the 
adjudication process. Certainly, the key factor there is that 
the ALJ is an independent decisionmaker who provides impartial 
factfinding and adjudication, free from agency coercion or 
influence, and considers, evaluates, and weighs all the 
evidence in accordance with the Social Security Act, SSA 
policy, as well as circuit court case law.
    For claimants, a fundamental principle of this due process 
right is their opportunity to present new evidence in person to 
the ALJ and to receive a decision from the ALJ which is based 
on all available evidence.
    We are very supportive of the efforts the Office of 
Hearings and Appeals is making to try to reduce the size of the 
backlog, including the allowance of senior staff attorneys as 
adjudicators, where favorable decisions can be issued, as well 
as increased emphasis on better development of cases before 
they reach the ALJs.
    Because the issue has materialized on nonacquiescence, we 
certainly would express our concern. This is a policy that 
flies in the face of our system of jurisprudence.
    I would emphasize that the major shortcoming we see with 
the process right now is that of development. It is an 
unreliable process, and the observation of our members would 
certainly be that the number one factor in cases that their 
potential clients bring to them is undeveloped, underdeveloped 
records coming from the DDS. It leads us to readily believe 
that lots of claims are denied at DDS not because the evidence 
establishes the person is not disabled, but because the 
evidence is inconclusive and really doesn't establish anything.
    We believe the most crucial change SSA could make is to 
encourage better development at the very front end of the 
process, and certainly, part of that is doing a better job in 
explaining to claimants why it is important to get evidence in 
and the type of evidence that the agency needs to process their 
claim.
    We don't believe closing the record at the ALJ level is a 
good solution to this problem for a variety of reasons. First 
and foremost, almost everyone has a medical condition which 
will change, unfortunately often worsen. They are undergoing 
treatment, and their treating source is normally providing 
continuously updated medical records. So, virtually, any 
claimant is going to have new evidence on a fairly routine 
basis.
    Second, many claimants are really not capable of 
understanding the kinds of evidence they need. They may ask 
their doctors for it, and their doctors won't respond. The SSA 
hasn't well explained to the doctors what it is they are 
looking for. Very often, DDS, because of time pressure, will 
request the evidence, but not issue followups for it if they 
don't get it.
    Finally, we think closing the record elevates form over 
substance. It elevates the appearance of a system as opposed to 
trying to discern truly who is and who is not disabled. For a 
variety of reasons, closing the record is not a helpful 
solution to the problem of encouraging claimants to get 
evidence in earlier.
    We commend the Subcommittee for holding the hearing today 
to look at the hearings and appeals process. We certainly are 
committed to supporting the basic structure of the system and 
to working with the agency in all ways to reduce the huge 
backlogs. Better development of the claims before they reach 
OHA would produce a great benefit both to claimants and to the 
hearings and appeals process.
    We look forward to working with you, and we would be 
pleased to answer any questions you may have.
    Thank you.
    [The prepared statement follows:]

Statement of Nancy G. Shor, Executive Director, National Organization 
of Social Security Claimants' Representatives

    Mr. Chairman and Members of the Subcommittee:
    I am very pleased to be here today to talk about the 
disability appeals process. The hearings and appeals system is 
a critical component of the Social Security disability program 
and certainly merits your attention. I appreciate your 
extending an invitation to me to testify.
    For the past seventeen years, I have been the executive 
director of the National Organization of Social Security 
Claimants' Representatives (NOSSCR). Our current membership is 
approximately 3,300 attorneys and others from across the 
country who represent claimants for Social Security and 
Supplemental Security Income benefits. We have many years of 
experience in representing claimants at every level of the 
process and welcome this opportunity to share some observations 
and recommendations with you.
    Today's hearing should focus on ensuring the fairness of 
the process of determining which claimant is entitled to 
receive benefits and which claimant is not. Certainly it is 
extremely important to today's claimant to know that the 
process of adjudication is fair. But at a time when opinion 
polls as well as our own conversations with neighbors tell us 
that the confidence of the American public that Social Security 
benefits will be there for them is eroding, we need to assure 
today's taxpayers that the process will be fair when some of 
them become disabled in the future and file for their benefits.
    We share the Social Security Administration's goal of 
providing accurate decisions for claimants as early in the 
process as possible. Changes made at the ``front end'' can have 
significant beneficial impact throughout the hearings and 
appeals backlogs.

           The hearings and appeals system--A sound structure

    A claimant files an application for benefits, most often at 
the Social Security district office. The state disability 
determination agency will decide whether or not that claimant 
is eligible for benefits. If the claim is denied, the claimant 
can file for a reconsideration by the same state agency. If the 
claim is denied on reconsideration, the claimant can pursue the 
appeal to an Administrative Law Judge at SSA's Office of 
Hearings and Appeals. If the claim is denied by the ALJ, the 
claimant can file a request for review with the Appeals 
Council. A claimant who is denied by the Appeals Council can 
file suit in federal court.
    The right of a claimant to file a request for hearing 
before an Administrative Law Judge is central to the fairness 
of the adjudication process. This process provides the right to 
a full and fair administrative hearing by an independent 
decision-maker who provides impartial fact-finding and 
adjudication, free from agency coercion or influence. The ALJ 
asks questions of 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, and Circuit 
caselaw. 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 which is based on all 
available evidence.
    Because of the importance of the administrative hearing 
step, we support the initiatives of the Office of Hearings and 
Appeals to address the backlog of cases without infringing on 
the right of claimants to a full and fair hearing. We support 
OHA's allowing experienced staff attorneys to review cases and 
issue fully favorable decisions where warranted. We support the 
agency's efforts to better develop cases that reach the OHA 
before those cases go to an ALJ for a hearing, although we 
would like to see more consideration of alternatives to the 
adjudication officer program. But we are dismayed by the 
agency's recent restatements of its policy on non-acquiescence. 
SSA's position, that it is not bound by Circuit Court 
precedent, is at odds with fundamental premises of 
jurisprudence. As we have long advocated, the agency's pursuit 
of this policy should be abandoned.
    For ALJ decisions, SSA's ``process unification'' plans call 
for broad own-motion review by the Appeals Council. We 
understand that the Appeals Council will be reviewing only 
those ALJ decisions which are favorable to claimants. The plan 
resonates with overtones of Bellmon review, which resulted from 
a mandate in the early 1980's to review favorable decisions 
exclusively from ALJs whose allowance rates were considered 
``too high.'' Bellmon review was struck down by the courts as 
interfering with the decisional independence of ALJs because it 
``targeted'' those ALJs who had higher allowance rates. By its 
plans to review only claimant-favorable ALJ decisions, this 
process unification plan is subject to the same criticism. What 
message does it send to claimants? What message does it send to 
ALJs? We believe that any own-motion review that the Appeals 
Council conducts must be even-handed, so that the Council 
reviews both favorable and unfavorable decisions, so that there 
is no perception of bias.
    The last, and very important, element in the hearings and 
appeals structure is access to review in the federal district 
and circuit courts of appeal. At this level, the review is not 
de novo; rather, judges are applying the substantial evidence 
test. We believe that both individual claimants and the system 
as a whole benefit from the federal courts hearing Social 
Security cases. Given the wide variety of cases they 
adjudicate, federal courts have a broad background against 
which to measure the reasonableness of SSA's practices. Federal 
court review in Article III courts should be maintained.

            How evidence is obtained--An unreliable process

    Developing the record so that relevant evidence from all 
sources can be considered is fundamental to full and fair 
adjudication. The decision-maker needs to review a wide variety 
of evidence in a typical case, including, for example, the 
medical records of treatment, opinions from medical sources, 
pharmacy records of prescribed medications, statements from 
former employers, and vocational assessments. The decision-
maker needs these types of information to determine the 
claimant's residual functional capacity, ability to return to 
former work, and ability to engage in other work which exists 
in the national economy in significant numbers.
    Unfortunately, very often the files that claimants with 
denials from the reconsideration level bring to our members 
show how little development was done at the initial and 
reconsideration levels. Until this lack of development is 
addressed, the correct adjudication of the claim cannot be 
made. Claims are denied not because the evidence establishes 
that the person is not disabled, but because the limited 
evidence cannot establish that the person is disabled.
    A properly developed file is usually before the ALJ because 
the claimant's counsel has obtained evidence, or because the 
ALJ has developed it. This is one part of the explanation for 
the disparity in the claims files at the DDS and at the OHA. 
Not surprisingly then, different evidentiary records can 
readily produce different results on the issue of disability.
    To address this, the agency needs to emphasize the full 
development of the record at the beginning of the claim. This 
includes encouragement to claimants to submit evidence as early 
as possible. The benefit is obvious: the earlier a claim is 
adequately developed, the earlier it can be approved and the 
earlier payment can begin. Despite the obvious benefit to 
claimants, the fact that early submission of evidence does not 
occur more frequently indicates that factors beyond the 
claimant's control contribute to this problem. This means that 
proposals to close the record are not beneficial to claimants, 
or to the system of fair adjudication.
    First, most medical conditions change over time: they may 
worsen or improve, diagnoses may change, or the diagnosis may 
become more finely tuned after further testing or assessment. 
Individuals may undergo new treatment or procedures which 
affect their condition. They may be hospitalized or referred to 
different specialists. Some conditions, such as multiple 
sclerosis, may take longest to diagnose. Some claimants may 
also mischaracterize their own impairments, either because they 
lack understanding of their illness or its treatment. By their 
nature, these claims are not static and a finite set of medical 
evidence does not exist. If the record is closed, individuals 
will be forced to file new applications merely to have new 
evidence reviewed, such as reports from a recent 
hospitalization or a report which finally assesses and 
diagnoses a condition. Closing the record to such evidence does 
not serve either the claimant or the agency well.
    Second, claimants benefit by submitting evidence early. 
However, there are many reasons why they are unable to do so 
and for which they are not at fault. Closing the record 
punishes them for factors beyond their control, including
     DDS failure to obtain necessary and relevant 
evidence.
     SSA failure to explain to the claimant what 
evidence is important and necessary.
     Claimants are unable to obtain medical records due 
to cost.
     Medical providers, especially treating sources, 
receive no explanation from SSA or DDS about the disability 
standard and are not asked for evidence relevant to the claim.
     Medical providers ignore, or respond very slowly 
to, requests for evidence.
    So that claimants are not wrongly penalized for events 
beyond their control, the current system provides a process to 
submit new evidence. This should not be eliminated in the name 
of the streamlining.
    Third, closing the record at the reconsideration level may 
make the process more formal but it will not improve the 
quality of the decision-making on the merits of the disability 
claim. For decades, Congress and the United States Supreme 
Court have recognized that the informality of SSA's process is 
a critical aspect of the program. Imposing a time limit to 
submit evidence and then closing the record is inconsistent 
with the legislative intent to keep the process informal and 
with the philosophy of the program. Additionally, closing the 
record will not ultimately improve the process from an 
administrative perspective. A claimant would be required to 
file a new application merely to have new evidence considered, 
even though that evidence was relevant to the recent prior 
claim. As a result, SSA can expect to handle more applications, 
unnecessarily clogging the front end of the process. Further, 
we anticipate there will be additional administrative costs for 
SSA since the cost of handling a new application is higher than 
reviewing new evidence in the context of a pending claim.

            Legislative Reforms--Encouraging Return to Work

    NOSSCR supports efforts which encourage disabled 
beneficiaries to work. Many beneficiaries fear losing medical 
insurance. They fear that a brief episode of employment will 
terminate their Social Security benefits, even if they are 
unable to sustain the employment. Many do not understand the 
provisions in the current law for trial work periods and 
extended periods of eligibility. SSA needs to provide more 
information and answers to specific questions on an on-going 
basis for those on the disability rolls.
    New legislation is necessary to provide the foundation for 
beneficiaries to test their capacity to return to employment. 
Key provisions of an ideal return-to-work legislative 
initiative include a package of access to Medicare, earned 
income exclusion, tax credit, and options for vocational 
rehabilitation services.

                               Conclusion

    We commend the Subcommittee for holding this hearing today 
to look at the Social Security disability appeals process. We 
are committed to support the basic structure of the hearings 
and appeals process, and to work with the agency on reducing 
the huge backlogs. Better development of the claims before they 
reach the OHA would produce a great benefit, both to claimants 
and to the hearings and appeals system. We also commend the 
Subcommittee for its attention to return-to-work initiatives, 
which we anticipate will be enthusiastically received by many 
beneficiaries.
    We look forward to working with the Subcommittee to improve 
the adjudication process and to improve the disability program.

                                

    Chairman Bunning. Now I can thank you all for your 
testimony, and we will start out with Mr. Willman.
    Many of the Process Unification Initiatives will impact 
resources needed by DDS. Since SSA has put these additional 
burdens on you to obtain more evidence, more extensive 
analysis, and so forth, has SSA reduced any of their 
expectations for your agency in terms of productivity? Doesn't 
productivity affect your findings?
    Mr. Willman. Yes. No, sir. The expectations have not been 
reduced. Much of the Process Unification rulings, much of the 
content of that would be good improvements in the program. They 
will not be free. They will not be easy to administer, and they 
will not be free.
    If we are going to do more, a broader range of tasks on 
each case, then we either must do fewer cases or obtain more 
resources to do all the cases better.
    Chairman Bunning. Contrary to Ms. Shor, you recommend 
closing the record. Why is this?
    Mr. Willman. Because at some point, I think we have to say 
this is the record. If we are going to manage this backlog and 
produce decisions in reasonable amounts of time, we have to be 
able to say this is it, it is over now, we are going to analyze 
this evidence and get on with it.
    I certainly--I don't want to close the record so early as 
to elevate form over substance. That is not the intent at all. 
I think if we were to have an understanding with claimants and 
make it clearly understood that at some point the record is 
going to be closed and explain what closing the record is, we 
give the claimant every reasonable opportunity to submit all 
the evidence that she or he wants to have considered while 
still being able to manage the backlog.
    Chairman Bunning. With 491,000 people in the backlog, we 
have to do something to make it more credible that we are 
actually trying to get them on the system. The 491,000 people 
are now backlogged in this system.
    I am going to ask a general question to all of you. How do 
we do this legitimately and not jeopardize the credibility of 
the system? In other words, if we are not going to close the 
record and we have almost a half a million people in the 
backlog, how do we justifiably go forward and reduce the 
backlog in a systematic way? We are trying to do this in a 
systematic way, without jeopardizing the credibility of the 
system.
    Anybody can answer. Speak up.
    Judge Bernoski. Well, I will take a shot at that, Mr. 
Chairman.
    One way we can do it, as we indicated in our testimony, is 
to use the single standard of adjudication at all levels in the 
system, so that would allow----
    Chairman Bunning. I think everybody agrees with that.
    Judge Bernoski. Agrees with that.
    The next thing would be, from the ALJ perspective, that we 
feel you could consider closing the record after the ALJ 
hearing because, at that time, the claimant has had an 
opportunity to appear, provide evidence, testify and, at that 
time, make a solid record that can go forward on appeal to 
either the Appeals Council or to the district court.
    To close the record before that, you could be--you would be 
interfering with the de novo hearing because you would be 
foreclosing evidence that the claimant should have an 
opportunity to present at the hearing.
    Chairman Bunning. But, Judge, the ALJ hearing may occur 9 
months, 12 months down the road----
    Judge Bernoski. Well----
    Chairman Bunning [continuing]. From the initial claim----
    Judge Bernoski. Correct.
    Chairman Bunning. We may be 9 months into the process, and 
that is not acceptable. I am telling you right up front, that 
is not acceptable.
    Judge Bernoski. Right.
    Chairman Bunning. That is how we built 491,000 people in 
the backlog.
    Judge Bernoski. Right. Now, the redesign system has its 
theory to move that space between the ALJ hearing and the DDS 
determination closer, but I can tell you from experience that 
back in the late eighties, there was a period in time when the 
caseload shrunk to a very small level, and at the ALJ level, we 
were actually sitting around at that time waiting for cases.
    Chairman Bunning. Gee, wouldn't that be wonderful now?
    Judge Bernoski. It would be wonderful today, the good old 
days, but when those cases----
    Chairman Bunning. Let me hear from others.
    Judge Bernoski [continuing]. When those cases would come 
in, we would set them for hearing, and the claimant would say 
we don't want the case this soon. So there is a period of time 
that the case has to ripen, and I would say that 5 to 6 months, 
the claimants--it is difficult to move those cases on for 
hearing before that time. There is this, and that is----
    Chairman Bunning. Some of the claimants die, and we don't 
want that to happen.
    Judge Bernoski. No.
    Chairman Bunning. Other views?
    Mr. Hill.
    Mr. Hill. Yes. I think that the biggest single problem I 
see in cases coming into OHA is they are not fully developed. I 
think when I get a case as a senior attorney, it may have been 
in the office 10 days, and I can call up, either look through 
the record, call doctors, or if there is an attorney, call the 
attorney representing the claimant, and I can get a stack of 
documents in like this within a couple of weeks that were 
there, but nobody has gotten them yet. It is time consuming.
    Developing cases takes a lot of time. It isn't something--
they don't magically come in to you. You have to work on it, 
and I think that, in fairness to the DDSs, that requires more 
assets because you are going to spend human person time, and 
there is very little substance for that.
    Chairman Bunning. In other words, to build the record more 
completely?
    Mr. Hill. Completely, right at the outset, yes, because----
    Chairman Bunning. Well, that is what we are trying to 
figure out how to do.
    Mr. Hill. Now, currently, the senior attorney program does 
what I just said. The case comes into the hearing office, and 
we look at it right off the bat, and if we can pay it, it 
doesn't have to wait for an OHA hearing. We can pay it within 
120 days.
    Chairman Bunning. Do others have an opinion on this?
    Mrs. Kennelly, go ahead.
    Mrs. Kennelly. Thank you, Mr. Chairman.
    Ms. Shor----
    Ms. Shor. Yes.
    Mrs. Kennelly [continuing]. I heard all of the experience 
you have in various areas of this situation. I wonder if you 
would comment on the medical records kept at the DDS level, if 
you think enough is being done. Do you think it makes sense not 
to have the individual's doctor at that point? Then, I would 
like you to comment on the judge's level, what you think the 
adequacy is of the medical records and the information.
    Ms. Shor. Thank you.
    I think the primary difficulty we see with the records 
being kept at the State agency level is coming from State 
agency physicians, doctors who have never examined the claimant 
and who are rendering opinions based upon the record before 
them.
    There is minimal effort made and minimal cooperation in 
many cases, unfortunately, from claimants' treating doctors to 
provide anything more than a copy of a hospitalization report 
or possibly copies of office notes.
    For a variety of reasons, unfortunately, treating 
physicians oftentimes are not particularly cooperative with 
requests from DDS to submit evidence. There is also very short 
timeframes and often very little followthrough.
    In contrast, when a case reaches OHA, whether performed by 
personnel within that office or performed by the claimant's 
attorney, there is a lot more effort made for this medical 
development. There is much more effort made to explain to the 
physician what the rules are, what Social Security's criteria 
are, to get a narrative report from the physician, and to offer 
a broader assessment than simply a photocopy of office notes.
    Mrs. Kennelly. So if you could choose one thing, it would 
be to improve the evidence right from the beginning of the 
system.
    Ms. Shor. Absolutely.
    Mrs. Kennelly. Thank you.
    Mr. Willman, at some place, you said in your testimony that 
the amount spent for attorneys is half the budget for the DDS. 
Do you think people are getting an attorney for the next step 
because--I believe you can have an attorney for the DDS step, 
if you want to, but most people don't. Am I----
    Mr. Willman. Right, very few.
    Mrs. Kennelly. Yes. Do you think they are getting an 
attorney for the next step because they are going into a more 
judicial atmosphere, or do you think they are getting an 
attorney because, Oh, my heavens, they didn't realize, I am 
turned down, I am sick and I am turned down. You go to your 
government and you are sick and you get turned down, and you 
say, Oh, I should have hired an attorney. Then, you go to the 
next level, and this is going to cost money. Is there anything 
we can do about this?
    Mr. Willman. Well, I certainly think there are a couple of 
reasons and maybe another one as well.
    People at their initial reconsideration level feel they 
don't need an attorney because they don't have much 
participation in the process. They just fill out an application 
and indicate who their medical sources are and what their 
impairment is and sit back and wait for a decision.
    Then, when they are denied, they find out the next level is 
to go for a hearing, and they feel they can't represent 
themselves at a hearing and so they will need help.
    And the third reason a lot of attorneys are involved is 
because there are attorneys who do a lot of recruiting of 
claimants to represent them in these processes.
    I think the answer----
    Mrs. Kennelly. Yes, but they have been turned down. So 
there is somewhat of a need for, you know----
    Mr. Willman. Yes.
    Mrs. Kennelly. Maybe we should advertise--I am thinking 
about Mr. Hill's and Ms. Shor's remarks. Maybe we should tell 
people to get an attorney early so the documents are collected 
and get them on the DDS desk. Then maybe you won't have to have 
an attorney for a long and lengthy hearing.
    Mr. Willman. We wouldn't need to do that. We should be able 
to get all the medical evidence on the DDS desk without the 
claimant being represented by an attorney.
    Mrs. Kennelly. But we are not doing it. But we are not 
doing it.
    Mr. Willman. Pardon me?
    Mrs. Kennelly. Obviously, from the testimony today of 2 
hours, it is not happening.
    Mr. Willman. We think that when--as far as I can see and 
what I know from the feedback of the cases I get and from the 
cases I see every day and those that are returned back to me 
after they are allowed at the OHA level, I personally am not 
seeing this difference in the amount of documentation. 
Certainly, as time goes by and new information becomes 
available because of the deterioration of the condition or 
because of treatment that the claimant has sought since the 
denial at the DDS level, that evidence becomes available, but I 
really am seeing very few instances of cases where the evidence 
was available at the time the DDS made the decision and we 
didn't get it.
    Mrs. Kennelly. I think that is something, Mr. Chairman, we 
are going to have to continue to look at.
    One last question for Ms. Gardiner. You make 
recommendations about changes for the ALJ level. What do you 
think should be changed at your level?
    Ms. Gardiner. Oh, I think we should have additional 
training as well. I think it is essential we all have the same 
training, which is what Process Unification was trying to do or 
is hopefully going to do for us.
    I think we need training equally as much as the ALJs do. It 
was just an emphasis on the medical portion for the ALJs.
    Mrs. Kennelly. Well, then I have got to ask another 
question. Who would like to comment on how the present new 
training is working? Is it worthwhile? Is it making things 
better? Because we now see that the DDS says we should have 
that training.
    Judge Bernoski. Well, I think it is a step in the right 
direction. I think it is too early to see what is actually 
going to happen because the program is just in its inception, 
but it is an attempt to go to the single standard, and it is an 
attempt to have a more--a complete review of the case at the 
reconsideration level, which meets the concern GAO raised, and 
so those are--would be positive.
    As Jim Hill indicated, one of the problems--or one of the 
benefits would be if the record would come to us more complete, 
the more timely and easier it is to move that case along 
because sometimes that case goes to a hearing and then the 
record isn't completed there, and the claimant requests the 
record be held open for more evidence. So, then, you see that 
is claimant-induced delay to a certain extent, but still, it is 
to add to the record.
    Mrs. Kennelly. Well, we are talking about time again, and I 
have a feeling the Chairman is losing patience, and time is 
part of the problem.
    Judge Bernoski. I have a couple of--go ahead.
    Mr. Christopher. If I could offer just a thought on the 
training piece of this, that would be if I were starting a 
program from scratch and I had different appeals processes, 
which we do and we need to have, it would seem to me there 
would be two things I would want to do for sure. I would want 
to be sure everybody receives the same basic training, so that 
everybody has the same basics on which to work from. It would 
seem to me, beyond that, I would want to ensure that all the 
decisionmakers are applying the same rules and regulations in 
the same way, that is, the same book, and I guess if I had a 
thought for both of you, I think it would be useful to SSA, it 
would be to put a much higher priority on the single-book 
concept, and it would be to put a much higher priority on more 
consistent training for all the decisionmakers.
    There are so many of us out there, we all want to do the 
right thing. Obviously, we are doing it somewhat differently, 
and it is frustrating to all of us, and I think we are 
entitled, if you will, to more consistent training so that we 
can try to provide the clients with the most consistent process 
we can.
    Chairman Bunning. Since the problem has been around for a 
long time and we don't seem to be making as much progress as 
all of you seem to think we are, I have a couple more questions 
I would like to ask the judge.
    Mrs. Kennelly. Can I just make a final statement before I 
finish?
    Chairman Bunning. Oh, go right ahead.
    Mrs. Kennelly. I want to thank the Chairman for having this 
hearing. It has been very helpful to me, but I would just like 
to make the comment, often when I deal as a Congresswoman at a 
Federal level, you get huge numbers. We are talking this 
morning about a program with $60 billion, 7 million people, but 
we cannot forget about those individuals who make up those 
numbers. I just want to end by saying we have got to figure out 
some way that an individual who got sick and doesn't want to be 
sick, can't work, has bills, can, in fact, get the fair 
treatment they need and deserve. I just have to say to you, 
what I fear so about our country's future is people losing 
faith in their government. We hear about it all the time.
    We are talking this morning about a very arcane issue, but 
really, at the heart of the matter, if we don't do something, 
then we will have to answer for the weakness in our Federal 
Government.
    Chairman Bunning. I have three questions for the judge, 
since he so violently disagreed with the GAO report we 
received.
    You mention in your testimony that judges understand their 
responsibility to follow the constitution and apply the law, 
agency regulations, and agency policy, which you take very 
seriously. You also say that it is beyond the scope of your 
oath of office to apply agency policy that is inconsistent with 
the law. Are you saying it is up to each individual judge to 
interpret agency policy?
    Judge Bernoski. No, sir. Mr. Chairman, No, that is not what 
I am saying.
    The agency establishes the policy, and it is not our role 
to interpret the policy or even the regulations to the point 
where we create a policy within ourselves. No, sir. We 
understand that is the agency's role.
    What I was referring to there was when the agency adopts a 
policy, which is inconsistent with the law, such as when it got 
into conflict with the courts under the pain standard which 
resulted in the Hyatt case, which I referred to, which was a 
massive class action with thousands of cases coming back for 
readjudication; the Samuels case, the Minnesota Mental Health 
case, the Zebley case, these are the types of things I am 
referring to.
    Chairman Bunning. Are you telling me the SSA is writing 
agency policy inconsistent with those rulings?
    Judge Bernoski. Well, there are----
    Chairman Bunning. Their chief counsel sat right here today 
and didn't indicate to me that they deliberately wrote policy 
inconsistent with court law or with law that has been 
determined by the courts.
    Judge Bernoski. The best way I can answer that, Mr. 
Chairman, is that the courts certainly have said that. In the 
Zebley case, for instance, the court very clearly said the 
regulation that was promulgated was contrary to the basic 
underlying statute, and the Hyatt case, the result was the 
same. The Minnesota Mental Health case was the same. So the 
answer is, Yes. In certain circumstances, the agency has 
promulgated policy that has been inconsistent with the basic 
law, and the evidence is there in the form of these massive 
class actions, which are very, very expensive and very time 
consuming.
    Chairman Bunning. Yes, I am familiar.
    Judge Bernoski. And the Steberger case is another one in 
New York--very, very expensive.
    Chairman Bunning. Well, you mentioned the judges have 
increased their productivity recently. Have you heard of 
instances where a judge's productivity is being restricted by 
individual office policy? There are offices whereby according 
to union agreement, no hearing can be scheduled after 2:30 p.m.
    Judge Bernoski. Yes, sir, I am familiar with that 
situation.
    The office escapes me at the moment, but, yes, sir, that 
did come up, and the answer to the question is, Yes.
    Chairman Bunning. But don't you think that restricts 
productivity just a little bit?
    Judge Bernoski. Yes, sir. Yes, Mr. Chairman.
    Chairman Bunning. OK. I want to thank you all for your 
input because, if we are going to get to the bottom of how we 
can improve this huge SSDI Program, we need to make sure we 
don't have people dying before they get in and that people who 
become healthy get out in a timely fashion.
    I did see a report which indicated that each percentage 
point of the ultimate award rate represents $2 billion in 
lifetime costs. Accurate decisionmaking is critical to the 
long-term solvency of the trust funds.
    We thank you for your testimony.
    Judge Bernoski. Thank you, Mr. Chairman.
    Mr. Willman. Thank you.
    [The following questions were subsequently submitted by 
Chairman Jim Bunning to Mr. Willman:]

    1. In your testimony, you recommended a ``shared vision'' 
of the disability program among all components. How do you see 
this happening and why is it so important to you?
    2. You indicated that SSA quality reviews show a decisional 
accuracy of more than 96% at the DDS level, yet ALJs reverse 
two-thirds of your decisions. How can this happen and how can 
it be fixed?
    3. You expressed concern in your testimony that the quality 
review process being planned for the ALJs is modest in scope 
and nature, and may not be useful. Why do you feel this way?

    [The response of Mr. Willman follows:]

                         National Council of Disability    
                                    Determination Directors
                                                      June 19, 1997

The Honorable Jim Bunning
Chairman, House Subcommittee on Social Security
U.S. House of Representatives
Washington, D.C. 20515

    Dear Congressman Bunning:

    This responds to your letter of May 20, 1997, in which you asked 
three questions in follow up to testimony presented at a hearing on 
April 24, 1997. I am happy to have the opportunity to respond to your 
questions.
    First, relative to the development of a shared vision common to all 
components of the disability program, you asked why this is so 
important and how it could happen.
    The various tasks necessary to administer the disability program 
are completed by personnel in several different organizational 
components of SSA. I feel that a substantial obstacle to improving 
service to the American public is the tendency of each component to 
focus on the program only from its individual point of view. For 
example, the component responsible for developing policy instructions 
issues its directives without adequate consideration of the resources 
that will be needed in the field to actually apply the instructions; 
the budget component provides limited resources based on its 
expectation that productivity must constantly improve and without 
regard to the fact that new policies are more labor intensive; the 
quality assurance personnel attempt to ``enforce'' the labor intensive 
policy requirements in openly stated disregard of the fact that the 
operational component lacks the resources to apply the policies; 
decision makers at the initial level attempt to faithfully apply 
policies that they know will not be applied by decision makers at the 
appeals level. All of this creates inefficiencies in service delivery 
and compromises the morale and day to day efforts of the persons 
performing the front line work.
    The problem can be solved only by management actions that see that 
the tough decisions are made at the appropriate level and that they are 
fully communicated and applied consistently across organizational 
lines. SSA's recent process unification initiative is an example of an 
overdue attempt to get the several involved components working 
together.
    Second, you asked for an explanation of how DDS decisions that are 
determined to have been 96% accurate could be overturned at the rate of 
about two thirds when they are decided by the Office of Hearings and 
Appeals.
    This question has been mystifying knowledgeable observers, 
including those from the Congress, for two decades that I know of.
    I believe that the explanations historically put forth by SSA 
account for a minor part of the true explanation. Worsening of the 
claimants' conditions, the development of new evidence, the face-to-
face appearance, and attorney representation all account for some of 
the difference but leave most of it unexplained. I believe that, with 
respect to cases allowed at OHA, if DDS personnel were to consider the 
updated evidence, meet face-to-face with the claimants, and hear from 
the claimants' attorneys, the great majority of the cases would still 
be found not disabled.
    The more important reasons include the following: the policy 
instructions are not uniformly stated for adjudicators at the two 
levels, and OHA is permitted to develop policy interpretations not 
shared or even known to the DDSs; there is no common training for 
personnel at the two levels; separate and opposite quality assurance 
and case review systems, with DDSs being reviewed mostly on allowed 
cases and OHA being reviewed almost exclusively on denials, tend to 
drive the two components apart; SSA management has permitted the 
development of a view that ALJs are immune from management control 
including the adherence to agency policy; the difference in medical 
training and expertise between the two components is extreme with DDS 
decision making being driven by detailed medical analysis of claimants' 
conditions and OHA decision making permitting the medical facts to be 
overwhelmed by a priority on legal due process and on conclusions about 
the claimants' credibility; SSA has permitted what could be called the 
``judicialization'' of OHA, that is the transformation from an 
administrative to a judicial entity.
    The path to achieving greater consistency of decision making 
between the two levels must include the reversal of the factors 
described above. To these should be added a meaningful system of 
quality review of ALJ decisions (with enforcement power) and closing 
the evidentiary record.
    Third, you asked why I feel that SSA's current plan for a quality 
review process for ALJs is too modest in scope and in nature.
    Regarding the scope of the review, SSA plans to review only about 
10,000 OHA cases per year which amounts to about one case per ALJ each 
month. Even presuming an error rate of 33%, this would result in only 
about one piece of feedback per ALJ each calendar quarter. This number 
is not high enough to provide meaningful feedback to ALJs, nor to 
establish useful enforcement in cases in which ALJs are not correctly 
applying agency policy, nor to create a quality review system which is 
reasonably consistent between components.
    Regarding the nature of the review, the differing standards SSA 
intends to apply to DDS and OHA cases review goes far in the direction 
of weakening the usefulness of the review. DDS case completions are 
reviewed under the ``preponderance of evidence'' rule (meaning that the 
decision supported by the greater weight of the evidence must be made), 
but SSA intends to review the ALJ allowances under a ``substantial 
evidence'' rule (meaning that a decision is correct if it is supported 
by any substantial evidence even if greater and more substantial 
evidence would support an opposite decision). I understand that the 
definition of the word ``substantial'' will be ``more than a 
scintilla''. Under this case review scenario, a DDS could twice deny a 
case because most of the evidence supports a denial, the claimant could 
wait a year for a hearing, the evidence could be unchanged, an ALJ 
could allow the case because some evidence supports an allowance, and 
both decisions would be considered by the SSA to have been correct. I 
would tend to perceive this sequence of actions to be a textbook 
example of bureaucratic inefficiency and wasted effort rather than a 
meaningful step toward improving service to the American public.
    Thank you for the opportunity to have provided this additional 
clarification. As always, if I can be of additional help, please 
contact me at your convenience.

            Sincerely,
                                            Douglas Willman
                                                    NCDDD President

                                

    [The following questions were subsequently submitted by 
Chairman Jim Bunning to Mr. Hill:]

    1. Your testimony included some very encouraging statistics 
regarding a certain project utilizing Senior Attorneys. Why do 
you believe this program has been so successful and why doesn't 
SSA make the project permanent?
    2. You also mentioned the Adjudication Officer pilot 
project and pointed out the many ways that the project seems to 
be failing, yet, instead of abandoning the project, SSA is 
extending the project for more testing. Why do you believe so 
strongly that the project isn't working and why hasn't SSA 
stopped it?
    3. Based on your experience working side-by-side with ALJs, 
what percentage write their own decisions? When you are asked 
to write a decision for an ALJ, how specific is their direction 
to you in terms of what to say in the decision?

    [The response of Mr. Hill follows:]

                                Summary

The Senior Attorney Program

     The Senior Attorney Program is a highly focused 
program designed to attack a specific set of problems--the 
disability backlog at OHA and the inability of OHA to timely 
adjudicate the applications of disability claimants. The Senior 
Attorney Program involves the use of experienced OHA Senior 
Attorneys at their normal work sites, within the already 
existing organization structure, using currently available 
technology and staff resources, focused upon a set of cases and 
using a process that identifies and develops only those cases 
most likely to be paid. This process permits timely payment for 
many of those claimants who are in fact disabled, and permits 
SSA to focus its most expensive decision making resource, 
Administrative Law Judges, on the cases less likely to result 
in a favorable decision or which for other reasons require an 
administrative hearing. By facilitating SSA focusing its 
Administrative Law Judges on its more difficult workload and 
not upon cases that can be more efficiently and more 
inexpensively decided by other OHA decision makers, the more 
difficult work load can be processed in a more timely manner. 
The Senior Attorney Program will cause a decrease in both 
processing time and age of pending cases at OHA.
     The Senior Attorney Program has not been made 
permanent because it is not part of the Disability Process 
Redesign, and it is inconsistent with the short term goal of 
the Agency to eliminate OHA and its long term goal to eliminate 
the due process hearing. Indeed, the antipathy of many in SSA 
towards traditional American adjudicatory principles as 
embodied in our legal system and the involvement of legal 
professionals in the disability adjudication system, whether it 
be as claimant's representatives, ALJs, Senior Attorneys, Staff 
Attorneys, or the judges (and justices) of the U.S. court 
system, is a potent force and the underlying philosophy driving 
the Disability Process Redesign. The efficient and inexpensive 
Senior Attorney Program is in marked contrast to the expensive, 
inefficient, and heretofore unsuccessful Adjudication Officer 
Program and is therefore a direct threat to the Agency's 
Disability Process Redesign. To make the successful Senior 
Attorney Program permanent would be a repudiation of the 
foundering Adjudication Officer Program and the Disability 
Process Redesign as a whole.

The Adjudication Officer Program

     To admit that the Adjudication Officer Program is 
a failure would require abandoning its goal of eliminating the 
due process adjudication system with its protection of 
claimant's rights and the vigorous participation of the legal 
community.
     Abandoning the Adjudication Officer Program would 
require admitting that the plan was poorly conceived, poorly 
planned, and poorly executed and has wasted substantial amounts 
of taxpayer moneys.
     To terminate the Adjudication Officer Program 
would damage many personal reputations and careers.\1\ Since 
SSA has loudly proclaimed for the last two years that the 
Disability Process Redesign would solve the Agency's disability 
problems, admitting failure would place the Agency's reputation 
at risk.
---------------------------------------------------------------------------
    \1\ Currently, there are a number of ``reorganization of OHA'' 
plans floating around SSA headquarters in Baltimore. While the plans 
are very different, one factor is common: the power and prestige of the 
official offering the plan will be greatly increased if his/her plan is 
adopted.

Administrative Law Judge decision writing and decisional 
---------------------------------------------------------------------------
instructions

     The issues of how many decisions are written by 
ALJs and the nature and extent of ALJ decisions instructions 
are relatively new to OHA. The staff attorney program was begun 
in 1975 to relieve ALJs of decision drafting responsibilities, 
and in fact it is the single most important reason that ALJ 
productivity has increased from 16 decisions a month to the 
current 40+ decisions per month.
     However, with the advent of computer technology, 
ALJs are being encouraged to draft their simplest, fully 
favorable decisions using Agency developed ``macros''. 
Currently, the Agency's approximately 1000 ALJs draft about 
4,000-5000 cases per month, approximately 10-15% of the total 
decision drafting workload. However, ALJs draft virtually none 
of the more complex, time consuming denial decisions.
     The nature and extent of ALJ decisions 
instructions is a relatively new issue to OHA. Since the Agency 
has increasingly relied upon the considerably less skilled 
paralegal specialists as decision drafters, the importance of 
more specific instructions has increased. However, except in 
rare instances, decisional instructions are general in nature 
and supply very little to the specific rationale explaining the 
decision. Nonetheless, it remains the responsibility of the 
individual drafting the decision to create an acceptable 
rationale explaining the resolution of each issue necessary for 
a legally defensible decision.
     In my personal experience, instructions have 
ranged from ``you make the decision'' to lengthy narratives 
which the ALJ wants inserted into the decision. However, I have 
seen decisional instructions from one ALJ (not from Cleveland) 
that consisted of an ink stamp of a dancing pig (favorable 
decision) and an homeless waif (a denial). Much more commonly, 
ALJ instructions indicate the decision (pay or deny) and the 
step in the sequential evaluation at which the decision was 
made, for example, ``deny--range of light work''. It would be 
most unusual for an ALJ to include specific language for 
insertion in the decision or to include specifics on assigning 
probative value to various exhibits, the claimant's 
credibility, evaluating subjective symptoms, or explaining 
discrepancies in the record. Quite often the instructions are 
incomplete and fail to deal with the complete range of issues 
required for a legally defensible decision.

The Senior Attorney Program

     The Senior Attorney Program, also known as Action 
#7, was originally developed as the key component of the Short 
Term Disability Program. It has been successful despite intense 
ALJ opposition,\2\ because it is designed to accomplish a 
limited goal within the current organizational structure, using 
currently available technology, and to the greatest extent 
possible, using existing human and material resources. Action 
#7 is designed to identify those claimants most likely to be 
disabled and render favorable disability decisions to those 
claimants who are in fact disabled and for whom a decision can 
be made without the time and expense of a hearing before an 
Administrative Law Judge. Action #7 employs experienced OHA 
Senior Attorneys, who have temporary regulatory authority to 
review and develop selected cases and issue fully favorable 
disability decisions in appropriate situations. Senior 
Attorneys work in their normal workplace within the current 
organizational structure and use currently available 
technology. Unlike the Adjudication Officer Program, there are 
no new offices, no additional office space, equipment, or 
support staff, no one is detailed for months (now years) at a 
per diem expense, and no extensive and expensive off-site 
training program was required. Aside from additional decision 
writers, the Senior Attorney Program requires little in the way 
of additional office space, staff or equipment, and does not 
require changes in work processes in other SSA components or 
expensive and not yet available ``enablers'' as does the 
Adjudication Officer Program.
---------------------------------------------------------------------------
    \2\ This has resulted in active sabotage of the program by many 
Hearing Office Chief Administrative Law Judges.
---------------------------------------------------------------------------
     These characteristics are in stark contrast to the 
Disability Process Redesign which requires global changes in 
workload, work sites, work processes in multiple SSA 
components, technology, disability criteria, decisional 
processes, organizational structure, and fundamental changes in 
SSA's relationship with claimants, their rep- 
resentatives, and the health care community. The Disability 
Process Redesign is typical of the large bureaucratic response 
to a problem which has come to typify the Federal Government in 
the latter half of the 20th Century. Action #7 is a ``small 
program'' that works.

Prime benefits of the Action #7 are:

     Substantial reduction of time, in many cases of 
more than a year, which many disabled claimants must wait for a 
favorable disability decision;
     Immediate reduction of the OHA backlog;
     More timely hearings for those claimants for whom 
hearings must be conducted because cases that can be decided 
without a hearing are removed from the que;
     A reduction in overall OHA processing time
     Transferring some of the workload of developing 
cases from OHA employees to the claimant's attorneys;
     A decrease in overall ``reversal rate'' at the 
hearing level;
     Senior Attorneys are also available to OHA to 
assist in the traditional OHA work processes particularly 
drafting of the more complex Administrative Law Judge denial 
decisions.
     Substantially increases OHA decision making 
capacity without hiring more ALJs;
     Provides SSA with additional decision making 
capacity at a lower marginal cost, significantly less cost than 
an ALJ or an adjudication officer;
     Has resulted in higher quality decisions, when 
measured by the Appeals Council effectuation rates, than either 
comparable ALJ or Adjudication Officer decisions.
    The Senior Attorney program involves about 40% of the cases 
received at OHA, those cases most likely to result in a 
decision favorable to the claimant. Unlike the AO program which 
involves reviewing every case in which a Request for Hearing is 
filed, focusing the attention of the Senior Attorney upon cases 
more likely to result in a favorable decision is a far more 
efficient use of the Senior Attorney's time. Concentrating on a 
work load which is more likely to result in favorable decisions 
has proved quite productive. An initial review reveals those 
cases unlikely to result in a favorable decision and those 
cases are quickly forwarded to the master docket for assignment 
to an ALJ. This reduces the expenditure of assets on cases 
requiring ALJ adjudication and permits the concentrated effort 
to be directed to those cases more likely to result in a 
favorable decision. Senior Attorneys are comfortable working 
with claimant attorneys, and perhaps more to the point, 
claimant attorneys are comfortable working with Senior 
Attorneys and recognize the advantage of supplying the medical 
evidence requested by the Senior Attorney. The program is 
perceived by claimants and their representatives as beneficial 
to their interests; not because the payment rate of Action #7 
cases is high, it is only 22-25% of the cases reviewed, but 
because they know if they are contacted by a Senior Attorney, 
there is a good likelihood that a favorable decision will be 
rendered. This serves as an incentive for the claimant and the 
claimant's representative to actively cooperate in a timely 
manner. In many cases, the case development is done by the 
claimant's representative rather than by Agency personnel. In 
my personal experience, if I tell a claimant's attorney that 
unless specific pieces of evidence are in the record, I will 
have to pass the case to an ALJ, that attorney will quickly 
secure the evidence and present it to me. Shifting part of the 
work load to non-OHA employees is an obvious benefit to OHA.
    Senior Attorneys have substantial experience in evaluating 
disability cases; some have as much as 22 years experience as 
OHA staff attorneys and have analyzed and written thousands of 
cases. This depth of knowledge in both the medical and legal 
aspects of the disability program cannot be obtained through a 
training program of only a few weeks, and permits the Senior 
Attorney to produce both more accurate, and better written 
decisions in a shorter period of time.
    The Senior Attorney Program functions within the existing 
structure of OHA and individual hearing offices. It does not 
require establishing new work sites, the acquisition of office 
furniture and office equipment, or the hiring of additional 
support staff. Senior Attorneys continue to bear a substantial 
responsibility for drafting ALJ denial decisions. This permits 
OHA management a considerable degree of flexibility to assign 
assets, both human and material, efficiently and quickly to 
address short-term as well as long-term operational necessities 
such as balancing ALJ and Action 7 decision writing work loads.

Why hasn't SSA made the Senior Attorney Program permanent:

    Action #7 was originally developed as a ``short term'' 
program designed to help decrease the backlog at OHA prior to 
the implementation of the Adjudication Officer Program. The 
intent of SSA is that Senior Attorneys would be phased out 
during the roll out of the Adjudication Officer Program of the 
Disability Process Redesign because adjudication officers 
render continued employment of Senior Attorneys, or for that 
matter nearly all Staff Attorneys, unnecessary. The 
expectations of SSA in this regard were first stated in a 1995 
memo from then Principal Deputy Commissioner Lawrence Thompson 
and more recently, and more graphically, demonstrated in the 
infamous ``Fiander Memorandum''.
    Action #7 was originally scheduled to end no later than 
December 31, 1996. After a lengthy struggle in which several 
SSA components vigorously contested extending the program 
despite its success and despite the lack of any other vehicle 
available for reducing the OHA backlog, it was subsequently 
extended to June 30, 1997 and then to December 31, 1997. The 
authorizing regulatory authority will be extended to September 
30, 1998 but not necessarily the program itself. The concept of 
a small program specifically targeted to solve a major problem 
with a minimal use of Agency assets is a threat to the 
expensive comprehensive program favored by many. Many in SSA 
would be concerned if its Disability Process Redesign was shown 
to be unnecessary. To make the Senior Attorney Program 
permanent would be a repudiation of the Disability Process 
Redesign, and this for a variety of reasons, SSA is loath to 
do.
    At the creation of the Disability Process Redesign, SSA 
conceded that it was not designed to reduce the already 
existing backlog. Only when it became obvious that the Agency's 
comprehensive plan for the future ignored the current backlog 
problem wan. The inappropriateness of the Adjudication Officer 
Program as a vehicle for backlog reduction is made quite clear 
if one reviews the projections of new work loads expected by 
OHA. However, the propensity of the Agency to advance plans 
using other components in a backlog reduction scheme is 
demonstrated by the current plan to ``informally remand'' 
100,000 cases currently in OHA for readjudication by the State 
Agencies. I was surprised to learn that the State Agencies had 
the time and resources to deal with such a large workload. I 
will be surprised if many more than 10% of the 100,000 cases 
result in favorable decisions at the State Agency. Permitting 
Senior Attorneys to review those 100,000 cases would require 
far less in the way of administrative costs and almost 
certainly result in a more productive program in terms of 
identifying those cases which deserve favorable decisions.
    However, SSA has historically exhibited an antagonism 
towards OHA and has consistently failed to facilitate its 
operations. In this instance, permitting OHA to significantly 
reduce its backlog would prove that the Disability Process 
Redesign is unnecessary or at least overly inflated. The 
antipathy of many in SSA towards traditional American 
adjudicatory principles as embodied in our legal system and the 
involvement of legal professionals in the disability 
adjudication system, whether it be as claimant's 
representatives, ALJs, Senior Attorneys, Staff Attorneys, or 
the judges (and justices) of the U.S. court system, is a potent 
force and the underlying philosophy driving the Disability 
Process Redesign. Indeed, the Disability Process Redesign can 
only be fully understood in light of this antipathy. The 
underlying purpose of the Disability Process Redesign is to 
fundamentally limit the current due process disability appeals 
process. A permanent and efficiently operated Senior Attorney 
Program would facilitate OHA successfully handling its 
disability workload and frussire to eliminate the current dues.

The Failure of the Adjudication Officer Program

    The Adjudication Officer Program is doomed to failure, as 
is most of the Disability Process Redesign, because its success 
is predicated upon a number of assumptions which are not valid. 
Perhaps the most fundamental of these assumptions is that 
claimants will be satisfied with their initial denials because 
they are impressed by the operation of the disability 
determination process and not file requests for hearings. Those 
who work in the field believe that claimants want to be found 
disabled and will pursue their claims as far as necessary to 
achieve that goal. Claimants do not want quick accurate 
decisions, they want favorable decisions as quickly as 
possible. Other assumptions that in the light of experience 
seem unlikely are a payment rate of 20% from ALJs, a paperless 
process, the complete and timely cooperation of medical and 
mental health professionals in supplying medical evidence, the 
existence of a simplified disability decisional process, a 
functioning disability claims manager process, and a completely 
integrated data processing system. At its outset, the success 
of the Disability Process Redesign was predicated on a 
substantial number of ``enablers''. As far as I can tell, none 
of those enablers are in place and none are likely to be in the 
immediate future. GAO recently commented that none of the 83 
goals for the Disability Process Redesign had been 
accomplished. Some will probably never happen. Without the 
enablers, the Adjudication Officer Program has absolutely no 
chance of success, a fact vividly demonstrated by the current 
Adjudication Officer Program testing results.
    SSA can expect to receive approximately 600,000 Requests 
for Hearing per year for the next several fiscal years. 
According to the Disability Process Redesign, each of these 
cases must be processed by an Adjudication Officer. After more 
than a year of testing in the most favorable of situations, AO 
productivity remains at approximately .8 to .85 dispositions 
per day per AO. It is my belief that this level of production 
represents a good and realistic projection of the productivity 
that can reasonably be expected from an adjudication officer, 
given the relative difficult job duties. A federal employee has 
a work year of 2087 hours, approximately 261 days. A federal 
employee with the amount of service typical for an AO will use 
about 40 days annual leave and sick leave and approximately 10 
holidays. Therefore, only approximately 210 work days are 
available. One typical AO working one typical year will produce 
approximately 168 dispositions per year (210  .8). At 
that rate approximately 3,600 adjudication officers will be 
needed. This is at least three times the number originally 
forecast when DPR was announced. Additionally, it was 
originally estimated that additional staff supporting the AO 
would be 5 staff persons for 3 AOs. While this ratio has proven 
to be somewhat optimistic, even accepting its validity, another 
6,000 employees would be required. The total employees 
associated with the AO Project would be at least 9,600, far 
more than OHA's current workforce of approximately 6,500 
employees. Of course OHA currently handles adjudications 
through the Appeals Council; the AO would pay approximately 25 
% of its cases and forward the rest to ALJs and their staffs 
for further development. Full implementation of the AO project 
would double the number of employees involved in the disability 
appeals process. This is the kind of ``progress'' that has made 
us ``famous''.
    The Adjudication Officer Project has failed to meet the 
expectations of it designers. By 1993 it was's process was 
failing to provide even minimal levels of service. The backlog 
was growing at an alarming rate, and the payment rate of OHA 
ALJs was in the minds of many observers, including the 
undersigned, significantly higher than what was justified. This 
presented a unique opportunity for SSA executives to achieve 
two long term goals--the elimination of OHA and the destruction 
of the due process disability hearing process, both fueled I 
believe, by SSA's antipathy towards our legal system and its 
practitioners. The reasons for eliminating OHA included 
``empire building'' for certain senior SSA executives, 
elimination of a despised component which was perceived as 
receiving favored treatment, and removing involvement of the 
``legal system'' including claimant's attorneys and the Office 
of Hearings and Appeals. SSA has bitterly resented the roles of 
claimant's attorneys, ALJs, Senior Attorneys, Staff Attorneys, 
the courts, and the whole legal system in the disability 
adjudication process which it perceives as thwarting its good 
judgment regarding disability. The Disability Process Redesign 
offers a mechanism to eliminate or greatly curtail the 
influence of the legal system. This attitude which pervades SSA 
is illustrated in a memorandum dated March 8, 1995 from Manuel 
J. Vaz, currently the Regional Commissioner of Region I.
    ``The redesign proposal points out that claimants `resent 
the need for attorney assistance to obtain benefits.' However, 
rather than minimizing the need for attorney involvement at the 
first level of appeal, the AO process encourages it. Requiring 
the AO to explain to the claimant his/her right to 
representation will surely intimidate many individuals (akin to 
`reading them their rights') into feeling that legal 
representation is a critical issue. Providing a list of legal 
referral sources will only reinforce this perception. The 
claimant will be further induced to retain legal counsel in the 
event that the AO is an attorney.
    ``Since attorney representatives receive 25% of past due 
benefits, we must take care not to cause an unnecessary 
increase in their use, particularly at the first level of 
appeal. Contrast this with the current reconsideration process 
in which claimants rarely retain legal counsel and it becomes 
apparent that our present first appeal step is in this respect 
more `user friendly'.
    ``To retain the user friendly approach in the first stage 
of appeal, we strongly recommend that the subject of 
representation rights only be brought up by the AO at the point 
the case is referred for the ALJ hearing (unless the claimant 
inquires about this earlier in the process). Further, to avoid 
the natural tendency for claimants to retain their own lawyer 
when dealing with a government attorney, we firmly believe the 
AO position should NOT be an attorney.''
    Properly represented claimants are more likely to receive 
benefits than unrepresented claimants and certainly more likely 
to pursue remedies outside the Social Security Administration. 
I find this anti-claimant attitude, which is widespread in SSA 
to be troubling indeed. It demonstrates less interest in 
serving the public than maintaining its proprietary hold on the 
disability system. SSA has a very proprietary attitude towards 
the disability system. This attitude is clearly demonstrated in 
its attitudes towards the public, the courts, and while less 
obvious, this attitude controls its interaction with the 
Congress and even other components of the Execu- 
tive Branch. This Committee has frequently requested that SSA 
advise it on what it needed to effectively operate the program. 
SSA refuses to answer, not I suspect because it does not have 
any ideas, but rather because it is loath to have the Congress 
``interfere'' with its conduct of the disability system.
    To admit that the Adjudication Officer Program is a failure 
would require abandoning the goal of reducing or eliminating 
the influence of the legal system and would subject SSA to a 
good deal of ridicule. SSA has spent enormous amounts of money 
and other assets on this program. Many of those involved in the 
current test including the adjudication officers and the 
clericals, are receiving per diem payments in addition to their 
salary. Clerical workers have been detailed to AO sites all 
over the country, even New York City, rather than use clerical 
workers already in the locales where testing is occurring. 
Admitting that huge sums of money and other resources have been 
wasted is difficult to do in today's climate of smaller, more 
efficient government.
    SSA has loudly proclaimed for the last two years that the 
Disability Process Redesign would solve the Agency's disability 
problems. Unfortunately many personal reputations and careers 
\3\ and perhaps even the Agency's reputation are at risk. 
Admitting they were wrong would be difficult and potentially 
damaging to their careers. The situation is made even more 
unpalatable because of the attitude and statements of SSA 
officials as the Disability Process Redesign was designed and 
amended. At the outset of the Adjudication Officer Program, the 
Agency sought an implementation regulation. Testing, senior 
agency officials said was unnecessary. A very high level 
committee has worked for almost two years on reorganizing the 
disability appeals process (the elimination of OHA); its 
charter assumed the success of the Adjudication Officer Program 
hence reorganization schemes are predicated upon a successful 
Adjudication Officer Program. OMB did not accept the Agency's 
opinion that testing was unnecessary. However, the Agency 
quickly minimized its embarrassment regarding the necessity of 
testing. Even as OMB demanded a testing program for the 
Adjudication Officer Program, SSA officials emphasized that the 
testing was not designed to test the adjudication officer 
concept, only fine tune implementation. In a memorandum from 
Charles Jones, then Director of the Disability Process Redesign 
Team dated June 9, 1995 Mr. Jones stated:
---------------------------------------------------------------------------
    \3\ Currently, there are a number of ``reorganization of OHA'' 
plans floating around SSA headquarters in Baltimore. While the plans 
are very different, one factor is common: the power and prestige of the 
official offering the plan will be greatly increased if his/her plan is 
adopted.
---------------------------------------------------------------------------
    ``I recommend that testing and subsequent rollout 
implementation of the AO process as quickly as possible. A 
testing as opposed to final regulation was required by OMB to 
ensure that the AO process does not escalate program costs. We 
have already concluded favorably the efficacy of the AO process 
and project dramatic productivity increases and savings both in 
human and monetary resources within two years of full 
implementation. The purpose of testing is to reassure OMB 
regarding program costs and fine tune procedural aspects of the 
process.''
    The rationale was that since Commissioner Chater had 
already decided the Adjudication Officer Program would work, 
there was no sense in testing the concept. Agency employees 
were told that after a four month testing period commencing 
November 1995 which would validate the process, full roll out 
would commence at the rate of 10 adjudication officer sites per 
month until the originally planned 200 sites of 5 adjudication 
officers each were in place. While these officials could be 
characterized as being overly-optimistic, a better 
characterization might be ``delusional''. Over the past several 
years literally scores of senior agency officials have 
privately commented to me and other OHA employees that the AO 
test was a failure, but that the Agency would declare it a 
success and implement the program anyway. SSA has consistently 
avoided any forum in which an unbiased decision maker might 
become involved. SSA illegally terminated impact and 
implementation negotiations with the National Treasury 
Employees Union and to this day alleges that such negotiations 
are unnecessary. This is so even though AO sites remove cases 
that would normally be processed by Senior Attorneys; SSA 
contends that this does not impact upon Senior Attorneys. The 
real reason for the refusal to negotiate is that eventually a 
impartial party would review the situation; SSA cannot afford 
such a review. NTEU began litigation contesting the Agency's 
failure to negotiate, but terminated that process despite our 
complete faith that this was any easy winner because the 
failure of the test was so evident that it would fail. We saw 
no reason to terminate the test which would only prove us 
right, and we did not want to be cited as a reason for its 
failure. We made the right decision.

ALJs, Decision Writing, and Instructions

    The issues of how many decisions are written by ALJs and 
the nature and extent of ALJ decision instructions are 
relatively new to OHA. The staff attorney program was begun in 
1975 to relieve ALJs of decision drafting responsibilities, and 
in fact it is the single most important reason that ALJ 
productivity has increased from 16 decisions a month to the 
current 40+ decisions per month. Over the years following 1975, 
as the program was more fully staffed, more and more ALJs wrote 
fewer and fewer of their own decisions. Additional decision 
writer resources were added with paralegal specialists to write 
the easier ALJ decisions so that eventually, few ALJs were 
writing any decisions at all. However, using ``fill-in-the-
blank'' and other macros, more and more emphasis is being 
placed on ALJs writing some of their own decisions. The Agency 
is currently in the process of supplying each ALJ with a 
notebook computer in order to encourage decision drafting. 
However, even today, few ALJs draft even their simple favorable 
decisions and practically none draft the far more complex and 
demanding affirmation decisions.
    Currently, the Agency's approximately 1000 ALJs draft about 
4,000-5000 cases per month, approximately 10% of the total 
decision drafting workload. Again, ALJs draft virtually none of 
the more complex denial decisions. This is unfortunate because 
drafting the more complex decisions requires an adjudicator to 
recognize, understand and explain discrepancies in the record, 
develop and evaluate the claimant's subjective complaints, 
consider and assign the appropriate probative weight to all the 
evidence in the record and weigh the testimony at the Hearing. 
Decision making, without some decision drafting, does not 
develop these skills and is a decisional process that leads to 
increased instances of incorrect (not legally defensible) 
decisions. While these may seem like skills necessary to the 
decision making process, they are only necessary to the 
complete and accurate decision making process. The lack of 
these skills and the lack of knowledge of the nuances of SSA's 
disability program results in imprecise decisional processes 
and increased instances of incorrect (legally indefensible) 
decisions.
    As noted earlier, the issue of specificity of ALJ 
instructions is relatively new. Many experienced Staff 
Attorneys neither need nor want more than general directions 
regarding the decision. We prefer to rely upon our ability to 
review and analyze a case and rely on our own analytic 
abilities to craft a legally defensible decision. To such 
individuals, detailed instructions, unless they are accurate 
and carefully thought out, which is not usually the case, are 
often more an impediment than an asset. However, as the Agency 
has increasingly relied upon the considerably less skilled 
paralegal specialists as decision drafters, the importance of 
more specific instructions has increased. These individuals do 
not have the analytic capacities nor the extensive legal 
writing experience of staff attorneys and hence require more 
detailed instructions. However, except in rare instances, 
decisional instructions are general in nature and supply very 
little to the specific decision.
    There are over a thousand ALJs currently employed by the 
Social Security Administration. In my personal experience, 
instructions have ranged from ``you make the decision'' to 
lengthy narratives which the ALJ wants inserted into the 
decision. However, I have seen decisional instructions from one 
ALJ (not from Cleveland) that consisted of an ink stamp of 
dancing pig (favorable decision) and an homeless waif (a 
denial). Much more commonly ALJ instructions indicate the 
decision (pay or deny) and the step in the sequential 
evaluation at which the decision was made, for example, 
``deny--range of light work''. It would be most unusual for an 
ALJ to include specific language for insertion in the decision. 
Likewise, it would be most unusual for instructions to include 
specifics on assigning probative value to various exhibits, the 
claimant's credibility, evaluating subjective symptoms, or 
explaining discrepancies in the record. Quite often the 
instructions are incomplete and fail to deal with the complete 
range of issues required for a legally defensible decision.
    The responsibilities of the decision drafter are set forth 
in considerable detail in the position description of the GS-12 
Attorney Advisor.
    ``Serves as a program/legal expert with full responsibility 
for formulating legally defensible decisions which address all 
medical and legal aspects of even the most difficult cases ad 
as supported by the evidence. Ensures that the decisions are 
consistent with the Social Security Act and with the 
Secretary's adjudication policies as reflected in Social 
Security Regulations and Rulings. Provides the rationale for 
the ALJ's findings on the relevant issues and on the ultimate 
decision in the case. The rationale includes appropriate 
reference to the applicable statutes, regulations and Social 
Security Rulings and a discussion of the weight assigned to the 
various pieces of evidence in resolving conflicts in the 
overall body of evidence; e.g., conflicts between treating and 
nontreating medical sources, including a statement as to which 
evidence is more persuasive and the supporting analysis. The 
rationale in- 
cludes a resolution of all the claimant's subjective 
allegations, especially those regarding symptoms and an 
assessment of the credibility of the evidence. Ensures that the 
rationale includes any specific language required by court 
orders, class action settlements or SSA policy embodied in 
Acquiescence Rulings, as well as an explanation of how the case 
law was applied. Is responsible for ensuring the decisions 
properly address those issues identified by the Circuit Courts 
as significant. Identifies the pivotal issues in a case and 
ensures that the decisional rationale includes sufficient 
discussion to demonstrate that he or she has properly 
considered the issue according to circuit law''
    Given the paucity of specific instructions typically 
provided by the ALJ to the Staff Attorney, and the complexity 
of the written decision, the text of most denial ALJ decisions 
is the intellectual property of the writer not the ALJ. The ALJ 
normally provides certain ``findings'', but the rationale 
supporting each conclusion is the work of the Staff Attorney. 
Because of the increased importance of ALJ instructions, 
several offices have prepared ``decision format'' for use by 
ALJs. If the decisional format form is complete, it will 
require the ALJ to address most of the relevant issues, but 
again, in a very abbreviated format. It remains the 
responsibility of the individual drafting the decision to 
create an acceptable rationale explaining the resolution of 
each issue necessary for a legally defensible decision.

                                

    [The following questions were subsequently submitted by 
Chairman Jim Bunning to Ms. Shor:]

    1. You mentioned in your testimony that you would like to 
see more consideration of alternatives to the Adjudication 
Officer program. What alternatives did you have in mind?
    2. You indicated in your testimony that you are not in 
favor of closing the record. Can you provide more details as to 
why you believe the record should not be closed?
    3. In testimony before the Subcommittee, we learned that 
75% of individuals denied benefits by the State DDS file an 
appeal to appear before an ALJ. We also learned that in about 
75% of all appealed cases, the claimant submits additional 
evidence. Do you have any sense of how often this evidence is 
really new, or was simply held back so it could be considered 
by the ALJ? How can we ensure this doesn't happen?

    [The response of Ms. Shor follows:]

                       National Organization of            
         Social Security Claimants' Representatives        
                                      6 Prospect Street    
                                  Midland, New Jersey 07432
                                                      June 19, 1997

Rep. Jim Bunning, Chairman
Subcommittee on Social Security
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515

    Dear Congressman Bunning,

    Thank you for the opportunity to respond to questions arising from 
my testimony to the Subcommittee on April 24. I want to express again 
our appreciation for the opportunity to testify at that important 
hearing concerning the disability program.

Adjudication Officer

    In my testimony, I indicated that we support the agency's goal of 
deciding claims correctly at the earliest possible stage. SSA's 
redesign plan created the Adjudication Officer position to screen cases 
before they reach an Administrative Law Judge. We would encourage 
consideration of alternatives which would more successfully achieve 
this goal. First, there should be a final automatic screening for all 
cases before a reconsideration denial is issued. Note that in the AO 
scheme, it is necessary for a dissatisfied claimant to file a request 
for a hearing before an ALJ before the case can be sent to an AO. As a 
result, those claimants who are fearful of appearing ``in court'' 
before an ALJ and who do not file a request for hearing for that reason 
will not have an AO look at their claims. Second, we have urged the 
agency to con- 
sider a magistrate-type position instead of the AO. The magistrate 
would be a lawyer who would draft recommended decision, both allowances 
and denials, for the ALJ's consideration. Third, we encourage the 
agency to consider whether increases in staffing at the Offices of 
Hearings and Appeals for preparation of the record and summaries of the 
evidence might obviate the need for creation of additional positions 
altogether.

Closing the Record

    Claimants should be strongly encouraged to submit evidence as early 
in the process as possible. The benefit is obvious: the earlier a claim 
is adequately developed, the earlier it will be approved and the 
earlier payment can begin. However, closing the record is not the 
solution. Past efforts to close the record to new evidence have failed, 
since such proposals are (1) inconsistent with Supreme Court precedent 
and the Social Security Act; (2) not beneficial to claimants; and (3) 
not administratively efficient for SSA.

A. Constitutional and statutory rights of claimants.

    1. Claimant's right to impartial decisionmaker's developing the 
facts of the case.
    Closing the record before the hearing level would not be consistent 
with the due process and statutory rights of disability claimants. 
Based on due process and the Social Security Act, a claimant has the 
right to have an impartial decisionmaker gather the evidence and make a 
decision based on evidence adduced a the hearing. See 42 U.S.C. 
Sec. 405(b); Richardson v. Perales, 402 U.S. 387 (1971); Goldberg v. 
Kelly, 397 U.S. 254 (1970). Thus, the ALJ has the ultimate 
responsibility to develop the facts of the case. Richardson, 402 U.S. 
at 410. Subsequent case law has emphasized the remedial purpose of the 
[Act] and the duty of the Administrative Law Judge to fully develop the 
record. Lashley v. Secretary of HHS, 708 F.2d 1048, 1051 (6th Cir. 
1983). Closing the record prior to a hearing would co-opt the ALJ's 
duty to gather the evidence and develop the record. It further 
precludes the ALJ from issuing a decision which is based on evidence 
brought out at, and not before, the hearing.
    2. Maintaining informality of the process.
    Requiring evidence to be submitted at an earlier point in the 
process and then closing the record would impose a formality on the 
appeals process not intended by the Act. For decades, Congress and the 
United States Supreme Court have recognized that the informality of 
SSA's process is a critical aspect of the program. Proposals to 
eliminate this informality have generally been rejected by Congress. In 
Richardson, the Supreme Court noted that from the current procedures:
    There emerges an emphasis upon the informal rather than the form. 
This, we think, is as it should be, for this administrative procedure, 
and these hearings, should be understandable to the layman claimant, 
should not necessarily be stiff and comfortable only for the trained 
attorney, and should be liberal and not strict in tone and operation. 
This is the obvious intent of Congress so long as the procedures are 
fundamentally fair.

Richardson, 402 U.S. at 401-01

    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. Technical 
requirements, such as closing the record at an earlier level, raise 
obstacles to claimants which are inconsistent with the philosophy of 
the program. Rather, SSA should be encouraged to work with claimants to 
obtain necessary evidence and more fully develop the claim at an 
earlier point.

B. Closing the record is not fair to claimants.

    Despite the obvious benefit to claimants, the fact that early 
submission of evidence does not occur more frequently indicates that 
factors beyond the claimant's control contribute to this problem. In 
attempting to find a solution, Congress should be careful not to make 
the process less ``user-friendly.'' There are several crucial reasons 
why closing the record at an earlier level is not beneficial to 
claimants.
    1. Conditions change. Most medical conditions change over time: 
they may worsen, the diagnosis may change or become more finely tuned 
after further testing or assessment. Individuals may undergo new 
treatment or procedures. They may be hospitalized or referred to 
different specialists. Some conditions, such as multiple sclerosis, may 
take longer to diagnose. Some claimants misdiagnose their own claims 
either because they are in denial or lack judgment about their illness.
    By their nature, these claims are not static and a finite set of 
medical evidence does not exist. If the record is closed, individuals 
will be forced to file new applica- 
tions merely to have new evidence, such as reports from a recent 
hospitalization or a report which finally assesses and diagnoses a 
condition, reviewed.
    2. Claimants are unable to submit evidence earlier for reasons 
beyond their control. Claimants are always benefited 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 punishes them for factors beyond their control, including:
     Neither SSA nor DDS explains to the individual what 
evidence is important and necessary to obtain for the claim.
     Medical providers, especially treating sources, receive no 
explanation from SSA or DDS about the disability standard and are not 
asked for evidence relevant to the claim.
     DDS's fail to obtain necessary and relevant evidence.
     Claimants are unable to obtain medical records either due 
to cost of because of state laws preventing them from directly 
obtaining their own medical records.
     Medical providers delay or refuse to submit evidence.
    So that claimants are not wrongly penalized for events beyond their 
control, the current system provides a process to submit new evidence 
if certain conditions are met. This exception should not eliminated in 
the name of streamlining the system.

C. Closing the record will cause further administrative problems for 
SSA.

    In addition to the reasons why closing the record would not 
benefits individuals, closing the record would not improve the process 
from an administrative perspective. As mentioned above, a claimant 
would be required to file a new application merely to have new evidence 
considered, even though it was relevant to the recent, prior claim. As 
a result, SSA could expect to handle more applications, unnecessarily 
clogging the front end of the process. Further, there would be more 
administrative cost for SSA since the cost of handling a new 
application is higher then reviewing new evidence in the context of a 
pending claim.

New Evidence

    As discussed above, there are many reasons that additional evidence 
is submitted at the hearing level. Most of these reasons are outside 
the control of claimants, as well as their representatives. Clearly, 
claimants benefit by submitting evidence as early in the process as 
possible, and should be so advised throughout the pendency of their 
claims.
    If we may provide additional information and perspective, please do 
not hesitate to contact me.

            Very truly yours,
                                              Nancy G. Shor
                                                 Executive Director

NGS/ct

                                

    Chairman Bunning. In conclusion, I would like to thank 
everybody that has testified today. Your testimony has been of 
great value in updating the Subcommittee regarding the 
disability appeals process at SSA.
    The Subcommittee is now adjourned.
    [Whereupon, at 11:16 a.m., the hearing was adjourned.]
    [Submissions for the record follow:]

Statement of James F. Allsup, Founder and President, Allsup, Inc.

    Mr. Chairman and members of the subcommittee. My name is 
James F. Allsup and I am president and CEO of Allsup 
Incorporated in Belleville, Illinois. My written testimony 
differs markedly in experience and perspective from the other 
testimony you will hear today. Specifically, I have experienced 
the Social Security disability program from multiple 
perspectives--as a Social Security employee, and as a Social 
Security disability representative for both individuals and 
employers.
    Since I founded my company in 1984, we have obtained 
disability awards for about 25,000 people. Prior to starting my 
company, I was a claims representative and a field 
representative for four and one-half years with the Social 
Security Administration. Many of my employees also have Social 
Security disability claims experience, working both inside and 
outside the Social Security system. Cumulatively, we have more 
than 500 years' experience as either claims representatives or 
claims examiners for SSA and Disability Determination Services 
or as private non-attorney representatives.
    Disability claims can be referred to us by individual 
claimants, their employers or their insurers. If an individual 
approaches us directly and does not have private disability 
coverage, our fee is paid on a contingency basis. We obtain the 
fee directly from the individual, not from the Social Security 
Administration. Unlike other organizations, we do not believe 
it is necessary to strain Social Security's limited resources 
to collect our fees.
    When claimants are referred to us by their employers or 
insurers, the referring party pays our fee because of its 
financial stake in the outcome--an offset against the 
disability benefit they pay. This offset exists because 
employer-provided disability plans integrate with Social 
Security disability, and both employers and their employees 
share the FICA tax burden.
    With all due respect to the dedicated Social Security and 
Disability Determination Services employees who will offer 
testimony today, their knowledge and perspective is limited--as 
was my employees and mine before we left the Social Security 
Administration. While employed by SSA, we were not privy to the 
actual law we were supposed to be administering. We followed 
the agency's extremely narrow policy contained in its Program 
Operations Manual System, or POMS. We assumed the agency's 
policy was the law. And because our knowledge of the law was 
obscured by agency policy, we frequently became upset when 
administrative law judges reversed our denials. We did not 
understand why and how an administrative law judge could allow 
a claim that we had denied because we followed the directions 
given to us in the POMS.
    That's why I can understand the concern the Social Security 
and Disability Determination Services employees have with the 
high reversal rate of administrative law judges. But I also 
understand that their viewpoint is limited because they never 
left the Social Security disability system to represent 
individuals with disability claims. Only by leaving the agency 
and subsequently representing disability claimants can one 
really understand that administrative law judges are simply 
following the law. Unless you are aware of the law, you will 
never understand it. So what may appear as inconsistencies in 
the Social Security disability decision-making process are only 
inconsistencies because the agency itself takes a narrow view 
of the law.
    The only solution is to replace the dual standards used in 
the decision-making process with a single standard--the legal 
standard.
    I abhor the attempt by Social Security Administration 
policy makers to intimidate administrative law judges into 
abandoning their oath to provide due process and a fair hearing 
to individual claimants in accordance with the law. This is a 
brutal attack on working Americans who expect their government 
to make good on its promise to provide a safety net when they 
are no longer able to work. If SSA's attempt to overrule the 
law succeeds, even more claims will be denied and even more 
people with disabilities will be deprived of the disability 
income and Medicare coverage they so desperately need. It will 
also deprive them of extended COBRA coverage if they elected 
such coverage upon leaving work because of their disability.
    Allsup Incorporated is concerned with their welfare. We 
will not sit back and be silent while they are attacked by 
policy makers isolated from the world of disabilities. Because 
our fees are not guaranteed by the Social Security 
Administration, I am free to speak with total honesty and 
without restraint in criticizing this attack on disabled 
claimants. Therefore, I am not concerned about potential 
retribution through the loss of a guaranteed fee collection 
system.
    In addition to serving as authorized representatives of 
disabled individuals, we often serve as unofficial 
representatives of their employers' interests who referred 
their claims to us. We must recognize that employers also have 
a big stake in the outcome of these disability claims. 
Employers not only pay half of the total FICA taxes for each of 
their employees, they many times also provide their own 
disability and health coverage. If the disability claim is 
denied, the employer is denied the offset against its 
disability claim, and the Medicare coverage that allows the 
employer health plan to revert to secondary payer. The employer 
is left paying the entire bill for both disability income and 
health insurance coverage, eliminating any incentive to provide 
this coverage. We must understand that both disabled 
individuals and active employees are harmed each time Social 
Security unfairly denies a disability claim.
    We will not allow this lawlessness on the part of Social 
Security policy makers to go unnoticed. We have launched a 
campaign to rally disability associations, individuals, 
employers and other organizations to stop this ill-conceived 
effort. We are gathering petitions throughout the country and 
demanding that this outrage be terminated immediately. We are 
also urging all disabled individuals to contact their elected 
representatives in Congress to put a halt on this attack.
    This is the United States of America where the rule of law 
reigns supreme. As law-abiding taxpayers, we demand law-abiding 
administrators.

                                

Statement of John H. Pickering, Chair, Senior Lawyers Division and 
Commissioner Emeritus, Commission on Legal Problems of the Elderly; on 
Behalf of American Bar Association

    Mr. Chairman and Members of the Subcommittee:
    My name is John H. Pickering. I chair the American Bar 
Association's Senior Lawyers Division, and serve as 
Commissioner Emeritus of the ABA Commission on Legal Problems 
of the Elderly, which I also chaired for a number of years.
    I appreciate the opportunity to submit this statement on 
behalf of the American Bar Association, in conjunction with the 
April 24, 1997, Oversight Hearing on the Disability Appeals 
Process.
    As representative of the legal profession in the United 
States, the American Bar Association is particularly concerned 
with equal access to justice for those members of our society 
who are generally least able to protect their own rights--low-
income persons, individuals with disabilities and older people. 
We have a long-standing interest in the Social Security 
Administration's disability benefits review process, and have 
worked actively over the years to promote increased efficiency 
and fairness in this system. In recent years, we have followed 
carefully the Social Security Administration's efforts to 
redesign this process, and we commend the agency on its efforts 
to ensure that the correct decision is made as early in the 
process as possible. Like members of this Subcommittee, we are 
concerned about the growing backlog in processing appeals and 
the impact of those delays, on the public confidence in the 
system, on agency staff and most importantly, on the claimant. 
We are quite aware that the timeliness and the quality of 
decision making can have a profound effect on the lives and 
well-being of millions of Americans, and that for many 
individuals, Supplemental Security Income and Social Security 
disability benefits constitute the sole source of income and 
access to health care.
    Over a decade ago, the ABA joined with the Administrative 
Conference of the United States (ACUS) to sponsor a national 
symposium on the Social Security Administrative Appeals 
process. Since that time, the Association has drawn upon the 
considerable expertise of a membership with backgrounds as 
claimant representatives, administrative law judges, 
academicians and agency staff, to develop a wide ranging body 
of recommendations that emphasize clarity in communications 
with and due process protections for claimants, and that urge 
the application of appropriate, consistent legal standards at 
all stages of the disability adjudication process. In 1986, in 
an amicus curiae brief in the landmark U.S. Supreme Court case, 
Bowen v. City of New York, the Association argued successfully 
that the Social Security Administration should reopen the cases 
of thousands of mentally disabled claimants who were denied 
disability benefits because they failed to meet sub rosa 
requirements and appeal deadlines Brief for the American Bar 
Association, Amicus Curiae, in Support of the Respondents, 
Bowen v. City of New York, 476 U.S. 467 (1986). It is with this 
background that we offer some recommendations to the 
Subcommittee for consideration. We believe that implementation 
of these recommendations can lead to the development of a fair 
and efficient administrative appeals process, and minimize the 
delays that are threatening to overwhelm that system.
    The stated goal of the Social Security Administration's 
``process unification'' initiative is to improve efficiency and 
create consistency of decision making at different levels of 
the disability appeals process. Yet in all too many cases still 
in the system today, claims that could have been decided at the 
initial stages are awarded at the hearing level simply because 
the evidence presented is more complete by the time it is 
presented to the administrative law judge. SSA could improve 
this situation at the front-end of the process, by providing 
individuals applying for benefits with a clear statement of 
applicable eligibility requirements, the claimant's 
responsibilities, a description of the administrative steps in 
the process, an explanation of relevant medical and vocational 
evidence and notice of the availability of legal 
representation.
    We agree that many claimants, either independently or with 
the assistance of a representative or other agent, should be 
encouraged to take more responsibility for providing 
documentation in support of their claim. However, many persons 
eligible for disability benefits are unable, as a result of 
their disability, or because of linguistic or cultural 
barriers, to follow through on certain tasks. Moreover, few 
claimants have a legal representative to assist them at this 
stage of the process. To improve the quality of medical and 
vocational evidence at the initial stages and reduce the need 
for appeal, we suggest that the agency consult the claimant's 
health care providers, and compensate them adequately for 
providing relevant medical information. We encourage SSA to 
take affirmative steps to compile accurate documentation and to 
supplement reports (particularly those from treating 
physicians) that are not sufficiently detailed or 
comprehensive. Agency staff could speed up the process by 
educating the medical community about eligibility criteria used 
in the disability program, and the kind of evidence required to 
establish eligibility for benefits, and by assisting claimants 
in compiling necessary documentation and in supplementing 
incomplete reports.
    We recommend that, prior to denying claims, the Social 
Security Administration notify claimants of the pending adverse 
action; inform claimants of reasons why the finding of 
disability cannot be made and ensure that they have access to 
all the evidence in their file, including medical reports; 
provide them the opportunity to submit further evidence, and 
advise claimants' health care providers of deficiencies in the 
medical evidence and give them the opportunity to supply 
additional information. We recommend that disability claims 
managers be encouraged to consult with legal as well as medical 
resources in their evaluation of a claim. Our policies support 
face-to-face interviews between claimants and agency decision-
makers before a final decision is made, and elimination of the 
reconsideration level of appeal. If the quality of intake and 
development of evidence at the early stages is improved, there 
is little reason for reconsideration, particularly given the 
historically low reversal rate and substantial delays involved 
at this level.
    In the event that the claim is denied after full and 
complete development of the file, we suggest certain additional 
steps to enhance the integrity and efficiency of the appeals 
process while guaranteeing the claimant due process. The 
Association has long-standing policy supporting the right of 
claimants to due process, including a hearing on the record, 
before an administrative law judge whose authority as an 
independent fact-finder is assured. This hearing is an 
essential element in ensuring a full and fair review of the 
claim, providing administrative law judges the opportunity to 
take testimony from the claimant, develop evidence when 
necessary, consider and weigh the medical evidence, and 
evaluate vocational factors in order to reach an impartial 
decision free from agency coercion.
    In 1995, in response to SSA's efforts to eliminate the 
backlog of cases that threatened (and continues to threaten) 
the ability of administrative law judges to assure due process, 
the ABA House of Delegates endorsed additional reforms at the 
hearing and pre-hearing stages. We recommended the designation 
of adjudication officers with supporting staff who, immediately 
following the initial denial of a claim, would work with the 
disability claims manager to develop the evidence, assemble a 
file and, where appropriate, allow the claim. Additional 
evidence may be necessary to establish a change in medical 
condition, or to include evidence that the claimant was unable 
to obtain due to cost or other circumstances beyond the 
claimant's control. Should the case proceed to a hearing, the 
adjudication officers could be responsible for presenting the 
agency's position during the hearing. Concerned about the 
disadvantage such a system might pose to unrepresented 
claimants, we proposed that the administrative law judge be 
permitted to assert direct control over the development of the 
record, and have access to investigative sources.
    We are aware of proposals to provide finality to the 
process by closing the record during the administrative appeal 
process, and urge that such proposals be carefully considered, 
and that the record certainly not be closed prior to the 
hearing. To close the record before the hearing would serve 
only to penalize claimants who may have been unable through no 
fault of their own to gather the evidence necessary for a full 
and fair hearing, and would lead to additional costs for the 
agency as claimants file new applications simply to submit new 
evidence. The record should not be closed until the conclusion 
of the hearing, and then only if provisions are made for 
allowing claimants to reopen the record within one year of an 
adverse decision, upon a showing of good cause (such as newly 
discovered evidence or a material change in condition).
    Finally, we are most concerned that SSA's ``process 
unification'' plans provide for the Appeals Council to review 
decisions of administrative law judges on its own motion. The 
ABA has advocated for many years for a complete study of 
Appeals Council procedures and functions, to determine whether 
such review is necessary and to explore possible changes in the 
Council's role. Fully aware of past attempts to control the 
rates at which ALJs allowed claims (e.g. the Bellmon Review), 
we caution that the independence and impartiality of 
administrative law judge decision making must not be 
compromised by discretionary review. The scope of such review 
should be limited to clear errors of law or lack of substantial 
evidence for factual conclusions, with the latter based on 
specific documentation and review of the hearing tapes.
    We commend the Subcommittee for holding the hearing on 
these important issues, and appreciate the opportunity to 
submit this testimony. We look forward to working with the 
Subcommittee and with the Social Security Administration on 
these issues in the future.

                                

              Scheine, Fusco, Brandenstein & Rada, P.C.    
                                               Woodbury, NY
                                                       May 15, 1997

A.L. Singleton
Chief of Staff
Social Security Subcommittee
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515

RE: Oversight Hearing on the Disability Appeals Process April 24, 1997

    Dear Chairman Bunning and Members of the Subcommittee:

    I write to you as an experienced practitioner with over twenty 
years experience in the field of Social Security Disability. As I 
understand the concerns of your subcommittee, they may be capsulized as 
follows:
    1. Why does it seem to take so long to process a disability claim?
    2. Why does there seem to be such a discrepancy between decisions 
by administrative law judges and the state agency disability 
determination services?
    3. Why don't we get enough people off the rolls?
    These are valid questions that deserve honest answers. However, 
having reviewed the position papers submitted to your subcommittee, by 
various stakeholders in the system, it seems to me that, at best, you 
have a great deal of conflicting information, and varying opinions as 
to why the system is in the state it is in. At worst, you have what 
appears to be one group back stabbing another, perhaps for the 
understated purpose of preserving their jobs, even at the other guys' 
expense.\1\
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    \1\ The most glaring example of this is the statement of Larry 
Jacks of the Disability Determination Services. Mr. Jacks would have 
your committee believe the ALJ's are not following the law and giving 
benefits away on a wholesale basis. He would like to see the private 
bar removed from the process, and the Federal Courts removed as well. 
If there ever was a prize given to position paper biased to protect 
one's own interest this one would take a pulitzer.
    Another Disability Examiner, Douglas Willman of the National 
Council of Disability Determinations Directors, starts out his 
statement by taking a pot shot at ALJ independence, and supports 
institutionalized non-acquiescence. This underscores Judge Bernoski's 
observations that the DDS don't follow the law, and don't want to, and 
in fact, Willman, doesn't even want to consider the evidence from the 
treating physician on the issue of disability.
    See the statement of James A. Hill, Esq., of the National Treasury 
Employees Union, at page 8, noting the resistance of both state 
agencies and the ALJ's to the highly successful Senior Attorney 
project. Hill alludes facing unjust criticism from the Redesign 
bureaucracy which had a stake in the largely unsuccssful adjudication 
officer program, as well as office obstructionism within the confines 
of local Hearing Offices.
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    Allow me to share my observations, based upon twenty years of 
working with Social Security Disability claims at all adjudicative 
levels. I am the managing partner of a firm with a substantial Social 
Security practice. I have lectured extensively in the area, and serve 
on the Board of Directors of the National Organization of Social 
Security Claimant's Representatives. I have handled over 2000 hearings, 
and over 500 Federal Court appeals. More significant, however, is that 
I have handled many thousands of cases which were favorably adjudicated 
at the initial and reconsideration levels, or by on-the-record 
decisions at the Office of Hearing and Appeals. The views expressed 
herein however are solely my own, and not necessarily endorsed by 
NOSSCR.

      I. The Disability Standard and The ``Duration'' Requirement

    Before giving my answer to the question as to why is there 
a backlog, it would do well to remind ourselves that the legal 
standard of disability under the Social Security Act, requires 
a showing that the disability has lasted (or is expected to 
last) for 12 consecutive, continuous months. Curiously, the 
statement of Carolyn W. Colvin, Deputy Commissioner for 
Programs and Policy of SSA, neglected to include this rather 
significant part of the definition of disability. Ms. Colvin's 
statement was merely that ``The Social Security Act broadly 
defines disability as the inability to engage in substantial 
gainful activity.'' That's hardly accurate, in light of the 
duration requirement. If we don't understand the duration 
requirement, we will have a very difficult time understanding 
anything about the disability process at all.
    With some minor exceptions, it is very difficult to 
anticipate whether most impairments will last twelve continuous 
months. In some instances a State Agency DDS will need to defer 
a decision until it can determine if the otherwise severe 
impairment will, in fact, meet the duration requirement. In 
other cases, they will disallow a claim because administrative 
experience in similar cases has shown that a particular 
impairment would ordinarily not last twelve months at a 
disabling level of severity although it may be quite disabling 
at the point when a claimant applies. In short, my experience 
is that many claimants are denied because people file 
prematurely, and no one ever bothers to explain the duration 
requirement to them.
    Second, as I will demonstrate, there is a backlog because 
claimants are not generally represented by independent counsel 
at the initial application stage and many people apply who have 
no business applying, either because they do not meet and never 
will meet the disability standard, or they will not meet the 
duration requirement, or apply so prematurely that they invite 
a denial, or are unable to produce medical evidence in support 
of their claim because they are not under regular care. Or, 
perhaps they are not insured for disability at the time they 
claim to be disabled due to spotty work records.
    The bottom line is there are too many claims of dubious 
quality coming in to flood the system. These claims help clog 
the appeals process and delay the disposition of more 
meritorious claims.

                 II. Getting People Off the Rolls Early

    We can't get people off the system, because we make them 
such vital stakeholders in getting on the system.
    In the first place we (wrongly) convince them that they 
need to be ``permanently totally disabled'' to get benefits. 
Neither permanency nor total disability is a requirement of the 
Social Security Act, but if you let people think they are 
permanently and totally disabled, by defining their eligibility 
for a disability benefit in such terms, they will eventually 
come around to perceiving themselves as actually being 
permanently and totally disabled. We do not emphasize the 
availability of ``closed periods of disability,'' which is 
really all that many applicants want in the first place.
    Most Americans, and I would not be surprised if members of 
the subcommittee were included in this, may be unaware that 
Social Security awards closed periods of Social Security 
Disability for people who are so disabled they can't work, but 
only for the limited period that they are so disabled. Once 
they recover, the benefits stop. This doesn't require any 
legislation. It has been part of the Social Security Disability 
process for years, but rarely invoked, except by the much 
aligned Administrative Law Judges.\2\
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    \2\ Statistically, when an ALJ awards a ``Closed Period'' (and they 
award many) it shows up as a favorable decision, thus skewing the 
numbers of ``favorable'' decisions attributable to ALJ's much higher 
than they should be.
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    Congress can hardly expect to purge the rolls of those who 
have recovered, when SSA is taking five years to get them on 
the rolls in the first place, and at least another three years 
to review them. (And, we doubt SSA can keep up with even that 
pace of review.) By that time, any transferable skills, or 
general aptitudes the claimant may possess, have long been 
neglected by disuse, the claimants are considerably older and 
may fall into a different disability classification under the 
medical vocational rules, they are less motivated, are 
``retired'' in their minds, and have adjusted to whatever 
standard of living they now have. Moreover, as is well known, 
they are afraid of losing their medical benefits. (The recent 
proposals by Representative Kennelly and Senator Jeffords may 
address this latter part of the problem.)
    Moreover, think of the actual dollar cost of having to 
finally pay someone five years of retroactive benefits because 
it sometimes currently takes that long to resolve a case, and 
then to pay continuing payments for at least three years before 
the case is even looked at!
    It is my view that the sooner you let someone into the 
system the sooner you can get them out, if you act fast. 
However, getting people in sooner, doesn't mean getting them in 
prematurely, it means expediting the process, once they have 
applied.

           III. Why is There a Backlog at the Hearing Level?

1. The Initial Claims Process is Designed to Exclude Evidence.

    It is my view that the main reason there is a hearing 
backlog is, simply stated, the State Agencies (DDS) do not do 
their jobs. They do not develop medical evidence, and they base 
their decisions on scanty files. You've already heard this from 
Judge Bernoski and from Nancy Shor of NOSSCR, and from OHA 
Staff Attorney James A. Hill, so it should come as no surprise 
to hear it from a practitioner. See Ms. Shor's statement at 
page 4, listing five reasons why the evidentiary record at the 
State Agency DDS is often lacking. The DDS's also do not follow 
the law, despite what they've told the subcommittee in their 
position papers.
    Second, the Social Security Administration itself tacitly 
institutionalizes procedures designed to cause backlogs at the 
initial levels and forces claims up to the hearing level. 
District Offices, (with the exception of some on the East 
Coast, such as the ones on Long Island, where I practice) put 
major obstacles in the path of an attorney who even tries to 
represent a claimant at these levels, including the often 
repeated advice to the claimant that they don't need and 
shouldn't have an attorney until there is a hearing. SSA's Ms. 
Colvin's states that ``there is some anecdotal evidence that 
representatives wait until the hearing before submitting new 
evidence.'' However, our experience is that it is almost 
impossible for a representative to get involved in cases before 
the hearing level, and very difficult to track down a file \3\ 
while it is pending a hearing, and it is for that reason that 
representatives who have not been on the case since the 
inception, have no choice but to wait until the hearing to 
submit evidence.
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    \3\ Once a case is assembled at the District Office it is shipped 
off to the DDS--when exactly this occurs is a mystery. After the DDS 
acts, we are told, (but don't believe) the file is then shipped to 
Baltimore. If a hearing is requested, the request is filed at the 
District Office and then sent to the servicing hearing office; however, 
to meet local demands, judges are often brought in from other parts of 
the country, which means the files are shipped out of the area, and 
counsel cannot get access to them. I've had the unfortunate experience 
of submitting medical to the District Office, to have it returned with 
the notation the case has been decided, though we have no notice to 
that effect. I have submitted evidence to a local hearing office to 
have it returned on the grounds the file was not there. Two months 
later it turns out the file was there--and then the judge was upset 
that we took so long to submit the evidence that was now two months 
old!
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    What generally happens in Social Security Disability claims 
is that claimants appear at the District Office, a claim is 
taken, and then sent on to the State Agency to process. 
Claimants, and probably most people on your subcommittee, 
believe that the DDS goes about gathering the medical evidence 
for the claim. (See Ms. Colvin's statement at page 1: ``The 
State DDS requests medical evidence from treating physicians 
and other sources identified by the claimant.'' That's the way 
it's supposed to be anyway.)
    For twenty years I have observed that, at best, DDS will 
send some perfunctory forms to treating sources. These forms 
are either inadequate to allow the doctor to provide the 
information SSA really needs to adjudicate a claim, or are so 
long and involved that it is rare that any busy practitioner 
would have the time to decipher them and complete them. Lacking 
timely evidence, and to supposedly ``expedite'' the claim, the 
DDS sends the claimant to a volume provider of medical 
examinations for a substandard exam, and the claim is decided, 
usually adversely. Moreover, as pointed out by James A. Hill, 
``The payment rates of the screening units \4\ dem- 
onstrate that even using DDS standards, DDS decisions are 
incorrect a significant amount of time.''
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    \4\ These are units which re-review cases at the Reconsideration 
level, after a Hearing Request has been filed, but before the case is 
shipped to the Office of Hearings and Appeals. Using the same 
``standards'' as the DDS, they still find a great deal of error 
requiring reversal of DDS denials.
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    The process is repeated at Reconsideration, and then, and 
only then, after the claim has been twice denied and on its way 
to the hearing level is the claimant advised that he or she may 
want to secure counsel. Counsel goes about gathering all the 
medical evidence that you would like to believe should have 
been gathered by the DDS. Counsel presents the evidence to the 
judge, who based on that evidence, appropriately grants 
benefits under the law. For that reason alone the proposal to 
close the record before the hearing level is problematic. (Yet, 
this notion is embraced by at least one of the disability 
examiners, see statement of Larry Jacks at page 2, wherein he 
advocates closing the record after the DDS reviews the claim, 
but offers no supporting rationale for the suggestion.)

2. It's the Evidence, Not Standards that Causes the 
Discrepancy.

    In reading the position papers presented to the 
subcommittee, the great debate appears to be over whether the 
decisional differences between the DDS and the OHA is due to 
the use of differing standards or better quality evidence. DDS 
witnesses seem to be under the impression that ALJ's use widely 
divergent standards for the assessment of disability, and they 
don't appreciate that the evidentiary records compiled in their 
agencies are sorely lacking. Clearly, it's the evidence.
    My experience is not that there is a wide disparity between 
the standards imposed by the State Agency and the standards 
used by Administrative Law Judges. ALJ's are not push-overs, 
and not interested in simply giving benefits away, as the 
statistics may lead one to think. Come to a hearing with me, if 
you think these judges are giving away the store, you'll be 
readily disabused of that notion. Most of the ALJ's are quite 
tough.
    Nor are the OHA staff attorneys ``paying down the 
backlog,'' as James A. Hill has proven statistically. My 
experience is that there is a great deal more evidence before 
administrative law judges who are bound by case law and the 
regulations to help the claimant develop the record, 
particularly when the claimant is unrepresented. When the 
claimant is represented, most often the representative will 
develop the record. And, as Judge Bernoski pointed out, often 
the medical sources drag their feet in supplying evidence. I 
would like to believe it is because they have other matters of 
more pressing concern. Judges can and do subpoena records, 
attorney can and do badger the doctors until they provide 
what's necessary.

3. Some Actual Case Studies:

    I have ample evidence from my own practice to demonstrate 
that a disability claim need not be a long drawn out process 
and that most cases would not have to go to hearing if 
representation was involved at the early stages.
    My office handled 88 cases which were resolved at the 
initial application level in 1996. These are not necessarily 
cases RETAINED in 1996, only cases RESOLVED in 1996.
    Of these cases, the average length of time between the date 
retained and the date resolved (date of the wage earner's award 
notice) is 5 1/2 months. This includes the time we spend 
developing our files so that the average amount of time between 
the actual filing of the application is substantially less than 
5 1/2 months.
    Let me tell you about a few of these cases:
    [a] Mark C. is a forty-one year old truck driver. He last 
worked on March 28, 1995 when he was severely injured in an on-
the-job accident. He consulted us about his Social Security 
case on September 23, 1996. We began to prepare and to 
investigate \5\ the case and filed his application on December 
12, 1996. On February 25, 1997, we received a favorable award 
certificate in his case. Total elapsed time--two and half 
months.
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    \5\ This consisted of obtaining files from his Workers' 
Compensation case files and from his personal injury case, visiting the 
Workers' Compensation Board to review their file, writing to his 
doctors and hospitals for their records, and obtaining a narrative 
report from his treating doctor and arranging a consultation with a 
specialist for a functional capacity evaluation. When and only when all 
of this was completed, and we were convinced of the validity of the 
claim, did we file the application for benefits. As officers of the 
court we view our duty as requiring reasonable investigation so that 
frivolous or fraudulent claims are not filed.
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    [b] Linda T. consulted us in October 1996. She was a fifty 
year old who had battled MS for many years, and finally had to 
stop working in June of 1996. We sent for her medical records 
and her vocational rehabilitation assessment. We had her 
examined by a neurologist to determine her functional capacity. 
In February of 1997 her application was filed. In April a 
favorable decision was issued. Elapsed time in the system was 
about 2 months.
    [c] Nilda C., our S96-0148, consulted us on March 7, 1996. 
We investigated her claim and had sufficient information to 
file her application as of April 1996. She was a fifty year old 
person with a ninth grade education, who had worked as an 
assembler for fifteen years. She suffered severe depression and 
left hip pain since August of 1995. Her date of entitlement, if 
she was successful, would be February 1996. The application 
that we filed on April 15, 1996, was favorably adjudicated on 
September 27, 1996, by the issuance of an award certificate. 
Social Security completed all the work on the claimant within a 
period of five months.
    [d] Jack T., (our S96-0328), was a chiropractor who became 
disabled as a result of post traumatic stress disorder 
following an accident in which several of his friends were 
killed. He became disabled in December of 1995, and consulted 
us in July of 1996, when his short-term disability benefits 
expired. It was too early to file a claim for disability as we 
could not determine whether his disability would last for 
twelve months. We began to gather medical evidence and in 
September of 1996, decided to file his application. The 
application was filed on September 18 and denied on October 
10th. (Three weeks!) Reconsideration was filed on November 8 
and that was denied on December 12, 1996. (Five weeks!) Jack 
had been disabled only for a year at this point, and the denial 
by the state agency at both levels was not unreasonable 
considering the fact that the claimant had hardly met the 
duration requirement.
    The total adjudicative time for Jack's claim was September 
18, 1996; the initial filing, to the hearing decision of 
January 14, 1997--approximately four months. Hardly a long 
drawn out appeals process.
    The case also points out why so many cases would be denied 
at the state agency level, that are obviously grants at the 
Administrative Law Judge level. Many of these cases have not 
yet met the duration requirement and DDS personnel are 
reluctant to presume disabilities will persist for twelve 
months, the statutory requirement. DDS examiners have no 
crystal ball; some people do get better and yes, some get 
worse. Had I been an employee of the DDS, I too, would have 
been reluctant to grant benefits on this case. However, by the 
time the case reached the Office of Hearing and Appeals, it had 
aged appropriately, and the award of benefits was warranted.
    [e] Robert J. H. (our file S96-0487) first consulted us on 
November 5, 1996. We investigated his workers' compensation 
file and found sufficient enough medical evidence upon which to 
base the filing of an application. The application was filed on 
November 15, 1996. Robert had become disabled as a result of 
and on-the-job injury involving his back, right leg, and right 
foot. On April 26, 1997, the Social Security Administration 
issued a fully favorable decision once the claimant had reached 
the one-year threshold.
    Apparently SSA refrained from making a decision until the 
claimant had attained the duration requirement. Shortly after 
his disability met the one year mark, a fully favorable 
decision was issued, presumably once they had verification that 
the claimant remained disabled for twelve continuous months.
    The favorable decision was issued a mere five days after 
the one-year anniversary of disability.
    As Ms. Colvin observes on page 6 of her prepared statement: 
``....cases denied by the DDS based on expected improvement in 
the claimant's condition within 12 months of the onset of the 
condition are allowed by the ALJ because improvement has not 
occurred since the DDS determination.'' (However, if anyone 
thinks that remanding of these cases back to the DDS as 
envisioned in process unification will speed up claims, they 
are misguided. It can't possibly do anything but slow down the 
process by bouncing files back and forth. Since an ALJ makes a 
de novo (fresh) determination, why shouldn't the ALJ be able to 
consider that the DDS was right at the time it made its 
decision, but that subsequent events have changed the picture?)
    Merely because we take a case in at the initial application 
level, however, does not mean that it will be granted at that 
level. Some cases do require the intervention of judges or the 
accumulation of medical evidence over a period of time in order 
to prove that the disability will be longstanding and 
continuous.
    [f] Consider the case of Mei Shi L., our S96-0280. We were 
retained in this case on June 11, 1996. We filed our 
application shortly thereafter, on July 2, 1996. This 
application was denied on September 5, 1996. That is within two 
months. We think that any charge of unnecessary delay by Social 
Security or the DDS is simply not supported by the speed in 
which this case was initially adjudicated. We immediately filed 
a request for reconsideration and that was adjudicated on 
October 29, 1996.
    It is important to note that the claimant's date of 
entitlement was January 1996 based on disability beginning July 
1995. A hearing request was filed and adjudicated by an 
Administrative Law Judge on March 18, 1997--within nine months 
of the initial application filing. As you can well appreciate, 
the speedy adjudication of this claim made it possible to limit 
attorneys fees to only $970 out of the claimant's past due 
benefits.
    Unfortunately, upon review of the award certificate, it 
became apparent that Social Security miscomputed the Workers' 
Compensation award and it was the award certificate that had to 
be appealed, but this is not something that goes to the merits 
of disability.
    [g] Gary L. was a forty-two year old police officer who had 
sustained serious injuries to both of his legs. However, 
because of his age and vocational profile, skilled work and 
education (a B.S.) this was not an easy claim for disability.
    Gary alleged disability as of July 1995. He consulted us in 
April of 1996, and we began collecting medical evidence at that 
time. The filing of an application at that point in time would 
have been premature in our view, as the claimant could quite 
possibly have recovered within a year. The nature of his 
condition was either that he was going to recover or probably 
become worse.
    By July of 1996, we determined that the claimant had not 
yet recovered and we filed an application. The state agency 
acted on this application in less than two months, issuing a 
denial. Reconsideration was filed in November of 1996 after 
reevaluating the case and obtaining more evidence to see if the 
claimant still, in fact, was disabled. The denial was issued 
within a month. We do not think the DDS dragged its feet. Nor 
could we convincingly argue that in light of the vocational 
issues in this case, DDS necessarily should have granted the 
case. This was the type of case which should have gone on to 
additional scrutiny to consider the impact of the limitations 
on the claimant's vocational capacity.
    The case went to the Office of Hearing and Appeals and 
after a conference with a staff attorney, at which the 
additional issues were explored in depth,\6\ benefits were 
approved for Gary. The decision was dated January 17, 1997. 
Gary's case was in the system for a total of six months. We do 
not think Social Security in any way dragged its feet. The 
claimant did have a severe condition, there was a question at 
the outset of duration, and there was a very significant 
vocational issue to be considered in this case. By the time the 
case reached the hearing level, it became clear that the 
claimant's condition approached, but did not meet the listings. 
Additionally, it was very difficult getting information from 
the claimant's treating physician. However, by the time the 
case reached the Office of Hearing and Appeals, we did have the 
necessary information from the treating physician, which 
buttressed information from consultants, to whom both we and 
the Social Security Administration had referred the claimant.
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    \6\ This largely supports the observations by James Hill referring 
to the success of the Senior Attorney program at the Office of Hearing 
and Appeals, which permits experienced Senior attorneys to screen out 
the obvious cases, and issue favorable decisions. Generally, these are 
cases that should have been granted by the State Agency, had the law 
been followed. (See Hill at page 8.)
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    [h] The case file of Police Officer Daniel R. is an 
instructive one on two counts. First of all, it shows how 
quickly a case can go through the system. Second, it shows that 
despite state agencies claims that they have far more medical 
sophistication than an Administrative Law Judge, experience has 
shown the opposite to be true. Dan was a forty-two year old 
police officer who stopped working in January 1995 due to 
cardiac symptoms. He suffered idiopathic cardiomyopathy with a 
markedly depressed ejection fraction of 15%. This condition far 
surpassed the criteria of the listings of impairments. Dan was 
a very disabled man. Somehow, the fact that this man's 
condition objectively met the listings escaped disability 
examiners and state agency review physicians at the initial 
level, and at the reconsideration level. Dan's disability claim 
was filed on February 14, 1996. This was approximately a year 
and a month after he had become disabled. He clearly had met 
the duration requirement. Nonetheless, the state agency denied 
his claim on June 4, 1996. Reconsideration was filed and was 
denied on July 15, 1996, (within six weeks).
    A hearing request was filed on July 23, 1996, and this case 
was resolved by favorable decision on the record, as it should 
have been, on September 20, 1996. Dan's case was in the system 
for approximately seven months from application to hearing. 
Again, although this claim probably should have been paid at 
the time of the initial application, the appeals process worked 
quickly enough so that one would be hard pressed to state that 
the adjudication of this claim was unduly prolonged.
4. The Myth that ALJ's Are Not Medically Trained.

    I take great issue with the insinuation by Debi Gardiner of 
the National Organization of Disability Examiners to the effect 
that ALJ's are not sufficiently grounded in the knowledge of 
medically acceptable diagnostic techniques to make supportable 
determinations, and instead exercise uncritical acceptance of 
medical opinion. That is not, and has not been, my experience 
over a twenty year career in which I have appeared before 
approximately 150 different Administrative Law Judges from all 
over the country. The statement that these judges are not 
medically trained is at best preposterous, and amounts to 
nothing more than judge bashing.
    In the first instance, many of the hearings have medical 
advisors present; \7\ second, some of the judges are 
experienced trial attorneys and know as much medical evidence 
as do doctors. If anything, the state agency examiners appear 
to think they know more than do treating physicians.\8\ Thus on 
three separate occasions within the same case, I recently had 
to stop a local DDS examiner from trying to put one of my 
clients with severe hypokinesia of the heart, and two prior 
heart attacks, from taking an exercise stress test prohibited 
by his treating physician. The problem is not that ALJ's don't 
understand medical evidence, the problem is that disability 
examiners begin to play doctor after they've been in the job 
for a while and think they know more than the treating doctors 
do. State agency doctors rarely do more than sign off on 
perfunctory rationales prepared by examiners. Rarely does one 
find a probing intelligent analysis by a DDS doctor in a 
disability file.
---------------------------------------------------------------------------
    \7\ One commentator decried the fact that only 8% of ALJ favorable 
decisions resulted from hearings with medical advisors. Of course, this 
doesn't tell us how many denials resulted from the availability of a 
medical advisor. Also, a number of commentators, particularly, Jane 
Ross of the GAO, Carolyn Colvin of SSA, Judge Bernoski and Staff 
Attorney Hill have reported that the DDS medical analyses were 
routinely found to be poorly articulated, and lacking evidentiary 
support or rationale.
    \8\ Mr. Willman, apparently would give reports from treating 
physicians no weight at all.

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5. Misplaced Concern Over Attorneys Fees.

    A reading of the statements of Mr. Willman, and Mr. Jacks 
of the disability examiner community, clearly indicates their 
extreme displeasure with the attorneys role in the disability 
process. Mr. Jacks suggests that Congress should ``deregulate 
attorneys fees...SSA should not expend resources arranging or 
collecting attorneys fees.'' This issue had been debated before 
the Subcommittee last year, in connection with a similar 
provision in the Senior Citizens Right to Work bill. That 
provision was deleted by bi-partisan action in the Senate 
Finance Committee where members of both parties unanimously 
agreed that removal of the attorney fee collection mechanics 
would effectively deprive most claimants of representation. We 
need not revisit the debate here. We suggest that the 
disability examiners would like nothing more than to see 
claimants deprived of effective representation, which would, 
undoubtedly, negatively effect the number of OHA reversals and, 
as such, perhaps ``make the DDS folks look better.''
    As to the notion that attorneys' fees are unjustified or 
excessive, or that attorneys are ambulance chasing to bring in 
Social Security cases, I must again tell you about real cases:
    [i] My firm has represented Kurt H. since June 1, 1994. We 
filed an application on his behalf and finally resolved the 
matter on August 30, 1995, after going through three stages of 
the process. The total attorney fee in this case for some 
sixty-five hours of work on a file, approximately ten inches 
thick, was $2,798.75, or about $46.64 per hour. I doubt you 
could find an auto mechanic who would work for $46.64 per hour. 
(Doing away with contingency fees, for a client such as Mr. H., 
would have precluded his ability to obtain any representation 
whatsoever had he been required to pay an hourly rate on a pay-
as-you-go basis.)
    [j] Roseanne G. was a forty-nine year old woman who had 
worked as an electronics assembler and became disabled due to 
an on-the-job back injury. We took the case in May of 1990. We 
developed all available evidence and ultimately filed a claim 
on behalf of the claimant. This claim was denied initially and 
upon reconsideration, then by the Administrative Law Judge, and 
then by the Appeals Council. However, it was reversed in 
federal court. When all was said and done, we exerted 72 and a 
half hours on administrative level services, including 
extensive appeal and file development. The total fee on this 
case was $3,705, or about $51.11per hour.
    [k] Maria P. (our S96-0261) retained us in May of 1996. We 
obtained a favorable result by December 24, 1996. We put in 
approximately thirty-six hours on the case and our total fee 
was $92.50. You read it right. The claimant was significantly 
offset as a result of Workers' Compensation. Nonetheless, 
although we realized this at the outset of the case, we still 
accepted the case in order that the claimant's rights could be 
protected.
    As you might have gathered, we do not look to see how much 
of an ultimate fee a case will pay, we look to the merits of 
the case in deciding whether to represent the claimant.

6. Re-examination of the Role of an Attorney in the Disability 
Process.

    We interview a great many people. We only accept a small 
portion of these prospective clients for representation in 
Social Security Disability matters. (Maybe 20% of those we 
interview.) We screen out most of the claims, not by 
discouraging people from applying, but by suggesting 
alternatives. So many people come to us who are fearful of 
working because they might lose their Workers' Compensation, 
yet they are not disabled enough for Social Security 
Disability. We explain to them that New York has a reduced 
earnings statute under Workers' Compensation which allows them 
to work and still get partial Workers' Compensation for any 
disparity in earnings. Others we refer to the State Division of 
Vocational Rehabilitation. We take very seriously the 
responsibility of supporting someone's notion and encouraging 
someone's notion that they are in fact ``disabled.'' Much like 
the members of the Subcommittee, we too believe that people who 
can work should and that Social Security disability is an 
extraordinary remedy for extraordinary circumstances. Along 
with all of you, we are very concerned about clogging the 
system with cases of dubious merit. It simply delays 
disposition of the meritorious cases; moreover, it doesn't 
bolster our credibility before the agency or before Congress.
    One of the problems that plagues the disability process is 
the apparent perception that the attorneys and the agency are 
in an adversarial position to each other. It is a perception 
which is more that of the agency, than the organized bar. It 
causes great delay and other problems in administering the 
program. From observations made at the oral hearing before the 
Subcommittee, I gather that there are those on the subcommittee 
who do not appreciate the role the bar can play to expedite the 
disability process if only we would be permitted to do so. The 
role of an attorney in the Social Security Disability process 
should mirror what attorneys do in society. Think of your own 
legal needs. Many of us consult attorneys as a preventative 
measure, not for the purpose of litigation. We consult 
attorneys for counsel, for advice, for help by preparing our 
contracts and agreements, and for formulating our legislation. 
We utilize attorneys in every facet of our lives, and 
businesses, and yet most attorneys rarely, perhaps never, need 
to see the inside of a court room.
    I would suggest that the role of attorney in a Social 
Security case should be first and foremost to investigate the 
claim.
    (1) An attorney should determine that it is a legally 
viable claim. That does not necessarily mean that the claim is 
a winner, but attorneys should screen out claims that don't 
belong in the system--at least as a preliminary screening.
    (2) In advising a claimant, the Social Security law is 
complex. One needs to know issues such as Workers' Compensation 
offset, tax consequences, insured status, what the effect would 
be if the claimant chooses a later onset date than merely 
trying to win benefits based on a date last worked (which may 
not be supportable). The effect of Social Security benefits on 
other benefits claimant may be receiving such as long-term 
disability insurance or pensions, and issues such as taxability 
or the effect of an SSD award on a matrimonial or an ADA 
action.
    These are complex legal questions, and it is unlikely that 
any disability case manager will ever have the answers to these 
types of questions. Certainly, most claimants cannot, at 
present, get these answers from Social Security. Social 
Security can certainly answer questions about Social Security, 
but they cannot answer questions about the ramifications that a 
Social Security Disability award has on other legal rights and 
entitlements. These are legal questions requiring legal 
knowledge of other areas of law. Did you know, for example, 
that we have had to counsel to withdraw claims because of 
taxable consequences would have exceeded the amount of the 
award?
    The attorneys role should be to help the claimant produce 
the evidence and then to file an application--not to stuff 
undocumented applications into an already overburdened system 
and not to come in late in the game at the last minute to try 
to resurrect a claim that could have been granted early on in 
the process with similar intensity of effort. One of the 
reasons that the system is bogged down is because there are 
many applications filed which should never have been filed in 
the first place. Social Security rushes people into filing 
applications. Private carriers rush people into filing 
applications. Doesn't anyone investigate these applications to 
see if they are at least colorable claims? That should or could 
be the role of the bar.
    The key to all of this is a contingency fee system. If we 
allow attorneys to be paid only when the claims are successful, 
then the attorneys will have every incentive to thoroughly 
develop the cases and to make sure ``clunkers'' don't get in 
the system. If we stop putting false barriers in the way of 
attorneys representing people at the initial application level, 
and if process unification truly works, as it should, then you 
would see more claimants getting paid on the application and 
fewer claimants being paid at the Administrative Law Judge 
level. One, there will be fewer claimants going to the hearing 
level and, two, the claims that do need to go, will have 
already been developed. Those claims will be the ones that rise 
and fall in close legal questions or vocational issues, 
extremely complex medical issues, and credibility issues.
    Because we are bound by the ethical rules of conduct which 
apply to all attorneys, we are duty bound to remove from the 
system claims of doubtful veracity.
    [l] For example, on October 8, 1996, we were retained by 
Mr. Albert W. in connection with a possible claim for Social 
Security Disability benefits. We began to represent Mr. W. and 
based on the evidence that we were able to obtain, it appeared 
that Mr. W had a viable claim. We, therefore, filed his 
application. While that application was pending, we continued 
to develop evidence which led us to conclude Mr. W. was not 
disabled. Based on that evidence, we withdrew the claim for 
disability.
    The risk of developing the claim was ours, not SSA's, and 
the responsibility for withdrawing the claim was also ours. SSA 
didn't have to waste time adjudicating a claim that we withdrew 
on the merits. We have withdrawn hundreds of claims, when the 
facts did not support them, or we felt there was even a 
suggestion of fraud on the claimant's part.\9\
---------------------------------------------------------------------------
    \9\ Our incentives for keeping fraudulent and dubious claims out of 
the system should be obvious: (1) We are taxpayers and stakeholders in 
the system too; (2) We are officers of the court and by implication the 
agency, sworn to uphold the law; (3) We are subject to suspension by 
SSA, censure and even disbarment; (4) An attorney is bound to avoid 
even the appearance of impropriety; (5) Allowing phonies on to the 
rolls makes it harder for the legitimately disabled people we 
represent; (6) Promoting a fraudulent claim is a felony; (7) Our 
interest is in promoting a stable disability system, as our own 
livelihoods, in part, revolve around the stability of the system; and 
(8) It is important for us to maintain our credibility before SSA and 
the ALJs.

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7. The Danger of Closing the Record.

    As we have discussed above, the evidentiary record 
established by DDS offices for unrepresented claimant's is 
usually scanty, often for reasons beyond the control of DDS. It 
is often only the clout of an attorney or a judge that can 
compel the doctors to produce records. Second the manner in 
which SSA bounces files around from one component to another 
also makes it difficult for evidentiary submission to reach the 
person adjudicating the file. (Hopefully some of SSA's re-
engineering initiatives will deal with these problems. The re-
engineering model certainly recognizes and appreciates the 
depth of the problems.) To close the record before the hearing 
will essentially preclude most claimants from producing any 
evidence at all, so they will have no option but to lose at the 
hearing. Then they will file new claims, and the system will be 
even more clogged than it is now, as Nancy Shor has observed in 
her statement pages 4 & 5.
    Another danger in closing the administrative record at any 
time prior to the hearing level is that the claimant may 
actually recover from the disability. If Administrative Law 
Judges are restricted to a review of only the record available, 
the DDS in such cases, they may be constrained to award ongoing 
disability benefits rather than closed periods of benefits only 
through the date of the claimant's recovery. If the record is 
closed and additional evidence is not allowed in, it is 
possible that Social Security will be paying on-going benefits 
to many people whose claims should merely be closed periods. 
One of the reasons that Social Security has such a terrible 
backlog is that all components of the agency are too quick to 
deny, rather than to determine that all the claimant is really 
seeking is a closed period.

8. DDS Perspective is Biased.

    Some of Social Security's re-engineering models suggested 
the State DDS would be eliminated as part of the disability 
process. Understandably, the DDS community is afraid their jobs 
could be eliminated. As a result, they have made unprecedented 
attacks upon all other components of the Social Security 
process, particularly the judges and the claimants' 
representatives. I do not believe they have given an accurate 
depiction of what is wrong with the disability process, and 
there is plenty wrong.
    The problems start at the inception of the process. SSA's 
re-engineering model recognizes this. The ALJ's recognize it. 
Nancy Shor recognizes it. Even the DDS witnesses recognize it. 
However, it is interesting that no representative of the 
Disability Examiner community understands the grave legal 
implications of an institutionalized non-acquiescence policy as 
recently announced by SSA in one of its much touted recent 
rulings. Debi Gardiner, of the National Association of 
Disability Examiners, and Mr. Willman applaud SSA's ruling that 
it will disregard Circuit Court decisions. This position 
clearly backs up Judge Bernoski's (and my) assertion that State 
Agencies routinely disregard the law.
    The proposal for a Social Security Court seems to be 
something supported by disability examiners, but by no one else 
in the process. Why do we need to set up an expensive new 
bureaucracy to do what Federal Courts have been doing well, and 
inexpensively, for the last forty years?
    As Nancy Shor stated, ``Given the wide variety of cases 
they adjudicate, federal courts have a broad background against 
which to measure the reasonableness of SSA's practices.''
    The Social Security Bulletin's Annual Statistical 
Supplement for 1996 establishes that in 1985 only 9076 new 
Social Security cases were filed in federal courts at a time 
when over 588,596 hearing requests were filed. This averages 
out to 182 cases per each state.
    This means that the total number of court cases amounted to 
less than 2% of the total hearing load. That year, Federal 
Courts decided 6867 cases of which only 673 were reversed, 
(about 10%). If the notion of limiting Federal Court 
jurisdiction is based on the premise that the Federal Courts 
have too many SS cases and are reversing too many; such is 
clearly not borne out by SSA's own statistics. Only a very 
small number of cases are appealed into the Federal Courts, and 
of that, even a much smaller number are reversed.
    In 1996 there were 630,000 hearing dispositions. Comparing 
673 Federal Court reversals to total administrative 
dispositions shows that only about 1/100 Federal court cases 
result in a reversals vis-a-vis total administrative 
dispositions.

                               In summary

    I agree with Judge Bernoski, that the extent to which there 
are two different standards utilized between the DDS and the 
ALJs, is a phenomenon of agency creation, in that the Social 
Security Administration has permitted the State agencies to 
disregard the law, and instead decide claims on the basis of 
the POMS and other unpublished, and illegal guidelines. Like 
other commentators, I do expect process unification training to 
obviate this issue to a significant degree.
    I also agree with Judge Bernoski that the ALJ's review 
quite a different evidentiary record, because the state 
agencies don't bother to develop the record and SSA basically 
places obstacles in the ability of claimants to secure counsel 
at the early stage. This sentiment was echoed in the statement 
of Nancy Shor to the effect that: ``Very often the files that 
claimants with denials from the reconsideration level coming to 
our members show how little development was done at the initial 
and reconsideration levels. Until this lack of development is 
addressed, the correct adjudication of the claim cannot be 
made. Claims are denied not because the evidence established 
that the person is not disabled, but because the limited 
evidence cannot establish that the person is disabled.... a 
properly developed file is usually before the ALJ because the 
claimant's counsel has obtained evidence or because the ALJ has 
developed it.''
    Judge Bernoski and James A. Hill and other commentators 
including the DDS people are all correct when they point out 
that the recent process unification initiative should help 
narrow the gap between the ALJ allowances and state agency 
adjudications, if, and only if, the state agencies follow the 
unified standards.
    Nancy Shor's statement that ``changes made at the 'front 
end' of the process can have a significant, beneficial impact 
throughout the hearings and appeals backlogs,'' also is 
entirely correct and borne out not only by my personal twenty 
years of experience, but also by the thrust behind the redesign 
proposals--proposals which are receiving more resistance from 
within SSA than from the outside. This is echoed in Mr. Hill's 
observation that State Agencies fail to ``provide adequate 
written explanation for the decisions'' and fail to 
``adequately develop cases....''
    Expediting the process may not require massive 
reengineering, it may simply require SSA to use rules and 
regulations which they've had for years but have steadfastly 
ignored.
    Encouraging representation at the earlier levels rather 
than discouraging it, could significantly impact the backlog at 
the hearing level, and help foreshorten the wait at the hearing 
level. Clients will benefit by paying lower attorney fees, as 
cases get resolved more quickly. Attorneys benefit because they 
would have more rapid case turn around. Contrary to 
conventional wisdom, we don't make more money as a case drags 
on, we make less per each hour of additional work. Attorneys 
are better off with high turnover and happy clients who refer 
more clients, not with unhappy clients who waste the attorneys 
time with incessant telephone calls about ``what's hap- 
pening with my case'' and think the attorney, rather than the 
system is delaying their cases. SSA would benefit by having 
lower processing times, and having cases be reviewed that much 
sooner. Some readers may take the position that I am merely 
trying to bolster the employment of attorneys. In response to 
that I argue:
    1. My proposals result in lower attorneys fees for 
claimants;
    2. My proposals result in privatizing, at no cost to SSA, 
much of the file development chores which are time consuming 
and expensive;
    3. My proposals would be unnecessary if the DDS did their 
job.
    4. I am for the following:
    (a) discouraging premature claims that clog the system;
    (b) screening out of cases of dubious merit;
    (c) quicker resolution, by better development;
    (d) providing the DDS with better and more complete 
evidentiary records so that they can do their job of 
adjudicating in a quality manner and concentrate on 
adjudicating rather than chasing after evidence.
    (e) paying the obviously meritorious claims as early in the 
process as is possible.
    In my own practice, I have (not without battling certain 
obstructionists within the Social Security Administration and 
Office of Disability Determinations) achieved these goals. I 
believe they can be achieved nationwide without massive re-
engineering, threatening the jobs of state agency DDS 
personnel; or unduly clogging the system with unnecessary 
repeated re-applications for benefits. I firmly believe that if 
all components to the disability process (SSA, DDS, OHA, and 
the bar) concentrate on what they do best, and stop the back 
stabbing, the entire process will function with the high degree 
of efficiency that Congress envisions when it enacts Social 
Security legislation.

            Respectfully submitted,
                                         Victor Fusco, Esq.

                                

                                          Mooney & Park    
                               The Nathaniel Ropes Building
                                                        May 6, 1997

A. L. Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Bldg.
Washington, D.C. 20515

    Dear Sir:

    I am responding to the invitation for public comment on the 
following: The current status of OH&A workloads; their impact on 
service to the public; Social Security's initiatives for addressing 
those workloads, including how the system can be improved, and; 
timeliness and consistency issues with respect to SSA disability 
decisions. I am submitting these comments on my own behalf, the 
statements do not necessarily represent the position of any of my 
clients or other persons.
    By way of background, I have been an attorney for 25 years, I 
represented my first Social Security client in 1974 and have practiced 
almost exclusively in the Social Security disability area for the last 
7-8 years. I'd like to add that I am consistently impressed with the 
competence, intelligence and dedication of the employees of the 
government who process disability claims--if there is a problem it is 
not due to ``lazy bureaucrats.''
    The major focus of the hearings, apparently, is whether the current 
hearing and appeals system makes sense. I believe with some fine 
tuning, the existing system could be made to work much more efficiently 
with the result that decisions could be made more quickly and 
accurately, thus benefiting both claimants and the government.
    The initial problem with the existing system is that, while there 
are two separate methods of qualifying for disability benefits, Social 
Security only uses one of those two methods at the application and 
reconsideration levels. The two methods of qualifying for Social 
Security disability are: 1) establishing the individual has a physical 
or emotional impairment that is so severe that it has been ``listed'' 
by Social Security as automatically qualifying an individual for 
benefits. The Social Security regulations contain numerous such 
``listed'' impairments. Assuming an individual does not meet a 
``listing'' then, 2) they must demonstrate that the limitations caused 
by their emotional and physical impairments, either separately or in 
combination, make it impossible to do their former work or any other 
work.
    As may be obvious, if only one of two methods of qualifying for 
disability benefits is considered at the application level and at the 
reconsideration level (the first level of appeal) then many claims that 
otherwise would be granted are denied. Thus, the first change to the 
existing system that should be adopted would be to instruct the 
decisional apparatus at the application and reconsideration levels to 
consider whether an individual qualifies under the second method of 
establishing disability and to provide adequate training and support so 
that they are knowledgeable as to how to apply that second standard.
    The second recommendation for modifying the current system would be 
to simply eliminate the reconsideration level. In my experience this is 
basically a useless step which results in precisely the same decision 
being made for precisely the same reasons by the same people who denied 
the initial claim. All it really does is slow the process up.
    The third recommendation for making the first two steps of the 
process more efficient would be to require the individuals preparing 
the decision on the initial application to actually describe to the 
applicant's treating physicians what the Social Security standard for 
that particular disability is. For instance, if an individual has a 
severe heart impairment, Social Security now asks for the treating 
physician's records. Remarkably, however, Social Security will not send 
the doctor its definition (its ``listing'') of when a heart impairment 
is bad enough to qualify for benefits or ask the doctor whether his 
patient satisfies that definition. Thus, on the key issue of whether an 
individual satisfies Social Security's disability standard for heart 
conditions, the one physician in the best position to provide an 
accurate answer, the patient's treating physician, is never asked that 
question. Instead, his records are sent to Social Security doctors who 
have never met the patient, and have no familiarity with his long-term 
history, and those individuals, based purely on a review of paperwork, 
determine whether or not the standard has been met.
    When claimants visit my office for representation, one of the first 
things I do is send a copy of the listings for their particular medical 
condition and ask the doctor whether his patient satisfies that 
condition. I then forward that response to Social Security Judge 
assigned to the case who is often persuaded by the treating doctor's 
rationale for concluding the patient does satisfy the listing standard 
and grants benefits. Why should the claimant have to hire an attorney 
to seek this important information and why couldn't this information be 
obtained by Social Security at the early stages of the claim thus 
avoiding the one year delay in granting benefits while the case is 
appealed and then pends at the ALJ level for a decision?
    Neither of the above two changes are radical and could be adopted 
with much less effort than the various wholesale proposals currently 
under consideration. They would also do much to bring a prompt 
resolution of the claim and, if an appeal to an ALJ follows, these 
changes would do much to bring down the reversal rate by ALJ's which, 
as described, is in significant part a result of the ALJ having more 
relevant evidence as well as being able to use the second method of 
granting disability benefits.
    When assessing the current system's efficiency, please remember 
that the various recent changes in the disability law are causing 
hundreds of thousands of claims to be re-decided e.g.: the new 
regulations for children's claims and drug and alcohol claims means 
that all of those cases which were decided in the past must now be re-
decided. In addition, the new disability standards must be mastered. 
This will inevitably cause delay but it would not be appropriate to 
fault the system for this.
    With regard to the suggestion that the ALJ hearing itself be 
modified in some fashion, I would strongly oppose that. Just as the 
expression ``A picture is worth a thousand words,'' is commonly 
recognized as true, a personal appearance is worth ``a thousand 
pictures.'' That is, when a claimant actually appears before an ALJ, it 
is the first time in the 1-2 year history of a claim that anyone in a 
position of deciding the claim actually has seen the claimant. Such in-
person experience in extremely educational. A medical record cannot 
convey any of the following:
     The fact that a 40 year old looks 85.
     The fact that a claimant has great difficulty 
understanding even basic questions and cannot recall simple facts, 
including his birthdate.
     How severe the personal experience of pain is for an 
individual claimant.
     How humiliating it is for a claimant to have to apply for 
disability after years of self-sufficiency and self-support.
    All of these and thousand of others bits of information are 
presented directly, and indirectly, by a personal appearance at an ALJ 
hearing. In addition, the claimant has the opportunity to have a 
dialogue with the ALJ, to answer his or her questions, to explain 
inconsistencies in the record, to describe details of his condition 
that have escaped the evaluations done by Social Security doctors in 
their 15 minute, one-shot consultative exams. Because it is a dynamic 
process with much give and take, the ALJ hearing is the best method of 
gathering evidence, processing that evidence, learning about the 
claimant as an individual, and understanding the dimensions of his or 
her physical and mental impairments. Therefore, the ALJ hearing should 
be preserved in its entirety.
    Unlike many of my colleagues I am not a strong believer in the 
Appeals Council as a source of review of ALJ decisions. Currently, it 
takes the Appeals Council 18 months to review claims and virtually 
every appeal I have made in the last two years has been denied anyhow. 
Given the enormous delay and the fact that, at this point, the Appeals 
Council is simply rubber stamping its approval of all ALJ denials 
without any critical review, it would seem that this method of review 
could be eliminated without any denial of fairness to claimants.
    Also, unlike some of my colleagues, I would strongly support the 
establishment of a Social Security Court to review decisions. This is 
currently being done in the veterans' disability area and I have 
practiced before the Court of Veterans Appeals on numerous occasions. 
The contrast between appealing a VA disability case to COVA and 
appealing a Social Security case to District Court or to a Circuit 
Court is striking. The COVA Judges and staff are extremely well 
informed as to the law, it's nuances and precedents, and have a global 
view of how the system should work. District Court Judges and Circuit 
Court of Appeals Judges are, by and large, entirely uninformed and 
uninterested in Social Security and are entirely unenthused about 
hearing ``yet another'' Social Security Disability claim. I do not 
believe the current federal court system provides meaningful review of 
Social Security decisions and, therefore, would actively support its 
abolishment and replacement by a specialized review court hearing only 
Social Security claims. Such a court would have to be adequately 
staffed, however, to handle the sizeable workload that would be 
expected. Otherwise the change would be meaningless.
    It would also be a mistake to close the record to new medical 
evidence prior to the ALJ level. The result of this will simply be 
numerous re-applications, as the ALJ's decision will not be based on 
all of the medical evidence. The proposal that new evidence would 
trigger a remand from the ALJ for consideration by the initial 
reconsideration staff is similarly flawed. It would cause enormous 
delay as the file bounced back and forth between the lower level and 
the ALJ level. A similar system is currently used by the VA and is a 
constant barrier to reaching a prompt final decision (which frequently 
takes 4-6 years).
    With regard to the proposal for own motion review of favorable ALJ 
decisions, this can only produce cynicism about the decisional process. 
If accurate decisions are the goal of the change, then review of 
unfavorable decisions should be mandatory. Otherwise, the obvious 
message to claimants is that they are playing with a deck stacked to 
increase their odds of losing.
    Thank you for taking the time to consider these comments. I will be 
happy to provide any additional information deemed relevant.

            Sincerely yours,
                                          Michael J. Mooney

MJM/jrr

CC: Congressman Robert J. Portman
      Nancy Shor

                                

Statement of Larry Jacks, Division Leader, Public Employees Federation, 
Office of Disability Determinations

                 The Social Security Disability Program

             Sensible Solutions to Restoring Program Intent

    While understanding Congressional reluctance to micro-
manage a huge Federal agency such as the Social Security 
Administration (SSA), we are very appreciative of recent 
Congressional interest and efforts to restore efficiency and to 
maintain the integrity of the Disability Program.
    Everyone agrees that the present processing time at the 
Office of Hearings and Appeals (OHA) is unacceptable. Short 
term initiatives have reduced the OHA backlog from 547,690 at 
the end of FY 1995 to 503,481 at the close of FY 1996, but this 
is still far in excess of the 172,756 cases pending at OHA as 
recently as 1990. Most of the reduction was achieved by 
reallocating experienced SSA personnel, in effect robbing Peter 
to pay Paul, rather than a true long term solution.
    SSA has had a Re-Design plan since 1994. We agree with many 
of its goals, but unfortunately many elements of the Plan have 
had very limited value. The Re-Design has the following current 
priorities:
    1. Adjudication Officer (AO).
    2. Single Decision Maker (SDM).
    3. Full Process Model (FPM).
    4. Disability Claims Manager (DCM).
    5. Process Unification.
    6. Quality Assurance.
    7. Simplified Disability Methodology.
    8. Computer Systems Development.
    SSA recently decided to expand the number of AO's even 
though it concedes that the expected production levels have 
never materialized and probably never will. The SDM and FPM are 
precursors to the DCM position that is the cornerstone of the 
Re-Design Plan. SSA has persistently ignored concerns from SSA 
employees, DDS's, and its own Advisory Council Members, that 
the DCM is too grandiose to be workable.
    The ``Simplified Disability Methodology'' has shown very 
little progress. This is not surprising because ``simplifying'' 
increasingly complicated fields like law and medicine will 
never be easy.
    SSA has tried to achieve some measure of Process 
Unification, and had national training for both OHA and DDS 
personnel. This was a useful introductory step, but does not 
seem to have had any dramatic effect on either level. At some 
of the sessions, ALJ's announced that they had no intention of 
following SSA's recommendations regarding assessment of 
Residual Functional Capacity, weighing evidence, and paying 
careful attention to medical analyses provided by Review 
Physicians at the DDS. These ALJ's were adamant and insisted 
they would follow court interpretations and holdings rather 
than be bound by SSA's nationwide policy.
    SSA would like to include in-line as well as end of line 
reviews in its Quality Assurance process, but has not piloted 
this in any efficient way. We remain concerned that under the 
Re-design Plan, SSA will not automatically return deficient 
cases and erroneous decisions for corrective action. Instead, 
it will simply tabulate the data for training purposes. We 
strongly object to any agency knowingly implementing incorrect 
decisions.
    Re-Design also suffers from changing management. The four 
principal officials responsible for the Re-Design have now left 
SSA. The new Director of Re-design candidly admitted that she 
had little experience with Re-Design, and was unfamiliar with 
its particulars. A project of this scope requires consistent 
leadership.
    We need to look beyond the Re-Design plan of SSA and 
envision what sensible changes are required. It was never 
Congress's intent that 85% of claimants at the OHA level would 
need attorney representation, or that the process would be so 
delayed and expensive to both claimants and taxpayers, or that 
two inconsistent standards of adjudication would be allowed to 
evolve. There are steps we can take that will get the Program 
back on track and keep it there:
     Create a Social Security Court to provide uniform 
review of SSA decisions and consistent interpretations of 
regulations, replacing the current system of 89 Federal 
District Courts and 13 Circuit Courts each issuing disparate 
decisions.
     Revise the Administrative Procedure's Act to give 
SSA the requisite authority to manage the OHA's, including an 
effective quality assurance system for ALJ's. This was 
highlighted in GAO report GAO/HE'S 96-87.
     Clarify the adjudicative weight given objective 
evidence vs. subjective elements such as allegations, treating 
source opinions. This would help achieve authentic Process 
Unification between the DDS's and ALJ's.
     Congress should provide a uniform standard for 
reviewing decisions. A legislated ``preponderance of the 
evidence'' standard would help ensure uniform decisions at all 
levels.
     SSA and OHA must address the lack of input by 
program trained physicians at the OHA level and the lack of 
medical training for ALJ's.
     SSA should better identify optimum caseloads for 
DDS examiners and ensure that necessary resources are available 
to DDS administrators.
     Close the case file after DDS actions are 
completed, unless there is good cause for late submission of 
these reports. This should decrease the incidence of 
individuals withholding relevant medical evidence which causes 
further backlogs at OHA.
     Remand targeted OHA cases to DDS's.
     Deregulate attorney's fees for disability 
representation. SSA should not expend resources arranging or 
collecting attorney fees.
     In the event that these steps are insufficient, or 
meet with excessive resistance, we recommend that the Committee 
revisit the testimony of former Social Security Commissioner 
Lou Enoff (8/3/95), in which he recommended placing the initial 
decision and the hearing decision within the DDS with the use 
of an ombudsman to safeguard the applicants. This would combine 
more consistent and timely decisions with protection for the 
claimants.