[Senate Hearing 114-424]
[From the U.S. Government Publishing Office]
S. Hrg. 114-424
EXAMINING DUE PROCESS IN ADMINISTRATIVE HEARINGS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
REGULATORY AFFAIRS AND FEDERAL MANAGEMENT
OF THE
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
MAY 12, 2016
__________
Available via http://www.fdsys.gov
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
Christopher R. Hixon, Staff Director
Gabrielle A. Batkin, Minority Staff Director
John P. Kilvington, Minority Deputy Staff Director
Laura W. Kilbride, Chief Clerk
Benjamin C. Grazda, Hearing Clerk
SUBCOMMITTEE ON REGULATORY AFFAIRS AND FEDERAL MANAGEMENT
JAMES LANKFORD, Oklahoma, Chairman
JOHN MCCAIN, Arizona HEIDI HEITKAMP, North Dakota
ROB PORTMAN, Ohio JON TESTER, Montana
MICHAEL B. ENZI, Wyoming CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
John Cuaderess, Staff Director
Eric Bursch, Minority Staff Director
Rachel Nitsche, Chief Clerk
C O N T E N T S
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Opening statement:
Page
Senator Lankford............................................. 1
Senator Heitkamp............................................. 3
Prepared statement:
Senator Lankford............................................. 27
Senator Heitkamp............................................. 29
WITNESSES
Thursday, May 12, 2016
Theresa Gruber, Deputy Commissioner, Disability Adjudication and
Review, U.S. Social Security Administration.................... 5
Hon. Marilyn Zahm, Administrative Law Judge, Buffalo, New York,
Office of Disability Adjudication, and President, Association
of Administrative Law Judges................................... 6
Joseph Kennedy, Associate Director, Human Resources Solutions,
U.S. Office of Personnel Management............................ 8
Alphabetical List of Witnesses
Gruber, Theresa:
Testimony.................................................... 5
Prepared statement with attachment........................... 30
Kennedy, Joseph:
Testimony.................................................... 8
Prepared statement........................................... 69
Zahm, Hon. Marilyn:
Testimony.................................................... 6
Prepared statement with attachment........................... 57
APPENDIX
Chart submitted by Judge Zahm.................................... 68
Statements submitted for the Record:
Federal Administrative Law Judges............................ 74
Allsup, Inc.................................................. 77
National Organization of Social Security Claimants'
Representatives............................................ 83
Responses to post-hearing questions for the Record:
Ms. Gruber................................................... 89
Ms. Zahm..................................................... 103
Mr. Kennedy.................................................. 120
EXAMINING DUE PROCESS IN ADMINISTRATIVE HEARINGS
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THURSDAY, MAY 12, 2016
U.S. Senate,
Subcommittee on Regulatory,
Affairs and Federal Management,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:04 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. James
Lankford, Chairman of the Subcommittee, presiding.
Present: Senators Lankford, Sasse, Heitkamp, and Tester.
OPENING STATEMENT OF SENATOR LANKFORD
Senator Lankford. Good morning, everyone. Welcome to
today's Subcommittee hearing. Today we are going to look at
several issues surrounding administrative law judges (ALJs),
their independence, and the importance of due process as
provided by the Administrative Procedures Act (APA). The APA
validates due process principles through the guarantee of an
administrative hearing before an independent decisionmaker.
These independent and impartial decisionmakers are most often
administrative law judges.
The office of the ALJ is unique in our Federal Government.
Although they are like Federal judges in the sense that we
expect them to preside over formal administrative adjudications
independently, ALJs are, in fact, executive branch employees
selected by the Office of Personnel Management (OPM) to oversee
adjudications as required by law. Though ALJs are spread
throughout the executive branch, our focus today will center on
ALJs from the Social Security Administration (SSA), as they
employ the largest number of Federal ALJs. ALJs are hired
through the Office of Personnel Management. OPM is tasked with
reviewing all ALJs' qualifications. And OPM has made strides in
providing qualified ALJs to the Social Security Administration
and elsewhere across the executive branch.
At the same time, over the last four 4 years, Congress has
appropriated significant resources so that the Social Security
Administration could hire more ALJs to address its backlog of
disability claims. Yet, the agency has been unable to hire
sufficient numbers of approved ALJs to tackle the rising
backlog of cases--a backlog which topped 1 million last year
and, may I say, in my own State of Oklahoma around 13,000. But
instead of hiring more ALJs, in a misguided effort to expedite
the adjudications process, the Social Security Administration
is in the process of moving tens of thousands of pending cases
from ALJs to non-APA attorney examiners, who are regular
employees of the agency and lack the requisite decisional
independence. In March, SSA posted close to 30 non-APA
``Attorney Examiners'' job openings to support this initiative.
The Social Security Administration proposal raises important
questions about whether cases heard by non-APA attorneys
constitutes a violation of the Administrative Procedures Act.
Further, Social Security regulation makes repeated reference to
a claimant's right to an independent decision from an ALJ.
SSA's newfound policy also raises procedural issues. Given
the magnitude and potential economic effect of the Social
Security Administration's proposed reinterpretation of its own
rule here, it appears that the rule should also have been
submitted by SSA to the Office of Information and Regulatory
Affairs (OIRA). Economics aside, the proposal creates an
inequity where some claimants will receive the independent
decision guaranteed to them by the APA and others may not.
Furthermore, for non-disability cases the loss of due process
is compounded by the fact that a majority of these individuals
are unlikely to have access to attorney representation due to a
lack of a financial incentive for that attorney representative.
But once a sizable number of claimants have been denied a
hearing before an ALJ, there is the potential that the Social
Security Administration's proposal to move cases away from ALJs
to non-APA attorneys could result in a large class action
lawsuit.
While we all share the goal of eliminating the hearing
backlog--and I do agree we all share that goal--it is our
concern not just about meeting those results; we must also
focus on how we get there. Accordingly, there are three main
points I would like to address today:
First, I would like to focus on the how attorney examiners,
drawn from the SSA's own ranks, can be said to appear
impartial, especially to the extent that they may review cases
de novo.
Second, I would like to know more about the Social Security
Administration's policy pivot, which in the past allowed for
certain transfers on a case-by-case basis, to permit now large-
scale transfers of entire classes of cases.
Third, I believe we need to carefully consider alternative
proposals to the Social Security Administration's untested and
legally ambiguous policy, such as using retired ALJs from local
offices to hear these cases. If the Social Security
Administration believes that there are not enough qualified
ALJs to meet the current demand, shouldn't they and OPM instead
focus on new recruitment efforts to increase the supply of
worthy applicants?
There are a lot of issues as we deal with Social Security
right now. There are some success stories. I met yesterday with
the Inspector General (IG), talking about the fraud that has
now been exposed in the West Virginia case. It is a $600
million fraud case that was exposed. There are others on the
horizon. I am proud of the work that SSA is doing in changing
some of the processes for handling ALJs and some of the
oversight and some of the intentional things they are doing to
be able to work on the backlog. We just have to make sure that
we do this right.
There are millions of dollars in each of these fraud areas,
and there is a lot that is pending in case we have an exposed
area for a class action lawsuit. It has got to be done right.
We are happy to have with us here today Deputy Commissioner
Theresa Gruber from the Social Security Administration,
Associate Director for H.R. Solutions Joseph Kennedy from the
Office of Personnel Management, and Marilyn Zahm, an ALJ from
the Social Security Administration, to help us navigate these
important issues. We are grateful for your testimony. I look
forward to the issues we will discuss at this hearing.
With that, I would like to recognize Ranking Member
Heitkamp for her opening remarks.
OPENING STATEMENT OF SENATOR HEITKAMP
Senator Heitkamp. Thank you, Mr. Chairman, and thank you
for that great outline of why we are here today. I think over
several decades, Congress has held dozens of hearings about the
Social Security Administration and its management of retirement
and disability benefits. This oversight is important since
traditional Social Security and Social Security disability are
critical and important programs that impact people all across
the Nation, and in North Dakota.
Since I took office in 2013, literally hundreds of North
Dakotans have asked me for help in navigating the Social
Security programs. It works out to about five new cases every
month. Many of these individuals are seeking help with the
appeal of a disability claim. Others find themselves subject to
overpayments or caught in some other kind of bureaucratic
struggle. Nationwide, there are over 1 million people awaiting
a decision or hearing by the Social Security Administration.
These millions of individuals find themselves caught up in
bureaucracy, struggling to find the correct path forward--
whether it is submitting the correct medical proof or
understanding the disability program rules. It is critical that
today we keep these citizens in mind.
Our interest today in the big and complicated subject of
Social Security disability is relatively narrow. We want to
learn about the Social Security Administration's proposal to
shift certain non-disability appeals away from the realm of
administrative law judge hearings to proceedings presided over
by administrative appeals judges (AAJs) and attorney examiners
within the agency's Appeals Council. This proposed action has
raised, I think, very serious questions about whether this
change will accomplish what the Social Security Administration
hopes to achieve and, most importantly, the impact of this
policy on the thousands of Americans seeking appeals of these
decisions.
I look forward today to better understanding the
differences between ALJs and attorney examiners, as well as the
challenges the Social Security Administration faces in managing
competing needs and challenges. I want to fully understand the
rationale for this change and, most importantly, get clarity on
how claimant due process will be affected if this plan is
implemented.
Those who are familiar with the work of this Subcommittee
know that we are interested--in fact, charged with the
responsibility of improving the efficiency, transparency, and
effectiveness of our Federal Government. This hearing provides
an opportunity to discuss how this proposal meets those
standards, while ensuring the integrity and fidelity of
administrative appeal decisions.
Finally, given the important role that the Administrative
Procedures Act plays in much of this Subcommittee's work, I
welcome testimony that illuminates how and why the independence
conferred upon ALJs by the APA should be preserved or enhanced.
That is a critical question here, because it seems that we have
taken a turn and deviated from what has always been the norm
when you make a change like this, especially when it involves
due process under law, the only opportunity that someone has to
present their case, impartiality, the fact that you should have
an opportunity to not be judged by people who probably already
were part of a system that judged your claim. It is a troubling
set of facts, but my mind I think remains open to better
understand how we can improve efficiency but not take shortcuts
on due process or on the rights of citizens of this country,
especially to critical programs like the Social Security
program.
So thank you again. I look forward to your testimony, and I
look forward to this Committee's discussion after your
testimony.
Senator Lankford. Thank you. At this time we will proceed
with testimony from our witnesses.
Ms. Theresa Gruber is the Deputy Commissioner for
Disability Adjudication and Review at the U.S. Social Security
Administration. Ms. Gruber has served the Social Security
Administration in various capacities since starting with the
Minnesota field office in 1991. She has a Bachelor of Arts from
St. Mary's University in Minnesota.
Ms. Marilyn Zahm is an administrative law judge at the
Buffalo, New York, Office of Disability Adjudication and Review
with the U.S. Social Security Administration, where she was
appointed in 1994. She is in the first year of a 3-year term as
president of the Association of Administrative Law Judges. You
know what the best role is in any association? Past president.
[Laughter.]
Yes, and you are in your first year of 3 years as the
president, so you have to take it on.
Before becoming an ALJ, Ms. Zahm was a litigator for the
National Labor Relations Board (NLRB) and legal services
authority.
Mr. Joseph Kennedy is Associate Director for Human
Resources Solutions at the U.S. Office of Personnel Management.
He has worked on H.R. reform in various capacities within the
OPM office and was a Fellow to Congresswoman Morella. Mr.
Kennedy received his Bachelor of Arts from the University of
the District of Columbia.
I would like to thank all of our witnesses for appearing
before us today. It is the custom of the Subcommittee to swear
in witnesses, so if you do not mind, I would like to ask you to
please stand and raise your right hand. Do you swear that the
testimony that you will give before this Subcommittee will be
the truth, the whole truth, and nothing but the truth, so help
you, God?
Ms. Gruber. I do.
Judge Zahm. I do.
Mr. Kennedy. I do.
Senator Lankford. Thank you. You may be seated. And let the
record reflect the witnesses have all answered in the
affirmative.
We are using a timing system today. You will see a clock in
front of you as you start your oral testimony. Obviously, your
written testimony is already a part of the permanent record. In
your oral testimony, if you can stay as close to 5 minutes as
you can, that will allow question time, and we will have
interaction time for a while.
Ms. Gruber, we are honored to be able to receive your
testimony first.
TESTIMONY OF THERESA GRUBER,\1\ DEPUTY COMMISSIONER, DISABILITY
ADJUDICATION AND REVIEW, U.S. SOCIAL SECURITY ADMINISTRATION
Ms. Gruber. Thank you, Chairman Lankford, Ranking Member
Heitkamp, and Senator Sasse. My name is Theresa Gruber. As the
Deputy Commissioner for Disability Adjudication and Review
since July 2015, I am responsible for SSA's hearings and
appeals operation. Thank you for inviting me today to discuss
the significant public service challenge that we face, over 1.1
million individuals and their families awaiting a hearing
decision.
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\1\ The prepared statement of Ms. Gruber appears in the Appendix on
page 30.
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I began my career at SSA in a Minnesota field office, as
you said, and I have known firsthand the faces behind each
appeal and am profoundly aware that they are counting on us to
make decisions in their cases.
It troubles me that people are waiting an average of 17
months for a hearing decision, and in some places the wait is
considerably longer. Any wait, but especially this wait, is too
long for Americans who are facing hardship, having to make
unimaginable choices between one basic need like paying a
mortgage or rent over another equally important one. The status
quo is unacceptable.
Given the urgency of the situation, we must take every
reasonable step to reduce the amount of time people across the
Nation wait for a hearing decision. As outlined in my written
testimony, we have developed a comprehensive multi-year plan:
the Compassionate and Responsive Service (CARES) plan.
A key pillar of that plan is our significant and
collaborative effort to timely recruit, hire, and retain enough
administrative law judges, to meet the extraordinary demand.
And I thank both my colleagues on the panel for their help
toward that end.
We know, though, that progress on that front will not come
fast enough to address the critical need to increase decisional
capacity quickly, so ALJ hiring is not our only strategy.
Our plan combines a number of initiatives to help increase
decisional capacity. One of the initiatives, the Adjudication
Augmentation Strategy, is part of an all-hands-on-deck approach
where we will use highly qualified administrative appeals
judges, or AAJs, from the Appeals Council to help bring down
the backlog. These adjudicators will hold hearings, where
necessary, and issue decisions in non-disability cases and in
disability cases that are already pending before them that may
have otherwise been remanded back to an ALJ. If we are going to
be successful in reducing wait times for Americans, we must
increase our decisional capacity at the hearing level.
Let me assure you at the outset that our decision to have
AAJs on the Appeals Council hold hearings and issue decisions
in certain cases comports with due process. Since its inception
in 1940, the hearings process has safeguarded a claimant's
right to due process and continues to do so.
The fundamental requirement of due process is that the
decisionmaker be fair and impartial. While hearings have
generally been conducted by ALJs, previously called
``referees'' and then ``hearing examiners,'' our Appeals
Council members have always had the authority to hold hearings
and issue decisions. When our Appeals Council members take
these actions, they follow the same rules as ALJs.
Our hearings process provides, for example, a neutral
decisionmaker; an opportunity to make an oral presentation to
the decisionmakers; an opportunity to present evidence and
witnesses; an opportunity to confront and cross-examine
evidence and witnesses; the right to appoint a representative;
and a decision based on the record with a statement of the
reasons for the decision. Our Appeals Council members will
provide no less.
The augmentation strategy is just that: an augmentation of,
not a replacement of, ALJs. In fact, with adequate and
sustained funding, we plan to have a record number of ALJs on
board by fiscal year (FY) 2018, that number being 1,900.
We will continue to collaborate with Congress, our
employees, our Federal partners like OPM, our union, and
advocates to reduce wait times. We have made some progress. We
are on target this year to reduce the wait time for those who
have waited the longest.
The Fiscal Year 2017 President's budget request gives us
the best chance to stay on track to fulfill our collective duty
as public servants and take the steps we need.
The people and families waiting are not just numbers or a
distant statistic. They are people in our communities, and for
some of us in our families, each entitled to a quality and
timely hearing decision, and I am confident both our ALJs and
AAJs will provide. We ask for your support, and I thank you for
your time today. And we will be happy to take any questions.
Senator Lankford. Thank you. Ms. Zahm.
TESTIMONY OF HONORABLE MARILYN ZAHM,\1\ ADMINISTRATIVE LAW
JUDGE, BUFFALO, NEW YORK, OFFICE OF DISABILITY ADJUDICATION AND
REVIEW, U.S. SOCIAL SECURITY ADMINISTRATION, AND PRESIDENT,
ASSOCIATION OF ADMINISTRATIVE LAW JUDGES
Judge Zahm. Chairman Lankford, Ranking Member Heitkamp,
Senator Sasse, thank you for this opportunity to discuss the
Social Security Administration's plan to divert two categories
of cases from administrative law judges to attorney examiners.
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\1\ The prepared statement of Judge Zahm appears in the Appendix on
page 57.
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As mentioned, I am president of the Association of
Administrative Law Judges, and the views I express today are
those of the judges.
No one is more aware of the seriousness of the
unprecedented pending caseload than the ALJs, who every day see
the toll that waiting for a hearing can take on a claimant.
The agency plans to hire 65 new attorney examiners with the
internal organizational title of administrative appeals judges,
along with close to 300 staff, to hold hearings and issue
decisions on non-disability and remanded cases.
The agency's initiative to remove these cases from ALJs
violates the Administrative Procedure Act, which requires APA
judges to hear APA cases. It also violates the agency's own
regulations. Moreover, this plan eliminates valuable rights
that have been granted to the American public.
For decades, ALJs have conducted evidentiary hearings on
appeals made from adverse agency determinations in conformity
with SSA's own regulatory scheme set out in the Code of Federal
Regulations (CFR). The regulations guarantee the right to a
hearing before an ALJ.
What SSA plans to do is to remove categories of cases from
ALJs and have these cases heard by their own hand-picked
people. It contends that Appeals Council attorneys are
equivalent to ALJs. This is simply not true.
Please review the chart\1\ that is included and is up here
on the floor--yes--comparing ALJs to Appeals Council attorneys
with regard to qualifications in hiring, discipline, hearing
authority, ex parte contacts, performance reviews and bonuses,
and claimants' appeals rights.
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\1\ The chart referenced by Judge Zahm appears in the Appendix on
page 68.
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Why are all these safeguards and rules for APA judges
important? They are what gives the American public confidence
that they will get a fair hearing, that a judge is independent
and cannot be improperly influenced by the agency. This is the
very right that Congress granted to the American people when it
passed the APA in 1946.
These new Appeals Council attorneys, who have never held
SSA hearings or issued decisions, will have to undergo
training, and since they will all be located in the D.C. area,
they will have extensive and costly travel to hold hearings.
SSA has told the Association of Administrative Law Judges
(AALJ) that this new program is temporary and will last for one
year. But the precedent of having decisions made by individuals
who are not APA judges will be long-lasting.
Under the agency's plan, claimants who appear before these
Appeals Council adjudicators will lose their right to a level
of appeal. Instead of simply writing a letter to the Appeals
Council to obtain a review of their cases, their recourse will
be to file an action in Federal district court, a much more
difficult and expensive endeavor.
The regulations SSA uses to justify its plan do not provide
sufficient legal support for its position. I refer you to the
legal analysis prepared by administrative law expert Dean
Harold Krent, who has concluded that these regulations do not
permit the agency to transfer whole categories of cases to the
Appeals Council for hearing. This plan is a case of unnecessary
bureaucratic overreach.
The AALJ has suggested an alternative use of these
resources to reduce the pending caseload. The particulars are
set out in my written Statement. Our proposal does not violate
a claimant's right to an independent APA adjudicator or a
claimant's right to an internal level of appeal, nor does it
contravene long-standing regulatory procedures.
In conclusion, SSA's initiative to supplant ALJs with
Appeals Council attorneys eliminates APA protections for the
American public in the name of expediency. Not only is this
plan ill-advised, it will not make a dent in the backlog of
pending cases. More likely, a court challenge will necessitate
the rehearing of all of these cases by an ALJ. We are adamantly
opposed to this plan.
Thank you.
Senator Lankford. Thank you. Mr. Kennedy.
TESTIMONY OF JOSEPH KENNEDY,\1\ ASSOCIATE DIRECTOR, HUMAN
RESOURCES SOLUTIONS, U.S. OFFICE OF PERSONNEL MANAGEMENT
Mr. Kennedy. Chairman Lankford, Ranking Member Heitkamp,
and Members of the Subcommittee, I am pleased to have the
opportunity to testify this morning regarding the role of OPM
with respect to the hiring process for administrative law
judges.
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\1\ The prepared statement of Mr. Kennedy appears in the Appendix
on page 69.
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ALJs help ensure fairness and certain procedural
requirements are met in administrative proceedings before
Federal agencies. Twenty-eight Federal agencies employ ALJs,
and as of September 2015, there are approximately 1,800 ALJs
across the Federal Government.
Consistent with the Administrative Procedure Act and civil
service law, OPM is responsible for establishing ALJ
qualifications and classification standards, developing and
administering the ALJ examination, and maintaining a register
of qualified candidates. To preserve the independence of ALJs,
OPM approves certain personnel actions affecting incumbent and
former ALJs, such as promotions, transfers, reassignments,
reinstatements, and details, and approves agencies' position
descriptions for ALJs.
To provide surge support, OPM also administers the ALJ loan
program and the senior ALJ program. To be qualified, applicants
must be licensed and authorized to practice law and must also
have 7 years of relevant experience. ALJ applicants also must
undergo an examination. For the 2013 examination, OPM
psychologists surveyed the Federal ALJ population and worked
closely with incumbent ALJs from across the country to develop
the current multi-hurdle assessment process.
Given the breadth and the input from ALJs across the
government and the rigor with which the exam was developed, OPM
has great confidence in the ability of this examination to
identify high-quality candidates for ALJ positions across
government. Under this examination process, applicants who meet
the preliminary qualification requirements go through an online
assessment. Applicants in the higher-scoring subgroup are
invited to participate in the in-person component of the
examination. Eligible candidates are then placed on the ALJ
register based on their final numeric rating. Agencies make
selections from the candidates provided by OPM consistent with
the law governing Competitive Service.
OPM is confident there is a robust list of candidates on
the current register to cover the near-term hiring needs of
agencies. However, we recognize that SSA is facing an
unprecedented challenge to manage their current backlog. We are
working closely with SSA leadership to respond to the
increasing need of ALJ candidates they need to meet their
hiring goals to manage the backlog.
For example, during the past year, OPM processed additional
applicants under the 2013 announcement and added candidates to
the register. OPM also opened the ALJ examination for new
applicants by April 1st, as required by the Bipartisan Budget
Act of 2015. Prior to opening, OPM conducted an extensive
recruitment effort, targeting national bar associations, women
and minority bar associations, ALJ associations and unions,
chief ALJs, and various veterans organizations. When the
announcement was posted, it yielded more than 5,500
applications, the largest applicant pool in more than 15 years.
OPM is currently reviewing the applications to determine which
applicants meet preliminary qualifications. After we complete
the administration of the examination, which will take some
time, OPM will add the candidates who successfully completed
all the components of the examination to the register. The new
candidates and the candidates currently on the register will
remain there until they are appointed to an ALJ position or
until OPM develops and administers a new ALJ examination.
While keeping in mind its government responsibilities, OPM
has worked collaboratively with SSA for over a year to assist
SSA with its hiring needs. OPM meets with SSA officials,
providing suggestions to their hiring process, and as noted
previously OPM recently administered the examination to an
additional wave of 2013 applicants to further supplement the
list of available candidates on the register. These efforts
added depth to the pool OPM draws from to provide candidates to
agencies that employ ALJs, including SSA. OPM is committed to
continue working with SSA so it can appoint more ALJs.
Thank you for having me here today, and I will be happy to
answer any questions you may have.
Senator Lankford. Thank you, Mr. Kennedy. Thank you to all
of our witnesses for their testimony today. This conversation,
as is the habit of this Subcommittee, is a more open dialogue
as we go through the questions, and so we will have a lot of
back-and-forth.
I want to get just a couple clarifying statements here at
the beginning of this. Ms. Gruber, how many ALJs does the
Social Security Administration have right now?
Ms. Gruber. At last count, 1,506.
Senator Lankford. OK. And your statement is we need to get
to 1,900.
Ms. Gruber. That is our current hiring plan: 250 this year,
250 next year, 250 the following year. I will say we have
slightly adjusted our expectation this year because we are
trying to gauge whether this summer, will be able to hire
enough ALJs to meet the 250. So I am thinking 225 to 250 will
be our target for this year. But by that, we would top out at
about 1,900.
Senator Lankford. Do you have enough in the pool from what
OPM is sending you? My understanding is OPM is sending about
5,000--they get about 5,000 applications coming in for ALJs.
Then they are whittling that number down to try to get you the
number that they would recommend from the pool that then they
are handing to you. Do you have enough to be able to get to
that 250 number? Or are you saying there are not enough
qualified folks to be able to get to the 250 number?
Ms. Gruber. Just to be clear, as for the new exam, we will
not have access to those names until about, I would say, the
spring of 2017, although we are working collaboratively with
OPM to see if there is any way to streamline and speed up that
timeline.
With respect to the----
Senator Lankford. How many do you have access to now? If
that is the spring of 2017, do you have access to some in the
spring of 2016?
Ms. Gruber. As Mr. Kennedy testified, they updated our
registers or our certificate of eligibles both in November and
in March. Right now, we are interviewing from the March
certificate. We have 81 certificates for 81 different
geographic locations. In each geographic location, we have
multiple vacancies, generally, two or three. In some places we
have as high as six, seven, or eight vacancies.
When we received our aggregate list of certificates in
March, we received about 5,800 names. It is important, though,
to recognize for us that is not the number of candidates--and
if I were an ALJ candidate myself, I would apply for many
locations. So when we looked at the 5,800, we actually only
have access to, I think, 260 unique names for vacancies across
81 offices. What we are doing right now is interviewing those
individuals----
Senator Lankford. So wait. I am sorry to interrupt you.
Ms. Gruber. Sure.
Senator Lankford. You have 260 applicants for----
Ms. Gruber. Unique names that we can consider for the
vacancies across 81 locations, correct.
Senator Lankford. So when we talk about 5,000 on this, for
OPM, how many does OPM receive as far as applicants total that
you have worked down to that 260 then? Is that the 5,000 number
that I have seen before? There are 5,000 applicants as you
interview and go through the first stage and as you are getting
down to about 260, then they are trying to apply to multiple
locations from there?
Mr. Kennedy. Mr. Chairman, thank you for that question.
When we receive about 5,000 applicants, you typically will see
about maybe 50 percent of those will actually fall out.
Senator Lankford. Right. And so you are thinking there are
2,500 or so that are going through the process. Then that
actually gets down to 260? That is what I am trying--this is a
new number for us, to say there are 260 individual names.
Ms. Gruber. Sure. Again, as Mr. Kennedy had said, there are
applicants who apply for the exam.
Senator Lankford. Sure.
Ms. Gruber. Then they go through a number of stages in the
OPM process, and as he had said, about half fall out. What
actually gets referred is the list of eligibles to all the
hiring agencies, which might be, for example, 2,500 names. When
we go in, we say we have 81 locations that we would like lists
of eligibles for. They give us a list of 75 names per location,
and what I was explaining is when we go through the process of
saying how many of those 75 names per location across 81
certificates are duplicates, we only really have 260 unique
individuals.
For example, if I hire Candidate A for Newark, New Jersey,
and Candidate A also applied for Fargo, North Dakota, I cannot
hire that candidate for Fargo. I have to move down the list.
And that is where the difficulty comes. It is really a numbers
thing for us.
Senator Lankford. OK. So part of the question then I have
is that when I wrote a letter earlier to Carolyn Colvin about
this, the statement came back to me, ``We cannot hire enough
qualified ALJs to be able to actually hit the backlog numbers
that we need,'' which begs the question then: Who are the AAJs
here that are these individuals? Because the first thing that
comes up is if you cannot hire enough of these and you say,
well, we cannot hire enough of these and so we are going to go
to these, it is an obvious question to say are we getting
people less qualified than we are getting for the ALJs? Who are
these individuals that are then being tapped on as the AAJs?
Ms. Gruber. Thank you, Mr. Chairman, for the question. One
thing I will also say is, we have seen in both your opening
statement and Judge Zahm's statement, talk about attorney
examiners. That is really the personnel title for this
position. Attorney examiners on a position description are
administrative appeals judges. They are the administrative
appeals judges that staff our Appeals Council. They are the
administrative appeals judges that are referred to even on
OPM's own website. And it is the administrative appeals judges
back, in the early 2000s that Congress acted to bring on par
from a pay standpoint with ALJs. The pay scale for both are
exactly the same.
In terms of who they are, many are internal hires, although
we do plan, as we open the positions to also have external
vacancies.
Senator Lankford. So do they have other tests that they
will do internally?
Ms. Gruber. Well, in terms of what we look for are people
who have good interpersonal skills. We look for people who
understand the sequential evaluation process. That is why a
number of internal candidates will certainly be individuals
that will compete well.
Senator Lankford. So what I am trying to figure out is--and
it is one of the things that we have tried to search through
everything to figure out who these individuals are. When you
are talking about bringing on other individuals to be able to
supplement, I know who ALJs are. I know the training that they
have. I know the background; I know the qualifications. I
cannot seem to figure out who these individuals are other than
they are internal. Are they internal to the Washington, D.C.,
office? Do they have other jobs? And will they retain those
other jobs while they are also doing this so this is really
kind of a part-time--occasionally, they are going to do some of
these hearings, but at other times they are going to do
something else with their tasks? Or who are these individuals,
and what is their interaction with other individuals? An ALJ
obviously is separate and independent through the process. They
are receiving a case. I do not know if these other individuals
are sequestered away from other folks that are in the middle of
the decision process because I just do not know.
Ms. Gruber. Thank you again for the question.
First, in terms of how we are recruiting, we are opening
job vacancies across the country. They can be individuals who
are in the Baltimore-Washington area. They can be individuals
across the Nation. We have opened the vacancies internally. We
plan to open external vacancies as well. Not everybody, I would
certainly say, who applies to be an administrative appeals
judge, is someone who has ever even applied for an ALJ
position.
In terms of the training, we are working right now on a
pretty significant training plan that mirrors and tracks
closely the plan in terms of ALJ training. One big difference
between administrative appeals judges currently is they do not
conduct face-to-face hearings. Part of the training that we do
for a new ALJ who has never done a hearing in our process, we
teach them sequential evaluation. We teach our AAJs the same
thing. We teach a class on how to conduct and do fair and
impartial hearings.
The same will happen with our AAJs. We look for people with
good interpersonal skills because I think that is one other
thing to point out. Our process is non-adversarial. That is
unlike other administrative law proceedings. We need people who
can understand how to work with a claimant who comes to us at a
very difficult time. And as both have said--or as you had said
in your opening remarks, I think about 20 percent of our
claimants are not represented. So it takes a unique kind of
skill. And we are a high-production environment.
Senator Lankford. OK. I would expect, though, when you are
talking about the non-disability cases, these are folks that
are coming back--they may have retirement or pension issues or
overpayments. I would expect them to have a much lower number
for representation because, quite frankly, the representatives
are paid to get someone on disability, not necessarily someone
is overpaid, there is no benefit to them to do that. So I would
expect for these administrative judges you are talking about
that very few would have representation with them. Is that
correct?
Ms. Gruber. When you look at the non-medical piece, I think
that that is a fair----
Senator Lankford. OK. So then I am still trying to get an
answer to my initial question. Will these individuals also do
something else? Or will they solely be dealing with these
cases, these 40,000 cases? Or will they do the case hearings at
times but they also do something else at other times?
Ms. Gruber. In our Appeals Council, the other category of
cases that folks handle are cases that are pending for the
Appeals Council review. That is at 30,000. All of the members
will do that piece, but we will segregate out a group of the
judges to focus solely on the non-disability cases
Senator Lankford. So they will solely focus on hearings, is
what they are hired for, they are not current employees that
will do something else part-time and they will also do----
Ms. Gruber. In terms of the non-DIB cadre, they will be
solely dedicated to that. The rest are already doing the work.
We are simply proposing that they would expand the amount of
work they do.
Senator Lankford. OK. We will have a lot of questions here.
I do not want to take up all the time here for our interaction.
Senator Heitkamp. Obviously we are concerned about taking a
process that we believed was required by law, which is an
independent ALJ, and now doing a process internally that draws
upon some of the folks who have already done the informal kind
of adjudication, which was unsatisfactory. Right? You have an
informal process where you review these and obviously have
denied benefits, resulting in the need for an appeal. That is
where we are at, right?
So what we are trying to get at is are these same people
who are involved in this informal process of determining
appeals going to be the ones that sit as now a fact finder for
what could result in an appeal to the Federal district court?
Ms. Gruber. No, they are not.
Senator Heitkamp. OK. Good. That is what I need to know,
because we are trying to figure out why you are doing this. We
understand that you are in crisis when you have this many
appeals pending. I want to know, in your decisionmaking, what
was the matrix of ideas that came in? And why didn't you choose
an idea that would beef up the ALJs whether you go back and
find some retired Article III judges, whether you go back and
find retired ALJs to come on to amp up, the ability to do this,
working with OPM? I understand the OPM process, and we do not
want people classified as ALJs unless they are clearly
qualified. But by the same token, we do not want people
deciding cases unless they are qualified. And so why do we
think we need this level of qualification for an ALJ but have
someone within your agency doing these tasks without the same
level of qualification?
I think we are buying ourselves--I think our concern here
is, No. 1, to understand your decisionmaking, and I applaud
you. The last thing we want to do here is tap down creative
thinking on how we solve governmental problems. But we also do
not want to buy ourselves a bigger problem, and I think that
the Chairman in the front end here talked about, the potential
for a class action, the potential for more appeals to the
district court, which would, in fact, result in more resources
being utilized and more time in the appeals process.
And so what were the alternatives that you examined coming
to this decision to make this change?
Ms. Gruber. Thank you, Ranking Member Heitkamp. One of the
things that I think is important for me, when I came into this
job, I was asked to look at the challenge that faces us and
what can we bring to bear to address it. As I have said in my
testimony, both written and oral, this piece of the plan is a
small part of our overall plan. There is no single silver
bullet or solution.
Senator Heitkamp. But you have to admit it is small but
controversial.
Ms. Gruber. Absolutely.
Senator Heitkamp. So you are taking on a lot of water for
something that you are calling small.
Ms. Gruber. But I do think that it is important for me to
say we are looking at business process changes. A number of the
business process changes in our plan are about how can we best
support our decisionmakers, our ALJs, so that they can do what
only they can do, which is conduct hearings and issue
decisions.
We are looking at a lot of IT innovations, a lot of
changes, how we can move out manual work and paper workloads,
how we can leverage video so that we can erase service
imbalances from State to State, which there certainly are, when
I look at wait times.
Senator Heitkamp. But when the public says you made a
decision to hire your own judges, it seems like I would say,
the system is rigged.
Ms. Gruber. I do not think that that is actually the case.
The rigor with which we look to hire administrative appeals
judges mirrors the rigor, in my mind----
Senator Heitkamp. Then why not hire administrative law
judges?
Ms. Gruber. I think that is part of the----
Senator Heitkamp. That is the problem. You cannot come here
and say we are going to do this and de facto they have the same
qualifications, the same ability, and the same independence as
an ALJ. I go back to then why not hire ALJs? That is the
disconnect for us here.
Ms. Gruber. But we are not adopting one construct over
another. Our plan calls for aggressively hiring ALJs at the
same time we are utilizing all of our other strategies. To hire
ALJs----
Senator Heitkamp. I do not think you are answering my
question. And I do not mean to be combative. I came into this
without a strong opinion one way or the other and recognizing--
because as I said in my opening comments, this is something
that I do consistently. Our office spends a lot of time dealing
with your office on appeals. People, especially elderly people,
struggle with process. They struggle with understanding the
bureaucracy. We help them navigate that. We get great responses
from you. So I did not come to this--but I keep hearing the
same thing, which is we are not taking shortcuts, it will be
impartial and independent, they will have the same
qualifications, the appeals rights will not be violated because
we will keep an adequate record.
Then I keep going back to if you can find people who can do
that, who have the level of qualifications, why can't they be
ALJs? Why do we have to have this hybrid risking the potential
for, a lot of mischief later on?
Ms. Gruber. Again, I think that from my standpoint it is a
matter of timing. We are hiring as many ALJs as we can. I will
give you an example, though, from 2015. We planned to hire----
Senator Heitkamp. I get it. I get it that you can hire
faster than you can through the process of OPM.
Ms. Gruber. But we have not set that process aside. We are
trying----
Senator Heitkamp. I get that. But why can't we amp up the
OPM process so that there is more--these same people who you
say are qualified to do this, or looking at kind of how do you
clear this backlog. And so I think, Mr. Kennedy, the question
comes back to you. Do you believe that OPM can meet the needs
of Social Security as they are looking at trying to take care
of this backlog and do their job? I mean, I am sympathetic to
them.
Mr. Kennedy. Thank you, Senator. We are confident that we
have the number of candidates on the current register to meet
agency projections as we know them.
Senator Heitkamp. No. Let us assume that she now tells you
she wants to hire ALJs instead of going the route that she is
committed to. What is your role? And how do you meet her needs
in providing a pool? She has already explained that, the
numbers get skewed because somebody applies for five different
positions so you count them five times in the numbers. That is
not helpful to her. It is not helpful to us to understand this
problem.
Mr. Kennedy. Thank you for your question, Senator. In March
of this year, we added additional names to the register. We
released the new re-administration of the current exam, and we
will be adding additional names. That will take some time
because the process is a really detailed and structured process
to get through.
We will be also meeting with SSA later on this month in our
Innovation Lab to think through other creative ideas of how OPM
and SSA can work together to meet their backlog. We take this
very seriously.
Senator Heitkamp. But I think she is telling you that she
does not have enough qualified people in the pool that you have
sent in order to take care of her backlog. That is what she is
saying, and so they are turning to an alternative method. And
if that is not the reason why they are turning to an
alternative method, then we really have a lot bigger discussion
here.
Mr. Kennedy. Senator, I think that is something that OPM
and SSA are working through. OPM looks at the examination
process that we put ALJs through. It is potentially the most
comprehensive examination in government. And we feel those who
come through that process are extremely qualified.
We do know that the Social Security Administration has some
concerns, and we want to sit with our colleagues and make
certain we better understand that to see what we can do in the
future to support our colleagues.
Senator Lankford. I am just as turned around, though,
because I understand if there are 250 openings this year and
you get 260 applicants for it, I am fairly confident you are
not going to be able to hire 250 people out of 260 applicants.
So if we are starting with 5,000 and we end up with 260 at the
end, are we agreed that is the number that we are at? Because I
have heard 5,000, I have heard 2,500. And I am trying to figure
out how to be able to get the accurate number here.
Mr. Kennedy. Senator, I do not have the actual number with
me. I will be more than happy to get the number to you.
Senator Lankford. Somehow we need to be able to followup,
and we will get that for the record in the days ahead, because
that is a critical aspect of--if OPM is not sending enough
people over that are qualified, then we need to obviously get
that resolved, and that is very helpful to everyone on this.
I do share Senator Heitkamp's concern on this that the more
that we go outside the structure and the system, the more
exposed that we are and the more exposed the taxpayer is to
some sort of litigation so we have a class action suit coming
in the days ahead. So that is the concern here.
And the other concern is, Is this a temporary program or do
you think this is a long-term structure? Is this a temporary
program?
Ms. Gruber. It is a temporary program. It is a program that
we believe will be temporary as we bring down the backlog----
Senator Lankford. So what does temporary mean? Help us
understand.
Ms. Gruber. And Judge Zahm----
Senator Lankford. Because, by the way, in the Federal
Government, it is hard to find anything temporary. [Laughter.]
Ms. Gruber. Judge Zahm, I know that you said that someone
had said a year.
Judge Zahm. Yes. More than once.
Ms. Gruber. OK. What I intend is that this will be in play
until about 2020, which is our target for eliminating the
backlog and reducing our wait time to 270 days.
Senator Lankford. So starting that in 2017, about a 3-year
time period to actually use these individuals to try to help.
And you are talking about dealing with about 40,000 cases of
1.1 million----
Ms. Gruber. Correct.
Senator Lankford [continuing]. Creating a training
structure, a hiring structure, a whole unique section for
40,000 people. And I am still confused why we should do that.
Is it your expectation that most of these hearings will be done
by video or will be----
Ms. Gruber. Yes.
Senator Lankford [continuing]. Done in person?
Ms. Gruber. The expectation is most of the hearings will be
done by video. And I think it is also important to note just
for the record that ALJs travel today.
Senator Lankford. Sure.
Ms. Gruber. And we spend roughly a little over about $1
million today to support traveling. So I do anticipate there
will be some travel, but right now about 30 percent of our
claimants opt out of the option to have a video hearing.
Senator Lankford. 30 percent of the total group or 30
percent of this non-disability----
Ms. Gruber. 30 percent of the total.
Senator Lankford. What is the percentage of this non-
disability group that opt out of the video?
Ms. Gruber. I would have to----
Senator Lankford. Because that is a very different section.
Ms. Gruber. Right. So as to not give you the wrong
information, I would have to submit that for the record,\1\ if
I may.
---------------------------------------------------------------------------
\1\ Approximately 8.5 percent of non-disability claimants opted for
an in-person hearing instead of a video hearing.
---------------------------------------------------------------------------
Senator Lankford. OK.
Ms. Zahm, can I ask you a question on this? Of your history
and background around this, how many folks opt out on a video
hearing? And you had mentioned in your testimony as well that
this creates an entirely new large bloc. Historically, someone
could opt out as an individual, as a single person, in order to
be able to make the decision that they are going to avoid this
process and they are going to expedite it. Now we are talking
about a whole class of people being pulled, 40,000 people. What
has been your experience in the past of how many people
actually opt out either the video conference at this level or
opt out of this entirely?
Judge Zahm. I would say probably that Terrie's 30 percent
is probably accurate. I do not have access to those figures.
However, I would note that in the application for these
attorney examiner positions, the agency said there would be 50
percent travel. So they are anticipating these people will
travel 50 percent of the time.
Senator Lankford. So is the assumption that individuals
then would say, ``I do not want to do the video conference,''
and at that point they are going to have to travel?
Judge Zahm. Correct.
Ms. Gruber. No, the assumption in that is that we tell
prospective applicants, ``You might have to travel.'' So some
people say, ``I do not want to apply for that job because it
might involve travel.'' In terms of claimants, they will have
the same rights to either opt in or opt out of video.
Senator Lankford. Right. But is it your expectation at this
point that 30 percent of the folks--or 30 percent of the
individuals will say, ``I do not want to do a video
conference,'' and these new AAJs are going to have to travel to
those locations?
Ms. Gruber. I do not have any information to suggest that
we would widely vary from the 30 percent, but, again, I will
look at these two specific categories of cases to see if the
opt out is higher or lower than the typical hearing
population.\1\
---------------------------------------------------------------------------
\1\ Approximately 24.6 percent of claimants declined a video
hearing following an Appeals Council remand.
---------------------------------------------------------------------------
Senator Lankford. Some of this goes back to the legal
standing as well. Ms. Zahm, you brought this up as well. We are
crossing into unknown territory because it has not been done
before. We are talking about 40,000 people. We are talking
about, I think, a significant exposure for a class action suit
once it is all said and done. We are trying to come back and
redo these things. Most of these individuals will not have
representation with them because the class of cases that are
coming through do not have representation.
Our office had asked the Social Security Administration for
information of how did you come to this legal decision, which
we thought was a fair question of oversight. The response that
we got back was, ``That is attorney-client privilege, and we
cannot tell you how we came up with this decision.''
Attorney-client privilege is not recognized by Congress.
Executive conversations, that is exempted can get access to.
But the conversation internally within the agency and your
conversations of how you came to the legal justification on
this is something that should be appropriate in our oversight.
Senator Heitkamp. Yes, and it would suggest that you guys
are concerned about litigation when you are trying to privilege
that information. If it is just legal advice, then why
privilege it? The taxpayers paid for it. Let us see it.
You said in your testimony you always have authority. We
now have a legal brief in the testimony here that you do not
have the legal authority. That is a foundational piece for us
to understand in oversight. And so we have not even talked
about that. We start from the beginning. Is this legal what you
are doing? And are we buying, like the Chairman said, a
lawsuit? We have a difference of opinion. We have one--and the
only person who has presented any kind of argument--and,
obviously, this is not a court of law. But the only person who
has presented any argument is Ms. Zahm. And so, in order to do
our job of oversight, we need to know what your legal
justification is so we can evaluate it here. Otherwise, we will
draw our own conclusions on what your legal authority is. And
we may only consider the evidence in front of us, and that
would not be good for you because we do not have yours.
Senator Lankford. So can we get it?
Senator Heitkamp. Yes.
Ms. Gruber. I just want to make sure that I am clear. In
Attachment C to my testimony was a summary of our legal
analysis, and I know that staff had late last week met with
your staffs to talk. We included our Office of General Counsel
(OGC). I would be very happy to set up any sort of additional
setting where we can go at length through the legal analysis.
Our point of view is that, and our legal analysis is that, we
have had longstanding regulatory authority to vest the Appeals
Council with these functions.
Senator Lankford. But in individual cases, not in whole new
blocs of cases. Has that ever been done before?
Ms. Gruber. No, it has not been done before. But what I can
say is that this is a very small percentage.
Senator Heitkamp. Do you understand that when you take a
classification of claimants and you say these folks are going
to get the ALJ and these folks are not going to get the ALJ,
you may have an equal protection problem? I am just saying, we
are not exaggerating, I do not think----
Senator Lankford. No.
Senator Heitkamp [continuing]. The concern that we have for
your legal underpinnings. And, sometimes the fix that you
create to a problem has unintended consequences, and that is
our concern.
I want to go back to taking a look at where you are--what
your thought process was in selecting this alternative. And if
there is a way that we can better understand the kind of
relationship that you have with OPM, the concerns that you have
about OPM, whether we are looking at, recruiting people who
have already been vetted and in the system, there is probably
some 67-, 68-year-old, former ALJs or judges who could be
brought back on a temporary basis to adjudicate some of these
claims. Those are the kinds of things that I need to know. What
was your decisionmaking process?
Ms. Gruber. Like I had said, Ranking Member Heitkamp----
Senator Heitkamp. I know. It is a small part.
Ms. Gruber. I was not actually going to say that. What I
was going to say is we are using senior ALJs to the greatest
extent that we can. And we have worked with our judges' union
and our management associations to let us recruit as many
senior ALJs as we can.
One of the things that we are looking to collaborate with
OPM on is what incentives, what kind of--staying with us a
little bit longer incentives can we provide. So senior ALJs are
part of our plan, absolutely. In fact, right now we have--I
think the latest number was right around 21 senior ALJs. If I
can get more than that, that helps us, for example, in 2015,
for the 50 ALJs we were unable to hire, even though our target
was 250, that translates into 25,000 lost hearings. Any way
that we can speed up our hiring of ALJs, that is a key tenet of
our entire plan, as is recruiting enough ALJs to meet our
hiring targets.
In terms of the analysis--and I appreciate the question--
the first thing I asked is, What options are available to us
legally? That is where this option, which I think had been
talked about many years in the past, how can we use the Appeals
Council differently? Again, the Appeals Council is currently
the group that reviews ALJ decisions today. That is their
function, to review. It is the Appeals Council that has led
most of the quality efforts that we have seen over the past
several years that have resulted in lower remand rates to ALJs,
that have resulted in better quality numbers in terms of agree
rate. The second thing I looked at was cost-effectiveness, and
then, finally, operational viability?
And so, again, I think that our plan looks at this. How do
we augment, how do we increase decisional capacity?
One of the other things that we are actively using are data
analytics. How can we pinpoint those cases that do not need to
go to an ALJ of any sort, that because there has been a change
in the condition or a worsening, can we identify--can we make a
decision sooner in the process? And we have seen excellent
initial outcomes from those efforts.
To me, it is really about looking at cases at every stage
of the process and how can we make it better, and that is what
we have laid out in our plan. But this piece is about
increasing decisional capacity, and for me it is not choosing
one type of adjudicator in favor of another. And it is not
abandoning in any way the ALJs. In fact, I think the evidence,
at least from my standpoint, shows a significant long-term
investment in the ALJ construct now and moving forward.
Senator Lankford. So if I am picking this up still
correctly, we are still talking about trying to get from OPM
more people in the process, more qualified people in the
process. If there were more people coming from OPM, qualified,
ready to go in this, this would not have been considered?
Ms. Gruber. I would think----
Senator Lankford. Because you have the funding that is
necessary to hire the ALJs. You are talking about bringing on
quite a few additional folks, these AAJs. You have already said
they are the exact same pay scale. They are going to require
300 additional staff around them. You have enough money to be
able to hire and bring on all of those additional folks, so you
clearly have enough money to be able to hire the ALJs as well.
This is about the number of qualified people coming in the
process.
Ms. Gruber. I think that that is a fair assessment.
Senator Lankford. OK. So somehow we have to be able to
resolve this back-and-forth on how we are getting more
qualified folks in there. If you are identifying qualified
people but they are not getting over here to OPM to be able to
come back to you, we are standing up a new temporary system for
three years and spending a tremendous amount of money creating
a new system and, we believe, creating a system that is legally
vulnerable for us long term, that we have asked for the
justification on this, and I understand you do not want to be
able to turn over everything on this. I do think it is
important so that we get the documents, even if we see them in
camera, that we have the ability to be able to go through the
legal justification because there are real questions here that
I would assume your counsel would have gone through and would
have given you all the different alternatives.
But at the end of the day, we have still got to have more
people, and even three years past this time, we may still have
the same situation here. So from the OPM side of it, how do we
increase the flow?
Mr. Kennedy. Mr. Chairman, thank you for that question. Out
of respect for the Ranking Member, I do want to give the number
that I at least have right now. There are currently about 600
candidates on the register, and we clearly will be able to
increase that number when the other exam actually is--when we
actually put additional individuals----
Senator Heitkamp. Does that include the duplication that
Ms. Gruber is talking about?
Mr. Kennedy. No. This would be 600 individuals.
Senator Heitkamp. Individuals.
Mr. Kennedy. Yes.
Senator Heitkamp. And geographically dispersed?
Mr. Kennedy. Geographically dispersed. And one thing I want
to say, because I want to make certain that everyone
understands, that SSA and OPM are working together. We are
trying to make certain that we typically try to give at least
three names for every vacancy. SSA brought it to our attention
a few months back that we need to make certain we are doing a
better job on the unique names, and we are trying our best to
make certain that we are responding to provide more unique
names.
Again, I think that everyone understands that SSA is just
in an unprecedented situation, and I think the more we talk
with SSA, the more the two organizations work together, we are
going to remedy this. This is important for both of us. We are
going to remedy this.
Senator Heitkamp. But we do not want the inefficiency of
starting this whole process when we could, fix the one that we
have. I think that is really the challenge. As the Chairman
outlined, we are taking on a lot of work, a lot of training, a
lot of folks here on a temporary basis, if we could just get to
making this process that you have work better.
Senator Lankford. Can I ask a question? Was OPM involved in
creating the job description for these attorney examiners? Was
this something that you cooperatively did together?
Mr. Kennedy. No. The Office of Personnel Management would
not have had a role in that, sir.
Senator Lankford. So the creation of the job description
and the design of this just SSA did on their own?
Ms. Gruber. And just to be clear, the administrative
appeals judge position, which is what we functionally call it,
has been around for several decades. This is not a new job
description for us.
Senator Lankford. OK. Mr. Kennedy, one of the statements
you made just brought this to my mind. You were talking about
the unprecedented backlog. I wish in some way this was an
unprecedented backlog. You go back to 10 years ago, 12 years
ago, we are still dealing with a 500-day wait, where you have
17 months through the process to be able to wade through it.
And so this is not new. The sheer numbers, we are dealing with
1.1 million now in the backlog, but the time period to wait for
the individual is not unprecedented.
So I guess one of the background questions we did not ask
on this, Ms. Gruber, and what you are sensing at this point is
the why. Why have we reached this number? Why do we have these
high numbers in the backlog that cannot seem to come down? We
continue to invest more resources in this. We continue to see a
growing amount here.
Ms. Gruber. Thank you, Mr. Chairman. The why is difficult.
Certainly, back in 2007-08 when we saw a similar backlog, maybe
not the total pending at 1 million but, rather, right around
the 750,000 mark, the wait times, like you said, were over 500
days. Part of the why is a number of years, about three years,
of funding that was $1 billion less than the President's
budget. I do think continued growth in receipts--right now, the
main factor in our issue where we are is that our receipts
continue to outpace our dispositions. And until that dynamic
shifts, we are going to continue to grow the backlog. And that
is a problem for us.
So I would say funding is a big factor. I do think
continued receipts is a big issue in it, and ensuring that
staff at all
levels--ALJs, our support staff, our administrative appeals
judges at the Appeals Council--no matter what role they play,
are accountable and productive.
Senator Lankford. Right. Ms. Zahm, why do we have a
backlog?
Judge Zahm. The American public is getting older, so that
is a factor. The recession was a factor. And I noticed in the
agency's submission of their chart of ALJ hiring, there were
years when there was no hiring, so the cases accumulated.
We also do not have the most efficient system. We have made
suggestions to the agency on how to modernize our adjudicatory
system. We need to have some rules of practice. We need to have
more support for the ALJs. This is a very labor intensive
process, and the courts have added more and more layers of
requirements on ALJs in terms of issuing decisions, and it
takes longer to do so.
It always takes longer to do a good job than a slipshod
job, and the danger with the backlog is that the pressure to
get the cases out the door may undercut the quality of those
decisions.
Senator Lankford. Right, and that was our concern in 2010
when it seemed to be a higher priority on getting things out
the door and just decreasing the backlog than getting good
cases. We do not want to have that again because every one of
these cases is $300,000 to the Federal taxpayer. And if the
paperwork is not done right and if we do not have a good
opinion at the end of it, we have no way to evaluate whether
this person has had any medical improvement. And so they are in
the system forever regardless of their physical condition
because we do not have a good paperwork trail on it. So it is a
nightmare scenario for the American taxpayer.
I do not know of a single place that I have traveled in my
State of Oklahoma, not one, where somebody in that region has
not said to me, ``I have a cousin, I have a neighbor, I have
someone that is on disability. They work for cash all the time.
They are very engaged.'' It is a common conversation in many
areas. The West Virginia cases that were just exposed were $600
million in fraud. And in my conversations with the Inspector
General yesterday, we have another case coming out soon that
will be even larger than that one dealing with disability fraud
that is coming out.
This is an incredibly important issue to a lot of people,
both for the individuals that are truly disabled, that while
they are waiting 500-plus days, their counsel has told them,
``Do not go get a job, do not work,'' because if you are
working, that is the first thing the ALJ is going to ask you,
``Are you working now? '' Well, if you are working now, then
clearly you can work at another time. And so no matter what
situation they are in, they are waiting 500 days without a job
for a decision, and so they have either got this huge gap in
their employment record, or they are truly disabled, and they
have waited a year and a half for a hearing. So either way it
is a really bad situation for them.
Judge Zahm. Yes.
Senator Lankford. So the resolution, you all understand, we
understand it. We just want to make sure at the back end of it
we are not having to redo it and we have a backlog that gets
even bigger because we created another system, and then that
system did not work, and now everything is even worse with the
new set.
Senator Heitkamp. I think the question becomes where do we
go from here, Mr. Chairman. Obviously, we hope that this
oversight Committee hearing has at least raised some flags
within the Social Security Administration to maybe, slow down
implementation of this idea, to think differently or at least
have this ongoing discussion.
We can talk until we are blue in the face, but if your
decision is we are going to proceed, for us to try and do
something here to stop you from proceeding, let me tell you,
that is a difficult thing for us to get done.
And so I am curious on where we are today. Are you, gung-ho
we are going to get this done, we are going to move ahead? Or
will you kind of take a pause here with us and help us better
understand this?
Senator Lankford. Or find a way to get more ALJs.
Ms. Gruber. Yes, as I said in my oral testimony it is about
capacity. My history is working with the disability process.
One of my first jobs in the Senior Executive Service (SES) was
to look at a backlog at our initial level and ask ``how do we
increase capacity''. And some of the solutions were not popular
ones. But certainly at the end of the day, my job is to make
sure claimants are not harmed, and that is my absolute
commitment. I think the issues raised here, the issues raised
by Judge Zahm, are ones that I will take back and, with my team
look at very closely.
I do think, we have not given you insight, deeper insight
into the legal analysis we have done. I myself am not an
attorney, but the summary we gave, laid out the regulations
that really flow from the Social Security Act. And nowhere in
the Social Security Act, in Section 205 or anywhere else, does
it talk about the type of decisionmaker that must preside at a
hearing. But I understand, we certainly have a longstanding
practice where we used ALJs.
That said, I would like to find a way to meet with you.
Senator Heitkamp. I guess what I am saying is we would
prefer that you hit the pause button on this idea so that we
can better understand the oversight, better understand where
you are at, and have further conversations about this.
Senator Lankford. And I would comment only in the legal
aspects of it. It has not been done before. It will be
challenged because it has not been done before. De novo cases,
for instance, are clear within the statute that they cannot be
transferred to a non-APA decisionmaker. There are some areas
that are pretty clear in it. And to try to transfer a whole
class of cases into a new area rather than individuals is a big
shift, and there will be a lot of challenges. And at the end of
the day, I do not want us to end up with a longer backlog
because we tried a novel theory that may or may not have
worked. That is why the legal opinion on this is so important
to us as well. We want to help walk through this. And if we can
help resolve these issues, we want to do this, because all of
us have the dual responsibility with this to the individuals
that are applying that are legitimately, clearly disabled,
cannot work anywhere in the economy, to be able to get through
the system. But those that are on the edges that are not
disabled to also make sure they do not get into the system,
because they are $300,000 each and they create a culture around
our communities that is very, very destructive.
So both of those are very important to us. So it is not
just a matter of speed. And I know a lot of these cases you are
talking about are overpayment cases that do resolve some of
those issues, but it is very important that we deal with both
the taxpayer interest and those individuals in the disability
community.
Senator Heitkamp. I guess you are going to hit the pause
button so we have a chance here to kind of vet this further?
Ms. Gruber. I think it is a very fair question. As you
know, we have not implemented it yet. Part of what we are doing
is vetting, and I think that this is a significant discussion,
and I am very willing to engage in additional discussion.
Senator Heitkamp. Yes, and thank you for that. And in no
way do I want to even suggest that we should not be looking at
creative ways to do this----
Senator Lankford. Right.
Senator Heitkamp [continuing]. That we do not appreciate
the difficulty of your job, and that you really have presented
very appropriate testimony here today. We just do not have a
comfort level both legally and in terms of due process with the
direction you are taking. And we do not have a comfort level
that we have really explored all potential opportunities for
going the traditional route.
And so thank you for your testimony today. It has been very
helpful.
Senator Lankford. Judge Zahm, any final statements?
Judge Zahm. Just that when Terrie mentioned that the
position description for attorney examiners has been around a
long time, that was accurate. However, adding the duty of
holding hearings only appeared in the position description in
February of this year. That had not been a part of the position
description in the past.
Also, in terms of is an attorney examiner the same as an
administrative law judge or the same qualifications or are you
getting the same benefits if you are a claimant, I would point
to the fact that Mr. Kennedy has outlined just how rigorous a
hiring process and vetting process it is, that it takes a year
between the time someone applies and someone gets on a list.
And the position application for these attorney examiner AAJ
jobs had a 15-day application period, and they are already
starting to hire. So you can see there is quite a bit of
difference in terms of looking at candidates and evaluating
their qualifications.
Senator Lankford. We had a hearing not long ago on the
Federal hiring process, period, and USAJOBS and all of the
great joy that it really is in getting through the process.
There is a tremendous amount of other issues that need to be
resolved there with length of time. Often we get very qualified
candidates that are not going to wait a year to get a job. They
are going to go do something else in that year. And we are
going to call them and say, ``OK, we are ready now,'' and they
are going to say, ``Sorry. I have already taken a new job
somewhere.'' So that is a whole different issue that you bring
up there on that one.
Mr. Kennedy, any final statements?
Mr. Kennedy. Mr. Chairman, I just want to thank you for
having the Office of Personnel Management at this hearing. As I
was listening, all I could think about was those individuals
out there waiting. There is probably a chance that everyone in
this room probably knows someone who is waiting. And the Office
of Personnel Management feels confident in the number of
candidates that we have on the register, but we do recognize
that the Social Security Administration has some concerns, and
we want to work with them. We pledge to work with them, and we
will work with them, and we will remedy this situation.
Senator Lankford. OK. Ms. Gruber, any final statement?
Ms. Gruber. No. Thank you for the opportunity, and I
absolutely commit to work with you, Senator Lankford and
Senator Heitkamp, to address all of the concerns as thoroughly
as we can.
Senator Lankford. OK. Thank you. And I would say only as a
final statement, please do not hear from us we are interested
in speed and not quality. We have done that before. We have
seen the results. I think that is part of the reason we have so
many people in the pipeline now, because since that was
created, if you get in the pipeline, you get onto the system.
So we want this to be done well and to be done right. So do not
accelerate the process just to be able to get people through
the pipeline. But at the end of the day, we have to have good
legal justification. The individuals that are truly disabled
need to be protected in the system, and people that just want
to get a government check that may have legitimate pain but can
work in the economy based on the definitions that have been
provided in statute, they can work in the economy, still should
work in the economy, as tough as that may be.
So you have a lot of tough decisions on a day-to-day, all
of you do, to be able to make those decisions, and I appreciate
what you are doing on that.
So, with that, let me make a quick closing statement. The
hearing record will remain open for 15 days until the close of
business on May 27 for the submission of statements and
questions for the record. I thank all of you for being here.
This hearing is adjourned.
[Whereupon, at 10:20 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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