Statement of Richard P. Morris, President, National Organization of Social Security Claimant Representatives, Midland Park, New Jersey
Testimony Before the Subcommittee on Social Security
of the House Committee on Ways and Means
February 27, 2003
Mr. Chairman, Congressman Matsui, and the Members of the Social Security Subcommittee, thank you for inviting me to testify at today's hearing on the Social Security Protection Act of 2003. I am Richard P. Morris, the president of the National Organization of Social Security Claimants’ Representatives ("NOSSCR").
The issues that you are discussing today are of great importance to claimants, to beneficiaries, and to those legal advocates whom they choose to represent them. We support this legislation, including those provisions that provide protections for claimants who require representative payees, attorney fee payment system improvements, and amendments to the Ticket to Work Act. We do have some concerns regarding provisions relating to fugitive felons, which are addressed later in our testimony.
Founded in 1979, NOSSCR is a professional association of attorneys and other advocates who represent individuals seeking Social Security disability or Supplemental Security Income ("SSI") benefits. NOSSCR members represent these disabled individuals in legal proceedings before the Social Security Administration and in federal court. NOSSCR is a national organization with a current membership of 3,400 members from the private and public sectors and is committed to the highest quality legal representation for claimants.
An applicant for any type of Social Security benefit may choose to be represented at all stages of the process. However, I, and the other members of NOSSCR, typically represent individuals who are seeking disability benefits. As an attorney in a two-person law firm in New York, I have represented claimants for the past twenty-six years. While I represent claimants from the initial application through the Federal court appellate process, the majority of my cases are hearings before Social Security Administrative Law Judges and appeals to the Social Security Administration’s Appeals Council.
Representation is a Valuable Asset for Claimants and for the Adjudication Process
As you know, the Social Security Administration’s disability determination system is a complex, multi-level, and often time-consuming process. Appealing the denial of an application for disability benefits is a daunting task for anyone without the necessary legal experience, but for individuals who are in poor health or disabled, the procedural hurdles that must be cleared in order to obtain disability benefits can seem insurmountable. As a result, many of the hard working men and women applying for Social Security disability insurance benefits or SSI benefits choose to retain an attorney to help them with their appeal.
It is not surprising that these individuals want to have legal representation, in light of the complexity of the disability determination process, the individual challenges each case contains, and the undeniable importance of the outcome. Exactly why a claim has been denied is frequently a mystery to the claimant who receives an initial denial notice. The men and women that come to my office often have been out of work for many months and are seeking the disability benefits for which they and their employers have paid FICA taxes. Many have no income other than the financial support they receive from their friends, family, or church or synagogue. Most have no health insurance and cannot pay for the medical treatments necessitated by their sudden disability. These men and women understand that their family’s welfare may be dependent on receiving disability benefits and the accompanying Medicare or Medicaid health insurance coverage.
The ability to have an experienced professional provide legal assistance is certainly valuable for claimants. The Social Security Administration has found that almost 75 percent of Social Security disability claimants were represented by an attorney in 2000. Approximately 64 percent of disability claimants who were represented at the hearing level were awarded disability benefits, while only 40 percent of claimants without representation were determined to be eligible for such benefits.
We believe this discrepancy between approval rates is due, in large part, to the assistance of a knowledgeable representative who knows the sequential evaluation system set forth in the regulations and Social Security Rulings. The representative can marshal evidence from doctors and hospitals, school systems, vocational testing centers, previous employers, and others who can shed light on the claimant’s entitlement to disability benefits.
Such trained legal professionals can also thoroughly interview vocational and medical witnesses during the hearing before the Administrative Law Judge. These are daunting tasks for pro se claimants, especially when we consider that they are in poor health and often have only limited education. Indeed, the Social Security Act requires the Social Security Administration to provide information on options for seeking legal representation, whenever the agency denies a claimant’s application for benefits.
It is my experience that attorneys are also a valuable resource for the Social Security Administration by helping to streamline the disability determination process. Attorneys and other representatives routinely explain the disability determination process and procedures to their clients with more specificity than the Social Security Administration’s information specialists. Additionally, they ensure a more efficient system by developing an accurate and complete medical and vocational record and presenting the supporting documentation and statements that the adjudicators require for a full and fair evaluation of the claim. Oftentimes, the evidence we obtain and the legal briefs we prepare on behalf of our clients contain the requisite evidence to support a finding of disability by an Administrative Law Judge without the necessity of a hearing, thereby saving time and expense for both the Social Security Administration and the claimant.
Clearly, legal representation is needed and desired by Social Security disability claimants and is beneficial to the disability determination system in general. We believe that the Social Security Protection Act of 2003 makes needed reforms to the user fee tax and increases the availability of representation for SSI claimants seeking disability benefits.
Rationalize the Amount of the User Fee
In an effort to ensure the availability of representation for claimants who desired it, Congress, in 1965, enacted a system for direct withholding of attorneys fees from a Social Security disability claimant’s award. The legislation you are considering today corrects a serious and, we believe, unintended consequence of an amendment added by the Ticket to Work Act during the 106th Congress. Although this clearly was a landmark piece of legislation, the Act also established, for the first time, a user fee tax to be charged to attorneys whenever the Social Security Administration pays an attorney’s fee. The statute set the user fee as 6.3% of the amount of the attorney fee. This assessment is unfair because the amount of the charge bears no relationship to the cost of providing the service.
When an attorney is successful in proving that a claimant is eligible for benefits, the Social Security Administration computes the amount it owes to that claimant. Under the attorney fee agreement provision of the Social Security Act, an attorney may receive 25 percent of the claimant’s past-due benefits or $5,300, whichever amount is less. The Social Security Administration calculates the claimant’s past-due benefits, determines 25 percent of the amount, and then determines whether that amount exceeds $5,300. This is a routine calculation, which does not require a substantial amount of time or effort. Furthermore, although the agency has indicated it cannot calculate the actual cost of writing a check for an attorney’s fee, we note that the Social Security Administration website, in encouraging beneficiaries to use direct deposit for their checks, states, "It costs 42 cents to process and mail each check, compared to 2 cents for direct deposit." (Source: www.ssa.gov/deposit/DDFAQ898.htm).
This 6.3 percent user fee, which may total as much as $334 for the simple administrative task of writing a check, is assessed regardless of how long it takes for the Social Security Administration to issue the fee check. As this Subcommittee has noted in past hearings, the pace of fee payments has slowed substantially in recent years. NOSSCR members report that the processing and payment of attorneys’ fees from the Social Security Administration often takes as long as one year.
At least once a week, a member has advised me that he or she is taking a bank loan or using a line of credit for the first time in order to meet payroll, because the agency is not paying the fees in a timely manner. This has led many attorneys to reduce their staffs. Others have decided to leave this area of practice altogether, and many more are considering substantially reducing this line of casework in their offices. As a result, the most vulnerable claimants--those with serious physical or mental impairments, those with financial challenges, and those who do not or cannot understand the disability claims process--are often left to find their own way through the Social Security Administration’s labyrinthine bureaucracy. This bill seeks to reverse this trend and to encourage attorneys to continue providing this much-needed public service by enacting rational and equitable modifications to the user fee tax. For this reason, we support the reduction of the user fee tax, as provided for in this legislation.
Improve Access to Legal Representation for Supplemental Security Income Claimants
As you know, SSI is designed to assist the most financially vulnerable members of our society. Those who apply for disability benefits from the SSI program must meet very low income and resource limits, in addition to meeting the standard for establishing disability. SSI claimants are often in dire financial and health straits; an award of benefits will provide a monthly subsistence check and access to health care through the Medicaid system in most states.
Many SSI claimants want and need representation for the same reasons that Social Security disability claimants do. Legal services programs across the country provide excellent representation for many SSI claimants. Unfortunately, many of these legal services programs are under-funded and unable to accept all of the SSI claimants who seek their assistance. SSI claimants often cannot retain a lawyer from the private sector, not because their cases lack merit, but only because the attorneys cannot take the risk of not being paid even if the claims are awarded. Some of the attorneys who used to take these cases on a pro bono basis or with a recognition of the uncertainty of payment can no longer afford to do so, in light of the impact of the user fee tax, discussed earlier.
We believe that this lack of availability of representation explains the statistics that show only 46 percent of SSI claimants were represented at the hearing level in 2000, compared to almost 75 percent of Social Security disability claimants. As noted above, represented claimants fare better than do unrepresented claimants in the disability determination process.
We also believe that extending the attorney fee direct payment system to SSI will bring the availability of counsel for SSI claimants to the same level as for Social Security disability claimants.
It is our position that establishing a fee payment process for SSI claims, as provided by this legislation, would address directly the underlying reason that many attorneys will no longer accept SSI cases: lack of assurance of receiving their fee if the outcome is successful. If assured of the payment of their fee in successful cases, many attorneys are ready, willing, and able to undertake representation for many SSI claimants. If this legislation is enacted, SSI claimants who want to have representation would find it generally available. Only if the claimants were awarded benefits would their attorneys receive attorneys’ fees. In addition, the amount of those fees would be regulated by the existing processes established under the Social Security Act.
We are dismayed, however, by the addition of a sunset provision for this program. Enactment of an attorneys’ fee payment system with an "end date" will undercut its very purpose: to enable more SSI claimants seeking a lawyer to hire one. Adding a sunset provision will be interpreted by many attorneys as a lack of commitment to the attorneys’ fee payment process in SSI cases. Many attorneys will conclude that the future for this provision is too uncertain. They may well make a decision not to participate in representing SSI claimants because of concerns about investing additional resources and personnel in a practice which may disappear in just three years. In the meantime, many SSI claimants will continue to face difficulties in hiring a lawyer and thus securing representation. The sunset provision shortchanges them. We are not aware of any policy justification for this provision, and we urge its deletion from the bill.
Study On Fee-Withholding for Non-Attorney Representatives
We support the provisions of the Social Security Protection Act of 2003, which require the Comptroller General to undertake a study regarding fee withholding for non-attorney representatives representing claimants before the Social Security Administration. The legislation sets forth several areas of concern that should be taken into account when the General Accounting Office compares non-attorney and attorney representatives, including the effect on claimants and program administration of extending fee withholding to unaffiliated non-attorneys. Our accountability concerns do not pertain to paralegals employed by legal services organizations or law firms because the claimants they represent are afforded the same protections as clients represented by attorneys in those organizations or firms.
We would urge the Subcommittee to ensure that the following issues are addressed by the study, which should be completed and evaluated before any changes are made regarding fee-withholding for non-attorney representatives.
In order to become an attorney, individuals in every state must pass a minimum two-day bar examination and must prove they meet the character requirements necessary for the practice of law. Thus, each state bar association requires prospective applicants to complete a lengthy application detailing information on each aspect of their lives that sheds light upon their character. This includes information on all civil and criminal proceedings (including traffic citations), financial and credit information, as well as numerous character references. Further, many states now add a third day to the written bar examination that deals solely with ethical issues. Many states also require a personal interview with a representative from the state bar committee. Such thorough investigations into an individual’s background serve to protect those seeking legal services, which includes those individuals seeking the assistance of an attorney in a Social Security disability case. It is evident that the Social Security Administration benefits from these thorough character examinations, and such benefits arise at no additional expense to the agency.
In order to represent individuals before the Social Security Administration, the only requirement is completion of the one-page "Appointment of Representative" form. The form requires only the representative’s name, address, and telephone number. The Social Security Administration has no method for verifying the character of a non-attorney representative; nor does it possess the resources to do so. The Social Security Administration can only rely on the representative’s self-certification as to their "good character and reputation." In contrast, the Social Security Administration requires that an attorney must be admitted to practice law in a State and be in good-standing with that State’s bar. Thus, attorneys must have been vetted by a state bar and have had to prove their good character before being allowed to engage in the practice of law.
The actions of attorneys also are more heavily regulated and face greater scrutiny than the actions of unaffiliated non-attorney representatives. States have enacted institutional controls to govern the conduct of professionals such as attorneys. The only controls that exist for non-attorney representatives are two short pages of regulations entitled "Rules of Conduct and Standards of Responsibility for Representatives." By contrast, attorneys and paralegals they supervise must comply with both these Social Security Administration standards and state bar codes of conduct, which are much more stringent and impose much more severe punishments for violations. While the Social Security Administration standards for non-attorney representatives do provide a starting point, the standards are general and, to date, enforcement has been limited. In contrast, state institutional controls provide many protections for disability claimants who are represented by attorneys and those paralegals they supervise.
Because unaffiliated non-attorney representatives do not fall under the purview of such institutional controls, claimants do not have many protections from unscrupulous non-attorney representatives. In order to practice law, attorneys must swear to abide by the ethical code of the state in which they practice. Failure to abide by such codes will result in fines, censure, or even disbarment. In contrast, non-attorney representatives are not under any similar ethical standards promulgated by a licensing body. The legislation this Subcommittee is considering today includes an important provision, which we support, that would increase the institutional protections afforded to claimants represented by attorneys. This provision would prohibit disbarred attorneys from serving as non-attorney representatives for Social Security disability and SSI claimants. Because non-attorney representatives are not governed by equivalent ethical standards, claimants are not afforded adequate protection against unscrupulous non-attorney representatives.
More troubling, if an unaffiliated, non-attorney representative behaves unethically the client has no direct recourse. The client cannot bring a charge against the non-attorney representative before an ethics committee because such a committee does not exist. The client is limited to complaining to the Social Security Administration, which may or may not bring a charge against the non-attorney representative. Surprisingly, the Social Security Administration has no obligation to investigate a charge of misfeasance or malfeasance against a non-attorney representative, unlike a state bar commission of professional conduct which is required by law to conduct an investigation of any charge of wrongdoing. Thus, the state licensing scheme for attorneys provides clients with direct recourse if they have a complaint.
Furthermore, complaints against attorneys and any resulting disbarment proceedings are public records, and the information is available to potential and current clients. On the other hand, information that the Social Security Administration has disqualified or suspended a representative under its own rules is not available to the public. Unfortunately, Social Security and SSI disability claimants have no way to determine whether non-attorney representatives have had any complaints filed against them. However, they can obtain similar information about attorneys from the State bar. Thus, Social Security disability claimants have no way to determine whether certain non-attorney representatives have had any complaints filed against them, but they can easily ascertain similar information about attorneys from a state bar association.
The Social Security Administration standards of conduct for non-attorney representatives are reactive and not proactive. Whereas attorneys can be disciplined for ethical lapses that do not involve their work as attorneys, the Social Security Administration can only punish non-attorney representatives after they have harmed a Social Security disability claimant. Consequently, the Social Security Administration standards by themselves do not adequately protect Social Security claimants. The absence of strict ethical guidelines to govern the conduct of representatives is troubling and is a powerful argument for a thoughtful, deliberate GAO study.
More importantly, even state governments cannot protect their own citizens by prohibiting unskilled or disreputable non-attorney representatives from taking advantage of Social Security disability claimants who reside within their states. Under the law, the Social Security Administration is the only entity that can take action against those non-attorney representatives who bilk or otherwise harm Social Security disability claimants.
Additionally, most states require attorneys to contribute to a "clients’ security trust fund" to reimburse clients for losses caused by attorney malfeasance. Such funds do not exist for non-attorney representatives, illustrating yet another control that protects attorneys’ clients, but not non-attorney representatives’ clients. Similarly, many states require attorneys to obtain malpractice insurance before they can practice law. Non-attorney representatives do not have such obligations, and claimants who suffer at the hands of non-attorney representatives cannot sue those individuals for malpractice. Furthermore, the Social Security Administration does not have the capacity to administer a similar "clients’ security trust fund" for non-attorney representatives.
Furthermore, in completing an "Appointment of Representative" form, non-attorney representatives are not required to certify that they have the training or experience to handle the appeal of a Social Security disability claim. As such, the Social Security Administration provides no opportunity to claimants to allow them to investigate the competence of non-attorney representatives. The Social Security Administration study mandated in this legislation will shed light on the proper level of training or education a non-attorney representative needs to adequately represent a Social Security disability claimant.
Because of the importance of the outcome of Social Security disability appeals, we believe the issues of qualifications, competency, accountability, ethics, and training should be studied by the General Accounting Office in the report mandated by this legislation.
Other Provisions of H.R. 743
Representative Payment Protections
We support the provisions in Title I of the bill that benefit the most vulnerable Social Security and SSI beneficiaries-those who require a representative payee. These provisions provide additional safeguards to ensure these individuals are protected from unscrupulous representative payees.
Issuance of Receipts to Acknowledge Earnings Reports or Change in Work Status
Under this legislation, the Social Security Administration, for the first time, would be required to issue a receipt whenever a beneficiary reports earnings or a change in work status. Overpayment due to work activity has been a serious problem for beneficiaries who take advantage of work incentives programs. These overpayments, which may amount to tens of thousands of dollars, often are caused by the lack of a single process for reporting earnings and the failure of Social Security Administration personnel to record earnings when they are reported. This legislation seeks to address this problem in a meaningful way.
Extending the Suspension of Benefits for Fugitive Felons
Similar to a provision in H.R. 4070, this bill extends the denial of Title II benefits to "fugitive felons and probation and parole violators." This ineligibility provision has existed in the SSI program since 1996. However, this legislation includes an important improvement-the "good cause" exception, which allows the Commissioner to continue benefits for fugitive felons. However, this exception does not apply to those in violation of probation or parole requirements. We urge that this provision is expanded to include fugitive felons and probation and parole violators.
This good cause exception is extremely important, in light of the hardships caused by the SSI ineligibility provision. While the agency has lauded the tens of thousands of fugitive felons identified under this provision, SSI advocates around the country have been inundated with requests for assistance from SSI beneficiaries whose benefits have been terminated for often minor, decades-old offenses which prosecutors have no intention of pursuing. However, the good cause exception, as currently drafted, only applies to fugitive felons.
We urge the Subcommittee to extend the good cause exception to probation and parole violators. In addition, the good cause exception should be extended to the SSI program. In determining whether to apply this exception, the Social Security Administration should consider: the seriousness of the alleged crime or violation; the length of time that has passed since the crime or violation occurred; whether there is an intent to extradite or prosecute the individual; any physical or mental limitations of the individual; and any linguistic and educational limitations of the individual. The inclusion of such protections, we believe, would ensure that the Social Security Administration considers all relevant information before determining the ineligibility of these individuals.
In conclusion, the members of NOSSCR and those claimants we represent thank the Chair and all members of this Subcommittee for your interest in these issues. I would be pleased to respond to any questions you may have.