House Committee on Ways and Means

Statement of Arthur Kaufman, President, National Association of Disability Representatives, and Owner and Chief Executive Officer, Insuring Assistance, Inc., Framingham, Massachusetts,

Testimony Before the Subcommittee on Social Security
of the House Committee on Ways and Means

February 27, 2003

Testimony before the Subcommittee on Social Security of the House Committee on Ways and Means, hearing on H.R. 743, the Social Security Protection Act of 2003.

Good morning, Chairman Shaw, Congressman Matsui and members of the Subcommittee. My name is Arthur Kaufman. I am honored to appear before you today to talk about H.R. 743, the Social Security Protection Act of 2003, and in particular the issue of representative fee withholding.

The National Association of Disability Representatives, Inc. (NADR) is a relatively new not-for-profit organization in its second operational year. Our job is to serve our existing membership's needs in the area of professional education, political action, and in maintaining and enhancing the skills of the membership. In our attempts to provide highly ethical and principled representation, we are now in the process of developing a Code of Standards for NADR members as well as what is tentatively called the NADR Satisfaction Guarantee for our members to give to their clients. I would like to submit for the record a draft of NADRís "Methodology to Achieve Stated Goals and Objectives," which makes reference to these efforts.

NADR has recently applied for membership within CCD and such is pending. We have been notified by the membership committee chair that we have been recommended for membership will be serving as a member on their Social Security task force.

Many of NADRís members who now perform professional disability representation were previously employed or contracted in various positions within the Social Security Administration. These positions have included claims representatives, examiners, supervisors, executive assistants, field office managers, paralegals, and agency analysts. We also have masters level nurses, social workers, physical therapists, lawyers, and vocational rehabilitation professionals, and others coming from a multitude of professional or educational backgrounds bringing various skills to claimant representation. None of us is an amateur in this field and we provide quality representation to impaired people trying to obtain Social Security Disability Benefits as well as Supplemental Security Income benefits. We are delighted that you have sought our views on this important legislation.

Our members and executive board would like to congratulate the Chairman and ranking member for a bill that effectively addresses the abuse of vulnerable Social Security beneficiaries by strengthening protections for recipients who are dependent upon representative payees to manage their financial affairs, the common sense changes allowing the Inspector General to fight systemic fraud and abuse, the Ticket-to-Work program moving persons with disabilities to meaningful employment, and the protection of dwindling Social Security resources. It is evident that striving toward individual actualization for our beneficiaries with disabilities while safeguarding our diminishing fiscal resources are clearly key considerations of this Subcommittee, as well as our organization, and I commend you for these efforts.

I am not only appearing before you as the president of NADR, but also as a person who has been successfully representing persons with impairments before the SSA since 1986. My background is Vocational Rehabilitation, and in the past year I became an employment network under the Ticket-to-Work Program. I have also served as a vocational expert for the SSA for about 2 years.

The one key area that NADR believes would enhance this legislation; is to simply establish parity for both attorneys and non-attorneys who represent persons seeking SSDI and SSI benefits.

Presently only attorneys are eligible to have their fees withheld by SSA. Non-attorneys, although explicitly recognized as equals in all other aspects of representation, are not allowed to utilize this service. H.R. 743 continues this disparity within SSDI and further proposes to extends it to SSI benefits, while entirely ignoring non-attorney representatives.

Non-attorney representatives have historically represented claimants applying for SSI benefits even though our fees were not withheld nor guaranteed by the Administration. Many of our members client base is with such individuals.

After reviewing the written testimony and subsequent submissions from the May 17, 2001 hearing, I concluded that the overwhelming theme from this Subcommittee is that you want more qualified representatives to assist claimants in the cumbersome application and appeals process of SSDI and SSI . We strongly concur. We propose that parity in fee withholding would assist in accomplishing this goal. Competent representatives are presently kept out of the marketplace because they cannot compete with attorneys who receive an unfair business advantage over non-attorneys due to this present lack of parity.

The disparity of fee withholding is elucidated by these small examples:

For more than 10 years I had been referred clients by an LTD insurance carrier to help their clients get SSDI. That carrier was purchased about a year ago by another LTD insurer. Upon completion of the purchase, I was notified that my services were no longer going to be utilized as the new carrier is only referring cases to persons or companies who can have their fee withheld and paid by SSA. After 10 years, I no longer get referrals from this company.

Another disparity arises when an attorney fresh out of law school having never seen a Social Security application nor spoken to an Administrative Law Judge, represents his or her first client and wins. The SSA will guarantee that he or she is paid. I, on the other hand, with more than 17 years experience, cannot utilize this service, even though my skills and experience far outweigh this attorneyís. From my time as a vocational expert at SSA, I was oftentimes appalled by the lack of knowledge many attorneys exhibited when appearing before the ALJ in my Local Office of Hearings and Appeals (at that time there were no non-attorney representatives actively practicing in that office).

Mr. Chairman, I would respectfully submit that simply the existence of a law degree does not ensure competence in a complex area such as this. Many representatives from our organization can enumerate examples of cases which we have taken after an attorney was unsuccessful in his or her representation. With your permission, I would like to submit for the record letters that were written to our members by claimants describing how pleased they were with their non-attorney representatives.

You have been sensitized via the written testimony as well as the oral presentations made by the colleagues of mine on this panel that the lack of an equivalent of Bar oversight for non-attorneys may result in unqualified, poorly prepared, or even unscrupulous representation. It is for this reason they claim that fee withholding for non-attorney representatives should be deferred until the study at Sec. 302 (c) of H.R. 743 is completed, and that such withholding not commence under Title II. We believe that this argument is without merit. The regulations of the Social Security Administration clearly outline not only the affirmative responsibilities of all representatives but also provide for severe penalties for representatives who do not abide by the rules for representatives outlined by the Social Security Administration (20 C.F.R. Pt. 404, Subpt. R for Title II, 20 C.F.R. Pt. 416, Subpt. O for SSI, and 62 F.R. 41,404-41,418, August 4, 1998, Final regulations that establish Standards of Conduct for Claimant Representatives.)

It is imperative to note that the attorney Bar does not act pro-actively to determine nor monitor whether attorneys are practicing good law. Rather it relies upon complaints being made by a dissatisfied party or member of the court. It is then, and only then, that an inquiry would commence. The Social Security Administration system presently has the rules and regulations in place to perform the same duties as each Stateís individual bar. If a dissatisfied claimant or a member of the Administration feels that the representative, whether they are an attorney or not, has not performed to standards which are expected, they have the right to complain directly to the Social Security Administration and that complaint will be evaluated. These rules however are uniform and apply equally throughout the nation. Unfortunately the same case cannot be made regarding each individual Stateís Bar. Furthermore, since an attorney does not need to be admitted to a State Bar to practice before the Social Security Administration, many attorneys provide representation in more than one State. The uniformity of rules on a federal level provides a far superior system for maintaining quality representatives than individually nuanced State rules.

The Administration may, and does prohibit anyone from practicing in this arena on a federal level if it deems such is appropriate. This applies equally to attorneys and non-attorneys alike. Clearly, this is one area where our colleagues who also practice law feel parity is acceptable.

The idea that attorneys have more at stake so they will be better practitioners is invalid. Clearly even disbarred attorneys still have skills that can be transferred to gainful employment in another field of endeavor. The same is true for non-attorney representatives. However, most of us are single practitioners or "mom and pop shops" where husbands and wives provide a service of Social Security representation. We do not provide representation for Workerís Compensation, Personal Injury, ERISA, or do wills, divorces, or any other area of law. We are highly trained specialists who focus our knowledge and understanding to the single area of Social Security representation typically on a full-time basis. Because this is our primary focus, we are astutely familiar with the rules, regulations and laws surrounding SSDI and SSI. This is not necessarily the case with most attorneys.

Since we "have all our eggs in one basket" our incentive to excel in our career and avoid any negative publicity not to mention condemnation from the Social Security Administration is paramount. Should we be unqualified, or provide poor or unscrupulous representation then the marketplace would soon drive us out of a job and, in all likelihood, our career. Such cannot be said about the attorney.

Currently, any representative, whether they are an attorney or not, must have their fee agreement or petition approved by the Administration. The oversight and protection by the Social Security Administration does not stop there however. Even after a fee has been approved, claimants are given the additional security to dispute the amount of and entitlement to a fee by a representative. This notification is provided directly to the claimant in the Notice of Award by the Administration on any claim where there has been professional representation involved.

The withholding of fees has never been the central focus of NADRís legislative agenda, but it is rather to obtain parity in the representation of persons with impairments before SSA. Our membership has divergent opinions about the utilization of fee withholding, but has significant interest in achieving an equal status with representatives who also practice law.

We sympathize with the members of the Committee who have been told that this issue had not surfaced until late in the 107th Congress, but this is simply is not the case. Having been a member of the National Organization of Social Security Claimantsí Representatives (NOSSCR) for more than 15 years, many of the non-attorney colleagues had frequently expressed concerns about the disparate treatment we have received from that organization. My concerns crescendoed when H.R. 3332 was introduced early in the 107th Congress. I personally contacted the Executive Director as well as all Circuit Representatives of NOSSCR and clearly expressed my dissatisfaction with the utilization of the word "attorney" in regards to fee withholding. I explicitly asked them to assist in crafting legislation that would change the term to "appointed representative." I was told that such could not be addressed at that time, but could be in future legislation. I would like to submit the letters detailing my concerns to NOSSCR to the Committee with my testimony.

The disregard of non-attorney representativesí concerns within NOSSCR led me to run for the presidency of NADR, and bring these concerns before Members of Congress, and in particular, this Committee. Being aware of these facts, it is my belief that the members of the Committee would not knowingly want to do damage to my profession.

On behalf of NADR, I strongly encourage you to amend H.R. 743 to allow professional non-attorney representatives to receive equitable treatment from SSA in all areas by initiating fee with-holding parity under SSDI, as well as in any changes which may be made to SSI. We believe that all qualified representatives should receive the identical benefits that attorneys derive from the Social Security Administration in all areas because all professional representatives, whether or not they are attorneys, are subject to the same regulations and codes of conduct when representing claimants before the Administration.

I am confident that the members of this Subcommittee are fair-minded, and will therefore want to take the necessary steps to provide parity in the way all representatives are treated by the SSA. If the goal of this Committee is to provide increased numbers of quality representatives in an expeditious manner, then we submit that providing a level playing field for all professional representatives - parity - will help achieve this goal.

On behalf of the National Association of Disability Representatives, Inc. I thank you for inviting me to comment on this important legislation. We look forward to working with you toward enacting this legislation in a manner that will increase access to quality representation for our citizens with significant impairments. Thank you.