I-5-1-15.Processing Cases Involving Potential Fraud, Similar Fault, and Abuse Issues

Table of Contents
I Purpose
II Terminology
III Background
IV Implementing Procedures
V Scope
VI Organization
VII Inquiries
Attachment 1 Questions and Answers
Attachment 2 Format of a CDI Report of Investigation

Issued: June 15, 2001

I. Purpose

This Temporary Instruction (TI) provides, in question and answer format, guidance on processing cases involving issues of potential fraud, similar fault, and abuse. The guidance provided focuses mainly on the identification, treatment, and resolution of issues concerning whether evidence should be disregarded because there is reason to believe that similar fault was involved in the providing of that evidence. The TI is part of an initiative of the Social Security Administration (SSA) to update and improve its procedures for dealing with fraud, similar fault, and abuse.

II. Terminology

The terms “fraud,” “similar fault,” and “abuse” cover the full range of infractions that may occur in the benefit programs administered by SSA. This TI sometimes uses the phrase “fraud and abuse” to refer to the full range of infractions, including “similar fault.” The term “fraud” may also be used in this broad sense. Thus, we may speak of “anti-fraud activities” to reference the Agency's activities against “fraud,” “similar fault,” and “abuse,” including the abuse that can justify SSA's imposition of an administrative sanction involving nonpayment of benefits.

III. Background

Since the inception of Social Security, SSA has taken its stewardship role very seriously and has always sought to prevent, detect, and respond appropriately to fraud, similar fault, and abuse in the benefit programs it administers. However, until recently, the Agency's anti-fraud efforts have depended largely on infrastructure systems and processes that were designed to strengthen SSA's overall program management and not solely to prevent or detect fraud and abuse (e.g., computer data matches, redeterminations, and continuing disability reviews (CDRs)).

Since 1995, when a separate SSA Office of the Inspector General (OIG) was created as a result of SSA becoming an independent agency, additional resources have become available for investigative activities targeted specifically at identifying and preventing fraud. Consequently, the Agency now has in place an expanded program for combating fraud and abuse.

Since 1997, SSA's strategic plan has included combating fraud and abuse in the Agency's strategic goals. Under the current plan, “Mastering the Challenge, Strategic Plan, 2000-2005,” one of SSA's five strategic goals is to “ensure the integrity of Social Security programs, with zero tolerance for fraud and abuse.” The strategic objectives the Agency has established to realize this goal include an objective to “[a]ggressively deter, identify and resolve fraud.”

SSA and its OIG have developed a comprehensive anti-fraud plan, and SSA has established a National Anti-Fraud Committee (NAFC) to oversee and support the Agency's anti-fraud activities. To coordinate anti-fraud activities regionally, SSA has established Regional Anti-Fraud Committees (RAFCs) that are co-chaired by SSA Regional Commissioners and the Special Agents in Charge (SACs) of OIG's field divisions. SSA has also established the national SSA Fraud Hotline. In addition, the Agency has undertaken some 40 Key Initiatives to detect and combat fraud on the part of claimants, representatives, medical and other providers, and State and Federal employees.

One of SSA's major anti-fraud initiatives is the Cooperative Disability Investigations (CDI) Program. Since Fiscal Year (FY) 1998, investigative units have become fully operational at twelve sites around the country — Atlanta, Baton Rouge, Chicago, Houston, Nashville, New York City, Newark, Oakland, Roanoke (VA), Salem (OR), St. Louis, and Tampa. Another unit is scheduled to begin operations within FY 2001 in Boston. The CDI units supplement and focus usual investigative activities carried out by the ten field divisions of OIG's Office of Investigations, and the development of fraud and abuse issues that SSA field offices (FOs) and State Disability Determination Services (DDSs) conduct.

SSA's Office of Disability (OD) and OIG's Office of Investigations jointly administer the CDI program. The CDI units rely on the combined skills and specialized knowledge of OIG law enforcement personnel (Special Agents), State or local law enforcement officials, and non-law enforcement personnel from the DDSs and SSA's Office of Operations.

Each CDI unit is headed up by a Special Agent of the OIG, and it is this Special Agent who, subject to oversight by OIG management, approves and authorizes release of the investigative reports submitted by these units. The Report of Investigation (ROI) that a CDI unit uses to convey the results of an investigation bears the image of a Special Agent's shield and includes language that identifies the report as property of the SSA OIG that may be used for official purposes only and may not be copied or reproduced without the permission of the OIG. The OIG Special Agent who heads up a CDI unit also has the lead for the unit in dealing with OHA, including any appearance the unit might be called on to make at a hearing before an ALJ.

Because of the role of the OIG Special Agents and OIG management in directing the investigative work of the CDI units, these units are correctly described as “OIG units,” the joint administration of the CDI program by OIG and OD notwithstanding. Like other investigative units in OIG's Office of Investigations, CDI units are subject to the Inspector General Act (IGA) of 1978, as amended, all regulations applicable to SSA's OIG, and the OIG Special Agent Handbook.

The OIG generally pursues an investigation only if it carries the potential for criminal prosecution. The IGA prohibits the OIG from engaging in program operating functions, including the determination of fraud or similar fault for administrative purposes. The OIG does not express opinions about whether benefits should be awarded or denied. However, CDI units and other OIG units may and do provide SSA with copies of their reports of investigations for any related administrative purposes that SSA may deem appropriate (such as an administrative finding of fraud or similar fault).

Law enforcement personnel assigned to CDI units, including the Special Agents of SSA's OIG, may engage in the full range of undercover, surveillance, and other investigative activities authorized by their respective offices (i.e., as the case may be, OIG's Office of Investigations or the State or local investigative office that has assigned an individual to the CDI unit). Non-law enforcement personnel assigned to the units (i.e., the personnel of DDSs and SSA's Office of Operations) are subject to all the rules and regulations applicable to SSA's administrative review process as established in 20 CFR Part 404, Subpart J, and Part 416, Subpart N.

The CDI units combat disability fraud in their respective areas by investigating issues of fraud and abuse in initial and continuing disability cases and by examining questionable practices by doctors, lawyers, interpreters, and other service providers who may be involved in the facilitation or promotion of disability fraud. The CDI units investigate issues of potential fraud or abuse that are referred to them primarily by the local DDS and at times by other sources. DDS personnel determine that an issue warrants referral through a two step process in which they initially identify a possible issue based on case characteristics associated with a high risk of fraud or similar fault and then determine, through a subsequent fact gathering and assessment step, that there is an issue of potential fraud, similar fault, or abuse that a CDI unit should consider as a subject for possible investigation. See Program Operation Manual System (POMS) sections DI 23025.010, DI 23025.015, and 23025.030; also see GN 02604.410B.

The CDI unit may advise the DDS that it believes an investigation is not warranted. If an investigation is conducted, the CDI unit reports the results of the investigation to the DDS to help substantiate or refute the original suspicions. The investigation and report are usually completed in time for the DDS adjudicative team to consider in its disability determination.

Like the Agency's other investigative activities, the investigations conducted by CDI units can have a wide variety of consequences. Investigations can result in the prosecution of criminal or civil actions by the Department of Justice (DOJ) under sections 206, 208, 1107, or 1632 of the Social Security Act (the Act), DOJ prosecution of criminal actions under various provisions of the United States Criminal Code, or prosecution of criminal actions by a State Attorney General under State law. Some investigations result in referrals to the Office of the Counsel to the Inspector General (OCIG) and proceedings by OIG to impose civil monetary penalties (CMPs) under sections 1129 and 1140 of the Act and the provisions of 20 CFR Part 498. And some result in the adjudication of fraud and abuse issues under the SSA administrative review process set forth in 20 CFR Part 404, Subpart J, and Part 416, Subpart N.

The specific matters at issue under the administrative review process concern the applicability of two additional mechanisms for combating fraud and abuse that the Act provides — the disregarding of certain evidence in the adjudication of claims for benefits and the imposition of administrative sanctions in the form of nonpayment of benefits. As in the past, adjudicators will also continue to decide the issue of whether a prior final determination or decision should be reopened under the rules of administrative finality because it was obtained by fraud or similar fault.

As amended by the Social Security Independence and Improvements Act of 1994 (Public Law No. 103-296), sections 205 and 1631 of the Act provide that, in initially deciding entitlement or eligibility in claims for benefits under title II and title XVI, and in redetermining the same, SSA “shall disregard any evidence if there is reason to believe that fraud or similar fault was involved in the providing of such evidence.” Social Security Ruling (SSR) 00-2p (65 FR 10140, February 25, 2000) sets forth the standards that SSA applies at all adjudicative levels in determining whether evidence should be disregarded because there is reason to believe that “similar fault” was involved in providing that evidence in a claim for benefits.

As amended by section 207 of the Foster Care Independence Act of 1999 (Public Law No. 106-169), the Act includes, in new section 1129A, provisions for the imposition by SSA of a penalty on any person who knowingly makes a statement that is false or misleading or omits a material fact for use in determining any right to or the amount of monthly benefits under title II or title XVI. The penalty is nonpayment for a specified period of months of any benefits that would otherwise be payable to the person under title II, and ineligibility for the same period of time for cash benefits under title XVI. SSA has published interim final regulations at 20 CFR §§ 404.459 and 416.1340 for implementing these administrative sanction provisions (65 FR 42283, July 10, 2000).

SSA's initiatives against fraud and abuse, in combination with the implementation of additional statutory provisions concerning same, have made SSA Field Offices (FOs) and State DDSs more aware of fraud and abuse issues and problems that occur in their local areas. Therefore, it is more likely now than in the past that fraud and abuse issues will be identified at the initial or the reconsideration steps of the administrative review process.

The existence of an OIG devoted to combating fraud and abuse in Social Security programs and operations increases the likelihood that identified issues of fraud and abuse will be properly developed and investigated before the filing of a request for a hearing before an Administrative Law Judge (ALJ). The increased variety of possible statutory penalties against fraud and abuse has the same effect, since fraud and abuse issues must be considered from additional perspectives. Under the Act as amended, where an issue of fraud or abuse is identified, the possible consequences to be assessed include prosecution of criminal or civil actions, the pursuit of CMPs by OIG, the imposition by SSA of an administrative sanction in the form of nonpayment of benefits, and the disregarding of evidence by adjudicators on the basis of fraud or similar fault.

As a result of the legislative changes discussed above and of the initiatives that SSA and its OIG have independently undertaken to strengthen the Agency's capacity to combat fraud and abuse, we expect adjudicators in the Office of Hearings and Appeals (OHA) to see an increase in the number of cases involving fraud and abuse issues that have been identified and investigated before a request for an ALJ hearing is filed. We do not expect that fraud and abuse cases will ever constitute a large part of the OHA workload. However, it is important that we process these cases correctly as they arise.

IV. Implementing Procedures

The attached questions and answers provide supplemental guidance for implementing SSA's policies and procedures in cases involving fraud and abuse issues. The guidance is to be used in conjunction with the published guidance available in SSR 00-2p and §§ 404.459 and 416.1340 of the regulations, and with the provisions on criminal violations of the Act and other Federal statutes in HALLEX I-1-3-1 through I-1-3-3. Adjudicators must also adhere to all applicable due process and confidentiality requirements in processing these cases.

V. Scope

This TI mainly concerns the processing of cases that involve, as one of the issues presented in a claim for benefits, the issue of whether evidence should be disregarded because there is reason to believe that “similar fault” was involved in the presentation of that evidence. In discussing the identification of these cases, the TI distinguishes the “similar fault” issue from “fraud” and “abuse” issues, and from the credibility issues typically presented in Social Security cases.

The TI also deals with the “abuse” that can lead to the sanction of nonpayment of benefits to a lesser extent, mainly to distinguish this infraction from “similar fault” and to explain that the issue of nonpayment of benefits may be decided by an ALJ only after it has previously been decided in an initial and a reconsidered determination. The TI also explains when and how ALJs refer cases so that consideration may be given to whether an initial determination on that issue should be made. (We plan to issue additional HALLEX guidance to provide information on the processing of administrative sanction cases that are before OHA for decision.) The TI deals with “fraud” mainly in the sense that it provides guidance on the question of whether the issue of fraud — as it may be decided in the context of the administrative review process described in 20 CFR Part 404, Subpart J, and Part 416, Subpart N — should be decided if the same result may be achieved by ruling on the issue of “similar fault.”

VI. Organization

This TI provides guidance in an attachment of questions and answers. A first, “General” part of the attachment addresses questions that deal with background information and various basic issues (see Table of Contents). A second, “Procedural” part focuses on operating procedures at the ALJ and Appeals Council steps of the administrative review process.

VII. Inquiries

Hearing office personnel should direct any questions to their Regional Office. Regional Office personnel should contact the Division of Field Practices and Procedures in the Office of the Chief Administrative Law Judge at (703) 605-8530. Headquarters personnel should contact the Office of Policy, Planning and Evaluation at (703) 605-8276.

Attachments:

1 — Questions and Answers

2 — Format of a CDI Report of Investigation

Attachment 1. Questions and Answers

Processing Fraud, Similar Fault, and Abuse Issues By the Office of Hearings and Appeals (OHA)

TABLE OF CONTENTS

GENERAL QUESTIONS

 
Identifying Investigative Evidence — Questions 1-2
OIG Evidence — Questions 3-7
Disregarding Evidence — When at Issue, Standards and Effects — Questions 8-14
Distinguishing “Administrative Sanction” and “Similar Fault” Cases — Questions 15-16
Distinguishing Fraud, Similar Fault, Abuse and Credibility Issues — Questions 17-18

PROCEDURAL QUESTIONS

 
General Procedures — Questions 19-20
ALJ Hearing Level Procedures — Questions 21-42
Pre-hearing and Hearing — Questions 21-36
Post-hearing — Questions 37-42
Appeals Council Procedures — Questions 43-50
Reopening Procedures — Questions 51-52

GENERAL QUESTIONS

Identifying Investigative Evidence

  1. How can OHA personnel identify investigative evidence that has been submitted by a Cooperative Disability Investigation (CDI) unit or another investigative unit of the Office of the Inspector General (OIG) of the Social Security Administration (SSA)?

    CDI units submit the results of their investigations via a Report of Investigation (ROI) of the OIG. Effective July 1999, all CDI ROIs are prepared in the format shown at Attachment 2. The claim file (CF) in a CDI case is also generally identified by a distinctively colored label or flag bearing the Special Agent seal and/or acronyms such as “OIG CDI” or “OIG/CDI.”

    As a rule, DDSs place CDI ROIs and associated documentation in the evidentiary part of the CF (the yellow (back), medical evidence section of the modular disability folder). CDI units deliver their ROIs with all the relevant documentation from their investigations that may be released under the laws and regulations applicable to OIG investigative units. In cases involving surveillance videos, the documentation routinely furnished may include, under procedures recently agreed to by OIG, OD, the DDSs and OHA, written summaries of or still photographs from the video tape, rather than the tape itself, because of the handling and storage problems tapes involve. However, the ROI will note that the full tape exists and that it will be made available on request.

    A CF may also contain investigative reports from other units in OIG's Office of Investigations. These offices may communicate evidence from their investigations to an SSA office or a DDS via SSA Form 8551, a letter/memorandum, or an OIG ROI.

  2. How should OHA personnel refer to evidence from a CDI unit or another OIG office in identifying that evidence in correspondence, notices and decisions?

    OHA personnel should refer to evidence from either a CDI unit or another OIG office as evidence submitted by OIG. There is no impediment to also noting, as the ROIs used by CDI units do, that the specific origin of the investigative evidence is a CDI unit. However, because CDI units are correctly described as OIG units and the evidence from a CDI unit is submitted under the authority of the OIG (see Background), the evidence from a CDI unit is correctly described as OIG evidence. In this respect, investigative evidence submitted by a CDI unit is like investigative evidence submitted by any other OIG office.

OIG Evidence

  1. Do OIG submissions include evidence that is favorable to the claimant?

    Yes.

    CDI units and other OIG offices use investigative techniques to help disprove as well as to help validate suspicions of fraud or abuse. Evidence that a CDI unit or other OIG office submits for consideration under SSA's nonadversarial administrative review process will include evidence resulting from an investigation that is favorable or unfavorable to the claimant.

  2. Does OIG evidence differ from other evidence typically considered in the administrative review process?

    Yes, in several respects.

    OIG evidence is frequently developed through investigative techniques, such as surveillance and undercover contacts, that differ from the developmental procedures typically used under the administrative review process of Subpart J (Part 404) and Subpart N (Part 416). OIG evidence may involve accusatory elements not typically found in evidence used in the administrative review process. OIG evidence may also present unusual questions for a claimant to resolve in deciding how to proceed with his or her case, either where the evidence is unfavorable to the claimant or where it is exculpatory in whole or in part.

  3. Will claimants who request an ALJ hearing always be aware, in cases in which the CF contains OIG evidence, that the CF contains such evidence?

    No.

    The claimant will generally be aware of the evidence only if a Personalized Denial Notice (PDN) listing or discussing the evidence has been issued. The claimant will generally be unaware of the evidence in the following situations: 1) a favorable determination has been made even though some evidence may have been disregarded; 2) OIG evidence has been considered, but no fraud or similar fault finding has been made; and 3) the PDN should have, but did not list or discuss the OIG evidence. See answers to Questions 21, 28, and 46 regarding advising claimants of the existence of OIG evidence in the CF.

  4. Does regulatory authority exist to consider OIG evidence in benefit claims?

    Yes.

    The regulations on determining disability provide broad authority to consider basically any kind of evidence bearing on the issue of disability. Sections 20 CFR 404.1512(b) and 416.912(b) specify that the term “evidence” means —

    ... anything you or anyone else submits to us or that we obtain that relates to your claim.

    Sections 20 CFR 404.1513(d) and 416.913(d) state that the non-medical sources we may use in assessing disability include, but are not limited to, educational, personnel, public and private social welfare personnel, and other non-medical sources.

    The definition of evidence is similarly broad in other types of claims. See, for example, 20 CFR §§ 404.702 and 416.801.

  5. May an ALJ request development of investigative evidence by a CDI unit or another OIG office?

    Yes. However, the CDI unit or other OIG office makes an independent determination concerning whether to initiate or continue an investigation. See Background; also see answers to Questions 24-27 below regarding specific criteria for requesting a CDI or other OIG unit to develop evidence and the procedures to follow in requesting development.

Disregarding Evidence — When at Issue, Standards and Effects

  1. When is the issue of whether to disregard evidence based on fraud or similar fault before the ALJ?

    This issue is before the ALJ if it was brought out in the initial, reconsidered or revised determination and was not decided entirely in the claimant's favor, unless it is established that the claimant only wishes to pursue the underlying claim and does not wish to contest the prior finding with respect to disregarding evidence. See 20 CFR §§ 404.946 and 416.1446; also see answer to Question 30 below about procedure to follow where the claimant only wishes to pursue the underlying claim.

    An ALJ may also consider a similar fault/disregard issue that was not previously decided or that was previously decided favorably to the claimant if evidence presented before or during the hearing causes the ALJ to believe that the issue should be considered.[1] However, in deciding whether initially to identify a fraud or similar fault issue or to revisit an issue of fraud or similar fault previously decided in the claimant's favor, the ALJ should consider the guidance provided in the answers to Questions 12, 17 and 18 below in determining if there is a true issue of fraud or similar fault that should be identified as an issue requiring formal consideration and resolution.

    If the evidence presented to the ALJ does not include additional evidence (evidence not considered at the pre-ALJ level) that is material, the ALJ will consider an issue(s) of fraud or similar fault that has previously been decided in the claimant's favor only if there is a clear lack of substantial evidence to support the favorable resolution of the issue or such resolution is based on an error of law. See HALLEX I-2-2-1 B.

  2. Should the ALJ decide the “fraud” aspect of the issue as to whether evidence should be disregarded because there is reason to believe that fraud or similar fault was involved in its presentation?

    No, generally.

    The issue of whether to disregard evidence can be resolved strictly on the basis of whether there is reason to believe that “similar fault” was involved in the presentation of the evidence. (The issue of reopening a prior final determination or decision can also be decided based on the issue of “similar fault.”) Therefore, the issue of fraud, with its complex, subordinate issue of intent to defraud, generally does not need to be decided to resolve the issue of disregarding evidence.

    OIG will consider investigating some cases for fraud or other sanctionable infractions after an ALJ has resolved the issue of disregarding evidence in deciding a claim for benefits. OIG may present a case to the Department of Justice (DOJ) for a determination whether a criminal or civil action is appropriate and for consultation regarding the appropriateness of a CMP. The Agency may also consider the administrative sanction of nonpayment of benefits after issuance of the ALJ's decision. (See answers to Questions 41, 42, and 50 below concerning procedures for referring cases to OIG after issuance of an ALJ decision.) The ALJ may generally avoid unnecessarily complicating those issues in any way by not deciding the “fraud” aspect of the fraud or similar fault issue. A finding of fraud may be appropriate in cases in which there has been a conviction or plea of fraud by the involved party.

  3. What is the standard for disregarding evidence?

    Sections 205(u) and 1631(e)(7) of the Act require SSA to disregard evidence if there is reason to believe that fraud or similar fault was involved in the providing of the evidence. These sections do not address the standard for fraud. However, they explain that “similar fault” means —

    (A) An incorrect or incomplete statement that is material to the determination is knowingly made; or

    (B) Information that is material to the determination is knowingly concealed.

    Social Security Ruling (SSR) 00-2p addresses the determination of similar fault and provides, among other things, that —

    • A similar fault finding may be made only if there is reason to believe, based on a preponderance of the evidence, that the person committing the fault knew that the evidence provided was false or incomplete; and

    • A similar fault finding cannot be based on speculation or suspicion. (65 FR 10140, at 10141, 10142.)

    A finding of similar fault does not require that an ALJ know that similar fault has occurred. Instead, the similar fault standard, and consequently the standard for disregarding evidence involved in instances of similar fault, is that there is “reason to believe,” based on a preponderance of the substantial evidence, and not on speculation or suspicion, that similar fault was involved in the providing of the evidence.

    A similar fault finding does not require that the person providing the evidence have any direct relationship to the claimant, or be acting on behalf of the claimant. A similar fault finding also does not require, as a finding of fraud does, an element of intent to defraud. See SSR 00-2p, 65 FR 10140, at 10141; also see the answer to Question 17 below for a discussion of the element of intent that is involved in “similar fault.”

  4. What does it mean to “disregard” evidence?

    SSR 00-2p provides that when an adjudicator determines that there is reason to believe that “similar fault” was involved in the presentation of evidence, the evidence “cannot be used as evidence in the claim” and “must be disregarded.” (65 FR 1014O, at 10142.) If similar fault is found, the adjudicator must, under §§ 205(u) and 1631(e)(7) of the Act, give the evidence no consideration in support of the claim.

  5. What discretion does the ALJ have with respect to disregarding evidence?

    If the ALJ finds, based on a preponderance of the evidence that there is reason to believe that similar fault occurred in the presentation of evidence, the ALJ must disregard that evidence. The ALJ may exercise discretion, however, in determining if there is reason to believe that similar fault occurred in the providing of evidence. In addition, as we discuss in our answers to Questions 8 and 18, where similar fault has not been found to have occurred in the initial or reconsidered determination upon which the request for a hearing has been filed, the ALJ also has discretion in determining whether any question of possible similar fault presented by a case is of a gravity to warrant identification of an issue of similar fault that requires formal consideration and resolution. The ALJ decides if fraud or similar fault is truly at issue in these cases. Finally, as we discuss in our answers to Questions 18 and 38, it is also unnecessary to identify an issue of similar fault as requiring resolution if that issue has not previously been resolved against the claimant and the benefit claim may be decided without considering the suspicious evidence.

  6. What effect does a finding that evidence should be disregarded on the basis of fraud or similar fault have on the overall decision on the benefit claim?

    The disregarding of evidence based on a “similar fault” finding does not complete the adjudication of any claim for benefits. The ALJ must make a favorable, partially favorable, or unfavorable decision on the claim as a whole by evaluating the remaining, not-disregarded evidence, without considering the disregarded evidence. See SSR 00-2p, 65 FR 10140, at 10142.

  7. What is the effect of a finding that evidence should not be disregarded because no fraud or similar fault was involved in the providing of the evidence?

    Where an ALJ makes this finding, the ALJ has concluded that there is not reason to believe, on the basis of a preponderance of the evidence, that fraud or similar fault was involved in the presenting of the evidence. Under SSR 00-2p (65 FR 10140, at 10141), challenged evidence that is not disregarded may be given little or no weight or credence relative to other evidence for many other reasons (as provided, most specifically, in 20 CFR §§ 404.1527 and 416.927 and SSR 96-7p). However, the evidence should not be given less weight because of the unsustained suspicions about its basic legitimacy and acceptability as evidence.

Distinguishing “Administrative Sanction” and “Similar Fault” Cases

  1. How do administrative sanction and similar fault cases differ?

    The standards for finding the infractions involved in these cases differ. While the infraction in each type of case must be committed “knowingly,” the definition of “knowingly” is broader for the purposes of imposing the nonpayment administrative sanction than for disregarding evidence based on “similar fault.”

    For the purposes of a nonpayment abuse, “knowingly” is defined to mean that the person knows, or should know that a statement is false, misleading, or omits a material fact, or that the statement is made with a knowing disregard for the truth. See §§ 404.459(a) and 416.1340(a), 65 FR 42283, at 42285, 42286.

    For “similar fault” purposes, “knowingly” is defined as describing “how a person acts in furnishing information that he or she knows is false or incomplete.” See SSR 00-2p, 65 FR 10140, at 10141. That SSR explains that a “similar fault” finding can be made only if there is reason to believe that the person committing the fault “knew” that the evidence provided was false or incomplete. Thus, under the rules for disregarding evidence based on “similar fault,” an individual may not be found to have acted “knowingly” on the basis that the person “should have known” that an incomplete or inaccurate statement material to the determination or decision was being provided, or that material information was being concealed.

    The penalties associated with the infractions also differ.

    The penalty in an administrative sanction case (where the abuse at issue in these cases is found to have occurred) is nonpayment for a specified number of months of benefits under title II that would otherwise be payable to the person who committed the infraction, and ineligibility of that person for the same period of time to cash benefits under title XVI. The penalty period does not begin to run until the person would otherwise be eligible for payment of benefits under either title II or title XVI.

    The disregarding of evidence based on a finding that there is reason to believe that similar fault was involved may preclude or jeopardize entitlement or eligibility under the current application altogether, for the claimant and any auxiliary claimants. See answer to Question 13 above. In instances in which the claimant was personally involved in the similar fault, the similar fault finding may also adversely affect the ability of the claimant to establish entitlement or eligibility under subsequent applications. See answer to Question 29 below.

  2. What is the ALJ's action in an administrative sanction case?

    An ALJ only decides the issue of whether a claimant has committed an abuse supporting imposition of the administrative sanction of nonpayment of benefits in instances in which the claimant has filed a request for an ALJ hearing based on his or her disagreement with a reconsidered determination on that issue. See §§ 404.959(f) and 416.1340(f), 65 FR 42283, at 42286, 42287. Where the issue of such abuse is not before the ALJ based on a reconsidered determination, the ALJ's action with respect to this issue is limited to referring the case to OIG. See answer to Question 41 below.

Distinguishing Fraud, Similar Fault, Abuse and Credibility Issues

  1. How are the issues of fraud, similar fault, and abuse distinguished from the issues of credibility typically presented in claims for disability benefits?

    A finding of “fraud” requires proof of an intent to defraud, either based on a preponderance of the evidence, as required in Social Security claims and civil actions, or beyond a reasonable doubt, as required in criminal prosecutions. Neither “similar fault” nor the “abuse” required to impose the administrative sanction of nonpayment of benefits requires proof of an intent to defraud. However, as discussed in the answer to Question 15 above, a finding that either of these infractions has occurred requires a conclusion, based on a preponderance of the evidence, that the infraction was committed “knowingly.” Thus, each infraction involves an intent to misinform.

    Adjudicators of disability claims frequently deal with allegations and statements that they find lacking in credibility or persuasiveness. For the most part, of course, such allegations and statements do not derive from an intent to defraud or an action knowingly undertaken to provide false or misleading information. Instead, they derive from misunderstanding, confusion, nervousness, and other weaknesses and limitations that are not sanctionable.

  2. What general factors should an ALJ consider in deciding whether there is a true issue of fraud or similar fault that requires resolution in cases in which the request for a hearing is not filed with respect to a determination that disregarded evidence based on fraud or similar fault?

    In deciding whether a case presents a true issue of fraud or similar fault requiring formal consideration and resolution in instances in which a fraud or similar fault finding was not made in the determination upon which the request for a hearing is based (see answer to Question 8 above), ALJs should carefully distinguish between that issue and ordinary credibility issues.

    The factors considered should include any circumstances bearing on the likelihood that there was a knowing presentation of false or incomplete information to the Agency about a material fact. The circumstances considered would include any physical, mental, educational or linguistic limitation (including any lack of facility with the English language) that the person providing the information may have. Consideration should also be given to the caution required any time a decision is made to officially declare the existence of an issue that involves at least a question of impropriety or unethical behavior.

    It is not necessary to identify an issue of fraud or similar fault as requiring resolution if the issue has not previously been resolved against the claimant and it is clear that the benefit claim may be decided on a basis that does not require consideration of the suspicious evidence. For example, if a claim should be denied because the claimant lacks insured status, or because of the performance of substantial gainful activity throughout the period at issue, it is not necessary to identify an issue of fraud or similar fault concerning medical evidence. See answers to Questions 38 and 41 below about post-decisional referral of such cases for consideration by OIG.

PROCEDURAL QUESTIONS

General Procedures

  1. Is evidence that OIG has referred for inclusion in a CF subject to access by the claimant under the Privacy Act?

    Yes.

    The CF is not exempt from access under the Privacy Act. Therefore, when investigative evidence that an OIG office or a CDI unit submits for consideration in the administrative review process is included in the CF, that evidence is subject to access by the claimant under the Privacy Act. It is for this reason that the ROIs submitted by CDI units are “sanitized” prior to their release to the DDSs to protect the identities of confidential informants, novel investigative techniques, or other information that can properly be withheld under the Privacy Act. See 5 U.S.C. § 552a(d) and 20 CFR § 401.35; also see answer to Question 23 below for procedures followed in providing access.

    NOTE:

    If the CF bears a flag or includes a notation indicating that there has been referral to a CDI unit or another OIG office and that office has not submitted a ROI, evidence, or other report, the flag or notation is not disclosable and should be removed from the CF if the file is to be examined by the claimant or his or her representative.

  2. Do our normal prohibitions against ex parte communications and actions violative of the principle of separation of functions apply in cases in which an OIG office or a CDI unit furnishes evidence?

    Yes.

    It has long been SSA policy to follow procedures in the administrative review process that meet or exceed the protections of the Administrative Procedure Act (APA) and due process. See, generally, Richardson v. Perales, 402 U.S. 389, 400-1, 408-410 (1971). This Agency policy applies in all claims for benefits, including those in which OIG is involved.

    Section 556(b) of the APA (5 U.S.C. § 556(b)) governs employees who “preside at the taking of evidence,” and mandates that “the functions of presiding officers... [and others] shall be conducted in an impartial manner.” Section 554(d)(1) provides that an “employee who presides at the reception of evidence” may not have ex parte consultation with "a person or party on a fact at issue" without notice to all parties. (Emphasis added.) Section 554(d)(2) provides that a presiding officer shall not be responsible to, or subject to the supervision of, an Agency's employee or agent engaged in prosecutorial or investigative functions for the Agency. Section 554(d)(2) further provides that —

    An employee or agent engaged in the performance of investigative or prosecuting functions for an agency in a case may not, in that or a factually related case, participate or advise in the decision . . . or agency review . . . except as witness or counsel in public proceedings.

    OHA observes the prohibition against ex parte communication with respect to HO staff as well as ALJs. The prohibition does not foreclose appropriate consultation between ALJs and responsible Agency officials and personnel regarding technical issues or questions of law or policy. The prohibition also does not preclude a person or party from inquiring about the status of a case or asking routine questions about administrative functions or procedures. (Our procedures in the latter respect are like those followed in CMP cases — see 20 CFR § 498.205.)

ALJ Hearing Level Procedures

  1. Should the HO modify the letter acknowledging receipt of the request for hearing to inform the claimant that the CF includes evidence provided by OIG?

    Yes, for the reasons explained below.

    Though not required to do so, we currently advise claimants in the acknowledgement letter issued at the start of the hearing process that they may examine the CF before or on the date of the hearing (HALLEX I-2-1-35, standardized acknowledgement letters). However, the acknowledgement letter does not currently advise claimants about any particular type of evidence in the CF.

    OIG evidence differs from evidence typically considered in the administrative process and may present unusual questions for a claimant to resolve in deciding how to proceed with his or her case. See answer to Question 4 above. In some instances, the claimant will not be aware that the CF contains OIG evidence. See answer to Question 5 above.

    Considering those factors, we believe that, though not required to do so, HOs should assure that claimants are aware of the existence of OIG evidence in the CF at the outset of the ALJ hearing process, when the HOs first advise claimants that they may examine the CF. Doing that will assure that claimants have the fullest possible opportunity to examine the evidence during the hearing process and determine how to proceed in light of that evidence, including deciding, in instances in which the claimant is not already represented, whether to appoint a representative.

    Based on these considerations, if the CF contains OIG evidence (see answers to Questions 1 and 2), the standard acknowledgement letter should be modified to advise the claimant or the claimant's representative of the presence of such evidence in the file. The following language should be used for this purpose —

    Your file contains investigative evidence submitted by the Office of the Inspector General of the Social Security Administration. You may see this evidence, as well as the other evidence in your file, if you decide to look at the file before the hearing or on the date of the hearing.

    Pending modification of the current acknowledgement letter to allow insertion of this language in the text of the letter, this language is to be provided in a stand-alone enclosure entitled —

    Statement About Information In Your File

    NOTE 1:

    If the CF bears a flag or includes a notation showing that a referral to a CDI unit or other OIG office has been made, but the CDI unit or other office has not submitted its ROI or evidence or other report for inclusion in the file, the acknowledgement letter should not be modified to indicate the existence of OIG evidence (see “Note” in answer to Question 19 above).

    NOTE 2:

    In instances in which an OIG office or a CDI unit submits investigative evidence to the HO subsequent to the HO's release of the acknowledgement letter, the normal procedures apply for giving the claimant an opportunity before the hearing to examine evidence that is received after the start of the hearing process from a source other than claimant (see HALLEX I-2-5-28 C). In addition, for the same reasons for which we modify the acknowledgement letter to note the existence of OIG evidence in the CF, the notice the HO uses to advise the claimant of the receipt of additional evidence should state that the HO has received investigative evidence from OIG, and that the claimant may examine the CF and the additional evidence before the hearing or on the date of the hearing.

  2. Should the HO arrange for a claimant and his or her representative to view a surveillance tape?

    Yes, under the circumstances and in the manner discussed below.

    In accordance with our practice of making materials in the CF available to claimants for examination before the hearing (HALLEX I-2-1-35), if the CF includes a surveillance tape, still photographs from such a tape, or any written descriptions of what a surveillance tape depicts, and the claimant asks to view the tape, the HO will secure the surveillance tape, if it is not already in the file (see answer to Question 1 above), and arrange to have a video monitor available for viewing it. In these instances, the monitor and the surveillance tape should be available in the HO or the FO in which the examination of evidence will occur.

    The video tape and a monitor for viewing it should also be available in any instance in which an ALJ may propose at a hearing to enter a surveillance tape into the record as an exhibit. The claimant has a right to view the tape at the hearing even if he or she has previously viewed, or declined to view, the tape. A surveillance tape may be adduced into evidence without viewing at the hearing if the ALJ and the parties to the hearing agree to that procedure. Still photographs from a surveillance tape, or written descriptions of what a surveillance tape shows, may also be entered into evidence without viewing of the tape at the hearing if the ALJ and the parties agree to that procedure.

  3. Is SSA required to provide the claimant a copy of OIG evidence, including a surveillance tape, if the claimant requests access to his records pursuant to the Privacy Act?

    Yes — unless the claimant's examination of the CF in person in an SSA office makes it unnecessary to copy the information.

    SSA complies with the access provision of the Privacy Act by providing one free copy of CF material to the claimant or representative when access is for program purposes. HOs may provide a claimant access to his or her records pursuant to the Privacy Act either by providing on-site review or by providing a copy of requested materials. However, in instances in which the claimant has examined the CF in person, the HO is still required to provide a free copy of CF material if the claimant requests a copy. See HALLEX I-1-4-3 G and I-2-1-35 C.

    These same rules apply with respect to a video surveillance tape. If the CF contains a surveillance tape, still photographs from a tape, or written descriptions of what a tape shows, and the claimant requests a copy of the tape, the HO must provide a copy, even if the claimant has already viewed the tape in person.

    Where a free copy of CF material has previously been provided, OHA will waive the cost of providing an additional copy if the total cost of providing the additional copy does not exceed $50, or if the CF has not been documented to establish that a free copy of any particular CF material currently requested by the claimant has already been provided. See HALLEX I-1-4-3 D.2 and I-2-1-35 C.

  4. When should an ALJ request a CDI or other OIG unit to investigate an issue of fraud or similar fault during the hearing process?

    Such requests are appropriate only if: 1) the case presents an issue of fraud or similar fault that requires formal consideration and resolution (see answers to Questions 8, 12 and 18 above); and 2) the available evidence, including any testimony received at the hearing, is insufficient for the ALJ to decide the issue of whether evidence should be disregarded on the basis of “similar fault.” If the evidence supports a finding that there is not reason to believe that “similar fault” was involved in the presentation of the suspicious evidence, there is no issue as to “fraud” that requires investigation or consideration by OIG. If the evidence supports a finding that there is reason to believe that “similar fault” was involved in the presentation of the suspicious evidence, the ALJ shall disregard the evidence on that basis. See answers to Questions 38 and 41 below concerning post-decisional referral of cases to OIG.

  5. What is the effect of an ALJ request for CDI or other OIG investigative development during the hearing process?

    An ALJ's request for an investigation does not ensure that the CDI or other OIG unit receiving the request will undertake an investigation because the unit will independently decide if an investigation is warranted (see Background). Such a request acts as a referral that causes the CDI or other OIG unit to evaluate the case to determine whether an investigation is warranted and also whether the pursuit of a criminal, civil, or CMP action could be appropriate. The HO will consider the case as ripe for ALJ adjudication of the issue of disregarding evidence on the basis of “similar fault” when OIG either notifies the HO in writing of its decision to decline investigation or returns its report, if an investigation is undertaken.

  6. If an ALJ wishes to request OIG to obtain additional investigative evidence or to initiate an investigation during the hearing process, how should the request be made?

    The request should be made in writing and should be in the form of a request to the local SSA FO or the State DDS that it secure the needed OIG assistance. These procedures will guard against any possibility of ex parte communication or actions violative of the separation of functions. The procedures should also facilitate action on the request since the FO or DDS will be aware of local OIG resources and procedures. The request should be to the FO where the issue concerns work activity or a nondisability issue, and to the State DDS where the matter involves medical issues.

    ALJ requests for OIG to initiate or to reopen an investigation should also be routed through the Hearing Office Chief Administrative Law Judge (HOCALJ) and the Regional Chief Administrative Law Judge (RCALJ). This procedure will help to assure that OHA's regional managers are aware of investigative activities that OHA requests.

  7. If an ALJ requests a CDI or other OIG unit to investigate an issue of fraud or abuse, should the claimant be notified of the request at the time it is made?

    No.

    As in other cases in which HOs make written development requests, the HO should keep a copy of the request for inclusion in the record and give the claimant an opportunity to examine the response to the request when it is received.

    Notifying the claimant of the request could adversely affect any investigative activity that the unit undertakes and could also compromise the safety of the unit's investigative personnel. Notifying the claimant might also unnecessarily alarm the claimant. The CDI or OIG unit that is asked to investigate the case may conclude that no investigation is warranted. The request is not subject to disclosure under the Privacy Act pending the submission of a ROI, evidence, or other report by the CDI unit or other OIG unit (see “Note” in the answer to Question 19 above).

  8. Will an ALJ be able to receive into the record information that a CDI or other OIG unit submits on its own initiative after a request for hearing has been filed?

    Yes.

    Once a request for an ALJ hearing has been filed in a case, the case is under the jurisdiction of OHA. However, that jurisdiction does not preclude other SSA components from carrying on their normal functions and from submitting to OHA potentially relevant information secured in the course of those functions. Thus, for example, a component that effectuates benefit payments might appropriately submit an updated earnings record that provides evidence of possible work activity after an alleged onset of disability. Similarly, a CDI or other OIG unit might appropriately submit information relevant to a pending request for hearing that it receives in the course of the unit's official duties. Any information submitted by a CDI or other OIG unit in these circumstances would be immediately subject to examination by the parties. See Note 2 in the answer to Question 21 above regarding claimant notification.

  9. Is evidence from other Social Security claims admissible for the purpose of deciding the issue of fraud or similar fault?

    Yes.

    Under SSR 00-2p, a “similar fault” finding involving an action or statement by a claimant in connection with one application may be used as evidence in deciding if there is reason to believe that the same individual has engaged in similar fault in providing evidence in a subsequent claim. SSR 00-2p also contemplates that evidence relied on to make a “similar fault” finding in one case about a third party (e.g., a doctor, interpreter, or attorney), and the facts established in the findings of that case, may be used as evidence in another case in which the same third party was involved in the providing of evidence that may be subject to the statutory provisions on disregarding evidence. (65 FR 10140, at 10141.)

    In instances in which evidence acquired in an earlier case or cases is to be considered in a current case, the claimant must be given an opportunity to examine and contest the evidence, including the opportunity to call a third party as a witness. The evidence must be sanitized to protect the identity of the claimants involved in the earlier case(s), unless the evidence is a matter of public record.

  10. What should the ALJ do if it appears that the claimant wishes only to pursue the underlying claim, and not to contest a finding in the initial or reconsidered determination that certain evidence must be disregarded because there is reason to believe that fraud or similar fault was involved in the presentation of that evidence?

    The ALJ should consider whether a formal prehearing conference should be conducted under §§ 404.961 and 416.1461 to determine if there is agreement on this issue. If a conference is held, a record of the conference will be made and the ALJ will issue an order stating any agreements reached.

  11. Should the notice of hearing advise the claimant that the issue of disregarding evidence because of fraud or similar fault will be considered at the hearing?

    Yes.

    Under 20 CFR §§ 404.938 and 416.1438, the notice of hearing must contain a statement of the “specific” issues that are to be considered. The issue of whether evidence should be disregarded under the fraud and similar fault provisions of the Act qualifies as a “specific” issue requiring notice.

    The ALJ should notify the claimant of an intent to consider this issue at the hearing in instances in which the issue was decided unfavorably to the claimant in the determination upon which the request for an ALJ hearing has been filed (unless it is established through a formal prehearing conference that the claimant does not wish to pursue the issue). The ALJ should also notify the claimant of intent to consider this issue in instances in which it is initially identified as requiring formal consideration and resolution at the ALJ hearing level, and in instances in which the ALJ decides to revisit an issue of fraud or similar fault that was previously decided favorably to the claimant. See answers to Questions 8, 12, 18, and 30 above.

    NOTE:

    Notice of an intent to consider the issue of disregarding evidence because of fraud or similar fault should also be provided in instances in which the original notice of hearing is issued before the ALJ determines that there is an issue of fraud or similar fault that requires formal consideration and resolution. All notice requirements regarding postponements, adjournments, and supplemental hearings must be satisfied. See 20 CFR §§ 404.936 and 416.1436; also see HALLEX I-2-3-30, I-2-3-35, I-2-6-80, and I-2-7-1.

  12. How should the ALJ give notice of the issue?

    The following language should be included in the issues section of the notice of hearing.

    I will also consider the issue of whether evidence in your case should be disregarded on the basis that fraud or similar fault was involved in providing the evidence. [Section 205(u)] [Section 1631(e)(7)] [Sections 205(u) and 1631(e)(7)] of the Act, as amended, [requires] [require] that evidence in a claim for benefits be disregarded if there is reason to believe that fraud or similar fault was involved in providing that evidence. I plan to consider whether there was “similar fault” in your case. I will decide that “similar fault” was involved only if there is reason to believe, based on a preponderance of the evidence, that false or incomplete information that could influence my decision on your claim for benefits has been knowingly provided.

    The ALJ should also include in the notice of hearing personalized language to specify the particular evidence that is in question regarding possible fraud or similar fault. In addition, if the issue of fraud or similar fault to be considered is a new issue or an issue that has previously been decided in the claimant's favor, the ALJ should advise the claimant of that fact.

  13. What type of challenges to OIG investigative evidence are claimants likely to raise?

    Claimants may seek to challenge the significance of, or the weight attributable to, such evidence. In particular, claimants may seek to show that OIG evidence warrants less weight than might appear to be the case by —

    • Contending that the activities depicted in the evidence occurred in an isolated instance(s) in which the claimant's symptoms were in temporary remission or the claimant was able to overcome normally debilitating pain;

    • Calling witnesses to testify that the claimant's activities normally differ from those depicted in the OIG evidence; and

    • Securing medical evidence concerning temporary periods of remission, or subsequent worsening.

    Claimants may also emphasize that OIG evidence must be viewed as only part of the evidence to be considered. In this regard, it should be remembered that OIG evidence is to be weighed with the other relevant evidence and accorded no special weight simply because it came from OIG. Finally, claimants may also seek to emphasize the importance of any exculpatory aspects of the investigative evidence. Claimants may contend that their credibility should be strengthened to the extent that investigative techniques like those used by CDI and other OIG units produce evidence that either supports or does not contradict their allegations.

  14. Should OIG Agents and witnesses be asked to testify at ALJ hearings?

    Yes — if a party requests an appearance that is necessary for a full and fair inquiry into the issues, or if the ALJ believes that an aspect of an OIG submission requires exploration in oral testimony.

    The Social Security hearing process is basically a document-based process, and the Agency has generally insisted on the acceptability of relying on documentary evidence at its hearings. OIG investigative evidence, whether submitted by a CDI unit or another OIG office, will frequently have supporting documentation in the form of video tapes, photographs, affidavits, or official records. However, given that OIG investigative evidence can involve accusatory elements not typically found in the documents relied on in the administrative review process, and that the demonstration of any exculpatory aspects of the information might benefit from the oral examination of witnesses, it may be appropriate, in many instances, to accommodate a party's request for an appearance by the OIG Special Agent who submitted the evidence or witnesses cited in the evidence.

    The ALJ may also request the appearance of the OIG Special Agent or witnesses in any instance in which the ALJ believes that full inquiry into the issues will require testing of the evidence in oral questioning. The ALJ might wish to request such appearances, for example, if the claimant challenges the authenticity or truthfulness of the OIG report or evidence without requesting an opportunity to question witnesses.

    An appearance by an OIG Special Agent should generally not be required merely to introduce or to explain an OIG submission, even where it includes evidence submitted by a third party (e.g., a surveillance video OIG received from an insurance company). The OIG/CDI ROI or other OIG transmitting document should normally suffice for that purpose. Chain-of-custody and hearsay rules such as courts apply to determine the admissibility of evidence do not apply in the informal, nonadversarial hearings conducted by the ALJs of SSA.

  15. May the ALJ use his or her subpoena authority to compel appearances of OIG sources who are unwilling to testify voluntarily?

    Yes — if issuance of a subpoena is reasonably necessary to the full presentation of the case.

    The statutory power of the Commissioner of Social Security to issue subpoenas has been delegated to ALJs and the Appeals Council through the Agency's regulations at 20 CFR §§ 404.950(d) and 416.1450(d). The power delegated is a qualified, discretionary power under which an ALJ may issue a subpoena, on his or her own motion or at the request of a party, “[w]hen it is reasonably necessary for the full presentation of a case....” The standards for determining whether issuance of a subpoena is “reasonably necessary” are reflected in the requirements that the regulations place on a party requesting a subpoena to “... state the important facts that the witness or document is expected to prove ... and indicate why these facts could not be proven without issuing a subpoena.”

    HALLEX I-2-5-78 emphasizes the need for an ALJ to exhaust all other means of obtaining documents or testimony before issuing a subpoena even in situations in which the evidence can be expected to prove important facts. Issuance of a subpoena is not reasonably necessary where important facts can be proved without issuance of a subpoena.

    It is possible that a need to take testimony from sources of documentary evidence will arise more frequently in cases involving fraud and abuse issues than in other cases. However, even if live testimony is deemed necessary, witnesses should be asked to appear voluntarily before any decision is made to issue a subpoena to compel an appearance. A subpoena should not be issued where a voluntary appearance can be arranged.

    There have been questions in the past about whether subpoenaing witnesses whose testimony may be adverse to a claimant might be justified on the basis that an appearance under compulsion of subpoena could tend to establish and protect the witness' neutrality better than would a voluntary appearance. Such a consideration is not relevant for the purpose of determining the reasonable necessity of issuing a subpoena in a hearing process that we conduct in an informal, nonadversarial manner, as provided in 20 CFR §§ 404.900(b) and 416.1400(b).

    The appropriate person to appear and testify about the activities of an OIG office or a CDI unit is the Special Agent who heads up the office or unit and authorizes issuance of its reports. OIG Special Agents who submit investigative evidence in Social Security cases, and the State/local law enforcement officers assigned to the CDI units, are prepared to appear voluntarily at ALJ hearings and to testify about the evidence submitted, if asked to do so by an ALJ. The Special Agents are also prepared to testify regarding public or non-privileged background information, such as general screening procedures used by DDSs to identify cases that should be investigated, and about investigative procedures generally followed in OIG and CDI units.

    Requesting the testimony of DDS personnel involves significant administrative and operational problems. Therefore, in cases involving OIG evidence, as in other cases, ALJs will ordinarily not ask DDS personnel to testify at a hearing. Under procedures described in POMS section DI 29501.040, in the rare instances in which an ALJ concludes that an appearance of a DDS employee at a hearing is necessary, the ALJ is to request the appearance by a memorandum addressed to the DDS through the Assistant Regional Commissioner (ARC), Management and Operations Support, and to send a copy of the request directly to the OHA Regional Office. These procedures apply except in emergency situations in which, upon prior approval of the ARC, the ALJ may send the request directly to the DDS, attention of the DDS administrator.

    We expect that witnesses relied on in a report submitted by a CDI unit will be prepared to appear and testify voluntarily if requested to do so by an ALJ. However, the CDI or other OIG unit may occasionally rely on evidence provided by a confidential source. If this occurs, the CDI or other OIG unit will attempt to supply independent evidence of the facts supplied by that source.

    A subpoena may be issued, of course, if a needed witness declines to appear voluntarily. In determining if issuance of a subpoena is reasonably necessary to the full presentation of a case, the ALJ may consider whether any refusal to appear and testify voluntarily by an investigator or witness involved in the development of OIG evidence should be deemed, considering the overall circumstances of the case, to make the evidence not credible in the consideration of fraud or similar fault issues in a Social Security claim.

  16. If there is to be an appearance at an ALJ hearing by a Special Agent, a State/local law enforcement officer, or a witness in an investigation conducted by a CDI or other OIG unit, how should the claimant and the witness(es) be notified of that appearance?

    The remarks section of the notice of hearing should be modified to notify the claimant of the identity of each individual who is to appear as a witness. Witnesses should be advised of the date and time of their scheduled appearance by letter.

    Although OIG expects that witnesses it cites in an OIG/CDI ROI will be prepared to testify if called upon to do so, the ROIs will normally not identify witnesses by name. The Special Agent who submitted the report will furnish the names of witnesses upon the written request of an ALJ made in preparation for issuing the notice of hearing. On those occasions where the CDI or other OIG unit has relied on evidence supplied by a confidential source, the unit will attempt to supply independent evidence of the facts supplied by that source.

  17. Is disregarded evidence included in the record for decision?

    Yes.

    Although it is disregarded, the evidence is included in the complete record of the hearing proceedings that the ALJ must make under 20 CFR §§ 404.951 and 416.1451. The status of the evidence as disregarded evidence is reflected in the ALJ's findings of fact concerning it (see answer to Question 39 below).

  18. If an issue of fraud or similar fault is before an ALJ, will the ALJ be required to decide the issue?

    Yes.

    SSR 00-2p provides that “[a]djudicators at all levels of the administrative review process are responsible for taking all appropriate steps to resolve 'similar fault' issues” in accordance with the standards in that ruling, and, if it is determined that similar fault was involved in the provision of evidence, for disregarding that evidence. (65 FR 10140, at 101401-10402.) In the context of the ALJ hearing process, this means formally deciding whether there is reason to believe that similar fault did occur in any instance in which the ALJ has given notice of the issue — except in certain circumstances, as discussed below, in which the ALJ ultimately determines that the issue is not material to the decision. The ALJ's discretion is generally limited to deciding whether there is an issue of fraud or similar fault that requires formal consideration and notice (see answers to Questions 8, 12, 18 and 30 above), and whether there is reason to believe that fraud or similar fault was involved in the presentation of evidence.

    If it is finally concluded that a case may be decided without reference to evidence that might involve fraud or similar fault, the issue of fraud or similar fault is not before the ALJ, ultimately, unless the claimant is seeking relief from a finding of fraud or similar fault made in the determination upon which the request for a hearing is based (see answers to Questions 8 and 18 above). If the issue of fraud or similar fault is not ultimately before the ALJ, the ALJ should not decide that issue even though it was named as an issue in the notice of hearing. (The ALJ should explain the reasons for not deciding the issue in the rationale portion of the decision.) However, a referral to OIG should be made if OIG has not previously considered the evidence of possible fraud or similar fault, or if evidence indicative of such has increased since OIG last considered the case. See answers to Questions 41 and 42 below concerning referral procedures.

  19. What should an ALJ include in a decision that, along with deciding the claim for benefits, decides whether evidence should be disregarded because of fraud or similar fault?

    The decision should include findings of fact as to whether there is reason to believe that similar fault was involved in the providing of evidence in the claim, and as to whether evidence is being disregarded on the basis of fraud or similar fault. The decision should discuss the provisions of the Act and SSR 00-2p that provide for disregarding evidence due to similar fault, the standard for determining if there is reason to believe that similar fault has occurred, and the evidence considered in reaching the stated findings. See answer to Question 10 above.

    If the ALJ finds that there is reason to believe that similar fault occurred in the presentation of evidence, the ALJ's findings should identify the document(s) or other evidence that is being disregarded because of the similar fault finding. The decision should explain that this means that the evidence cannot be used in deciding the claim and that the decision on the claim is based on the remaining evidence. See SSR 00-2p, 65 FR 10140, at 10141-10142; also see answers to Questions 11 and 13 above.

    Where the ALJ finds that there is not reason to believe that similar fault was involved and evidence is not being disregarded, the decision rationale should explain the ultimate decision regarding the benefit claim based on evaluation of all the evidence, including the evidence that was questioned. The weight accorded that evidence should not be reduced because of unsustained suspicions about its authenticity or legitimacy (see answer to Question 14 above).

    Except in the rare instance in which a finding is made that there is reason to believe that fraud was involved in providing evidence, the rationale should explain that the issue of whether evidence should be disregarded based on “fraud or similar fault” is being decided based on the simpler aspect of that issue — i.e., whether there is reason to believe that “similar fault” was involved in providing evidence. See answer to Question 9 above.

    The decisional paragraph should address only the disposition of the ultimate benefit claim decided. The issue of whether evidence should be disregarded because of fraud or similar fault is a secondary issue that is appropriately resolved in findings of fact.

  20. Should the HO use a standard notice of decision for an ALJ's decision that resolves an issue of disregarding evidence because of fraud or similar fault?

    Yes. The HO should use a standard fully favorable, partially favorable, or unfavorable notice.

  21. When should cases be referred to OIG after issuance of a hearing decision?

    The HO should make a post-decisional referral to OIG in any case in which the ALJ decides to disregard evidence for fraud or similar fault if the case has not been previously considered by OIG. A post-decisional referral should also be made where the ALJ decides to disregard evidence in a case that was previously considered by OIG if the evidence considered by OIG was less damaging to a party or any involved person on an issue of fraud or abuse than indicated by the evidence included in the record for decision. Cases not previously seen by OIG and cases involving an increase in the evidence should also be referred in instances in which the ALJ provided notice of an intent to decide whether to disregard evidence for fraud of similar fault, but ultimately did not decide that issue on the basis that it was not material to the decision (as discussed in the answer to Question 38 above).

    A referral to OIG should also be considered in instances in which the ALJ decides that a basis for disregarding evidence does not exist because there is not reason to believe, under the preponderance of evidence standard, that “similar fault” was involved in providing evidence. It may be appropriate to refer such a case, subject to the ALJ's discretion, because the criteria for imposing the administrative sanction of nonpayment of benefits involve a different, broader definition of “knowingly.” See answer to Question 15 above. The same broader definition of “knowingly” also applies in CMP cases. See 20 CFR § 498.102(a). However, if the ALJ concludes that no evidence of conduct that could be considered fraud or similar fault is present, and that all suspicions and allegations of fraud or similar fault are unfounded, the ALJ may determine not to make a referral.

  22. How should post-decision referrals be made?

    Post-decisional referrals may be made to OIG under the SSA Fraud Hotline procedures (see HALLEX I-1-3-3 A and I-1-3-3 B.3). The referral should include a request that OIG determine if the matter should be referred to the appropriate SSA component for consideration of whether to make an initial determination concerning the applicability of an administrative sanction of nonpayment of benefits. See answer to Question 15 above concerning when nonpayment penalties are imposed.

    Post-decisional referrals to OIG through the SSA Fraud Hotline are not part of the administrative proceedings in the case. These referrals should not be reflected in the evidentiary or the administrative record of the case. (A copy of a post-decisional referral made at an ALJ's direction should be included in the claim file.) Referral of a case to OIG post-decisionally occurs before, and does not alter, the normal procedures for case routing, tracking, and cassette handling under HALLEX I-2-8-45 and I-2-8-50.

Appeals Council Procedures

  1. Does an OIG office or CDI unit have authority to request the Appeals Council to review cases?

    No.

    Only parties to the hearing may request the Appeals Council to review a case. See 20 CFR §§ 404.967/416.1467. Moreover, as discussed above in the Background, CDI and other OIG units are statutorily precluded form participating in program operating functions, such as the Appeals Council's request for review functions, and may not express opinions about whether benefits should be awarded or denied.

  2. Does an OIG office or CDI unit have authority to refer a case to the Appeals Council under 20 CFR §§ 404.969/416.1469 for possible review under the Council's authority to review cases on its own motion?

    No.

    The procedures SSA has established for the regular, ongoing referral of cases to the Appeals Council for possible own-motion review are those described in §§ 404.969/416.1469 — i.e., the procedures for referring cases based on random and selective sampling and case examinations and the evaluations of cases undertaken to effectuate decisions. Cases that are identified as a result of selective sampling are examined for possible referral to the Council by the Office of Quality Assurance (OQA). Cases that are identified through the effectuation process are referred by the effectuating component (Processing Servicing Centers and FOs/Regional Offices).

  3. May OQA or an effectuating component refer a case to the Appeals Council for possible own motion review based on a perception of an ALJ error involving an issue of disregarding evidence for fraud or similar fault?

    Yes — in appropriate circumstances.

    OQA may refer a case to the Appeals Council for possible own-motion review (on this issue or any other issue) only if: 1) the case has come before OQA for examination as a result of random sampling or the selective sampling procedures that are used to identify cases which exhibit problematic issues or fact patterns, and 2) the case should be referred under the examination standards OQA applies to refine the identification of cases that may meet the criteria for review by the Appeals Council. See §§ 404.969(b)(1) and 416.1469(b)(1).

    An effectuating component may refer a case for a perceived error involving fraud or similar fault only if: 1) the case is before the component for effectuation of an ALJ's decision; and 2), in the view of the component, the error would prevent effectuation of the decision. The circumstances in which such an error may exist include those in which the decision is clearly inconsistent with the Act, the regulations, or a published ruling. See §§ 404.969(b)(2) and 416.1469(b)(2).

    NOTE:

    If OQA or an effectuating component refers a case to the Appeals Council for possible own-motion review, the referral must be in writing. See §§ 404.969(c) and 416.1469(c).

  4. If the Appeals Council decides to review a case on its own motion based on a referral from OQA or an effectuating component that discusses or includes evidence of possible fraud or similar fault, should the Council's notice of review include a copy of the referral?

    Yes.

    The normal rules apply on providing a copy of an OQA or effectuating component referral with the notice the Appeals Council sends the claimant when it decides to review a case on its own motion. See §§ 404.969(d) and 416.1469(d). In addition, if the CF contains OIG evidence and the claimant has not previously been notified of the existence in the file of that evidence, the notice of review should also advise the claimant that the file contains OIG evidence. See answers to Questions 5 and 21 above.

    NOTE:

    If the Appeals Council grants a claimant's request for review in a case in which the claimant has not previously been advised of OIG evidence in the CF, the grant review notice should advise the claimant of the existence of that evidence.

  5. May the Appeals Council make a decision in a case it has decided to review because there is a similar fault issue that requires resolution or reevaluation?

    If the CF contains sufficient evidence to resolve the issue of whether there is reason to believe that similar fault was involved in the presentation of evidence, and remand for further proceedings at the hearing level is not otherwise necessary to decide the claim, the Appeals Council may issue a decision that resolves the similar fault issue. Thus, for example, the Council could decide the issue in instances in which the ALJ's decision is unfavorable and the resolution of the similar fault issue would cause evidence which the ALJ used in support of the claim to be disregarded, provided the issue of disregarding the evidence in question was considered at the hearing. Similarly, the Appeals Council could also make the decision where it decides that the ALJ erred in disregarding evidence and the “restored” evidence causes a fully favorable decision to be possible. The Council would follow its normal proposed-to-find procedures in instances in which it concludes that it should make the Agency's decision.

  6. If the Appeals Council is remanding for the development of evidence concerning an issue of possible fraud or abuse, and that development may or will require the assistance of an OIG or CDI unit, should the Council's order state that the assistance of such a unit may or will be needed?

    The Appeals Council should avoid stating that an investigation by an OIG or CDI unit should be considered or requested. As a rule, the Council's discussion of why evidence is needed should provide sufficient guidance to the ALJ concerning the type of development that may be required. The Council should avoid announcing an investigation in advance for the same reasons that an ALJ does not announce the making of a request for an investigation (see answer to Question 27 above).

  7. May some orders of the Appeals Council remanding for consideration of a fraud or similar fault issue indicate that that the medical merits of the case need not be reevaluated in specified circumstances?

    Yes. For example, the Council's order might indicate that further evaluation of the medical merits will not be needed if the ALJ, following further consideration of a similar fault issue as directed by the Council, again concludes that evidence which was previously disregarded in a decision unfavorable to the claimant should be disregarded, provided the ALJ has not received additional evidence bearing on the medical merits.

  8. When should the Appeals Council refer cases to OIG?

    The Appeals Council should refer a case that it decides not to review, either on its own motion or at the claimant's request, if the HO should have made a post-decisional referral to OIG under the criteria in the answer to Question 41, but did not do so. The Council will also make a referral if it makes a decision in a case in which the circumstances for referral discussed in that answer are satisfied. The Appeals Council makes any post-decisional referral to OIG under the procedures of the SSA Fraud Hotline (see answer to Question 42 above). The Council's post-decisional referral is not a part of the administrative proceedings in the case and should not be included in the evidentiary or the administrative record.

Reopening Procedures

  1. May an OIG office or CDI unit refer a case to an ALJ or the Appeals Council for consideration of whether a condition for reopening a prior final decision exists under 20 CFR §§ 404.988 or 416.1488.

    No. CDI and other OIG units should not refer cases to ALJs or the Appeals Council because of the restrictions against the participation of these units in program operation functions. However, the units may provide investigative results to appropriate offices within the Office of Operations, which may decide to refer the matter to an ALJ or the Appeals Council for consideration of reopening.

    The regulations on reopening at any time on the basis of fraud or similar fault contemplate situations in which the issue of fraud or similar fault would generally not have been previously decided in the decision of an ALJ or the Appeals Council. Some ALJ and Appeals Council decisions will now include findings on the issue of fraud or similar fault that have been made to determine if evidence should be disregarded. The issue of fraud or similar fault as considered in determining whether to reopen a final decision may not be a new issue except where it was overlooked in the decision in question, or new evidence of possible fraud or similar fault has come to light. It would be inconsistent with the principles of administrative finality to reweigh previously considered evidence in determining that a final decision should be reopened for fraud or similar fault.

  2. What guidance is there for determining whether an ALJ or the Appeals Council has jurisdiction to consider the possible reopening of a final decision involving the issue of disregarding evidence for fraud or similar?

    The normal guidance for determining jurisdiction applies. See HALLEX I-2-9-10 and I-3-9-8.

Attachment 2. Format of a CDI Report of Investigation

oigbadge.gif

Cooperative Disability Investigations Unit

[City, State]

REPORT OF INVESTIGATION
TRANSMITTAL AND RECEIPT FORM

PLEASE DETACH THIS FORM FROM THE REPORT, COMPLETE THE BOTTOM SECTION, AND RETURN THE FORM TO THE CDI UNIT IN [CITY].

Transmittal Date: 00/00/1999 CDI Reference Number: XXX-99-00000-X
Destination: SSA Office 000 DDS Branch: [Branch Location]
Referral Received: 00/00/1999    
Referral Source: Name................[Name]  
  Address.............[Street Address]  
                 [City, State, Zip]  
  Telephone...........(000) 000-0000  
Allegation(s): [Brief Description of Allegation]  
Subject : Name................[Name]
  SSN.................000-00-0000
  Address.............[Street Address]
                   [City, State, Zip]
Circle One:     Claimant     Representative     Interpreter     Doctor     Lawyer     Other
FOR DDS USE:
____ The subject claim was denied/disallowed. Reg Basis/Reason Code: __________
____ The subject claim was allowed/continued. Reg Basis/Reason Code: __________
____ Other/Comments:  
  ______________________________________________________________________________
  ______________________________________________________________________________
DDS STAFF SIGNATURE PRINTED NAME TITLE DATE
       
oigbadge.gif

REPORT OF

INVESTIGATION

COOPERATIVE DISABILITY INVESTIGATIONS UNIT

[CITY, STATE]

Subject: [Name]
SSN: 000-00-0000
DOB: 00/00/0000
CDI Reference Number: XXX-99-00000-X
Date of Report: 00/00/1999
OIG Point of Contact: SA [Name]
  (000) 000-0000
DDS Point of Contact: [Name]
  (000) 000-0000

COOPERATIVE DISABILITY INVESTIGATIONS UNIT - OAKLAND, CALIFORNIA
REPORT OF INVESTIGATION

  1. SUBJECT DATA

    CDI Reference Number:

    Name:

    SSN:

    DOB:

    Related Reference Number(s):

  2. SYNOPSIS

    Highlight any inconsistencies in the claimant's record and synopsize investigative results that directly impact the adjudication process.

  3. NATURE OF REFERRAL

    Identify date and source of referral.

    Summarize the complaint.

  4. TYPE OF CLAIM

    Specify Title II, Title XVI, or concurrent pay.

    Indicate whether initial claim or in-pay.

  5. ALLEGED DISABILITY / FUNCTIONAL LIMITATIONS

    List the claimant's alleged impairments.

    Summarize the subject's responses to the daily activities questionnaire, and any third- party information.

  6. DETAILS OF INVESTIGATION

    Provide appropriate background data obtained from SSA/DDS computer systems, state DMV records, NICB, and other automated resources.

    Provide a detailed account of all investigative activities conducted in the field.

  7. LIST OF EXHIBITS

    Include as attachments to the report all appropriate witness statements, automated printouts, photographs, etc. and list them by description and exhibit number in this section. Local preferences, as agreed to by OIG, SSA, DDS, and OHA officials, may dictate how much supporting documentation to provide.

  8. SIGNATURES

    Prepared By: ________________________________________ ________________
      Name / Title Date
    Approved By: ________________________________________ _______________
      Name / Title Date
This report contains sensitive law enforcement material and is the property of the Social Security Administration, Office of the Inspector General (SSA OIG). It may not be copied or reproduced without written permission from the SSA OIG. This report is FOR OFFICIAL USE ONLY, and its disclosure to unauthorized persons is strictly prohibited and may subject the disclosing party to liability. Public availability to be determined under 5 U.S.C. §§ 552 and 552a.

CDI REFERENCE NUMBER: XXX-99-00000-X PAGE 2


[1]  In some cases, the previous adjudicator may have concluded after a preliminary assessment that there was no fraud or similar fault issue warranting further development or that the issue of disability could be decided without considering the suspicious evidence. Where a DDS adjudicator concluded that there was an issue of fraud or similar fault requiring development, but found that no fraud or similar fault occurred, the file will normally reflect that resolution of the issue simply through a Report of Contact and removal of the flag/alert that identified the case as a high risk for fraud or similar fault. A DDS adjudicator will have prepared a formal special determination to resolve the issue only in instances in which there is reason to believe that fraud or similar fault occurred. See POMS DI 23025.015C.3., DI 23025.020A, DI 23025.025C.3.b.