I-1-2-14.Appeals Council Reviews Fully or Partially Favorable Hearing Level Decision With Approved Fee Agreement
Last Update: 7/22/16 (Transmittal I-1-86)
As explained in Hearings, Appeals and Litigation Law (HALLEX) manual I-1-2-11, if a hearing level decision maker approves a fee agreement in connection with a favorable (fully or partially) decision, and the Appeals Council (AC) takes an action that vacates the favorable decision, the AC also vacates the approval of the fee agreement and any authorization of fees under the agreement. If the AC issues a revised favorable decision on the case, it will approve or disapprove the fee agreement based on the circumstances that exist as of the date of the AC's decision (even when the AC adjudicates only through the date of the prior decision).
This instruction generally applies only when the AC exercises its authority to issue a revised favorable decision after granting review or taking own motion review of a favorable hearing level decision. (For more information on own motion review, see HALLEX I-3-6-1). It is unnecessary for the AC to act on a previously approved fee agreement if the AC:
Changes a favorable decision to an unfavorable decision;
Remands a favorable decision to an administrative law judge (ALJ) for further administrative action;
Dismisses a request for hearing or a request for review; or
Does not grant review or decides not to take own motion review.
Because approval of a fee agreement is contingent on a favorable decision that results in past-due benefits (see HALLEX I-1-2-12), a representative is not entitled to a fee and must return any previously paid fee amount to the Social Security Administration (SSA) if the AC issues an unfavorable decision. The effectuating component will handle any incorrect payment issue(s). (There may be some circumstances in which the representative may later request a fee using the fee petition process, even if the decision is unfavorable. See HALLEX I-1-2-51. See also 20 CFR 404.1725(b)(2) and 416.1525(b)(2).)
When the AC dismisses or denies a request for review of a favorable hearing level decision, the hearing level decision becomes the final decision of the Commissioner. For more information on hearing level final decisions, see HALLEX I-2-8-5. Because the AC took no action that vacates the prior decision and any associated fee agreement approval, any action on a fee agreement by the hearing level decision maker remains in effect.
If a revised favorable AC decision results in more or less past-due benefits for the claimant, the effectuating component will determine whether the representative is due any additional payment or must refund any excess payment.
B. Non-tiered Fee Agreement
When the AC exercises its authority to issue a revised favorable decision, it will approve the fee agreement if there has been no pertinent change in circumstance and a fee agreement approval is proper under HALLEX I-1-2-12.
If the fee agreement limits application of the fee agreement through the hearing level (see HALLEX I-1-2-15), there has been a pertinent change in circumstance. For two-tiered fee agreement instructions, see subsection C below.
In the unusual circumstance in which a claimant appeals a favorable hearing level decision, the AC issues a revised favorable decision, and the fee agreement is non-tiered, the AC will approve a fee agreement that meets the statutory criteria, as long as no exceptions apply. If the representative states the intent to pursue an additional fee above the applicable statutory fee cap, see HALLEX I-1-2-44. See HALLEX I-1-2-12 A.3. for information about the statutory fee cap.
C. Two-tiered Fee Agreement
When the AC exercises its authority to issue a revised favorable decision and a prior decision maker approved a two-tiered fee agreement with the prior decision, it must determine whether the fee agreement was intended to apply at the AC level. If not, the AC will disapprove the fee agreement because there has been a pertinent change in circumstance (i.e., the fee agreement does not apply at the AC level).
There may be unique processing issues in some cases at the AC level. Most significantly:
When issuing a decision after granting review or taking own motion review, the AC may choose to limit application of the new decision to the time period adjudicated by the hearing level decision maker. However, even when the time period adjudicated is limited, the AC has still vacated the hearing level decision and, in doing so, has vacated the approval of the fee agreement and any authorization of fees under the fee agreement, as explained in HALLEX I-1-2-11. Therefore, the AC must act on the fee agreement if issuing a revised favorable decision.
When the AC takes own motion review and issues a revised favorable decision, the AC may find that the language in a two-tiered fee agreement does not envision own motion review (i.e., addresses application of the second tier only if the claimant initiates an appeal to the AC). When the AC takes own motion review and the second tier of the fee agreement would clearly apply had the claimant initiated AC review, the AC will disapprove the fee agreement because it cannot ascertain the level at which the fee agreement applies.
If the AC does not vacate the favorable aspect of an ALJ's decision but remands the case for additional proceedings on unfavorably decided issues(s), the fee agreement (that the ALJ approved) remains in effect. If a more or less favorable decision is later made on the unfavorably decided issues, depending on the circumstances, the effectuating component may pay an additional fee amount to the representative or notify the representative of an excess fee payment. The claimant or representative will have the opportunity to request administrative review of the amended fee that arises from the revised decision. For review procedures, see HALLEX I-1-2-44.
In the rare circumstance that a claimant or representative protests the amount of an authorized fee before the AC notifies the claimant and representative of an own motion review, the administrative review action on the fee authorization is moot because the AC vacated the prior decision when it took own motion review.