Statement by Arthur Fried,
March 28, 1996
The Social Security Administration is opposed to H.R. 1802, a bill which would create a Corps of Federal administrative law judges (ALJs). H.R. 1802 would primarily impact SSA since its ALJs represent more than 80 percent of all Federal ALJs.
SSA opposes H.R. 1802 for many reasons, but is particularly concerned that the bill would severely curtail our ability to provide the public with the service they deserve. We specifically oppose a separate Corps for the following reasons:
• Decisional Independence - SSA administrators cannot interfere in how ALJs decide cases. Adjudication takes place on the record, and strictly according to the statute and regulations without agency interference. Further, ALJs have full protection of decisional independence consistent with the Administrative Procedure Act.
• Loss of ALJ Expertise - The pending legislation would result in the loss of the high degree of ALJ expertise produced by ALJs' constant involvement in SSA's policymaking process.
• Loss of Accountability- Removing ALJs from SSA's closely bound adjudicative process would significantly decrease accountability to the public for efficient and timely processing of their appeals, to the Congress for all aspects of program administration, and to the courts.
• Costs of H.R. 1802 - There are significant costs associated with an ALJ Corps not previously considered in Corps estimates such as expenses for agency representation, hearing support functions which would be duplicated in a Corps, and development of a Corps claims tracking system. Also, the bill freezes funding for a Corps at the FY 1995 level which would prevent new resources to help handle an increasing hearing workload.
• Administrative Efficiencies - The bill would disrupt a highly integrated adjudicative claims process which would result in further delays in the payment of claimants' benefits.
• Management Initiatives - SSA has shifted resources from non hearing offices to reduce hearing backlogs. Under the bill, SSA would lose the flexibility needed to deal with increasing workloads. In addition, SSA has a plan well underway which is redesigning the disability process. The redesign will result in a customer-friendly process that produces decision more quick}y and accurately. H.R. 1802 would prevent SSA from redesigning and improving its adjudicative process.
MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
I am pleased to be here today on behalf of the Social Security Administration (SSA) to discuss legislation currently pending in the Congress that would create a Corps of Federal administrative law judges (ALJs) and its possible impact on the Social Security Administration (SSA).
I appreciate this opportunity to discuss the ramifications of an ALJ Corps for SSA. SSA's ALJs represent more than 80 percent of all Federal ALJs. Therefore, it is critically important to your deliberations on H.R. 1802 to keep in mind that the pending legislation's primary impact would be on SSA.
We at SSA oppose enactment of H. R. 1802 for a variety of reasons, but we are particularly concerned that the bill would severely curtail our ability to provide the public with the service they deserve.
Today, I want to address the issues with which we have major concerns including the perception that ALJs do not have decisional independence, the potential for loss of ALJ expertise and administrative accountability, the costs associated with establishing a unified Corps, and the administrative inefficiencies inherent in creating a new agency.
First, I would like to address the issue of ALJ decisional independence. Promoting an atmosphere of fairness and decisional independence is extremely important to us. ALJs have a direct delegation of authority from the Commissioner to decide cases. This direct delegation of authority sets the foundation for, and guarantees the integrity of, the adjudicatory process.
No SSA administrator can nor wants to intervene in a case or in any way direct an ALJ on how to decide a case. Adjudication takes place on the record, and strictly according to the statute and regulations without agency interference.
In FY 1995, over 500,000 ALJ decisions were rendered and yet SSA did not receive even one ALJ complaint regarding improper influence or agency pressure with respect to deciding any case.
Although a perception may remain with some that ALJs lack decisional independence, we think the fact that SSA ALJs' decisions differ from the agency's earlier determinations in almost two thirds of the cases is a strong indicator that these ALJs do in fact have decisional independence. Moreover, our ALJs have full protection of decisional independence consistent with the Administrative Procedure Act because hiring criteria and compensation are set by the Office of Personnel Management and adverse personnel actions may be taken by the agency only after the Merit System Protection Board establishes good cause. Thus, we believe that SSA's ALJs are currently independent in every way that matters. However, we would be happy to work with Congress on ways to eliminate the misperception that decisional independence is lacking short of creating an independent ALJ Corps.
LOSS OF ALJ EXPERTISE AND ADMlNlSTRATlYE ACCOUNIABlLITY
We are also concerned about loss of ALJ expertise and accountability.
Loss of ALJ Expertise
A unified Corps would jeopardize the reservoir of Social Security expertise currently characterizing SSA's ALJs. Supporters of pending legislation argue that ALJ expertise would not be lost if a unified Corps were established because as a general rule, ALJs would continue to hear and adjudicate precisely the same kinds of cases as they do at present. Others argue, however, that the bill would increase efficiency by making ALJs available to hear and decide cases in varied programs.
In either case, we do not believe that the kind of training programs that could be conducted under the bill's provisions would compensate for the loss of the ongoing training that SSA provides in response to changes in the Social Security Act and regulations, or for the constant exposure to discussion and examination of complex Social Security programmatic and policy issues that ALJs experience as members of the SSA community. Indeed, ALJ involvement in policy development contributes a distinct and valuable perspective which enhances the quality cf agency policymaking and ensures that ALJs understand the intent and scope of policy changes. Therefore, separating ALJs from SSA would adversely affect the current policymaking and decisionmaking process for both SSA and ALJs.
Moreover, consistent and uniform application of policy is difficult in the best of circumstances, especially in a complex and subjective program like disability; totally separating adjudicators from policymakers, however, simply invites disputes between adjudicators and policymakers over policy interpretatio and makes resolution of those disputes more difficult.
The creation of a separate Corps of ALJs would alae diffuse accountability to the Congress, the courts, and the public for administrative decisionmaking--particularly for the diaability determination process.
Because case processing would be split between the Corps and SSA, interested parties could no longer be certain of whom to contact--the Corps or SSA--concerning the status of a particular case. That uncertainty might unnecessarily delay their receipt of the requested status and, more fundamentally, could complicate identifying whether SSA or the Corps was responsible for case processing delays. Similarly, when the courts overturn or remand a case, it may not be clear whether the court found fault with the SSA's policy or the ALJ's application of that policy.
POTENTIALLY HIGH COSTS OF LEGISLATION
Mr. Chairman, it is important to consider fully the magnitude of resources required to process SSA's hearings and related workloads when considering legislation to create a unified ALJ Corps.
Removing SSA's ALJs to form a separate and unified ALJ Corps would inevitably disrupt a productive relationship between the ALJs and other SSA components--one that is becoming more efficient every day--and would incur unanticipated costs.
For instance, although some supporters of ALJ Corps legislation have indicated that it would eliminate the need for some current SSA staff and functions (for example, in the Office of Hearings and Appeals's (OHA's) regional offices), it is unclear how this could be achieved. A centralized Corps would require a significant support staff to perform functions now performed by the SSA regional offices, such as:
- hiring and training hearing office staff;
- procuring supplies and equipment;
- reviewing attorney fee petitions;
- coordinating with State agencies; and
- providing general hearing office oversight.
Duplicating and then centralizing these functions in an ALJ Corps would likely increase travel and other costs. Alternatively, requiring that these functions be performed at the local (rather than regional) level would increase hearing office staffing requirements.
Further, establishing an entirely new administrative structure to support a separate ALJ Corps would not eliminate hearings-related activities (costing at least $200 million annually) that SSA would need to continue to perform--receiving and forwarding to the Corps claimants' requests for bearings, processing hearing status inquiries, effectuating ALJ decisions or acting on requests to the Appeals Council for review of ALJ decisions, among others. Indeed, many of these activities would have to be done twice, once at SSA and once by the ALJ Corps.
The costs of the legislation would be further increased by any expenses entailed in providing SSA representation in proceedings before a separate Corps of ALJs. Both SSA and the Corps would each require sufficient professional and support staff to address a workload involving over 500,000 requests for hearings annually.
Additional costs could also be generated by other new functions. For example, SSA would have to institute procedures for preparing and submitting case records for adjudication before a separate ALJ Corps that would be more formal than those currently required in our integrated process. New procedures would also be required to ensure proper routing of ALJ dispositions to allow prompt effectuation of benefit payments or action on requests for Appeals Council review.
While I am on the subject of costs, I would also like to address the appropriations provision in H.R. 1802. The bill would freeze funding for a unified Corps through FY 2000 at the FY 1995 level. Without additional resources to allow a new agency to keep up with increasing workloads caused by increasing claim filings, we are concerned that service to the public will deteriorate dramatically.
I would also like to address the issue of administrative efficiencies. Although we have serious doubts that creating a new bureaucratic structure would streamline or improve administrative efficiency anywhere in the Government, we are certain that it would adversely affect SSA's massive claims adjudicative process.
As 1 have indicated, Mr. Chairman, 80 percent of all Federal ALJs work for SSA, where they are an integral part of the adjudication process. SSA processes almost 7 million claims a d over a million appeals each year. In FY 1995 alone, ALJs rendered over 500,000 decisions.
SSA's adjudicative process consists of a closely integrated four-step process. Since the vast majority of hearings involve disability claims, Iwill discuss SSA adjudication in terms of the disability claims process.
Initial disability claims are taken in 1,300 Social Security offices located throughout the country. Local field office staff request and evaluate information about the non-medical aspects of each person's claim, such as whether or not the individual has worked enough to be eligible for benefits. Field office staff also obtain information about claimants' impairments, including treating medical sources. Disability claims are then forwarded to the federally-funded, but State-administered, disability determination services (DDSs), in the State where the person lives. State DDS staff obtain and review necessary medical evidence and make disability determinations based on Social Security regulations and guidelines.
This process has been in effect since the beginning of the disability program and was designed to take advantage of the States' established links with the medical community and experience in dealing with the needs of the disabled.
Individuals dissatisfied with their disability decision may request a reconsideration which is reviewed at the State DDS level. If the reconsideration is denied, individuals may request a hearing before an ALJ, and if still dissatisfied, individuals may request an Appeals Council review. Each level of review involves multi-step procedures for evidence collection, review, and decisionmaking. This process requires thousands of day-today contacts among SSA field offices, State disability determination services (DDSs), and ALJ hearing offices. Placing the hearing level--the third step in the process--under the management of an entirely separate organization would break the links of this closely-bound process.
Coordinating SSA's caseloads entails numerous operational functions including: identifying and routing cases; securing and retaining case folders; and obtaining evidence from claimants, from claimants' medical sources, and from others who know the claimants. The process also entails fully developing the record, both before and after the hearing is held, screening cases for those that can be approved on the record without an ALJ hearing, both before and after development, preparing hearing transcripts, and responding to inquiries for case status from claimants, representatives, and members of Congress.
Pulling the ALJs out of SSA, and then reintegrating these functions with an ALJ Corps would reduce administrative efficiency and increase processing times, thus further delaying payment of benefits to eligible claimants. This would result largely from the additional case tracking and control procedures that SSA would have to establish to be able to continue to develop the record, to respond quickly and accurately to status inquiries, and to ensure that cases were not "lost" in the system. It would be a very cumbersome and time-consuming process to transfer cases from SSA to the Corps for decision and then transfer them back to SSA for review and revision by the Appeals Council or effe·ctuation by SSA employees, not to mention all the contacts required in between to fully develop the record and ensure that the agency's interests are served. Transfer of cases remanded by the courts back and forth between SSA and the Corps would be similarly burdensome.
Successfully processing SSA's huge caseloads through a Corps of ALJs would require high levels of cooperation between separate agencies. More likely, every hand-off to a separate ALJ Corps would increase the time required to serve SSA's "customers"--the American public--and reverse the progress we have made in streamlining our decisionmaking process.
Corps Council Provision
As you can see, success of SSA's highly integrated adjudication process can only be achieved with uniform policies and procedures. I am particularly concerned that the provision in H.R. 1802 regarding the proposed Corps Council--the policymaking body of the Corps--would interfere with the procedural continuity of our current process. That provision provides for only one SSA division out of eight, while affording the other divisions, representing only a fraction of the Corps, a disproportional share of policy and procedural-making power affecting SSA.
In addition, the nature of SSA's adjudicative process has no equal in the Federal Government. In most other Federal agencies it is standard practice for both appellants and the Government to be represented by attorneys both in their initial contacts and in making their cases before an ALJ. By contrast, the adjudicative process in SSA is nonadversarial at all levels--the Commissioner of Social Security is not represented in any proceedings even though the claimant may be represented at any level of the adjudicative process, and often is represented at the hearing level. Further, ALJs represent the interest of both the claimant and the general public and serve as an impartial decisionmaker as well. This special responsibility requires that, regardless of whether the claimant is represented, the ALJ must ensure that all interests are fully protected in reaching a fair and accurate decision. The role of the ALJ works well in our highly integrated adjudicative process.
But, with the removal of the ALJ to a separate ALJ Corps, SSA would be compelled to have a representative appear at the hearing to: 1) ascertain the contents of the record and hear case presentation; 2) present evidence and state the agency's position; 3) protect the integrity of the trust funds; and 4) ensure that the hearings decisions of such ALJs are in full accord with agency policy. The necessity of SSA representation at each Corps hearing would result in prohibitive administrative expenses and undesirable formal and adversarial proceedings.
As you know, Mr. Chairman, SSA has experienced unprecedented increases in its Social Security and SSI disability initial claims workloads in recent years. The creation of an ALJ Corps will only make dealing with those increases more difficult and service to claimants will deteriorate. In FY 1996, we estimate that 2.5 million initial disability claims will be forwarded to the DDSs for disability determinations--a 41 percent increase over the number of claims received by the DOSs as recently as FY 1990.
As a result of the upsurge in initial claims, SSA's Office of Hearings and Appeals also is experiencing unprecedented growth in its hearings workloads. We expect that, by FY 1997, annual requests for hearings before an ALJ will rise to 574,000, a 90 percent increase over FY 1990.
Needless to say, such rapid workload growth has adversely affected SSA's ability to process appeals timely. Currently, it takes more than 375 days, on average, to process an ALJ hearing from request to decision--compared to an average of 214 days in FY 1990. However, we expect that our redesign initiatives, which I will discuss later, will reduce ALJ processing time to about 260 days in FY 1997.
Even this level of progress does not satisfy our goal of providing world-class service to all who interact with SSA.
The impact of the extraordinary disability workload growth was initially felt in the State DDSs which make disability determinations for SSA. SSA's first response was to shift resources within its control to address the most critical immediate needs--primarily, more overtime for the DDSs and SSA components that process disability workloads. In early 1992, the Agency also implemented a variety of management initiatives to provide relief in the short term to the DDSs, such as using SSA employees to assist DDSs in processing cases and refining our case development and documentation procedures. As a result of such initiatives, DDS productivity has increased by 22 percent since FY 1990.
In 1993, our hearing offices also began to be impacted by the unprecedented disability workloads. With ALJ assistance, SSA then developed and implemented additional management initiatives to address the rising hearing workloads, such as standardizing case preparation and streamlining hearing practices and procedures. As a result, the productivity of SSA's ALJs--already the highest of all Federal ALJs--has steadily increased, rising from 37 cases per month per ALJ at the end of FY 1992 to 47 cases per month per ALJ at the close of FY 1995.
The accuracy of ALJ decisions also improved during this period. In FY 1995, the rate at which the Appeals Council granted requests for review of ALJs' decisions dropped to less than 29 percent of cases appealed (moving steadily downward since FY 1990, when the rate was 46 percent). Also, the rate at which the Federal courts affirmed the agency's final decisions in cases appealed to that level reached a near-record high of 90 percent (excluding remands).
SHORT-TERM MANAGEMENT INITIATIVES AND DISABILITY REDESIGN
Short-Term Management Initiatives
Nevertheless, the enormous challenges facing the disability program in the form of unprecedented workloads combined with staffing reductions required immediate action. We responded to the upward trends in disability workloads with two important initiatives--a Short-Term Disability Project and a redesign of the disability process.
The short-term disability project was designed to reduce the number of disability cases pending at the initial, reconsideration, and hearing levels over a 2-year period. For instance, skilled employees from non-hearing office staffs have been temporarily reassigned to assist in writing backlogged hearing decisions. In FY 1995, 10,800 hearing decisions were written by these employees. In addition, other non-hearing office employees have been assisting OHA by preparing folders for hearings. This case preparation provides invaluable assistance to the ALJ hearing the case and helps reduce the overall hearing backlog.
A separate ALJ Corps would not have this kind of management flexibility. A Corps would be unable to provide for the rapid shifting of resources between and among SSA components that is necessary to handle a shifting workload of over 500,000 hearing requests annually and reduce backlogs of comparable magnitude. Further, the bill would deprive SSA of much of its ability to refine its processes based upon its extensive experience with disability determinations, much as it is doing now with the short-term initiatives.
As I indicated, Mr. Chairman, the short-term initiatives were designed merely as a temporary measure to ease escalating workloads. We recognized that further, incremental improvements in the process would not suffice to achieve the level of service the public deserves. Thus, SSA developed a plan for a new disability process--the disability process redesign.
Disability Process Redesign
The redesign will dramatically change most of SSA'a current work processes, including those involving ALJs. Transferring ALJs out of SSA would jeopardize our new redesign process. Such a change could have serious implications--millions of Americans who rely on SSA to process their initial claims and appeals promptly would likely have to wait much longer for decisions on their claims.
For example, a key feature of the new plan is that it uses current staff in a streamlined process involving a new position called the adjudication officer. The adjudication officer increases efficiencies in the hearing process by developing the case and issuing fully favorable decisions if the evidence so warrants, without the need for a full hearing. SSA expects this feature to significantly contribute to cutting hearing-level processing time in half by the year 2000. An ALJ Corps would interfere with our ability to use this new process since jurisdiction would be given to the Corps as soon as a hearinglevel appeal is requested.
Another feature of the new plan which would be jeopardized by a unified Corps is the process unification effort which is directed at ensuring uniform understanding and application of binding adjudication policy at all levels of adjudication. One important aspect of this multi-faceted effort is the development of a single presentation of policy. Removing the hearings function from SSA would significantly impede this effort as well as the agency's overall ability to create a seamless and more responsive disability decisionmaking process at such a critical time.
Creating another bureaucracy would add to the complexities of the process rather than building the streamlined process envisioned in our efforts to redesign the disability process.
In summary, Mr. Chairman, H.R. 1802 would create unintended consequences which would jeopardize public service for millions of Americans who rely on SSA to process their initial claims and appeals promptly and fairly. We do not believe that legislation to create a separate ALJ Corps is warranted. At SSA we have put into placand are continuing to develop initiatives to improve public service for millions of Americans who rely on SSA to process their initial claims and appeals promptly and fairly. Removing SSA's ALJs from our organization would, in our view, seriously hamper our efforts to best serve the public.
We certainly would support continued efforts to maintain impartiality in SSA's decisionmaking, to address remaining misperceptions about ALJ independence, and to improve the quality and efficiency of administrative adjudication. However, in light of all that we have accomplished to date and have undertaken to enhance the hearing process, and given that the current process ia free of administrative interference, SSA continues to be in atrong opposition to H.R. 1802.