What's In A Name?

     The Institute of Medicine is recommending that Chronic Fatigue Syndrome (CFS), also known as Myalgic Encephalomyelitis (ME), be renamed as Systemic Exertion Intolerance Disease because "the term “chronic fatigue syndrome” can result in stigmatization and trivialization." CFS leads to a fari number of Social Security disability claims. I doubt that a new name is going to reduce the stigma problem. 

     Below are the diagnostic criteria proposed by the IOM panel -- and note that the panel still refers to "CFS/ME" even as they recommend a new name!

If These Are Your Best Arguments, You're In Trouble

     Andrew Biggs, who was Deputy Commissioner of Social Security during part of the George W. Bush Administration, has written an article for the National Review giving reasons why the cap on wages covered by the F.I.C.A. tax that supports Social Security shouldn't be raised. Here are the arguments and my take on them:

• There's always been a cap on wages covered by F.I.C.A. So what? Full retirement age used to be 65. It's now 66 and heading to 67. Biggs would undoubtedly prefer it be raised to 70, if not 80. He's being selective about what changes he opposes. We have to change something.
• The cap is necessary so that Social Security won't be considered a "welfare" program. That's rich coming from Biggs who wants to means test Social Security. Why would increasing the wage cap make Social Security into a "welfare" program anyway? And what's wrong with programs devoted to improving the welfare of the American people?
• Raising the cap wouldn't solve the entire long term Social Security funding problem. No one proposal will. Biggs has no one solution for Social Security's long term funding problems. He favors a series of massive benefits cuts. Why does one proposal have to solve the entire problem?
• We ought to solve the problem of rising health care costs before we do anything about Social Security. What does that have to do with the F.I.C.A. cap? Anyway, Biggs undoubtedly opposes the Affordable Care Act which is actually doing something about health care costs.
• Most other countries have wage caps on the their Social Security taxes. Why is that important? I thought the right was big on American exceptionalism.
• It's a big tax increase. It will make U.S. tax rates higher than those is Scandinavia. It's a tax increase only for the wealthiest Americans, a group that has fared extremely well in recent years while the rest of the country has fared poorly. The wealthy can afford it. On Scandinavian tax rates, Biggs is citing income tax rates that don't include Social Security charges. Here's what I'm finding as the maximum tax rates in Scandinavia: Denmark 61%, Finland 61.96%, Norway 47.2%, Sweden 57%. I think we'd be well below those rates even if we remove the wage cap. Besides, Scandinavians have a high standard of living and much better social security than the U.S.. Why should we fear that?
• When we fix Medicare and Medicaid tax rates are going to go up. Glad to hear that Biggs supports higher taxes to support Medicare and Medicaid but how is that relevant to this discussion?
• An economic study shows that a rise in the wage cap won't generate as much revenue as predicted. That's not exactly what the study cited by Biggs says. In fact, the study makes no bold prediction about the effect of an increase in the wage cap. It suggests more study which is always the way with these studies. If anything, the study suggests the opposite of what Biggs is representing it to say. Anyway, here's what the report actually said so you can judge for yourself, if you can stay awake as you read it: "We have eight main findings. First, the workers who would experience an increase in marginal tax rates from an increase in the taxable maximum are mostly married males – a group thought to have relatively small elasticities. There are, however, a significant number of self-employed workers among this population which could suggest somewhat higher responsiveness. Second, the recent empirical evidence showing large behavioral responses to taxation is largely irrelevant to this question as it mostly focuses on broader concepts of income for which elasticities are likely to be higher and on demographic groups such as wives of high earners that are not particularly common in the subset of the population whose incentives would be altered by an increase in the taxable maximum. In the few studies that have also focused on narrower concepts, elasticities fall dramatically when the tax base is something closer to earnings. Third, the earnings distribution of workers around the current taxable maximum is inconsistent with a model in which people are highly responsive to the payroll tax rate. Fourth, this is true even for the self-employed, a group that is often thought to have significant control over its reported earnings. Fifth, in panel data on high-earnings married men, we see a tremendous increase in earnings over the 1980s and 1990s, but no break in the trend around the TRA86 or OBRA93 tax acts. Sixth, the rise in earnings for the high earners is so much greater than for other income groups that it seems completely implausible that the other income groups could serve as reasonable control groups for the high earners. Seventh, the overall weight of our evidence does not support the Eissa (1995) finding of a large behavioral response to taxation by wives of high earners. Eighth, we think there remains considerable uncertainty about the relevant elasticities for high earners – uncertainty that will be very difficult to eliminate without much larger samples of such taxpayers than are available outside the U.S. Treasury. Our policy simulations suggest that with an earnings elasticity of 0.5, lost income tax revenue and increased deadweight loss would swamp any benefits from the increase in payroll tax revenue. In contrast, with an elasticity of 0.2, the ratio of the gain in OASDI revenue to lost income tax revenue and deadweight loss would be much greater. Thus, knowing whether the elasticity is closer to 0.2 (or below) versus 0.5 is critical to deciding on whether this would be a wise policy."

Online Social Security Card Replacement Coming

     From today's Federal Register:

We propose to revise our regulations to allow applicants for a Social Security number (SSN) card to apply by completing a prescribed application and submitting the required evidence, rather than completing a paper Form SS-5, Application for a Social Security Card. We also propose to remove the word ``documentary'' from our description of certain evidence requirements. These changes would provide flexibility in the ways in which the public may request SSN cards and allow us, in the future, to implement an online SSN replacement card application system, which we are currently developing.

    Can this be done securely?

Mutually Exclusive Goals

     I watched today's hearing before the House Social Security Subcommittee on the impending shortfall in the Social Security Disability Trust Fund. I noticed that Republican members were insistent on two points. One was that Social Security disability recipients should know that Congress won't allow their benefits to be cut. The other was that there must be no transfer of funds from the Retirement and Survivors Trust Fund to the Disability Trust Fund. However, these are mutually exclusive goals, unless we increase taxes and I don't think the Republican members will agree to that. 

     So what is the Republican plan? They're the majority party in Congress. They can't just sit back and criticize the plans that others come up with. They need a plan of their own. I look forward to reading the plan that meets both their goals.

You're Not Likely To Get What You Want When You're Afraid To Even Say What You Really Want

     Here's the witness list for the 2:00 hearing today before the House Social Security Subcommittee on "the financial status of the Disability Insurance (DI) and Old Age and Survivors Insurance Trust Funds, and the available legislative options to ensure full DI benefits continue to be paid":

• Charles P. Blahous III, Ph.D., Public Trustee, Social Security and Medicare Boards of Trustees
• Ed Lorenzen, Senior Advisor, Committee for a Responsible Federal Budget
• Webster Phillips, Senior Legislative Representative, National Committee to Preserve Social Security and Medicare

     It's Orwellian for the Republican majority to talk about wanting to assure that "full DI benefits continue to be paid" when it's clear they want dramatic cuts in DI. I suppose this language suggests that Congressional Republicans realize that they don't have public support for significant cuts in DI.

Spending Too Much Time Reading POMS

     Laurence Kotlikoff has a list of 10 Social Security Rules That Are Insane, excerpts from Social Security's Program Operations Manual Series (POMS):

• “Even if we caused the (benefits) overpayment, you must show that you are without fault.”
• Cash benefits for disabled workers end “the month before the month you die.”
• “The lump-sum payment cannot be paid on the earnings record of a worker who dies in or after the month we receive notice of deportation or removal.”
• "What does ‘actually paid’ mean? Actual payment occurs when you are actually paid.”
• “Third parties may assist a claimant when completing the (online) application, but the claimant must be present to select the ‘Submit Now’ button.”
• “The illegality of an activity does not prevent it from being a trade or business. For example, professional gamblers, bookies, etc. may be engaged in a trade or business. If you’re in this category, you are considered self-employed and are required to report your income and pay self-employment taxes.”
• “We may always make a new initial determination whenever a change occurs in the factual situation despite how much time elapses from the date of that change.”
• “The fact that we determine that a claimant meets the requirements for entitlement does not preclude us from making another determination that the claimant no longer meets those requirements at some subsequent date.”
• “In a disappearance case where the body is not recovered, you must clearly prove the death of the missing person. Submit all available evidence, including: statements of persons having knowledge of the situation; (or) letters or notes left by the missing person that have a bearing on the case.”
• Social Security representatives are instructed: “Do not attempt to explain the rationale for any particular operational guidelines, nor go to any great lengths to justify them.”

     Remember, it's his list, not mine.

Binder And Binder Struggling To Stay Afloat Even In Bankrutpcy

     This is an article on Law 360 dated February 11:

Social security disability firm Binder & Binder LLP asked for approval of a new $6 million loan on Tuesday as it navigates through the Chapter 11 process, claiming that its existing lenders would rather see the company liquidate than allow it to restructure. 

 Binder & Binder ... says that its existing loan has hamstrung its ability to intake new clients at a sufficient clip and keep the business afloat as federal disbursements have slowed under new government scrutiny. The firm asserts that new financing terms would be the only way for it to avoid liquidation, given the harshness of its current loan. ...

But the $6 million loan, which would be obtained from Stellus Capital Investment Corp., comes with the stipulation that Stellus gets the first lien position on all of Binder & Binder’s assets. The disability firm said it has shopped around and there is no “middle ground” in that regard. ...

Binder & Binder said that the slowdown in social security disability and veterans’ benefits has sapped its cash flow. It described the firm as being at a “critical juncture,” lacking the funds to pay its next payroll on Feb. 17, 2015. ...

Despite a prohibition on new advertising, one of the terms of its current loan, Binder & Binder said it is still handling approximately 1,000 new social security cases each month, and needs to keep its staff levels up to maintain the business. ...

Class Action On Old Overpayments

     From Accounting Today:

A group of plaintiffs are suing the Treasury Department, the Social Security Administration, and the District of Columbia, claiming the federal government is continuing to hold onto their tax refunds to pay for supposed overpayments of Social Security benefits decades ago. ... 

The Legal Aid Society and the law firm McKenna Long & Aldridge brought suit against the U.S. Treasury, the Social Security Administration and the District of Columbia government on behalf of three D.C. residents, Tina Heard, Pearline Snow and Carolyn Graham. They are seeking class-action status in the suit, and believe the case could affect up to 400,000 Social Security beneficiaries who had $75 million taken from their tax refunds. They claim the government confiscated the refund payments in violation of federal law and without the due process required under the Constitution. In most cases, the alleged debt to the Social Security Administration had been incurred by their parents or other relatives. ... 

Heard, Snow and Graham claim they originally learned of the debts they allegedly owed the government when some or all of the 2013 tax refunds they were expecting in early 2014 never arrived. They contend that they received no notice from the SSA before the Treasury Department seized their refunds. Only after they went to significant effort to determine why their refunds were withheld did they learn that the Treasury’s actions were based on the SSA’s findings that they had each been overpaid Social Security benefits decades before.

Despite multiple attempts to communicate with the agency, none of the plaintiffs has received a clear explanation of what exactly was owed or why, according to their attorneys.

Institute Of Medicine Reports Forthcoming

     The newsletter of the National Organization of Social Security Claimants Representatives (NOSSCR), which is not available online, reports that the Institute of Medicine (IOM), a division of the National Academies of Sciences, is working on three "consensus reports" for Social Security which may be coming out later this year. These will deal with:

• Psychological testing, including symptom validity testing;
• Mental impairments in children, especially autism spectrum disorder and attention deficit hyperactivity disorder; and
• Speech and language disorders in children.

     Whatever else it may be, the IOM in this instance is basically a beltway bandit, receiving large sums of money for reports that are always so tentative and hedged that they're useless. I wonder what they'll tell Social Security about symptom validity testing. Social Security has been resistant to using it because of questions about its validity. My understanding is that this sort of testing would only apply to claimants with brain damage or intellectual deficiency. Since the agency is approving so few with either of these problems, I doubt that using symptom validity testing would matter much anyway.

Some Info On ABLE Accounts

     The Social Security Administration has released the following set of questions and answers to help its staff in dealing with inquiries about the new ABLE accounts:

A. Purpose of this EM [Emergency Message]

This EM provides important information regarding the Achieving a Better Life Experience (ABLE) Act (P.L. 113-295) and ABLE accounts. Specific guidance on how to treat ABLE accounts for Supplemental Security Income (SSI) income and resources purposes will follow in future instructions.

B. Background

On December 19, 2014, the President signed into law the ABLE Act. The ABLE Act was established to encourage and assist individuals and families with saving funds for the purpose of helping individuals with disabilities to maintain health, independence, and quality of life. Qualified ABLE programs will provide secure funding for disability-related expenses for qualified individuals with disabilities that will supplement, but not replace, benefits provided through private insurance, Medicaid, SSI, the individual’s employment, and other sources.

C. Information regarding ABLE accounts

1. What is an ABLE account?

An ABLE account is a tax-advantaged account, similar to a Section 529 qualified tuition program (QTP). ABLE accounts are administered by the State in which the individual resides and they must be established for the benefit of the individual. The designated beneficiary is also the owner of the account.

2. Who is eligible for an ABLE account?

To be eligible for an ABLE account, a person must be blind or disabled according to the Social Security definition of disability by a condition or conditions that began before age 26. Eligible individuals are limited to one ABLE account.

3. What is the maximum contribution for ABLE accounts?

Generally, ABLE accounts may not receive aggregate contributions during a taxable year in excess of the annual gift tax exemption (which is $14,000 for 2015). Each State will set a maximum balance for ABLE accounts.

4. Will ABLE account balances count towards the SSI statutory resource limit?

For SSI purposes, we will exclude as a resource the first $100,000 in an ABLE account.

5. What happens if an SSI recipient has excess resources held in an ABLE account?

If an individual is ineligible due to excess resources held in an ABLE account, we will suspend the SSI benefits without a time limit, but not terminate the benefits. The SSI recipient would remain eligible for Medicaid while in suspense.

6. Are ABLE accounts transferrable?

ABLE accounts are transferrable to family members who are also qualified individuals.

7. What distributions are allowed from ABLE accounts and what is their impact on SSI benefits?

Some qualifying distributions are education, housing, transportation, employment support, assistive technology, health and wellness. Qualifying distributions from the ABLE account would not generally affect SSI eligibility or payment amount. Distributions from an ABLE account for the purpose of housing expenses will be countable income for SSI purposes.

8. What happens upon the death of an ABLE account beneficiary?

Subject to certain outstanding debts, the State can file a claim against the ABLE account for reimbursement of any medical assistance paid on behalf of the account beneficiary after establishment of the ABLE account.

9. When will there be POMS instructions on ABLE accounts?

The Department of the Treasury will publish regulations early this summer and many States will have to pass legislation to establish the ABLE account program. After we receive more guidance from Treasury, we will issue specific instructions on how to treat ABLE accounts for income and resources purposes.

10. What should we tell the public if they ask how to establish an ABLE account?

ABLE accounts must be established under a program established and maintained by the individual’s State of residence. Refer individuals to their State Comptroller or Tax Office for questions concerning ABLE accounts.

Direct all program–related and technical questions to your RO [Regional Office] support staff or PSC [Program Service Center] OA [? This acronym isn't even on Social Security's own list of its own acronyms!] staff. RO support staff or PSC OA staff may refer questions or problems to their Central Office.

Class Action On Consultative Examinations In Bay Area

     From a press release:

A class action lawsuit was filed today in federal district court in San Francisco against the Social Security Administration (SSA) by three plaintiffs who were deprived of disability benefits because of SSA’s continued reliance on medical reports from a doctor who has been disqualified. The grossly deficient reports were based on cursory examinations (often lasting ten minutes or less), referenced tests that were never performed, and were inconsistent with plaintiffs’ medical records. On the basis of these faulty reports, plaintiffs who were no longer able to work were denied Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) benefits, essential to their well-being....

 Kevin Hart is a San Mateo County resident who was sent to Dr. Frank Chen for a medical exam to determine if he was still disabled and thus still eligible for his SSI and SSDI benefits. Dr. Chen, didn’t review Hart’s medical records, didn’t ask him about his condition, repeatedly interrupted Hart when he attempted to explain his diagnosis, and only spent approximately 10 minutes on a perfunctory examination. Dr. Chen’s report referenced tests he didn’t perform and failed to mention Mr. Hart’s primary disability, a leg and foot injury he sustained after being hit by a car— even though Hart needed a cane to stand during his exam. After Dr. Chen’s evaluation, Hart was notified that his benefits were being terminated because he was no longer disabled. He was never notified that Dr. Chen had been disqualified, even though Dr. Chen’s report was an important reason for the decision in his case. ...

The lawsuit seeks to require the SSA to reopen all prior determinations that terminated or denied SSI and/or SSDI benefits and that relied on a consultative examination report from Dr. Chen, and offer Plaintiffs an opportunity for a new exam from a qualified medical professional. ...

Plaintiffs are represented by Morrison & Foerster LLP, the National Senior Citizens Law Center and the Legal Aid Society of San Mateo County.

Appropriations Hearing Scheduled

     The Labor, Health and Human Services, Education and Related Agencies Subcommittee of the House Appropriations Committee has scheduled a hearing for February 26 at 10:00 on "The Vital Responsibility of Serving the Nation's Aging and Disabled Communities."Social Security Commissioner Carolyn Colvin is scheduled to testify.

"To Ensure Full DI Benefits Continue To Be Paid"

     A press release from the Social Security Subcommittee of the House Ways and Means Committee:

 U.S. Congressman Sam Johnson (R-TX), Chairman of the House Committee on Ways and Means Subcommittee on Social Security announced today that the Subcommittee will hold a hearing focused on the financial status of the Disability Insurance (DI) and Old Age and Survivors Insurance Trust Funds, and the available legislative options to ensure full DI benefits continue to be paid. The hearing will take place on Wednesday, February 25, 2015 in B-318 Rayburn House Office Building, beginning at 2:00 p.m.

Netherlands No Model For U.S. On Disability Benefits

     The Center on Budget and Policy Priorities gives a primer on why the Netherlands probably won't be a model for the United States when it comes to disability benefits. Here's the gist as well as a chart:

 Even after reforms, the Netherlands spends far more than the United States on disability benefits. ...

Until the mid-1990s, the Netherlands spent six to eight times as much on disability programs as the United States, relative to GDP; even now it spends about twice as much.  The gap has shrunk because the Dutch cut spending, not because the United States expanded it.

      If the GOP wants to "reform" U.S. Social Security disability so that it looks like the Dutch program, I'm all in favor. I think such a proposal would get a lot of Democratic sponsors. Bring it on!

Where's The Outrage?

     From the National Organization of Social Security Claimants Representatives (NOSSCR) newletter (not available online) this is a report on Social Security hearing office processing time as of the end of January. Note that the "fastest" office is processing requests for hearings in 295 days while the slowest is taking more than two years. Tell me again how Social Security is using video hearings to even workloads around the country. The bigger problem, though, is that there is little public notice of these disgraceful backlogs.

Cutting Social Security Disability Will Be Tough

     The "Monkey Cage" at the Washington Post details some of the reasons why "reform" of Social Security disability, if "reform" means cutting, will be almost impossible. Maybe the most important reason listed is that there's no constituency lobbying for cuts in Social Security disability. The only ones lobbying for cuts are a few "scholars" at "think tanks" and the right's Social Security "scholars" are an unimpressive group.

Rep. Johnson Introduces Bill

     Sam Johnson, the Chairman of the House Social Security Subcommittee, has introduced a bill that would prevent a person from receiving both unemployment insurance benefits and Social Security Disability Insurance Benefits at the same time. The President has included the same proposal in his budget for the next fiscal year. That sounds great to many people. However, there are a few problems.

• All but two states limit unemployment insurance to 26 weeks or less. There's a five month waiting period for Disability Insurance Benefits. You do the math.
• Many, perhaps most, states already reduce unemployment insurance due to the receipt of Disability Insurance Benefits, leading to the possibility of a double offset.
• A high percentage of Disability Insurance Benefits recipients also get Supplemental Security Income (SSI). SSI benefits are already reduced due to the receipt of unemployment benefits, leading to the possibility of a double or even triple offset.

     The potential savings from this proposal are trivial. My guess is that it will be difficult to draft a bill that doesn't cause double or even triple offsetting of benefits. Even if you can get a bill drafted, implementing it will probably cost more than it can save. Other than these problems, it's a great idea.

Consultative Examinations Still Suck

A very small diabetic foot ulcer.  Not my client's foot.

 

    Social Security recently sent one of my clients for a consultative medical examination. She's a diabetic. At the time of the examination she has an ulcer on one of her feet. The consultative doctor records this fact that she told him about the ulcer. The claimant was and is complaining more than anything else about her feet, not just the ulcer but other quite significant foot problems as well. There's no mention in the report of an examination of the feet. The client confirms that she was never asked to remove her shoes and socks.

     There's a message tacked to the wall in the examining rooms at my physician's office telling diabetics to remove their shoes and socks since the physician will examine their feet. Probably, there's a similar message in the examining room where you're seen. That's standard medical practice. I'm a lawyer but I know very well that failing to examine the feet of a diabetic is bad medical practice even when the patient is not complaining of an ulcer on her foot. When a diabetic patient is complaining about her feet and specifically mentions a foot ulcer, failing to examine the feet is enough to make one's jaw drop in any situation other than a Social Security consultative examination. It's sort of what you expect in a Social Security consultative examination, though.

This Is Your Best Argument?

     From the testimony of  Dr. Philip R. de Jong, a Dutch professor, called by Republicans to testify before the Senate Budget Committee (emphasis added):

The reformed Dutch DI scheme purports to cover only those that have hardly any productive capacity left, and to provide other workers with disabilities with strong incentives to remain active. The results for the first nine years of the operation of the new scheme show that inflow rates have dropped substantially to levels that are reasonable by international standards, and showed to be robust against the deep recession of 2008-2013. The incentive structure that steers the behaviour of employers and long-term sick workers proves to work.

     Even though de Jong presents the Dutch Social Security disability program as only covering those who "have hardly any productive capacity left", 8.3% of the Dutch population receives disability benefits while only 5.9% of Americans receive the benefits! The Netherlands only achieves its low rate of disability by requiring employers to spend large amounts of money on rehabilitation. The United States gets to a much lower rate of disability by a simpler route; it just denies most disability claims, imposing economic hardship on huge numbers of disabled people.

Future Funding Debate

     John Fritze at the Baltimore Sun has written a good summary of yesterday's Senate Budget Committee hearing. The hearing was supposed to focus on Social Security's Disability Insurance Trust Fund but often seemed to be a debate over future funding of the nation's entire Social Security system. A short version of the Republican position would be that the Social Security trust funds are going to run out of money in 18 years which would result in significant cuts in Social Security benefits so it's vital that Congress enact significant cuts in Social Security benefits today. A short version of the position of the Democrats would be that there's no need for any cuts in Social Security benefits if we just eliminate the cap on wages covered by FICA, a loophole that only benefits wealthy people.