Where Everyone Knows Your Name and Mod

Those of us who live outside the Baltimore area may have negative attitudes towards the staff at SSA headquarters in Woodlawn, MD, but for those who work there, it is a job like any other job. As this Baltimore Sun article shows, these SSA employees have Monaghan's Pub, a nearby place where everyone knows their name.

Ominous Headline

Today's Wall Street Journal includes a short item with the headline "The White House Wants to Make Entitlement Cuts An Annual Event." The article quotes a "senior official" as saying that the 2007 budget due out in early February will likely include "another substantial set of savings in entitlements", with a figure of $40 billion over five years mentioned.

SSAB on Ticket to Work

The Social Security Advisory Board (SSAB) has filed comments on SSA's Notice of Proposed Rulemaking (NPRM) on the Ticket to Work program. The comments include this gloomy assessment of the current state of Ticket to Work:

After three years of operation, the participation rate in the Ticket program is very
low. The most recent available data shows that over 11 million tickets have been mailed, yet less than 1 percent of the eligible beneficiaries have actually assigned their ticket. Much work still needs to be done to entice a larger fraction of the remaining millions of beneficiaries to enroll in the program. We applaud SSA’s efforts over this past year to market the Ticket program to beneficiaries, employers and job placement organizations. However, it is clear that more beneficiaries need to access return-to-work services if the program will ever fulfill Congressional desire to facilitate self-sufficiency for a significant proportion of beneficiaries.

The marketplace does not seem to be responding either. The number of employment networks has declined over time. Experience to date shows that there are still financial disincentives for the ENs. Only 45 percent of approved ENs are actively engaged in providing services, and very few, if any, are actually making any money. The ENs state that it is too costly to provide the level of services that are truly required to return beneficiaries to the work place.

Medicare Part D Subsidy Rules

On the last possible day, SSA has published final rules on their part of the administration of the subsidy part of the Medicare Prescription Drug Benefit (Part D of Medicare).

The Costs of Delay

The New York Times has an article (registration required) that demonstrates the human costs of delaying filing a claim for Social Security disability benefits -- and the human costs of delay in adjudicating disability claims at SSA. This formerly middle class family was thrust into dire poverty primarily by disability and their delay in seeking disability benefits from SSA.

The indignities of poverty are endless. In this case, the family had a Thanksgiving meal only because of the generosity of Catholic charities and the wife has been forced to sell her wedding ring. Sadly, this sort of story is repeated hundreds of thousands times a year and gets almost no publicity.

One Week To Go on Age Proposal

There is only one week left to comment on Social Security's Notice of Proposed Rulemaking (NPRM) on the age classifications in the grid regulations. The proposal would add two years onto each of the age categories, making age 57 the new 55 and 52 the new 50. The change is predicted to cut Social Security disability benefits by almost $6 billion over ten years. Anyone wanting to comment on the NPRM may do so online at an SSA website.

Organized Comments on Age NPRM

Despite being predicted to cut Social Security disability benefits by almost $6 billion over 10 years, Social Security's Notice of Proposed Rulemaking (NPRM) on the age classifications in the grid regulations has drawn surprisingly few comments. This may be changing as the January 4, 2006 final date for making comments approaches. A series of identical comments started appearing on SSA's website on December 22. There are now several dozen of them, probably arranged by the ARC (Association for Retarded Citizens).

Anyone wanting to comment on the NPRM may do so online at an SSA website.

Top Management Challenges For SSA

Social Security's Office of Inspector General (OIG) has released to the public its report to the Commissioner of Social Security on what OIG views to be the top management challenges to the agency.

Americans Support Social Security

"When asked in a new Harris Poll how strongly they support 14 different government services, five services receive strong, or a fair amount of support, from about three-fourths of all adults or more. The five most popular services are The National Parks Service (85% support), Crime-fighting and prevention services (77%) Medicare (76%), Social Security (76%), and Unemployment benefits (74%)." PRNewswire

Good News on Christmas Day

Eric Schnaufer, a prominent Social Security attorney who had been hospitalized due to serious injuries, is scheduled for release from the hospital today.

Death Master File On DVD

Social Security's death master file is now available on DVD. This is SSA's official record of deaths reported to the agency. It is useful for fraud prevention and for genealogical research.

Medicare Problems After Release From Prison

A new addition to SSA's Program Operations Manual Series (POMS) alerts SSA employees to a problem with the data used by the Center for Medicare and Medicaid Services (CMS) concerning prisoners. Because of computer problems, Medicare claims are being denied on the grounds that a person is incarcerated even after they have been released and SSA has been notified of the release. Apparently, the computers at SSA and CMS are not communicating with each other on prisoner releases.

Prominent Social Security Attorney Hospitalized

Eric Schnaufer, a prominent Social Security attorney, has suffered a serious injury. He is hospitalized at the Evanston Hospital in Evanston, Illinois. He was in intensive care, but has now been released to a regular room.

A Christmas Wish List

What I am wishing for in this Christmas season are answers to a few questions:

1. How long is it taking to get a Social Security hearing these days? Can anyone at SSA send me a list showing how long it is taking to get an Administrative Law Judge (ALJ) hearing in each of the hearing offices? I think there are quite a few people who would be interested in this.
   
2. What happened to the results of the pilot projects that SSA did some years ago on eliminating the Appeals Council? It is no secret that such studies were done, yet SSA denies having any data produced by these projects. That is odd and surprising. It begs an explanation, yet SSA has not provided an explanation. There is great interest in what will happen when the Appeals Council is abolished, which is likely to start happening in 2006.
3. There have been some signs that SSA may be ready to enforce the requirement that approval be obtained before charging a fee for representing Social Security claimants even if the fee is paid for by the Long Term Disability (LTD) insurance company paying benefits to the claimant. Is SSA ready to bring charges? Are those representing LTD carriers changing the way they do business?

If you can help with my Christmas list, please e-mail me at charles@charleshallfirm.com.

Coal in the Stocking for SSI Claimants

The Senate voted today to pass the budget reconciliation bill according to this Washington Post article (may require registration). This bill would require staged payments of back SSI benefits that total more than three months of benefits at the full SSI rate. The budget reconciliation bill is not final. Some small changes were made in the Senate from the House of Representatives version of the bill. These changes do not affect SSI, but the bill must go back to the House of Representatives for final passage. That will not happen until after the Christmas recess, but it is unlikely now that anything could derail this bill.

Inspector General Gets Criminal Convictions

Social Security's Office of Inspector General (OIG) has issued a newsletter boasting of achieving a number of criminal convictions for Social Security fraud.

Former SSA Employee Sentenced For Fraud

WJLA reports that Franklin Thomas, a 35 year former SSA benefits authorizer, has been sentenced to one and a half years in prison for stealing more than $250,000 from SSA.

Profs Say They Have A Plan

Three professors have come up with what they call a non-partisan plan to "save" Social Security. The plan calls for benefit cuts, tax hikes -- and small private accounts, meaning that the plan will please no one and have no chance of adoption under current political circumstances. The curious thing about this document is that it can be accessed from SSA's Chief Actuary's website. No other plan is accessible from the Chief Actuary's website.

Social Security Website for Children

The Social Security Administration has produced a website designed for children they call the Kids' Place. Below is an excerpt. The layout is changed significantly by the transition to this format. This is a surprising way for SSA to use its scarce administrative budget when there are dramatic staff shortages throughout SSA and it is taking over two years in some areas of the country for a disabled person to get a hearing on their Social Security disability claim.

I am red, white & blue. You should have a card with your own special number, which will be the same number for life. Your parents could have gotten you a card when you were born. Ask your parents if they got you a card. If you do not have a card have your parents apply for one for you.

NJ CEs Superficial

The pressofAtlanticcity.com reports that consultative examinations (CEs) are often superficial in Southern New Jersey. CEs are examinations by physicians arranged by Social Security for purposes of evaluating Social Security disability claims.

Preliminary Injunction Sought in California LTD Litigation

The East Bay Business Times reports that an insurance industry coalition has sought a preliminary injunction to block California Insurance Commissioner John Garamendi from implementing an order that would require insurance companies selling long term disability (LTD) insurance in California from reducing LTD payments by Social Security disability benefits.

Clay Shaw To Have Cancer Surgery

The Miami Herald reports that Clay Shaw, former chairman of the House Social Security Subcommittee, will have surgery on January 4, 2006 to remove a cancerous tumor in his left lung. This is a recurrence of a cancer that was first removed in 2003.

Washington Post on ALJ Changes

The Washington Post reports on the recent changes in the rules concerning Administrative Law Judges (ALJs). The major change is to remove provisions from the regulations detailing how ALJ applicants are considered and tested. This will allow greater flexibility in hiring accordirg to the Office of Personnel Management (OPM), since the details could be announced in the job posting.

New Limits on Replacement Social Security Cards

Social Security has published new rules to limit the number of replacement Social Security cards that may be ussued to an individual to three in a year and ten over a lifetime, with exceptions for unusual circumstances.

Social Security Low Priority at Conference on Aging

According to the Senior Journal, the White House Conference on Aging has closed with a long list of resolutions adopted. Somehow, no resolution on Social Security came out in the top ten list of resolutions, although it is hard to imagine a topic that is of more concern to seniors.

California Social Security Lawyer Under Investigation in Oregon

Daniel Bernath, a lawyer who is licensed in California but who was denied bar admission in Oregon, is drawing attention from the Oregon bar for possible unauthorized practice after running newspaper ads in Oregon seeking Social Security clients by promising to cut the wait time for a hearing to a few weeks and reminding potential clients that they could switch lawyers, according to a wweek editorial.

June 18, 2006 Addendum:

Mr. Bernath has e-mailed me six months after this was first published to complain that the underlying article in wweek was unfair to him in using the work "promise" in describing what Mr. Bernath was saying to prospective clients. Here is a quote from a portion of Mr. Bernath's website:

• You have an absolute right to switch attorneys at any stage of your Social Security Disability case.
• Ask me how I can speed up your wait to a few months or weeks. Most people waiting for Social Security disability benefits have to wait a year and a half before a hearing and then months for the written decision of the Judge.
  

Obviously, Mr. Bernath does not use the word "promise" in this website, making the wweek statement inaccurate in this detail.

SSA Downsizing Leads to New Building in Birmingham

GlobeSt.com reports that work has begun on a new 587,000 square feet building which will be leased to house Social Security's Southeastern Program Service Center in Birmingham, AL. The annual lease payments will be $15.38 million. The new building is to be half the size of the current building, due to downsizing.

Bush Not Done With Social Security

According to an article in the Washington Times:

President Bush will again pursue Social Security reform next year and has been frustrated by Democrats' unwillingness to address ensuring the entitlement's long-term viability, his chief economic adviser said yesterday.

"This president is not going to give up on Social Security," said Allan Hubbard, director of the president's National Economic Council.

The response of one prominent Democrat was to quote the President: "Bring it on."

Budget Reconciliation and SSI Back Benefits

According to a report of the Center on Budget and Policy Priorities the Budget Reconciliation bill recently passed by the House of Representatives provides that:

... any SSI recipient owed more than three months of back benefits would have to receive these benefits in installments, and the initial installment payment would be made smaller. The first installment would cover only three months of benefits. The second installment paid six months after the first payment would cover no more than another three months of benefits. The final payment made a full year after the individual was found eligible for SSI benefits would cover all remaining amounts owed to the recipient.

The budget reconciliation ball is now in the Senate's court.

New Rules for ALJs

The Office of Personnel Management (OPM) has issued proposed new rules for Administrative Law Judges (ALJs). Since SSA employs something like 90% of all federal ALJs, this affects SSA far more than any other agency. At first glance this proposal does not look significant. It is unclear whether this proposal puts OPM closer to creating a new register from which SSA and other agencies can select new ALJs. There has been no new register in many years due to a long running dispute over the methods for ranking ALJ candidates on the register. Agencies have had to hire off a very old register. No new applications to become ALJs have been taken in many years.

Conference on Aging Delegates Don't Like Privatization

Were you aware that the White House Conference on Aging has been going on for several days now? It comes up only once every ten years. You would think that it would be a major story, especially in the wake of President Bush's efforts to create private Social Security accounts and the controversy about the Medicare Prescription Drug benefit. The New York Times reports on efforts at the conference to express opposition to privatization and White House efforts to prevent criticism of administration policy. President Bush was the first president to to snub the White House Conference on Aging by refusing to speak at the Conference.

Undocumented Aliens Help Social Security

According to this Kansas City Infozine article Social Security has $519 billion in reported earnings that it cannot match with earnings records and believes much of this is due to undocumented aliens. In addition, there are earnings falsely attributed to existing Social Security numbers assumed by illegal aliens and other earnings attributed to valid Social Security numbers that illegal aliens were able to obtain by some artifice.

Doctors Can Submit Medical Records to SSA Electronically

The American Academy of Family Physicians reports that physicians may now submit medical records electronically to AeDIB, Social Security's paperless electronic disability file of the future. Records may be submitted via an SSA website or by fax. The system as described is essentially the same as the one under development that will allow claimants' attorneys to submit medical evidence electronically.

Bush Has Even Grander Plans for Social Security

According to a Time Magazine article (go to the 4th page):

Once he gets past the midterm elections, Bush plans to introduce a concept that, if anything, is even more ambitious than his failed Social Security plan: a grand overhaul that would include not only that program but Medicare and Medicaid as well.

More on Glenn Sklar Presentation

Kevin Morton gives his take on Glenn Sklar's presentation in Winston-Salem on December 9, 2005.

Disability Backlogs and Inconsistency

Social Security is not the only agency having problems adjudicating disability claims. Here is an excerpt from a Government Accountability Office (GAO) study of disability determination at the Department of Veterans Affairs (VA) that should sound familiar to those involved in disability determination at SSA.

While VA made progress in fiscal years 2002 and 2003 reducing the size and age of its inventory of pending claims, it has lost ground since the end of fiscal year 2003. For example, pending claims increased by over one-third from the end of fiscal year 2003 to the end of fiscal year 2005. Meanwhile, VA faces continuing questions about its ability to ensure that veterans get consistent decisions across its 57 regional offices.

SSN Issues at Universities

A study by Social Security's Office of Inspector General (OIG) has found that many universities use Social Security Numbers (SSNs) as unique identifiers for students. OIG concluded that "unnecessary use of SSNs increases the potential for unscrupulous individuals to illegitimately gain access to these numbers and misuse them, thus creating SSN integrity issues."

Commissioner's Proposal Final By February?

Glenn Sklar, Assistant Commissioner for the Office of Disability Programs at Social Security, spoke on Friday, December 9 at a continuing legal education conference sponsored by the NC Academy of Trial Lawyers. Most of his presentation concerned Commissioner Barnhart's proposal for a revamped disability determination appeals structure. Sklar told the group that "Every day there are meetings about the comments" received on the Notice of Proposed Rulemaking (NPRM). He said to expect a final rule within about six months. Sklar indicated that there had been many comments made on the NPRM and that "No doubt the final rule will be different" from the NPRM.

Nancy Shor, the executive director of the National Organization of Social Security Claimants Representatives (NOSSCR) also spoke. She said that she expected the Commissioner's proposal to become a final rule by January or February 2006 at the latest.

Bruce Goldin, the Deputy Director of the Division of Information Technology Integration of the Office of Hearings and Appeals at Social Security spoke about the status of AeDib. He showed a website under development that would allow authorized attorneys and representatives to upload via the internet medical evidence to be placed in a claimant's file. This is still in the earliest stages of trials.

University Use of SSNs

A study by Social Security's Office of Inspector General (OIG) has found that many universities use Social Security Numbers as unique identifiers for students. OIG concluded that "unnecessary use of SSNs increases the potential for unscrupulous individuals to illegitimately gain access to these numbers and misuse them, thus creating SSN integrity issues."

Stats on Fee Payments

Social Security has published statistics on payment of fees to attorneys and qualifying non-attorney representatives in 2005.

Month/Year	Volume	Amount
Jan-05	20,744	$68,463,778.57
Feb-05	20,447	$68,137,343.20
Mar-05	20,522	$67,741,247.04
Apr-05	27,563	$91,228,724.50
May-05	21,047	$70,574,688.29
June-05	19,847	$66,810,743.37
July-05	25,840	$86,788,514.16
Aug-05	22,569	$76,249,416.56
Sep-05	20,403	$67,828,460.26
Oct-05	19,217	$64,828,683.10
Nov-05	18,179	$60,507,993.77

Axiom Wins $18 Million Ticket to Work Contract

Axiom has won an $18.2 million contract with Social Security under the Ticket to Work plan.

New Rules on Service of Process

The Social Security Administration has adopted new rules on the service of legal process on the agency. The new rules require that those suing the agency serve process on the Commissioner of Social Security by sending the process to Social Security's General Counsel office that serves the area of the country where the suit is brought. Separately, SSA published a long list of the addresses of the offices to which the Commissioner's copy of process must be sent. The rules are effective immediately, which is certain to cause problems for many litigants.

SSA Central Office Building May Close

The Baltimore Sun reports that Social Security's:

...26-year-old Metro West building on North Greene Street [in Baltimore] was designed to hold up to 5,000 employees, but that automation has reduced the number of people who work there to fewer than 2,000. The 1.4 million-square-foot building also needs a new heating and air-conditioning system and security improvements.

As a result SSA is considering closing the building and moving the employees to other buildings in the area.

Monthly Stats for November

The Social Security Administration has released basic monthly statistics for November on claims paid under Title II and Title XVI of the Social Security Act. These show by type of payment the numbers of people paid and amounts of benefits they received.

Second Circuit Says You Can't Be Fugitive Felon Without Knowing It

The Second Circuit Court of Appeals has held in Fowlkes v. Adamec that a peson cannot be a fugitive felon unless there is proof that they knew there was a warrant outstanding for their arrest. Ironically, Mr. Fowlkes cannot get benefits at the moment since he is imprisoned in Massachusetts on unrelated charges.

Barnhart: Tidbits on Her Future and Her Plan's Future

The National Council of Social Security Management Associations (NCSSMA), an organization of SSA's front line managers, has published the minutes of its annual meeting held in November. Present at the meeting was Mary Chatel, SSA's Director of Disability Service Improvement, who had, curiously enough, been President of NCSSMA at one time in her career. Chatel told NCSSMA that "The implementation [of the Commissioner's plan] will hopefully begin in the Spring of 2006 and will go region by region – probably taking about 5 years to complete."

The summary of the meeting also includes this interesting exchange which tells us that at least some people in Baltimore believe that Jo Anne Barnhart may be nominated for a second term as Commissioner of Social Security:

Q: What will happen to this new approach in January 2007 when the Commissioner’s term ends?

A: Since they do not know if the Commissioner will serve another term, they need to approach this in the belief that she may actually be gone in January. The Commissioner strove to work on changes that could at least be begun in some regions before her term ends. Hopefully, Jo Anne will be here beyond January 2007 to see the process even farther down the pathway. The publication of a final rule should help to see that this work continues.

Supreme Court Rules on Student Loan Case

The Supreme Court has issued a unanimous opinion in Lockhart v. U.S. holding that Social Security benefits may be seized for payment of a student loan, even though the debt is more than ten years old.

Age Category NPRM Comments

Even though the estimates are that the proposal would save almost $6 billion over the next ten years, SSA has received few comments on its Notice of Proposed Rulemaking (NPRM) that would add of the age categories of the grid regulations. My own comment may be worth taking notice of, more for the 426 pages of material I attached to the comment than for the comment itself.

The grid regulations were originally based upon administrative notice taken of the numbers of unskilled sedentary, light and medium jobs found in the Third Edition of the Dictionary of Occupational Titles, which has long since been superceded by the Fourth Edition of the DOT and now by O*NET. The material which I attached shows SSA's own serious concerns that the evidence no longer shows the existence of such numbers of unskilled jobs, particularly at the sedentary level. This material has received almost no attention over the years. My point is that if the entire foundation for the grid regulations has crumbled, it makes little sense to keep adding to the ediface.

The comment period on the NPRM closes on January 3, 2006.

Courts of Appeals Updates

Eric Schnaufer has updated his Schnaufer.com website that gives a comprehensive listing of recent Courts of Appeals decisions, including an 8th Circuit case decided on December 6. You cannot get more up to date than that!

SSAB Agenda

The Social Security Advisory Board has announced a schedule for its meeting on December 7.

Fraud Arrests in GA and SC

There have been multiple arrests in Georgia and South Carolina for fraud on the Social Security Administration under Operation Secure Star, billed as a Homeland Security operation, although, as described, the alleged crimes sound like unrelated cases of garden variety fraud, some of which happened to involve two Mexican nationals. The investigations included Social Security's Office of Inspector General (OIG).

NADE Newsletter

The National Association of Disability Examiners (NADE), an organization of employees of the State Disability Determination Service (DDS) agencies that make initial and reconsideration determinations on Social Security disability claims, has released its Fall 2005 Newsletter. The Newsletter contains a summary of Commissioner Barnhart's speech to a NADE conference in September. There is also a summary of a presentation made at the same conference by Patrick O'Carroll, SSA's Inspector General, that included showing video of several claimants engaged in activities alleged to be inconsistent with statements the claimants had made to SSA. The Newsletter includes comments made by NADE on recent Notices of Proposed Rulemakings (NPRMs), a good deal of information about NADE members' take on AEDIB, Social Security's paperless system of the future, and a NADE position paper favoring the elimination of the 24 month waiting period for Medicare.

New POMS on Medicare Part D Appeals

Social Security has added material to POMS (Program Operations Manual Series) concerning appeals of subsidy determinations under the Medicare Prescription Drug Benefit, also known as Part D of Medicare.

New Requirements For Proof of Age

In response to reports that fraudulent birth records have been used to get Social Security cards, SSA has issued a POMS (Program Operations Manual Series) update to tighten the requirements for proof of age when issuing a Social Security card.

SSA Interprets California Paternity Laws

Here is Social Security's summary of a new legal opinion from SSA's Office of General Counsel published in POMS (Program Operations Manual Series):

Under California law, while SSA is not bound by a posthumous court order of paternity, that court order can be used in conjunction with other statements and evidence to establish paternity under the state's clear and convincing evidence standard in cases where there is no contradictory evidence.

Proposed Regulations on Failure to Cooperate with CDR and Fugitive Felons

The Social Security Administration has published two Notices of Proposed Rulemakings (NPRMs) in the Federal Register. Comments are allowed on each proposal. Neither is effective until SSA reviews and responds to those comments.

One proposal would suspend the Title II benefits of a claimant facing a continuining disability review (CDR) who fails to cooperate. If the claimant later cooperated within a year after the suspension of benefits, benefits would resume. This process should be more favorable for a claimant than the current process whereby a claimant's benefits are not suspended, but cut off entirely for failure to cooperate. Under the current process, a claimant who could not be contacted due to circumstances beyond their control, such as a lengthy hospitalization or who failed repeatedly to attend consultative medical examinations due to lack of transportation, could lose their benefits altogether.

The second proposal would implement the changes to the Social Security Act that added a prohibition on payment of Title II benefits to fugitive felons. The most important part of this is SSA's interpretation of the "good cause" exception. To meet the good cause provision a claimant would have to show all of the following:

• The crime or violating the probation or parole which the warrant is based on was both nonviolent and not drug related and, if for violating probation or parole, the original crime(s) was both nonviolent and not drug-related; and

• The person has neither been convicted of nor pled guilty to another felony crime since the date of the warrant; and

• The law enforcement agency that issued the warrant reports that it will not extradite the person for the charges on the warrant or that it will not take action on the arrest warrant.

If the first two requirements above apply but not the third, we may also find good cause if the following two criteria apply:

• The only existing warrant was issued 10 or more years ago; and

• The person’s medical condition impairs his or her mental capability to resolve the warrant; or he or she is incapable of managing his or her benefits; or he or she is legallyincompetent; or we have appointed arepresentative payee to handle thebenefits; or he or she is residing in a long-term care facility, such as a nursing home or mental treatment/care facility.

NOSSCR Board of Directors

The National Organization of Social Security Claimants Representatives (NOSSCR) has published the list of its Board of Directors for the next year.

Fancy OIG Report: Convictions and 1099s to Attorneys

Social Security's Office of Inspector General (OIG) has issued its Fall 2005 Report to Congress, an elaborate full color document produced and, presumably, printed at what must have been considerable cost.

OIG is proud of achieving 2,159 convictions in fiscal year 2005, although no details are given on the nature of the charges.

One OIG recommendation mentioned in the report as not yet having been complied with may be of particular interest to attorneys who represent Social Security claimants:

Recommendation: We recommended that SSA collect each attorney’s SSN, name and address information so that IRS Form 1099 can be issued to attorneys.

Agency Response: SSA’s Executive Task Force is addressing the issue of providing IRS Form 1099 to attorneys and is developing a business process for issuing these forms.

Corrective Action: SSA must develop the automation support necessary to meet the Internal Revenue Code requirement that SSA issue Form-1099s to attorneys who receive attorney fees of $600 or more in a taxable year. The Attorney Fee Task Force has established a revised target of issuing Form-1099s toattorneys to January 2008 (representing attorney fees received during TY 2007). SSA has initiated planning and analysis required for development of the systems enhancements to collect and process the appropriate attorney data required for issuing the Form-1099s. Implementation of the attorney database is planned for the fall of 2006.

More on California LTD Insurance Litigation

I have been unable to find a copy of the order that brought about the litigation between the insurance industry and the California Department of Insurance, but there is a history of conflict over Long Term Disability (LTD) policies in California.

In February 2004 the California Insurance Department issued a letter banning discretionary clauses that gave LTD insurers nearly unfettered discretion in interpreting the meaning of disability in LTD insurance plans on the grounds that this sort of plan was "unsound insurance."

In October 2005, the California Department of Insurance settled a lawsuit with Unum-Provident, the nation's largest writer of LTD insurance. Under the settlement Unum-Provident was hit with a $8 million fine for knowlingly applying the wrong definiton of disability and for abuses of independent medical exams.

New POMS: LTD Representers May Face Discipline If They Do Not File Fee Petitions

Social Security has recently issued a POMS (Program Operations Manual Series) change entitled Conduct Subject to Suspension/Disqualification to list circumstances that might justify suspension or disqualification of an attorney or representative. The issuance includes the following language that may affect representatives who have worked on behalf of long term disability (LTD) insurance companies:

A claimant has a private insurance policy that pays him benefits when he is unable to work. The insurance company informs the claimant that the terms of the policy require that the claimant file for title II DIB. The claimant receives assurances that the insurance company will provide, at no charge, a representative who will represent him before SSA. The claimant agrees to this representation. Later, SSA awards the claimant title II DIB. The representative informs SSA that he or she is waiving his or her fee in this representation. Following the terms of the policy, the claimant notified the insurance company about the award of title II DIB. The insurance company then paid the representative $5,300 for his representation of the claimant before SSA. Next, the insurance company deducted $5,300 from the claimant's insurance policy benefits. The representative and the insurance company have not acted in accord with the regulations described in GN 03970.010B. based on knowingly charging, collecting, and retaining a fee in excess of that authorized by SSA, and knowingly making a false or misleading statements, assertions, or representations about a material fact or law concerning the $5,300 fee which only SSA can authorize.

California Insurance Commissioner Tries to Stop LTD Offsets

An article in the Sacramento Business Journal reports that an association of insurers has sued to block California Insurance Commissioner John Garamendi from implementing a proposal to impose limits on the types of Long Term Disability (LTD) Insurance that could be sold in California. One element of Garamendi's plan is a prohibition on reducing LTD benefits on account of Social Security disability benefits. According to the lawsuit, Garamendi's proposals would increase costs for group LTD by as much as 46% and for individual LTD policies by as much as 33%.

Backlog in Office of Regulations

Social Security is required to post in the Federal Register every six months a statement showing all proposals for new regulations currently under development. Social Security's most recent Regulatory Agenda showed 45 regulatory proposals that had already been published in the Federal Register. The comment period had long since expired on most of these. Many of these proposals dated back several years. One first appeared in the Federal Register in 1997! It looks as if SSA's Office of Regulations suffers from the same staff shortages and backlogs that afflict the rest of SSA.

The backlogs at SSA's Office of Regulations have potential consequences for two recent major regulatory proposals, Commissioner Barnhart's proposal to revamp disability determination and the proposal to add two years onto each of the age categories of the grid regulations. There were over 800 comments on the Commissioner's proposal. That is a lot of paperwork to wade through to produce a final set of regulations. There are reports that Barnhart wants her proposal finalized by Spring 2006. Certainly, she can order the Office of Regulations to give priority to her proposal, but Spring 2006 may be a hard goal to meet even with pressure from the Commissioner. How high a priority SSA places on the age category proposal is unclear. The proposal indicates that there will be major savings if the proposal is adopted, so there may be pressure from the Office of Management and Budget to adopt the change, but a badly backlogged Office of Regulations could easily cause delays in adoption of this rule.

Significant delay could push implementation of either proposal past the next Congressional election and January 2007, when Barnhart's term in office ends.

Going Paperless

Making the transitition to a "paperless" practice is a hot topic among attorneys who represent Social Security claimants. The National Organization of Social Security Claimants Representatives (NOSSCR) has posted an excellent piece by Charles Martin of Decatur, GA on Using the Electronic Folder with Adobe® Acrobat® Professional: Miscellaneous Tips.

Inspector General Report On Itself

Social Security's Office of Inspector General (OIG) has issued a Performance Report on itself. Not surprisingly, OIG gives itself high marks.