Oct 10, 2008

NPRM On Representation Of Claimants -- Part VII -- Entities As Representatives

I think this will be the last installment of my comments on Social Security's Notice of Proposed Rule-Making (NPRM) on representation of claimants.

My comments today have to do with the concept of an entity as a representative of claimants. The NPRM defines an entity as "any business, firm, or other association, including but not limited to partnerships, corporations, for-profit organizations, and not-for-profit organizations." An entity may be a principal representative and a professional representative. Direct payment of fees may be made to an entity that meets these conditions:
(1) The entity must attest that it is in possession of a signed statement from each attorney or non-attorney who has performed any representational services for the claim in question that includes the following:
(i) The attorney or non-attorney has performed all representational services on behalf of the entity, (ii) Any fees paid pursuant to the services the attorney or non-attorney have provided should be paid directly to the entity, and
(iii) The attorney or non-attorney representative receives compensation for the services provided directly from the entity.
(2) The entity must attest that all individuals who have provided representational services on the claim in question are individuals who qualify for direct payment under the Act or the direct payment demonstration project, as defined in § 404.1717.
Beyond this, the NPRM provides almost no guidance on how entities are to be treated.

I have already posted about the omission of a definition for the term, "representational services," and the contradiction between the apparent requirement that one attorney or non-attorney representative perform all "representational services" for an entity and the basic concept of allowing entities to represent claimants.

Let me list other questions about how entities are to be treated that occur to me after reading this NPRM:
  1. What happens when we make the transition to allowing entities to represent claimants and firms begin changing the name of the representative on pending cases from an individual to an entity? Does this mean that the fee agreement process no longer applies, that the case is automatically a fee agreement case?
  2. What happens when an entity breaks up? Does the claimant no longer have any kind of representative? Does this mean that the fee agreement process can no longer apply, that the fee petition process automatically applies?
  3. How will Social Security deal with a situation in which an entity, which we will call Smith & Smith, breaks in half and each of the newly separated halves of Smith & Smith claims to be the true successor to Smith & Smith?
  4. What if the entity we are calling Smith & Smith is a partnership, but decides to become a professional corporation. Does the change in the formal nature of the business mean that it becomes a different entity, so that the fee agreement process no longer applies?
  5. What happens if an attorney practicing as a solo decides to join an established firm that already has multiple attorneys representing Social Security claimants? If the attorney substitutes the entity he or she has just joined as the representative of his or her clients, do these claimants now have a new representative, so that the fee agreement process no longer applies?
  6. What happens if two entities merge?
  7. To what extent can an entity allow employees who are not attorneys or otherwise eligible for withholding of fees to work on a case? Can the entity have someone not eligible for withholding of fees appear at the hearing? (I know this is another way of asking what is meant by "representational services", but this is a crucial issue.)
  8. What happens to an entity which breaks the rules? We know what happens to individuals who break the rules -- they can lose their right to practice before the Social Security Administration. Does an entire entity lose the right to practice before Social Security if one person acting on behalf of the entity breaks the rules? If not, how do we know whom to punish? Should the entity be able to walk away from breaking the rules merely by firing one person? What if an entity has a pattern of breaking the rules? At what point can the entire entity lose the right to represent claimants?
You may comment on this proposal online and I encourage you to do so. This proposal has many implications. It appears to me that Social Security had difficulty drafting it and the end result is unsatisfactory. There should be many comments.

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