It's Official

     It's official. The fee cap on the amount that attorneys can charge Social Security claimants is going up to $9,200 on November 30.

Attorney Fee Cap To Go To $9,200 This Fall And Be Indexed

     From a press release:

The Social Security Administration (SSA) plans to raise the fee cap for claimants’ representatives, from $7,200 to $9,200, when they and their client agree to use what is known as a “fee agreement process.” This will be the first increase to the fee agreement cap since November 2022, when the cap went up from $6,000 to $7,200, after remaining the same for thirteen years.

The fee cap increase is scheduled to take effect this Fall. The agency also plans to tie future increases to the annual cost-of-living adjustment (COLA). SSA will publish notice of this change in the Federal Register in April in advance of the effective date. ...

Fee Cap Going Up And Will Be Indexed

      The National Organization of Social Security Claimants Representatives (NOSSCR) is reporting that there will soon be an increase in the cap on the amount that attorneys may charge under the fee agreement process and that henceforth the cap will be adjusted annually for inflation.

ALJ Fee Petition Cap Increasing To $12,000

     From the Social Security Administration:

We previously announced an upcoming increase to the maximum fee under the fee agreement process, the first increase in 13 years. Effective November 30, 2022, the maximum fee will change from $6,000 to $7,200.

Additionally, on November 30, 2022, we are also increasing the fee petition amount that an initial authorizer may approve if an appointed representative seeks authorization of a fee through the fee petition process. During the fee petition process, the initial authorizer may now approve up to $12,000 in connection with a claim adjudicated at the initial, reconsideration, or hearing level. ...

What Will The COLA Be This Year?

     It's that time of year when publications start trying to estimate the Cost of Living Adjustment (COLA) for Social Security benefits. Forbes is giving itself plenty of wiggle room by estimating it at 8.6% to 10.5%. Even the low figure is high. The upper figure is alarming.

    Obviously, the COLA is crucial for recipients of Social Security benefits but inflation that high has serious implications for Social Security's administrative budget, Social Security employees who won't receive a COLA anywhere near this great and Social Security attorneys who are subject to a fee cap that isn't indexed for inflation.

Offical Announcement Of Increase In Fee Cap

     The Social Security Administration is today publishing in the Federal Register the increase in the fee cap under the fee agreement process from $6,000 to $7,200 effective November 30.

Some Questions

     On May 11, the Acting Commissioner of Social Security spoke to a Continuing Legal Education conference sponsored by the National Organization of Social Security Claimants Representatives (NOSSCR). She announced that the cap on the fees that attorneys and some others can charge for representing Social Security claimants under the fee agreement process would go up from $6,000 to $7,200 on November 30.

    I have some questions. I imagine that some people reading this blog know the answers to most of these questions. I don't know whether they'll share anything with us but I'll ask the questions anyway.

• The increase in the fee cap isn't effective until November 30. Why such a long lead time? This length of time certainly isn't necessary in order to train staff. (I'll guess that there won't be any real training no matter how far in advance the agency announces this. There certainly wasn't in past years when the fee cap was raised.) When the fee cap was raised previously, the change wasn't announced this far in advance.
• There has been no notice in the Federal Register about the increase in the fee cap as there was in the past when the fee cap was hiked. Has the agency just not gotten around to the notice? Is this somehow still up in the air?
  
• Why $7,200? If adjusted for inflation, it should be more than a $1,000 higher. I can guess that there were proponents within the agency, and perhaps the Biden Administration, for a higher or lower increase. Who were the proponents on each side? What were their arguments? Did the Acting Commissioner make this call or was it the White House? (I don't know why the White House should have been involved but I also don't understand what took so long. I think it was last November when I first heard that an increase was coming.)
  
• Does the low increase reflect a desire on the part of some to change traditional representation patterns -- to force attorneys to be more amenable to a switch to all telephone/video hearings? A desire to generally reduce the effectiveness of representation? (I may be giving those involved too much credit. My impression has  long been that, in general, government employees have little comprehension of the economics of Social Security law firms. It's a high overhead, low profit margin kind of business. Reduce gross fees even modestly and the profit margin is greatly diminished or eliminated. What I've just written is painfully obvious to people like me but must seem like Greek to many who receive a paycheck every two weeks regardless. Of course, I heard a rumor that the Chief Administrative Law Judge has talked about attorneys needing to "become more efficient." What did he have in mind? Whether or not there was a desire to manipulate attorneys to become less effective and to agree to dispense with in person hearings, I predict those will be the effects. Attorneys are struggling under the effects of incredibly poor performance across most parts of the Social Security Administration which delays adjudication and payment of benefits as well as payment of attorney fees at a time when attorney fees have been effectively cut in a dramatic way by inflation. There's nothing we can do to stay afloat but to cut service to our clients which may be "more efficient" in the eyes of some. Claimants don't get the service they're willing to pay for but the service that others who may not have their best interests at heart are willing for them to pay.)
  

Fee Cap Going To $7,200

   This afternoon Kilolo Kijakazi, Acting Commissioner of Social Security, informed the National Organization of Social Security Claimants Representatives (NOSSCR) and the National Association of Disability Representatives (NADR) that the Social Security Administration will raise the cap on the amount that attorneys may charge under the fee agreement process for representing claimants from $6,000 to $7,200.

    In this past, such announcements were made via the Federal Register. This has not yet been published in the Federal Register nor is it scheduled for publication tomorrow.  

    If this were a true cost of living adjustment, it would be going to $8,200, not $7,200.

    When the cap was raised the last time, in 2009, it was not effective until four and a half months after the announcement. I hear that this time it won't be effective until November 30, 2022 which is more than six months off! My hope the last time was that Social Security would use the time to train its staff but it was quickly apparent after the effective date that Social Security's staff hadn't been trained since at first there were more cases handled incorrectly than cases handled correctly. Nobody seemed to have been told that attorneys were allowed to have escalator clauses in their fee agreements that allowed them to be governed by the fee cap in place at the time of implementation rather than the fee cap in place at the time the fee agreement was signed even though this has been Social Security's position since the earliest days of the fee agreement process. I know. I was practicing Social Security law then. At least, back in 2009, we were able to get in touch with the payment centers to get mistakes corrected. They're mostly incommunicado these days and unwilling to correct even the most glaring mistakes.

    By the way, if you're an attorney who represents Social Security claimants and your fee agreement hasn't had an escalator clause, you're out of luck. Trying to force a new contract on your clients for your benefit is clearly unethical in my view.

Equity Action Plan Talks About Attorney Fees

      A press release:

Today, the Social Security Administration released its first Equity Action Plan, supporting President Biden’s whole-of-government equity agenda to advance equity, civil rights, racial justice, and equal opportunity for all.

On January 20, 2021, The President signed an Executive Order, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government. The Executive Order requires all Federal agencies “to pursue a comprehensive approach to advancing equity for all, including people of color and other people who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality.”

“Social Security’s programs touch the lives of nearly every American, providing income security for the diverse populations we serve, including people facing barriers, people with disabilities, people who are widowed, retirees, and their families,” said Kilolo Kijakazi, Acting Commissioner of Social Security. “Systemic barriers may prevent people who need our programs the most from accessing them. Our Equity Action Plan will help to reduce these barriers and ensure people have access to our services.”

Social Security’s Equity Action Plan includes:

• Increasing collection of race and ethnicity data to help understand whether programs are equitably serving applicants and beneficiaries,
• Revising policies and practices to expand options for service delivery,
• Ensuring equitable access for unrepresented claimants in the disability application process,
• Decreasing burdens for people who identify as gender diverse or transgender in the Social Security number card application process, and
• Increasing access to research grant programs for Historically Black Colleges and Universities and Minority Serving Institutions and procurement opportunities for small and disadvantaged businesses.

To learn more about the actions outlined in the Equity Action Plan, please visit www.socialsecurity.gov/open/materials/SSA-EO-13985-Equity-Action-Plan.pdf. For more information about efforts to redress systemic barriers in policies and programs to advance equity for all, visit www.whitehouse.gov/equity.

    Here's a little from the Equity Action Plan that will be of immediate interest to some readers: 

... Some claimants get attorney or non-attorney representatives to assist with this process. However, representatives’ fees are based on awarded back benefits. This is a disincentive for representing SSI Disability applicants in favor of DI applicants, whose benefits are typically higher. There is evidence that although African American people are more likely to have a disability, they are less likely to be approved for disability benefits than White people. Considering this, we will assess whether African American claimants are less likely to have a representative than White claimants, research whether claimants who have representatives are more likely to receive disability benefits, reach out to claimants who do not have representatives to prepare them for their disability hearings and inform them of their right to representation, and work with professional associations of representatives to create incentives to increase their representation of disability program applicants. ...

[W]e are evaluating whether the current maximum fee of $6,000 that attorney and non-attorney representatives receive under the fee agreement process is enough. ...

    And on another topic:

... [W]e will: 

Explore establishing a Customer Experience (CX) office that reports directly to the Office of the Commissioner. ...

    That doesn't sound like an ombudsman or even a customer service office but it could be a step forward. Social Security has expended much effort telling the public how it must do business with the agency and more or less blaming the public for lousy service at the agency, as in telling the public that if they'd only just use online services, their service would be so much better, without noticing that the agency's online services are, on the whole, lousy and that many members of the public wouldn't be able to use them even if they were terrific. Quit blaming the customer.

Fee Cap Chokes Claimant Representation

     From The Legal Intelligencer (registration required):

A limit on the fees attorneys may collect on Social Security cases has remained unchanged for nearly 13 years, leaving some smaller firms and solo practitioners struggling to keep their practices running as inflation and costs of business outpace their earnings.

The stagnating cap has has resulted in a practice area that both fails to attract new talent and drives established practitioners to seek out more profitable types of law, say some Social Security attorneys. Those attorneys say the drain on resources is creating a smaller pool of representation available to vulnerable populations that will ultimately lead to fewer claimants getting the help they need.

In June 2009, the Social Security Administration raised the previous maximum limit for fee agreements under Section 206 of the Social Security Act from $5,300 (adjusted in 2002) to $6,000 in order to “adequately compensate representatives for their services while ensuring that claimants are protected from excessive fees.”

That limit has not been adjusted since. ...

According to National Organization of Social Security Claimants president David Camp, the tax that Social Security imposes for releasing the fee—currently 6.3%—has continued to go up in that time, as have most other business costs. 

“Nobody likes to say they want more money,” said Camp, “but at some point, when you’re operating a small business or when you’re a solo attorney with maybe one assistant, it’s very hard to have a payroll … and it’s been brutal, and it’s now been 13 years.” ...

Tim Cuddigan of Omaha-based Cuddigan Law said his firm had to adapt the services it offered about five years ago when it became clear that the cap wasn’t going to change any time soon. Cuddigan Law’s focus on Social Security disability proved unable to generate enough income to support the three-attorney firm, so it supplemented its offerings with a veterans disability practice. 

“The rent has gone up, salaries have gone up, insurance has gone up, and the fee cap hasn’t gone up,” said Cuddigan. 

“It’s become this low-wage way to practice law, and such an unfortunate overall reduction in the number of people that are willing to do it,” Camp said.

Camp and Cuddigan said they have seen fewer law school graduates looking to enter the field as well as experienced attorneys leaving behind their Social Security practices because of the low pay. They said in some cases small firms and solos have gone out of business. ...