Bad Day For Claimant: Legal Malpractice And A Possible Privacy Act Violation

From a recent opinion published in Social Security's Program Operations Manual Series (POMS):

The evidence provided indicates NH [Number Holder] reached a compromise settlement with his employer through the South Carolina Workers' Compensation Commission (SCWCC) in his workers' compensation case. NH was rated as having a 28% impairment to his spine. As part of the settlement, NH's employer agreed to pay NH a sum of $140,000. The parties agreed the sum would include attorney's fees and costs and $93,055.34 over NH's life expectancy of 57 years at the rate of $31.40 per week ...

... when a disability beneficiary receives a lump-sum settlement that is a commutation of, or substitute for, periodic workers' compensation benefits, the Act requires the Agency to prorate that lump-sum payment. Act § 224(b), 42 U.S.C. § 424a(b), 20 C.F.R. § 404.408(g). The Act instructs the Agency to prorate the lump-sum payment in a manner that "will approximate as nearly as practicable the reduction" that would have been applied had the beneficiary received his or her workers' compensation payments on a weekly or monthly basis. Id.. To accomplish this, the Agency must determine the amount of workers' compensation payments the beneficiary would have received weekly or monthly had he not opted for a lump-sum payment, prorate the lump-sum award using the prorated amount, and impose the statutorily prescribed offset accordingly. To guide Agency adjudicators, the longstanding policy in the POMS sets forth a three-tiered set of priorities for prorating state lump-sum workers' compensation awards at an established rate. In priority order, the Agency is to prorate the award at:

1. The rate specified in the lump-sum award.

2. The latest periodic rate paid prior to the lump-sum, if no rate is specified in the lump-sum award.

3. The state's maximum workers' compensation in effect in the year of the injury/illness, if no rate is specified in the award and there was no preceding periodic benefit.

POMS DI 52001.555(C)(4)(a). However, the Agency has for some time been aware that attorneys have seized upon the opportunity offered by these POMS instructions to insert artificially low rates in settlement agreements to lessen or perhaps avoid entirely the reduction that otherwise would be required by section 224 of the Act. While the Agency's long-standing interpretation of section 224 has been that the Act requires it to look to state law to determine what rate would have been paid had the workers' compensation been made on a periodic basis, see § 224(a)(b) of the Act, 42 U.S.C. § 424a(a)(b); 20 C.F.R. § 404.408(g) (2006), the Act still places the ultimate responsibility for determining the offset rate in the hands of the Commissioner. See B~ v. A~, 150 F.3d 177, 181-182 (2nd Cir. 1998). ...

In the settlement, the parties state this weekly allocation rate is based on a life expectancy of 57 years which was determined pursuant to S.C. CODE ANN. § 19-1-150. However, in reviewing this statute, we find that the SCWCC erred in calculating NH's life expectancy. The proper application of S.C.CODE. ANN. § 19-1-150 reveals that a person of NH's age of 57 actually has a life expectancy of 23.10 years. See S. C. CODE ANN. § 19-1-150. Therefore, the SCWCC's life expectancy determination was incorrect in light of the South Carolina statute relied on by the parties. (emphasis added) ...

The life expectancy determination by the SCWCC was incorrect. The Agency is not bound to follow the weekly allocation rate set forth in NH's settlement agreement as would be customary under step one of POMS DI52001.555(C)(4)(a).

If you are following this, the attorney representing this claimant based the worker's compensation settlement upon a life expectancy of 57 years, but 57 was how old the claimant was. His life expectancy was actually 23.1 years.

By the way, I will not repeat it here, but this opinion happens to list the actual name of the claimant. Only his Social Security number is redacted. It may not just the claimant's attorney who fouled up. I wonder if Social Security has some obligations under the Privacy Act in this case.

Statements To House Social Security Subcommittee On Identity Theft and SSNs

Several of the written statements to the House Social Security Subcommittee for today's hearing on protecting the privacy of Social Security numbers from identity theft are now available online. The statement of Marc Rotenberg of the Electronic Privacy Information Center contains this interesting information:

H.R. 948, the Social Security Number Protection Act of 2007, has passed before the Committee on Energy and Commerce and has been reported to the House. The purpose of H.R. 948 is to prohibit the display and purchase of Social Security numbers in interstate commerce pursuant to rules to be promulgated. ...

Sections 3(a)(1) through (3)(a)(3) of H.R. 948 create a facially broad prohibition on the public display of Social Security numbers on the Internet, the requirement to use an individual’s Social Security number as a password for access to any goods or services, and the display of Social Security cards on any membership or identity card. However, Section 3(c) grants the Federal Trade Commission open-ended authority to promulgate exceptions to the prohibitions contained within the bill.

Senate Finance Committee Written Statements

The written statements for the Senate Finance Committee's hearing today barriers to work for Social Security disability recipients are now available online.

The only witness whose written statement suggests a strong attachment to the delusion that some change in policy could return vast numbers of disability recipients to work was Dr. David Stapleton of the Cornell University Institute for Policy Research. Stapelton has been receiving a good deal of grant money from Social Security. Could considerations of his own self-interest have something to do with this paragraph at the close of his statement?

I urge this Committee, all government leaders, and advocates for people with disabilities to support the design, testing, and eventual implementation of transformative disability policy changes – changes that will help people with disabilities achieve both greater economic self-sufficiency and more fulfilling lives. Within that framework, the highest priority should go to efforts that will reduce the premature exit of workers with disabilities from the labor force and
into SSDI.

I would like to read even one report or statement from one of these researchers that did not call for more research dollars to be funeled to them.

Social Security Indendent On Budget

An anonymous poster responded to something I had written to say that regulations of the Office of Management and Budget prohibit federal agency heads from lobbying for appropriations in excess of what is contained in the President's recommended budget. This is true and an important fact for agencies other than Social Security.

However, the Social Security Administration is in a unique position. The Social Security Independence Act now only allows, but requires Social Security to submit its own budget request directly to Congress, which means that the Commissioner of Social Security is free to lobby Congress for whatever budget he feels that his agency needs. Indeed, if the Commissioner of Social Security is unwilling to do so, there is little point in the Social Security Administration being an independent agency.

In refusing to advocate for his own agency's budget, Michael Astrue is making the case that the "independence" of the Social Security Administration is a sham and that in the next administration Social Security should either be returned to the Department of Health and Human Services or made a cabinet level department. Either of these would put Michael Astrue out of a job, which might not displease a newly elected Democratic president.

Schumer And Barton Added As Witnesses For House Social Security Subcommittee Hearing

Senator Charles Schumer and Congressman Ed Markey have been added as witnesses for today's House Social Security Subcommittee hearing on Social Security numbers and identity theft.

Stem Cells And Social Security

From the Associated Press:

President Bush hasn't seen the last of legislation to allow federal funding for new embryonic stem cell

Supporters are answering his veto with an effort Thursday to add to an appropriations bill permission to use taxpayer dollars for new lines of embryonic stem cells. ...

The pushback was expected to begin Thursday. The Senate Appropriations Committee was to vote on a must-pass bill for the Labor and Health and Human Services departments that includes permission to use federal funding for embryonic stem cell lines derived after Bush in 2001 banned taxpayer dollars from being used on new studies of that kind.

The Labor-HHS appropriations bill includes the Social Security Administration. This has the potential for delaying a new funding bill for Social Security.

By the way, since when does the Associated Press' style manual permit contractions in a story -- and in the lead sentence, no less?

Astrue Appearance On CSPAN

I have receieved an anonymous tip about a recording of an appearance by Michael Astrue on C-SPAN. Here is a link to a streaming video. This was taped on June 14. I have not had a chance to watch it.

Congressional Three Ring Circus On Thursday

There will be two Congressional hearings and one appropriations markup session affecting Social Security on Thursday, June 21. The hearings, but not the markup session, should be available in live streaming video. Here is the list:

• 10:00 Social Security Subcommittee of House Ways and Means Committee Hearing on Protecting the Privacy of the Social Security Number From Identity Theft
• 10:00 Senate Finance Committee Hearing on Barriers to Work for Individuals Receiving Social Security Disability Benefits
• 2:00 Senate Appropriations Committee markup of appropriations bill including Social Security