House Social Security Subcommittee Hearing

The hearing of the House Social Security Subcommittee is going on at the moment. It can be viewed over the internet. The witness statements are available at the Subcommittee website. The hearing appears to be a grab bag, with much discussion of the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP), but also discussion of the five month waiting period for Disability Insurance Benefits, the 24 month waiting period for Medicare, the recent proposal for procedural changes in Social Security adjudication and various plans for improving a wide variety of types of Social Security benefits.

Allsup Got Cut

Earlier today I posted what I thought was the transcript of the story that CBS News ran last night. Actually, the transcript that CBS provided was not completely accurate. Here is a snippet that was in the transcript that did not appear on TV:

Part of the reason for that, says Jim Allsup, who employs former SSA employees at his Illinois-based company Allsup Inc., is that there is “an inherent conflict-of-interest between protecting the disability trust fund and providing the appropriate level of service to the claimant.”

It looks as if they realized at the last minute that they needed to cut a few seconds off the piece and this little bit got cut, but they forgot to change the transcript to reflect this last bit of editing. So, Jim Allsup misses his opportunity for face time on national television.

We know that Allsup was behind the USA Today article on Social Security backlogs that appeared a few months ago. It is unclear whether Allsup persuaded CBS to do this piece or just helped them after they got started. Either way, it is clear that Allsup is engaged in an impressively successful public relations campaign that helps Allsup but which is also of public benefit.

Waiting In Fargo

From the Bismark Tribune:

FARGO - Sharon Eid says she has spent the last four years battling paralysis, both from a spinal condition that left her unable to work and a government agency that left her without benefits. ...

"It's been a very long haul," Eid said Monday at a meeting with Rep. Earl Pomeroy, D-N.D., and Social Security Administration officials. "If it weren't for my children and my friends and my church taking care of me, I wouldn't be here. I think I would have put an end to it a long time ago." ...

"If it's this hard to reach a final decision in a case of these facts, as disturbing as they are ... what does it take to establish disability?" Pomeroy asked.

The average wait for a person in North Dakota to receive a decision on a disability claim is 435 days, nearly twice the average in 2001, Pomeroy said. The national average is a 520-day wait.

"I tell you something, if I had regulated an insurance company that took more than two years whether or not to play a claim, that would have been a company in a whole lot of trouble with me as insurance commissioner," Pomeroy said.

Waiting In Syracuse

WTVH, a CBS affiliate in Syracuse, NY, is running a story on Social Security backlogs that combines some footage from the CBS Evening News story with some local footage. Unfortunately, the story contains a glaring inaccuracy. The reporter states that an attorney can reduce the time it takes to get on Social Security disability benefits. I wish it were true. Attorneys can help a claimant avoid making mistakes that would delay a case, but cannot make the process go faster.

Text Of Second CBS News Report

The text of last night's CBS report on the Social Security disability programs:

Two years ago, 52-year-old Sherry Farner was a manager at a Denny's restaurant. But heart problems, strokes, and kidney failure put an end to her employment.

"I can't be alone, because I fall a lot. This is the hardest thing I've ever been through," Farner told CBS News chief investigative reporter Armen Keteyian. "And I wouldn't wish this on nobody."

When Farner filed a claim against a lifetime of paying into federal Social Security disability, she was turned down -- twice. Even though a rejection letter acknowledged she was severely disabled. But not disabled enough: Unable to perform work of any kind.

"It's a very tough standard," said Michael Astrue, commissioner of the Social Security Administration. "And you can argue whether that should be the standard or not, but I'm stuck with that."

A two-month CBS News Investigation uncovered a system whose own standards have been called into question - a federal agency reeling from budget cuts and high staff turnover. Doctors making decisions outside their specialties, and inexperienced examiners under pressure to keep costs down.

"We're failing the disabled on a very large scale," said Trisha Cardillo, who worked inside the system for years, reviewing 200 federal disability cases a month in Ohio.

She now fights for those seeking disability benefits.

"There were a lot of times when I was fighting with management because I wanted to approve a claim," Cardillo said. "And I had to go through so many steps and - jump through so many hurdles to do that, it just seemed ridiculous,"

All part, says Cardillo, of a culture built on denial. Examiners warned by their superiors that approving claims today could cost the government millions tomorrow.

"So are you saying, in essence, there was a quota system?" Keteyian asked.

"Every state had different numbers," she said. "They know that a certain percentage of people, once denied, will never file an appeal."

CBS News has learned that two-thirds of all applicants denied last year - nearly a million people - simply gave up after being turned down the first time.

Given how many claims are ultimately approved, that could mean hundreds of thousands of Americans are not getting the benefits they paid for - and deserve.

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Read Part I of the series: Disabled And Waiting
FYI: Resources about disability benefits

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Keteyian asked Astrue: "One of the state examiners we spoke to, told us that people were singled out, talked to, if they approved too many clients."

"You can approve too many, and you can approve too few. And they're both wrong," Astrue said.

That's not what the examiner told CBS News. She said that in her state there were quotas to be kept at a certain level.

"It's not the way the system works," Astrue said.

Keteyian said: "That's the way it worked in her office."

"You can always find a disgruntled person," Astrue said.

But we found nearly three dozen former examiners from 14 states who told us about a system-wide "culture to deny."

Part of the reason for that, says Jim Allsup, who employs former SSA employees at his Illinois-based company Allsup Inc., is that there is “an inherent conflict-of-interest between protecting the disability trust fund and providing the appropriate level of service to the claimant.”

That’s something CBS News found in a review of 50 cases across the country, where patients diagnosed with strokes, heart attacks, even brain cancer, were rejected for disability payments.

"Nobody cares if a case is denied. If you approve it, it will be subjected to intense scrutiny," Cardillo said.

No surprise to Sherry Farner, whose case was finally approved by a judge a few weeks ago - after a two-year wait. But not before losing her car, her life savings, and nearly her home.

Second Part Of CBS Report

CBS broadcast the second and final part of its series on the Social Security disability program this evening. You can view it online. This second part focused mostly on the standards used in making decisions on disability claims.

CBS stated that Social Security applies some sort of quota system in determining disability. As most readers of this blog know, that is not accurate. The system is far more sophisticated and far more insidious than that. Social Security actually uses a pyramidal quality assurance system that is heavily and intentionally skewed towards denials, but try explaining that in three minutes or so. The effect is about the same as if there were a quota system, but it is not a quota system.

CBS News has also posted online an unaired video interview with Dr. Nicholas LaRocca of the National Multiple Sclerosis Society. Dr. LaRocca undoubtedly means well, but he seems to suggest that claimants should delay filing a claim until they have gathered something -- he does not say exactly what -- from their doctor or maybe LaRocca is saying that trying to get something from one's doctor is a source of delay. It is hard to tell what we was trying to say.

Claimants often delay filing Social Security disability claims until they obtain permission from their doctor or obtain a report from their doctor. This is a mistake. No one needs permission from their doctor to file a disability claim and there is no magic report that one can obtain from one's doctor that will make all the difference.

Many treating physicians have their own absurd misconceptions about disability. I was talking today with one of my clients who was crying because her treating physician had told her that he could not support her disability claim. I tried to reassure her that Social Security was not going to care what her doctor thought, since she is in terrible shape and the only issue in her case is the onset date. A claimant like that could be dissuaded from filing a claim by a physician who has the misconception that one is only disabled when one is near death or quadriplegic.

There is no magic report that one can obtain from a physician that will make getting approved for Social Security disability benefits a snap. File the claim and then worry about trying to get medical reports or better yet hire an attorney and let him or her get what is needed.

Transcript Of CBS News Piece

Below is a transcript of last night's CBS Evening News piece on the Social Security backlogs. By the way, did anyone else notice the large picture of Vice President Dick Cheney on the wall at Social Security headquarters?

COURIC: There is much more CBS News ahead. Coming up next, you pay thousands of dollars into Social Security, but just try to get disability benefits when you need them. A CBS News investigation.

(COMMERCIAL BREAK)

COURIC: Every week, millions of American workers pay into Social Security, and every year 2.5 million apply to get some of that money back in the form of disability benefits. But most are initially denied. A two- month long investigation by CBS News found that a safety net you pay for may not be there when you need it. Here`s our chief investigative correspondent Armen Keteyian.

(BEGIN VIDEOTAPE)

SCOTT WATSON, DISABILITY CLAIMANT: I always figured that I would die in a fiery car wreck or something, never that I would be, you know, disabled.

ARMEN KETEYIAN, CBS CORRESPONDENT: Two years ago, a failed surgery left 33-year-old Scott Watson with a fracture in his spinal chord. It turned his life upside down, leaving him unable to work in his job as a broadcast engineer.

UNIDENTIFIED MALE: You are obviously showing the hump in this area.

WATSON: Everybody says that you have got to have a positive attitude, you know. And I say, well, I am positive. I`m positive this is the end. You know? I mean, it`s not going to get any better.

KETEYIAN: Declared disabled by the state of Maryland, Watson was told he was a shoe-in when he applied for federal disability last year, only to be turned down three months later on the grounds, according to federal guidelines, he wasn`t disabled enough.

Watson appealed, and was denied again -- one of 27,000 Maryland residents, 68 percent of all those who applied, to suffer such a fate.

Overall, two out of every three people who apply for federal disability benefits are rejected by a government agency critics charge that is out of date, underfunded, and incapable of serving the exploding number of disabled Americans. Waiting times for a hearing in some cities are now more than three years.

LINDA FULLERTON, SOCIAL SECURITY DISABILITY FOUNDATION: Well, I have people all the time writing to me saying that they are suicidal.

KETEYIAN: Linda Fullerton is an advocate for the disabled.

FULLERTON: I have no insurance, and doctors say I need two brain surgeries.

KETEYIAN: Her online support site is home to one horror story after another.

FULLERTON: I had to file bankruptcy to keep home. Losing home with four children.

KETEYIAN: A two-month CBS News investigation has found that over the last two years, at least 16,000 people fighting for disability benefits died while awaiting a decision. Overall, the backlog of cases now stands at 750,000, three quarters of a million people, up 150 percent since 2000. People wait an average of 520 days for a hearing on their claims.

People like Jerry Rice, who calls this abandoned toolshed home.

Where do you sleep?

JERRY RICE, DISABILITY CLAIMANT: Right here.

KETEYIAN: When we found Rice, who suffers from mental illness, he had been waiting for three years for his day in court.

RICE: This is how it is. I hope it ain`t how it ends up, but it`s how it is for right now.

KETEYIAN: But you deserve in your mind the disability.

RICE: I`m not asking them to give me welfare. I`m asking them to give me what they promised. Yes, I deserve it.

JOHN HOGAN, DISABILITY ATTORNEY: It is a mess from the time you apply to the time you try to get paid.

KETEYIAN: Attorney John Hogan has represented thousands of folks here in Atlanta, the backlog capital of the nation.

HOGAN: We`re the furthest behind of any area in the country. It could take 2.5 years to get your hearing.

UNIDENTIFIED MALE: 2.5 years.

MICHAEL ASTRUE, COMMISSIONER, SOCIAL SECURITY ADMIN.: We have a lot of room for improvement.

KETEYIAN: Social Security Commissioner Michael Astrue took over the federal disability program last year, stepping up efforts to fix a system many call broken.

ASTRUE: I think it`s been broken the way a leg is broken. And it can heal, and it is healing.

KETEYIAN: But what do you say to the people that have stood in that line, that three-year line?

ASTRUE: I don`t have a defense. I don`t think it is a good thing. I don`t think it should have been allowed to happen. So we`re probably not going to be able to drive the backlog down at the rate that it went up, but we`re sure as hell going to try.

KETEYIAN: Little consolation to the likes of Scott Watson, who had to rely on his parents to simply survive.

WATSON: You pay something into a system that you think is going to help you in your time of need. And it doesn`t even acknowledge that you even have a problem.

KETEYIAN: Armen Keteyian, CBS News, Bel Air, Maryland.

(END VIDEOTAPE)

COURIC: For a list of resources for disability benefits, you can go to cbsnews.com and click on CBS EVENING NEWS.

And what`s behind the high denial rate for Social Security disability benefits? You will see in the conclusion of our investigation tomorrow night.

Supreme Court Case On EAJA

The Supreme Court has granted a writ of certiorari in the case of Richlin Security Service Co. v. Chertoff, which will be of interest to attorneys who represent Social Security claimants. Here is a summary of the case from Northwestern University:

The Supreme Court has agreed to clarify whether companies that successfully sue the United States in administrative proceedings are entitled to recover the full market cost of paralegals who aided them.

In the case, Richlin Security Service Co. v. Chertoff, No. 06-1717, Richlin provided guards who watched over detainees at Los Angeles International Airport. Several years into Richlin's contract with the Immigration and Naturalization Service, the federal government concluded that it had misclassified -- and consequently underpaid -- the guards.

Richlin sued the government to recover its lost income and prevailed. Under the Equal Access to Justice Act, 5 U.S.C. Sec. 504, Richlin was entitled to recover "fees and other expenses" incurred in the proceedings.

When Richlin sought those fees, the agency refused to reimburse the company the full amount of money it had been billed for paralegal services, ranging from $50 to $135 an hour. Instead, the Board determined that the company's law firm had a $35 per hour cost for the paralegals and paid the company that amount.

The circuit court of appeals affirmed the decision. The court reasoned that paralegal work should be categorized as an "expense" compensable at cost rather than a fee, akin to an attorney fee, compensable at market rates. The court explained that because the statute capped attorneys' fees at $125 per hour but did not refer to paralegal fee rates, a market-based reimbursement for paralegals could induce firms to shift work to those paraprofessionals to escape the cap.

In asking the Court to review the decision, Richlin argued that the Eleventh Circuit, in Jean v. Nelson, 863 F.2d 759 (11th Cir. 1988) reached the opposite conclusion, creating a clean split between the cirucits.

Richlin also noted that in Missouri v. Jenkins, 491 U.S. 274 (1989), the Supreme Court held that under the analogous Civil Rights Attorney's Fees Awards Act, paralegal services are an element of attorney's fees and therefore should be compensated at a firm's billable rate, rather than at the cost to the firm.
The Court had concluded that permitting market reimbursement for paralegals would encourage attorneys to delegate appropriate work to paraprofessionals in order to provide more cost-efficient legal services.

In resisting the petition for certiorari, the government argued that while the statute was designed to encourage the filing of legitimate lawsuits against the United States, it was simultaneously designed to conserve public funds by reimbursing some services at cost rather than at a market markup.