Commissioner On Budget

From: ^Commissioner Broadcast
Sent: Friday, December 23, 2011 2:37 PM
Subject: COMMISSIONER'S BROADCAST--12/23/11

A Message To All SSA And DDS Employees‪

Subject:  Budget Approved

Thank you for your patience during the latest budget negotiations and for handling the uncertainty professionally.  I am pleased to report that President Obama today signed the Omnibus appropriations bill.  The good news is that we know how much money we have for this fiscal year much earlier than we did last year.

Accounting for the across-the-board reduction that each agency had to take, we received a small increase of about $25 million over last year’s budget.  This budget increase does not pay for much of our more than $300 million increase in fixed costs, so it will be another very tight year.  We are in the process of making some difficult decisions so that we can accomplish our most important missions.  We will release revised budget allocations in January and expect only to make minor modifications through the remainder of the fiscal year.

Thank you again for working hard during this period, and I wish you all a wonderful holiday season with family and friends! 

                                                            Michael J. Astrue

                                                            Commissioner‪‪

Binder and Binder Advertising Expenses -- Off The Charts!

     The Wall Street Journal article yesterday contained some interesting information on Binder and Binder's operations. Their total revenues in 2010 were about $88 million, which is a stunning number, but almost as stunning to me was Binder and Binder's television advertising expenses, more than $20 million. As big as that number is, you must remember that television is only a part of their advertising expenditures. They also engage extensively in search engine marketing, which is also expensive. Their search engine marketing expenses are probably in the same ballpark as their television advertising expenses. This means that they are probably paying out something over 40% of their gross revenues on advertising. Spending that kind of money on advertising explains their service delivery problems. They have little money to spend on customer service after paying for all the ads. 

     How does Binder and Binder's advertising costs as a percent of their revenue compare to the average Social Security practice? I can only make a rough guess here but I think it safe to say that Binder and Binder is incredibly far off the chart.

     Don't you have to wonder about any enterprise that spends such a huge percent of its revenues on advertising? Who else does this? Luxury retailers, maybe?

     By the way, I'll also take a guess that Binder and Binder's profit margin is small.  How can they have much profit, spending that much on ads? I wonder how well they''re doing in the current downturn in fee payments.

New Regulations

     From the new regulations published today in the Federal Register:

Sec. 404.903 Administrative actions that are not initial determinations. ...
(g) Refusing to recognize, disqualifying, or suspending a person from acting as your representative in a proceeding before us  ...


Sec. 404.1740 Rules of conduct and standards of responsibility for representatives.
All attorneys or other persons acting on behalf of a party seeking a statutory right or benefit must, in their dealings with us, faithfully execute their duties as agents and fiduciaries of a party. A representative must provide competent assistance to the claimant and recognize our authority to lawfully administer the process. The following provisions set forth certain affirmative duties and prohibited actions that will govern the relationship between the representative and us, including matters involving our administrative procedures and fee collections.

(2) All representatives must be forthright in their dealings with us and with the claimant and must comport themselves with due regard for the nonadversarial nature of the proceedings by complying with our rules and standards, which are intended to ensure orderly and fair presentation of evidence and argument.

     I have only conducted a cursory review of these regulations. I note a harsh, peremptory tone to the responses to the public comments. About the only reassuring thing it says is that "We are not asking anyone to disclose information protected by the attorney-client privilege or the attorney work-product doctrine." I have not seen in these regulations any explicit requirement that a representative must submit all medical evidence that comes their way. 
     They do not define the word "fiduciary." The normal meaning of this word would prevent the practice of helping insurance companies collect money owed to them by Social Security claimants. I will be surprised if Social Security is willing to enforce this.

Senator Calls For Social Security To Scrutinize Binder And Binder Clients

     From UPI (they still exist?!):

U.S. Sen. Tom Coburn, R-Okla., called on the Social Security Administration to examine cases of disability claimants represented by a high profile legal firm.

Coburn Thursday called on SSA Commissioner Michael Astrue to look into the health status of people represented by Binder & Binder, a firm based in Hauppauge, N.Y., that advertises nationally. ...

Coburn, the top Republican on a subcommittee on Social Security, said Binder & Binder's practices were "potentially fraudulent" and raised questions on how many disability beneficiaries "are potentially improperly receiving benefits."

A Top Ten List

     Below are some numbers from yesterday's Wall Street Journal article. These are the top ten individual recipients of fees for representing Social Security claimants in 2010, the amount received and their headquarters location. These are individuals, not entities. Some fees  are attributed to individual employees of larger entities and sometimes to just one individual at the head of such an entity making these numbers meaningful only in a relative sense. In all, or almost all, cases the total fees received by the entity are much higher, in the case of Binder and Binder almost four times as much.

1. Charles Binder	$22,817,430.62	Hauppauge, N.Y.
2. Thomas Nash	$6,292,296.41	Chicago
3. Eric Conn	$3,815,512.96	Stanville, Ky.
4. Michael Sullivan	$3,614,429.13	Lousiville, Ky.
5. Frank Latour	$3,464,262.24	Colton, Calif.
6. Ronald Miller	$3,241,150.42	Santa Monica, Calif.
7. Juan Hernandez Rivera	$2,816,311.80	Bayamon, Puerto Rico
8. Robert Friedman	$2,531,046.93	Seattle
9. Matthew Greenbaum	$2,004,375.65	New Orleans
10. Thomas Bothwell	$1,668,758.92	Yakima, Wash.

Merry Christmas

New Regs On Representatives Tomorrow

The new regulations on representatives will appear in the Federal Register tomorrow. It seems clear that these are intended as a response to the Wall Street Journal story. Social Security used an old proposal on recognizing entities as the basis for this although I think there is little connection between the two.

Binder And Binder Piece In Wall Street Journal

The Wall Street Journal is running its long anticipated story on Binder and Binder. I have not yet been able to read anything other than the blurb available so far online.
Here is a link to the full article.