Attorney Fees Down 19% In Last Four Years

     I have written that attorneys and others representing Social Security disability claimants are under considerable economic stress. It's a simple matter to demonstrate what's happening. Social Security posts the totals on fees paid. These numbers are available through August of this year. Let's compare the total fees paid to attorneys and others for representing Social Security claimants for this year and each of the preceding four years through August of each year:

• 2010 $977 million
• 2011 $941 million, a reduction of $36 million or 4% from 2010
• 2012 $935 million, a reduction of $6 million or 1% from 2011; a reduction of $42 million or 4% from 2010
• 2013 $876 million, a reduction of $59 million or 6% from 2013; a reduction of $101 million or 10% from 2010
• 2014 $792 million, a reduction of $84 million or 10% from 2013, a reduction of $185 million or 19% from 2010

     If there had been essentially no change in representation, these numbers should have gone up modestly due to inflation. Instead, they went down by 19% over five years, with most of that change happening in the last two years.

     What happened? There's been a generalized slowdown in processing disability claims at Social Security. It just takes longer to get a case through every stage of the process. Naive people might think that slower processing would mean higher fees but the reality is that it just means lower total fees as the cases pile up at every level. Even more important, it has become more difficult to get a favorable decision from an Administrative Law Judge. That's had the direct effect of reducing the fees paid because fewer claimants are winning. It's had the secondary effect of changing the standards used by attorneys and others in selecting cases. Because a fee is paid only if the claimants wins, everyone tries to avoid cases they regard as unlikely to succeed. The "unlikely to succeed" category has gotten considerably larger over the last five years. More prospective clients are turned away. It's also had the effect of reducing the advertising that attorneys and others do seeking Social Security clients. Many people who were advertising in the past just can't afford it now. Even if they do advertise, the advertising is less effective because more prospective clients are turned away because of increased selectivity. This means that advertising has a lower yield, making it less cost effective. Less advertising means that fewer claimants learn that they can try to hire an attorney. "Try" is the right word here since it's clear at ground level that there are many claimants desperately seeking an Social Security attorney and not finding one willing to take on their case.

     If you're not in the business of representing Social Security claimants, your reaction to this is probably, "Who cares? That's your problem, not mine." However, Social Security has offloaded a considerable part of its workload to those who represent Social Security claimants. We have to do a lot of the filing of appeals, gathering of medical evidence and advising claimants. The agency is in no position to pick up that workload.

Controversial Pay-Fors In ABLE

     Support has been growing in Congress for the ABLE Act of 2014 (H.R. 647). ABLE stands for Achieving a Better Life Experience. Under ABLE, individuals receiving Supplemental Security Income (SSI) and Medicaid could establish tax favored accounts to cover qualified expenses for medical care, housing and transportation. The accounts would not count against SSI and Medicaid resource limits. There is a chance that ABLE will become law this year.

     The ABLE bill, apart from its "pay-fors", is certainly worthy of passage. However, I would prefer that ABLE be a part of a comprehensive effort to update the income and resource provisions of SSI and Medicaid. I'm not sure about Medicaid but the SSI income and resources provisions in SSI haven't been updated since SSI became law more than 40 years ago. They are ridiculously out of date. As it stands, ABLE is primarily a bill to help the disabled children of middle class and wealthy parents. Those parents could use ABLE accounts to transfer funds to their disabled children. Those who are on SSI and Medicaid seldom have the ability on their own to accumulate assets in an ABLE account.

     The big problem with ABLE is that it would cost money and the House of Representatives is proposing "pay-fors" that would:

• Eliminate the percentage and dollar cap on the user fee that those representing Social Security claimants pay for processing direct payment of fees for representing Social Security claimants.
• End the Single Decisionmaker pilot currently used in twenty states.
• End the Reconsideration elimination pilot currently used in ten states.

     Ending the single decisionmaker and reconsideration elimination pilots would make it more difficult to be approved for disability benefits in the affected states. I don't think there is any substantive opposition to those pilots. Instead of eliminating them, they should be extended to all states. Why should ABLE be used to help middle class and wealthy families at the expense of disability claimants generally?

     Eliminating the percentage and dollar caps on the user fee is a big deal. Already, attorneys and others pay hefty fees to Social Security for the processing of their fees. This would increase those fees to preposterous levels that bear no relationship to Social Security's actual costs. Why would it cost Social Security almost $400 to compute 25% of a claimant's back benefits and authorize a direct deposit?
     I will write more about this later but those who represent Social Security claimants are already under considerable economic stress. Although no statistics have been released, it seems clear to me that fewer claimants are represented now than was the case a few years ago. Representing Social Security claimants is a high overhead, low profit margin business. Reducing the gross income of those who represent Social Security claimants by, perhaps 5%, would reduce their net income by a much higher percentage. Should ABLE be adopted with the elimination of the user fee caps, I expect a downward spiral of Social Security representation. At some point, it's just not worth it any more and we're rapidly approaching that point even without this proposal.
     The "pay-for" in the current House proposal will undoubtedly generate some opposition in the Senate which would endanger ABLE. As difficult as it is to pass any legislation in Washington, I would have thought that House Republicans would have tried harder to find less controversial "pay-fors" assuming they really want to pass ABLE. There aren't many legislative days left in this Congress. It may not take much of a dispute to kill ABLE in this Congress.

Three Confirmed To SSAB

     From The Hill:

The Senate voted Monday to clear three nominations to the Social Security Advisory Board.

Henry Aaron’s nomination was confirmed on a 54-43 vote. Shortly after, the Senate approved the nominations of Alan Cohen and Lanhee Chen by voice-votes. ...

President Obama is expected to make Aaron chairman of the board.

      Aaron was nominated to the SSAB in 2011. That's how long it took to get his noncontroversial nomination through the Senate.
     Chen was a campaign aide to Mitt Romney. He referred to President Obama's plans for Social Security as "laughable." Aaron and Cohen have a history of avoiding partisanship.

But Our Customer Satisfaction Ratings Are About 80%

     From the Baltimore Sun:

Hiring by Maryland's largest employer — the federal government — has fallen by more than 40 percent nationally over four years, and the state's job market is feeling the pain. ...

One agency that has taken an especially hard hit is the Social Security Administration, headquartered in Woodlawn. New hires in Maryland fell from 1,507 in 2009 to 117 in 2013. Employment at the agency in Maryland has dropped from 12,744 in 2010 to 10,769 this year. ...

Withold Skwierczynski, president of the American Federation of Government Employees' council for employees of Social Security field offices, said attrition has led to shorter office hours and longer waits for people seeking services. "The public is getting very frustrated and angry because of the diminishment of service, and people take it out on our employees," he said. "We're really producing a shoddy product. It's not the Social Security of old." ...

Nicole Tiggemann, a spokeswoman for Social Security, said service has not deteriorated. She pointed to customer satisfaction ratings in which the agency consistently scores about 80 percent...

     Why, why, why would Social Security try to downplay its service delivery problem? That's how the Department of Veterans Affairs got in such trouble. Is denial just a conditioned reflex in the public affairs office?

Three Former Social Security Employees Charged

     From the Philadelphia Inquirer:

Five women, including three former Social Security Administration employees, have been arrested in connection with what prosecutors are calling a “complex welfare, childcare and medical benefits scheme,” the Philadelphia District Attorney’s Office announced Friday. 

Investigators said Sakeenah Belle, 31, Chanae Thomas, 31, Felicia Fernandez, 30, Shonda Wayman, 30, and Abigail Millian, 38, received SNAP, subsidized childcare and medical assistance benefits totaling more than $76,000 between 2009 and early 2013. ... 

Prosecutors said the Social Security Administration received a complaint March 6, 2012 alleging Belle was using the computer and hard drive assigned to her by the SSA to create bogus Leave and Earnings Statements for herself and the four other women. 

The women allegedly used the fictitious statements to gain eligibility or to remain eligible for the welfare benefits.

Social Security Sets Up Message Board For Comments On Open Data Project

     Social Security has established a message board to allow the public to offer its opinions on the agency's Open Data project which has been mandated by the White House. A number of data sets have been made available to the public as part of this project.

Social Security's Service To The Public Poll

Free Web poll for your Web site - freepolls.com

"Dumb Ass Stupid Management"

     Alan Weiss believes his local Social Security field office has "dumb ass stupid management."