SSA’s Standards of Conduct for Claimant Representatives

2008 Poverty Law ConferenceAustin Texas

Suzanne Villalon-Hinojosasvhatty@heardandsmith.com

Regulatory History of SSA Ethics Rules

• Original regulations published – April 26, 1969 (34 FR 6973)

• Revised – August 5, 1980 (45 FR 52078)

• Revised – May 29, 1991 (56 FR 24129)

• Current rule draft proposal published – February 1995

• Final rules notice of proposed rulemaking – January 3, 1997 (62 FR 352)

• Final rules published – August 4, 1998 (63 FR 41404) Effective Date September 3,

1998• Amended

– February 17, 2006 (71 FR 2871)

•Regulations regarding Disability Service

Improvement (DSI) process

•Proposed new rules published

•July 27, 2005 •(70 FR 43590)

•Final rules published•March 31, 2006

•(71 FR 16424)•Rulemaking process suspended

•January 29, 2008

Features of the Rules

• Uniform national standards for both attorney and non-attorney representatives.

• Designed to address the special circumstances of SSA’s nonadversarial administrative process.

• SSA says they are compatible with American Bar Association’s Model Rules of Professional Conduct and Model Code of Professional Responsibility.

Administrative Appeal Process

Rules Structure

Affirmative Duties• Promptly submit evidence• Assist claimant in

responding to SSA’s request for information

• Represent claimant competently, diligently promptly.

Prohibited Actions• Improperly treat claimant• Knowingly charge an improper

fee• Knowingly make false statements• Unreasonably delay process• Divulge claimant information

without consent • Offer anything of value in an

attempt to influence• Disruptive behavior: disorderly

conduct, absences/tardiness, threatening actions

Affirmative Duties20 CFR §§ 404.1740(b)(1)&(2) and 416.1540(b) (1)&(2)

• Acquire and organize the evidence and submit it “for the earliest possible consideration.”

• Help the claimant respond to agency requests for information.

• Cooperate with the agency’s processes.

Federal↔State hand offsin decision making process

Issues in evidence submission• When to submit

– Should you submit even though the agency is also requesting records?

– Should you submit records without a copy of the exhibit file?• How and what to submit

– Should you change the records, i.e. pull duplicates, separate by type of providers?

– Should you submit adverse evidence? – How does the agency’s incremental move to a fully automated

appeal process change these issues?• Paper, CD, online access to the claim file, online applications and appeals

• ALJ Prehearing Orders– Judges cannot issue Prehearing Orders that are inconsistent with

the Social Security Act, regulations, rulings or HALLEX.• Sarah Humphreys, Office of General Counsel ODAR/SSA, 2004 FOSSCR, Austin,

TX.

Adverse evidence

• Advise from SSA in 2004:– The regulations require claimants to prove their

disability, not their ability.– The representative stands in the same position

as the claimant.– If faced with a request for information that is

adverse, decline to provide it because it does not support the claim for disability.

– But don’t make a false or misleading statement.• Sarah Humphreys, Office of General Counsel

ODAR/SSA, 2004 FOSSCR, Austin, TX.

In both 1995 and 1997 the ABA opined that these rules are overly broad with regards to the duty to submit evidence. “The ABA believed that the rules continue to include provisions that could give rise to serious ethical conflicts.” 63 FR 41407

Adverse EvidenceChanges in the law

• §1129 of the Act amended by Congress.– Prior prohibition against actively making false or

misleading statements viewed as “loophole” by Congress.

– Now SSA can impose penalty in absence of affirmative statement (“withhold” or “omit” information).

– SSA can re-determine entitlement to benefits if “fault or similar fraud” is involved in concealing information “material” to the determination.

• SSA can exclude representatives who commit an offense under this provision.

Adverse evidence Changes in the law

• 2005 proposed “redesign” regulations – “you must provide evidence showing how your

impairment(s) affects your functioning during the time you say that you are disabled, and any other information that we need to decide your claim, including evidence that you consider to be unfavorable to your claim.”

• 2007 Commissioner Astrue suspended the these regulations.

Adverse evidenceOther sources of authority

• ABA Model Rules & TX. Disciplinary Rules of Professional Conduct– ABA Rule 1.6 & TX 1.05 Confidentiality of Information– ABA & TX Rule 3.3 Candor Toward the Tribunal

• Is SSA hearing ex parte?– Rule 8.5 Choice of Law

• Rules of jurisdiction applies unless rules of tribunal provide otherwise.• “If federal law mandates disclosure of adverse evidence in a Social

Security proceeding, it is difficult to see how any perceived contrary obligation under state rules could possibly defeat that mandate.”

– Robert E. Rains Professor and Director, Disability Law Clinic, Pennsylvania State University Dickinson School of Law, 2005 NOSSCR, Orlando, Florida

• Best Practices: – Submit all treatment records.– Request and submit depending upon when hired and based on SSAs

average processing time.– Remove duplicates from prior submissions and from exhibits (if available)– Don’t cull multiple provider records supplied by one provider.

Affirmative Duties20 CFR §§ 404.1740(b)(3) and 416.1540(b)(3)

• 1998 rules now allow the agency to take action against attorneys, not just non-attorney representatives.

• Based on ABA Model Rule 1.1• SSA’s profile:

– “representatives who, because of a particular role they have in their community, or a particular familiarity with certain segments of society, have easy access to claimants who are vulnerable, who trust too easily, and who don’t know or understand enough to realize they’re being victimized.”

» Sarah Humphreys, Office of General Counsel ODAR/SSA, 2004 FOSSCR, Austin, TX.

Prohibited Actions20 CFR §§ 404.1740(c)(1)

• Honest mistakes do not constitute a violation.

• A violation could also be a prohibited action under the Act– prohibits representatives from, with

intent to defraud, in any manner knowingly deceiving, misleading, or threatening any claimant, prospective claimant or beneficiary.• § 406(a)(5) of the Act

• SSA says not commonly invoked but when seen it’s usually “egregious.”

Prohibited Actions20 CFR §§ 404.1740(c)(2)• By statute SSA sets the max fee

– provides that for Agency appeals, the Commissioner shall withhold 25% of past due benefits, up to $5300.00, subject to approval of fee agreement. User fee ($75 or 6.3%) is also deducted and cannot be passed on to the client.• § 406(a) of the Act

• Regulations require written fee agreements approved by SSA.

• 20 CFR §§ 404.1720 & 416.1529 • A violation could also be a prohibited action under the Act

– prohibits representatives from knowingly charging or collecting any fee, or making any agreement to charge or collect a fee, in excess of the maximum fee prescribed by the Commissioner.• § 406(a)(5) of the Act

• SSA says this is the most common violation. (75%)

Prohibited Actions20 CFR §§ 404.1740(c)(3)

• Claimants risk loss of benefits.• §1129A of the Act

• Civil monetary penalty imposed on anyone making false or misleading statements.

• §1129 of the Act

• SSA says this is the 2nd most frequently charged violation.

Prohibited Actions20 CFR §§ 404.1740(c)(4)

• Not responding to requests for information

• Failure to appear to court settings

• Requests for extensions and fails to meet deadlines

Prohibited Actions20 CFR §§ 404.1740(c)(5)

• Criminal consequences to disclosure of information SSA provides.– Felony, w/5 yr. imprisonment and/or $10,000 fine

per occurrence• § 1106 of the Act (42 USC §1306)

• Common error, argument that compares similar case without redacting or obtaining consent.

• Non-attorney sent letter to other clients, complaining about another client.

Prohibited Actions20 CFR §§ 404.1740(c)(6)

• Pretty much this is bribery, subtle or otherwise.

• SSA has investigated at least one pattern of behavior between a representative and an ALJ which also resulted in a criminal prosecution against both parties.

Prohibited Actions20 CFR §§ 404.1740(c)(7)

• Pre-1998 regulations contained no authority regarding these allegations

• Targets conduct that “exceeds the acceptable bounds of zealous representation.”

• Requires a “case-by-case assessment• SSA says this is the 3nd most frequently

charged violation.

Representative Sanction Case Information for Fiscal Year 2001 through 2006

# of Formal Complaints SSA filed

# of Cases … Before SSA Filed formal Complaints

# of Cases… After SSA Filed formal Complaints

# of Final decisions to Suspend or Disqualify

FY 2001 25 0 2 7

FY 2002 15 1 1 12

FY 2003 5 4 5 4

FY 2004 5 0 0 4

FY 2005 6 1 1 4

FY 2006 2 0 0 1

Total 58 6 9 32

Source: Response of Commissioner Barnhart to Questions for the Record from the September 27, 2005 hearing on the New Disability Approach from Congressman Sander Levin. November 8, 2005