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Ethical Considerations In Representing Social Security Disability Claimants

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This is a presentation to the Hidalgo County Women\'s Bar in the Winter of 2010

This is a presentation to the Hidalgo County Women\'s Bar in the Winter of 2010


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  • 1. REPRESENTING SOCIAL SECURITY DISABILITY CLAIMANTS: ETHICAL CONSIDERATIONS Women’s Bar Section Hidalgo County Bar Association Suzanne Villalón Hinojosa 1-800-481-0302 [email_address] www.southtexasdisabilitylawyer..com
  • 2. TWO PROGRAMS HOW ARE THEY DIFFERENT?
    • An insurance program funded by FICA taxes
    • Pays later of 6 mo. from onset or 1 yr prior to DOA
    • 4 yrs to reopen app.
    • Medicare after 2 yrs
    • Auxiliary
    • Other benefits: widow(er)s, adult child
    • A welfare program funded by general revenues
    • Pays later of mo. after DOA or mo. after onset
    • 2 yrs to reopen app.
    • Medicaid from DOA
    • No family benefits
    • Other benefits: child
    • Social Security Disability Insurance
    • DIB, Title II
    • Supplemental Security Income
    • SSI, Title XVI, SSID
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 3. TWO PROGRAMS HOW ARE THEY DIFFERENT?
    • Depends on earnings record
    • 2009 estimated average benefit $1,064 (includes 5.8% COLA)
    • No resource limits other than WC offset
    • WC offset if combined exceeds 80% of ACE
    • Trial work period
    • 20 CFR Part 404
    • Depends on resources
    • 2009 benefit max $674 mo. (individual) $1,011 (couple)
    • Resource limits: $2000 (individual) $3000 (couple)
    • WC (resource) usually precludes entitlement
    • No trial work period
    • 20 CFR Part 416
    • Social Security Disability Insurance
    • DIB, Title II
    • Supplemental Security Income
    • SSI, Title XVI, SSID
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 4. TWO PROGRAMS HOW ARE THEY SIMILAR?
    • Monthly income benefit so long as claimant remains “disabled”
    • Same definition of “disabled” (except Child SSI)
    • Regulatory 5 step determination used in decision making process (3 steps for Child SSI)
    • Benefits are increased each year based on cost of living adjustments
    • Attorney fee withheld from past due benefits and sent directly to attorney from SSA. Costs are not withheld by SSA.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 5. DEFINITION OF DISABILITY
    • Adult
      • An individual shall be considered to be disabled for purposes of this title if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
      • 42 U.S.C. § 1382c(a)(3)(A)
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 6. 5 STEP SEQUENTIAL EVALUATION PROCESS FOR ADULTS
    • Is the claimant working (SGA)?
    • Does the claimant have a severe impairment?
    • Does the impairment(s) meet or equal a medical listing?
    • Is the claimant able to perform prior work?
    • Is the claimant able to do other work?
    • 20 CFR §§ 404.1520(a)(4) & 416.920(a)(4)
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 7. 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)
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
    • 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
  • 8. 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.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 9. 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
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 10. AFFIRMATIVE DUTIES 20 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.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 11. ADMINISTRATIVE APPEAL PROCESS After an ALJ denial, the claimant can file a 2 nd application and appeal the 1 st application to the Appeals Council. SSA will process the 2 nd application thru the initial and reconsideration levels but will not conduct a 2 nd hearing until the Appeals Council resolves the 1 st claim. See HALLEX I-5-3-17 and The Ins and Outs of Subsequent Applications.pdf   Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 12. FEDERAL↔STATE HAND OFFS IN DECISION MAKING PROCESS Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 13. 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.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 14. 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 Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 15. ADVERSE EVIDENCE CHANGES 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.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 16. ADVERSE EVIDENCE OTHER 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.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 17. AFFIRMATIVE DUTIES 20 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.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 18. PROHIBITED ACTIONS 20 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.”
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 19. PROHIBITED ACTIONS 20 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 $6000.00, 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 & 416.1520
    • 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%)
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 20. PROHIBITED ACTIONS 20 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 2 nd most frequently charged violation.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 21. PROHIBITED ACTIONS 20 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
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 22. PROHIBITED ACTIONS 20 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.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 23. PROHIBITED ACTIONS 20 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.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 24. PROHIBITED ACTIONS 20 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 3 nd most frequently charged violation.
    Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com
  • 25. REPRESENTATIVE SANCTION CASE INFORMATION FOR FISCAL YEAR 2001 THROUGH 2006 Suzanne Villalón Hinojosa svhdisbilityhelp@gmail.com 1-800-481-0302 www.southtexasdisabilitylawyer.com # 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