The Social Security Disability Appeals Backlog Crisis and the Necessity of Radical Reform

• Author: Ken Matheny
• Position: Retired Administrative Appeals Judge, Social Security Administration. B.A., W.Va. Wesleyan College; M.A., West Virginia University; J.D., West Virginia University. The views expressed are those of the author and not the Social Security Administration.
• Pages: 361-389

THE SOCIAL SECURITY DISABILITY APPEALS BACKLOG CRISIS AND THE NECESSITY OF RADICAL REFORM KEN MATHENY * I. T HE D ISABILITY D ETERMINATION P ROCESS AND THE R OOTS OF THE C RISIS The Social Security Act (the Act) establishes two benefit programs for disabled Americans. 1 They are Social Security Disability Insurance Benefits (DIB) and Supplemental Security Income (SSI), which is for disabled Americans with little or no work history. 2 Because DIB is a form of social insurance that the Act provides for persons who have a significant work history, and SSI is a public assistance program created to assist those who have worked very little or never worked, there are many differences between the two programs. 3 However, the definition of “disability” for both programs is identical: An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy . . . . For purposes of the preceding sentence (with respect to any individual), “work which exists in the national economy” means work which exists in significant numbers either in the region where such individual lives or in several regions of the country. 4 Copyright © 201 7, Ken Matheny. * Retired Administrative Appeals Judge, Social Security Administration. B.A., W.Va. Wesleyan College; M.A., West Virginia University; J.D., West Virginia University. The views expressed are those of the author and not the Social Security Administration. 1 Matthew Diller, Entitlement and Exclusion: The Role of Disability in the Social Welfare System , 44 UCLA L. REV. 361, 362 (1996). 2 Id. ; see also SOC. SEC. ADMIN., SUPPLEMENTAL SECURITY INCOME (SSI): SSA PUBLICATION NO. 05-11000 (2016), https://www.ssa.gov/pubs/EN-05-11000.pdf [https:// perma.cc/JY96-EG2J]. 3 For a discussion of the different philosophies between social insurance and public assistance, see Diller, supra note 1. 4 42 U.S.C. § 423(d)(2)(A) (2012). The identical SSI definition can be found at 42 U.S.C. § 1382c(a)(3)(B) (2012). 362 CAPITAL UNIVERSITY LAW REVIEW [45:361 When determining if a claimant for DIB or SSI is disabled, the Social Security Administration (SSA) follows a five-step sequential evaluation process. 5 If at any step of the five-step evaluation SSA determines that the claimant is disabled or not disabled, the inquiry ceases. 6 At the first step, SSA determines if the claimant is engaging in a substantial gainful activity, that is, whether she is working and earning income that demonstrates that she is not disabled. 7 At step two, SSA determines if the claimant has a “severe impairment.” 8 At step two the use of the word “severe” is somewhat misleading. SSA has explained that it is relatively easy to establish the existence of a severe impairment. 9 SSA will find an impairment to be not severe only if it is a slight abnormality “which would have no more than a minimal effect on the individual’s physical or mental ability(ies) to perform basic work act ivities.” 10 Step two, then, is a test to 5 The five-step evaluation process is set forth in 20 C.F.R. §§ 404.1520(a)(4)(i)–(v), 416.920(a)(4)(i)–(v) (2016). Because the five-step process is identical for both DIB and SSI, in the remainder of this Article I will cite only to the regulations for DIB contained in 20 C.F.R. §§ 404.1501–404.1599 (2016) with the understanding that the SSI disability regulations are usually identical. I will cite to the SSI regulations only if they differ from the DIB regulations. 6 § 404.1520(a)(4)(i). 7 Id. The guidelines for determining if a claimant is working and earning income at a level that mandates a conclusion that the claimant is not disabled are set forth in 20 C.F.R. §§ 404.1574–1576 (2016). Cf. Substantial Gainful Activity , SOC. SEC. ADMIN., www.socialsecurity.gov/oact/cola/sga.html [https://perma.cc/92C8-D77A] (the substantial gainful activity amount for 2016 was $1,130 per month or $1,820 per month for blind claimants). 8 § 404.1520(a)(4)(ii). 9 20 C.F.R. § 404.1520(c) (2016); 20 C.F.R. § 404.1521(a) (2016); 20 C.F.R. § 416.920(c) (2016); Bowen v. Yuckert, 482 U.S. 137, 153 (1987). 10 See SSR 86-8, S.S.R. Cum. Ed. (1986) (elaborating on policy that was effective on August 20, 1980). The Supreme Court of the United States has observed that step two requires only a de minimis showing that the claimant has an impairment that can interfere with her ability to work. Yuckert , 482 U.S. at 153–154; see also McCrea v. Comm’r of Soc. Sec., 370 F.3d 357, 360 (3rd Cir. 2004) (the purpose of step two is to weed out frivolous claims). SSA has stated that a denial of benefits at step two is justified only if the evidence clearly shows that the claimant does not have an impairment of combination of impairments that have more than a minimal effect on the person’s abilities to perform basic work activities. SSR 85-28, S.S.R. Cum. Ed. (Nov. 15, 1985). Furthermore, SSA will not deny the claim at step two if the adjudicator is “unable to determine clearly the effect of an impairment or combination of impairments on the individual’s ability to do basic work activities, the sequential evaluation process should not end with the not severe evaluation step.” Id. (emphasis added). If the evidence does not clearly show that an impairment does not cause more than a minimal limitation, the inquiry should proceed to step three. See id. Accordingly, because step two exists to screen out frivolous claims, few claims are denied at step two. For data on the allowance and denial rates at the various steps of the sequential evaluation process, see Bernard Wixon & Alexander Strand, Identifying SSA’s Sequential ( continued ) 2017] THE BACKLOG CRISIS 363 screen out frivolous, meritless claims. Because of the relatively clear guidelines for the step one and step two analyses, they do not usually pose significant problems for administrative law judges (ALJs) and are relatively easy to apply. 11 Step three of the sequential evaluation process is one of only two steps where a claimant can be found to be disabled. 12 At step three, adjudicators apply medical criteria to determine if a claimant has an impairment that meets or is equal in severity to one of the impairments found in SSA’s Listing of Impairments. 13 Much like steps one and two, step three uses clear guidelines that make the analysis relatively straightforward. 14 Robert Ball, a former SSA Commissioner, stated that the purpose of the first three steps was to provide clear, objective criteria to screen the large number of cases that can be adjudicated using these criteria. 15 The remaining two steps, according to Commissioner Ball, exist to address “the troublesome cases that didn’t pass the screen.” 16 As will be discussed below, it is these “troublesome” cases that introduce significant complexity to the disability determination process and which are responsible for an alarmingly high backlog of cases. 17 The complexity of cases decided at steps four and five causes lengthy delays and disturbingly inconsistent outcomes. In addition, the complexity requires a massive, expensive administrative system which relies on thousands of lawyers (both ALJs and attorneys at SSA’s Appeals Council) who are charged with making what are essentially medical Disability Determination Steps Using Administrative Data , SOC. SEC. ADMIN. (June 2013), http://www.ssa.gov/policy/docs/rsnotes/rsn2013-01.html [https://perma.cc/G2G9-F3B4] (analyzing data showing that the vast majority of disability cases are decided at steps 4 and 5 of the sequential evaluation process, with the fewest decisions at step two). 11 I do not mean to imply that there are no cases where complex issues arise at the first two steps of the sequential evaluation process, but compared to steps four and five, the first two steps are significantly easier to apply because of the clear guidelines for their application. In addition, although I refer to ALJs in this Article, because it addresses the hearings backlog crisis, the same disability determination rules apply to all SSA adjudicators, including state disability examiners who make initial disability determinations. The problems discussed in this Article affect adjudicators at all levels, not just ALJs. 12 20 C.F.R. § 404.1520(a)(4)(iii) (2016). 13 Id. ; SSA’s Listing of Impairments can be found at 20 C.F.R. § 404 pt. P, app. 1 (2016). 14 However, as with steps one and two, despite clear criteria, the step three analysis can be rather complex because of conflicting medical evidence, which often requires a medical expert’s assistance. 15 Wixon & Strand, supra note 10 (quoting Mr. Ball that step three exists to adjudicate quickly those cases that can be allowed on relatively objective medical evidence). 16 Id. 17 See infra Part III. 364 CAPITAL UNIVERSITY LAW REVIEW [45:361 determinations. 18 The enormous complexity of the disability adjudication process, particularly at steps four and five of the sequential evaluation process, has real life consequences that harm hundreds of thousands of vulnerable Americans. 19 As of the end of the third quarter of fiscal year 2014, SSA had 955,000 cases pending at the ALJ hearing level, and over 386,000 of these appeals had been pending for over nine months. 20 In October 2014, the Washington Post reported that the number of cases awaiting hearings before an ALJ had skyrocketed to over 1,000,000. 21 In this Article, I argue the primary reason for these unacceptable backlogs and delays is an impossibly complex disability adjudication process that is not only time consuming but leads to wildly inconsistent and unfair outcomes. I argue the complexity arises from considering numerous factors other than medical evidence, which has shifted the focus from disability to emplo yability, a concept that...