Summer 2018 Newsletter

This is the Social Security Summer 2018 Newsletter for the State Bar of Michigan prepared by Attorney Lewis Seward from Seward, Tally and Piggott, P.C.

New Rules of Conduct Go into Effect August 1, 2018 

Summer 2018 Newsletter: These rules were initially published in the Federal Register two years ago, in August 2016. After a large volume of comments, including many from NOSSCR and its members, the final rules were published on July 2, 2018, effective August 1, 2018.

Very little was changed from the original proposed rules. The background information on this new Rules of Conduct and Standards of Responsibility for Representatives indicates that they are clarifying certain actions that are prohibited and providing additional clarification to address representative actions that do not serve the best interest of claimants.

The new rules prevent representation by anyone convicted of a felony or any crime involving moral turpitude, dishonesty, false statement or misrepresentation. These are examples of a person who lacks “good character and reputation,” according to SSA. There is a lifetime ban on these representatives. Social Security indicates that these criminal convictions reflect crimes that, by their nature, are more serious based on their characterization as felony or involve behavior that reflects poorly on the individual’s honesty and moral judgment.

This disqualification would not apply to convictions that have been overturned or other similar situations. The Regulation does not specifically bar individuals with misdemeanor convictions from serving as representatives “unless the misdemeanor involved moral turpitude, dishonesty, false statements, deceit or theft. We believe these misdemeanors reflect a lack of honesty and moral judgment, characteristics that we consider necessary in representatives. Further, even if individuals are unable to serve as appointed representative due to these rules, they may still assist their family members with claims in an unofficial capacity.” 

Additionally, the Regulations state that if the representative has been removed by a professional licensing authority for reasons that reflect the person’s character, integrity, judgment, reliability or fitness to immediately disclose to SSA.

Please note that there are some preparatory comments, including issues raised by representatives and the official response by SSA that precedes the new rules. Some very good points are raised. Basically, SSA has “raised the bar” in the standards of conduct to weed out those bad actors which now puts all representatives on a level playing field.

The new Regulations set forth standards of representation, i.e., “Competent representation requires a knowledge, skill, thoroughness and preparation reasonably necessary for the representation. A representative must know the significant issue(s) in a claim, have reasonable and adequate familiarity with the evidence in the case, and have a working knowledge of the applicable provisions of the Social Security Act, as amended, regulations, the Social Security Ruling and any other applicable provisions of law.” 404.1740(3)(i).

Under the same provision, it requires that the representative must act with reasonable diligence in representing a claim. This includes providing prompt and responsive answers to our request for information pertinent to processing of the claim.

Providing Your Schedule So Social Security Can Schedule a Hearing

Summer 2018 Newsletter:  As you are aware, Social Security has been in the process for several years of asking representatives to supply them with their schedule so that they can schedule a hearing. The new Regulations indicate that the representative must provide in any manner we specify potential dates and times that the representative will be available for a hearing.

We will inform the representative how many potential dates and times we require to coordinate the hearing scheduled. The preparatory comments indicate that the representative will not be sanctioned by Social Security for a scheduled hearing on a time that the representative or claimant is not available. They recognize that schedules change, and we do not expect representatives to hold open their schedules for all of the dates and times that they identify.

Please Note: Our Regional Chief Sherry D. Thompson Administrative Law Judge issued a letter to all representatives to discuss the roll out of the centralized scheduling for hearings. “The purpose of this teleconference is to discuss the centralized scheduling unit (CSU), a shared scheduling service, which will be implemented in the Detroit, Livonia, and Oak Park hearing offices. The CSU aims to pool staff resources from hearing offices geographically close to each other in order to increase scheduling efficiencies. Additionally, we will be adhering to the recent changes in the Regulations and requesting each representative provide us with dates and times the representative will be available for a hearing.”  The letter refers to the rules of conduct mentioned above.

The Regional Chief has invited all representatives for a planned discussion on Wednesday August 22, 2018 at 12 PM (EST). Please dial in to 1-855-719-5007, participant passcode 249143; 5-10 minutes prior to the start time, to join the call. Region 5 also welcomes representative to submit any questions in advance. Please send your questions to: OHO.R5.Chicago.RO@ ssa.gov ( no later than August 20, 2018). 

Affirmative Duty to Disclose Referral for a Medical Examination for the Purpose of Providing an Opinion

Summer 2018 Newsletter: This is probably the quirkiest Regulation mainly because it’s written so broadly any representative may end up with the potential of being sanctioned. The rule reads that the representative must disclose in writing at the time a medical or vocational opinion is submitted to us, or as soon as the representative is aware of the submission, if the representative referred or suggested that the claimant seek an examination from, treatment by, or the assistance of the individual providing the opinion evidence. (404.1740(5).

As an initial matter, when a representative refers a claimant for a medical, psychological or vocational analysis, it is usually self-evident. Most reports indicate how the patient came to the professional.

The Regulation also required disclosure when a representative refers a claimant to see a any medical provider, psychologist or counselor for treatment of their condition when ultimately that professional completes a medical source form.

The Commissioner explains in the preamble that if the representative or one of the employees prepares a form to be completed by a medical professional, including a “template,” questionnaire or format used to draft a medical or vocational opinion, disclosure is required. It is usually self-evident that a template or form to be completed by a medical source originated from the representative. However, as of August 1 to comply with the law, you should either submit it with a cover letter indicating your office prepared the form or “template” for the medical source provider to complete or, in the alternative, type something in the form itself indicating that it was prepared by the claimant’s representative.

Other Duties

Summer 2018 Newsletter: There are many other examples in these Regulations, most of which are common sense, such as the representative has an affirmative duty to take remedial action when its employees, assistants, partners, etc., violate these rules of conduct. There are provisions for misleading the claimant about the representative’s service and qualifications.

The representative is prohibited from charging, collecting or retaining from any source directly or indirectly any representation of services which violates the “applicable law or regulation.” This “include[s] soliciting any gifts or any item of value other than what is authorized by law,” i.e., a dozen donuts.

The representative must act with reasonable diligence and promptness in representing a claimant. This includes providing prompt and responsive answers to our request for information pertinent to processing of the claim. This provision can lead to sanctions for a representative who chronically does not return phone calls from their client.

The representative is also charged with an affirmative duty to disclose to SSA if their client has committed fraud against the agency.

The representative may only withdraw representation at a time and manner that does not disrupt the processing or adjudication of a claim if the claimant has adequate time to find a new representative (404.1740(3)(iv). A representative can only withdraw once the hearing is scheduled, unless there are extraordinary circumstances which “we decide on a case-by-case basis.”

This is not the complete laundry list. The Editor refers the reader to Federal Register, Volume 83, No. 127, July 2, 2018, beginning on page 30849. It is very important for the representative to read the preparatory comments along with the actual Regulation.

In response to these new Regulations, NOSSCR has a training seminar scheduled during the San Francisco meeting in October to discuss these new rules. NOSSCR also plans to communicate with SSA about the “challenges in areas of confusion related to the new rules, in hopes that adequate training is delivered to ALJs and support staff and appropriate sub-regulatory guidance.

NOSSCR also encourages its members to contact the national office for concerns regarding implementation of these new Regulations. For information on the October 17-20 seminar at the San Francisco Hilton Union Square, you can register at www.nosscr.org/events.

Filing a Request for Review Online to the Appeals Council

Summer 2018 Newsletter: SSA has now provided an online version of the Request for Review of Hearing Decision (HA-520). The representative can now file a request for review electronically and have the appeal routed to the correct Appeals Council branch. The new form is called the “i520.” The website to file the electronic request is https//secure.ssa.gov/iApplNMD.aoa.

A new electronic process also makes it possible to attach exhibits such as briefs, appointment of representative forms and additional medical records. You can use the online process to also request an extension to submit additional records or letter brief. However, you cannot also use this portal to request for extension of time for filing civil actions. The system is available Monday-Friday, 5 a.m. to 1 a.m. Eastern Time, Saturday 5 a.m.-11 p.m. and Sunday 11 a.m. to 8:30 p.m.

Social Security Ruling 96-3p and 96-4p Are Rescinded

Summer 2018 Newsletter: As of June 14, 2018, SSA has rescinded the above two Rulings. SSR 96-3p was the Ruling to assess whether an impairment is “severe” and evaluate pain and other symptoms. SSR 96-4p evaluates the exertional and nonexertional limitations of physical and mental impairments.

The rationale for rescinding these two Rulings is that they were “unnecessarily duplicative” in light of Social Security Ruling SSR 16-3p. This Ruling evaluates symptoms to determine whether a medically determinable impairment is “severe.” 

Summer 2018 Newsletter Final Topic:

Clark v. Commissioner,1 Eastern District of Michigan Addresses the Listing Under 12.05(B), Adaptive Functioning And Credibility

Summer 2018 Newsletter: This is a May 18, 2017, Eastern District case represented by Jim Rinck. The issue is the claimant had a valid IQ of 59 which the ALJ focused on adaptive functioning to trump the IQ score. However, the adaptive functioning analysis was superficial and inadequate.

In this case, the Honorable Magistrate Judge Patricia Morris noted that, although the ALJ found Mr. Clark had a full-scale IQ of 59, that score was “not dispositive” due to additional factors reflecting intact adaptive functioning capacity. The ALJ recognized that Mr. Clark had issues with reading and had a very challenging time when he was younger. He testified he was unable to make out a money order due to his illiteracy.

The Report does a very thorough job with factors of illiteracy and deficits of adaptive functioning. The Report also noted Clark’s responses at the hearing admitting he has few physical difficulties preventing him from working.

Although the ALJ accounted for the limitation in the RFC requiring no reading or writing, nonetheless the difficulty Mr. Clark had with reading demonstrates a deficit in adaptive functioning prior to age 22. (He was in special education in school.)

Additionally, the ALJ concluded that the claimant’s past work demonstrates he is able to handle job duties. However, as pointed out by the attorney and the Magistrate, Mr. Clark’s work history shows that he performed his first job in a sheltered environment as an insulation installer, which lasted two years. A second job performing the same work in a non-sheltered circumstance lasted less than three months.

The Commissioner argued that persons with a substantially lower IQ are capable of working in semi- skilled positions under supervision. Therefore, Mr. Clark’s performance as an insulation installer in a sheltered working environment is not determinative to his incorrect degree of adaptive functioning. The Court replied that the Commissioner’s erroneously argues that requiring deficits in adaptive functioning must be disabling on their own.

Also, the issue of hunting and fishing came up in the hearing, which is common in many Michigan cases. The ALJ relied on this remarkable ability as proof of no deficits of adaptive functioning. However, the Magistrate saw through the smoke screen. The Magistrate noted that the ALJ did not further inquire as to the type of hunting, fishing or camping Clark performs, and whether he is able to perform these activities alone. She quoted Clark, who stated at the hearing that these “activities could be as limited as putting a worm on a hook or shooting at Bambi from the back porch.”

Clark also indicated at a psychological consultation that he managed money in his marriage, but later clarified that he “managed” the money insofar as he “carried the money in his wallet and his wife pays the bills for him.”

Another key finding was that the ALJ did not question the validity of the IQ score. Therefore the Magistrate ruled that the Commissioner is bound by the ALJ’s findings.

Regarding the credibility issue, the Court confirmed Mr. Rinck’s argument that it was unsupported boilerplate used in nearly every ALJ decision. This Court indicated that the use of cookie cutter language is not troubling provided that the statement is supported by specific references that suggest inconsistency between the claimant’s statements, the medical evidence or other evidence of record.

However, in this case, the boilerplate statement comprises the entirety of the ALJ’s credibility findings. The Magistrate’s Report states, “When I look at Mr. Clark’s testimony at the hearing, which clearly indicated he had a diminished capacity to comprehend questions posed to him, seems to forget his own testimony and readily admitted facts which would be considered detrimental to his claim.” The Court noted that the inconsistencies in Clark’s testimony are plainly not the result of calculated provocation. 

The Magistrate admonished the Commissioner for attempting to argue that Clark’s extensive work activity and reported activities were inconsistent with his assertion that he has established deficits and adaptive functioning. The Magistrate indicated that the Commissioner cannot credibly argue that Clark understood the factors necessary to obtain disability and modified his testimony in an attempt to obtain benefits that were not due. The Court found that there was no inconsistency in the record and the Commissioner has not identified any reason to believe that Clark is anything less than fully credible.

Although the Court ruled that the credibility assessment has no support in the record and must be overturned, the case was remanded for further proceedings to determine whether Mr. Clark meets or equals 12.05(B). 

—Lewis M. Seward, Editor Endnotes 1 2017 U.S. Dist. LEXIS 2215 75 (E.D. Mich. May 18, 2017) Adopted and Remanded, Hon. Stephen J. Murphy III, May 31, 2017.

We hope this Summer 2018 Newsletter was helpful.

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Seward, Tally & Piggott, P.C.

1009 Washington Ave.

Bay City, MI 48708

Phone: 989-892-6551

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We are located across the street from the Post Office and Court House.