Proposed Major Revision of the Representation Rules — Updated: 11/10/08
SSA has proposed significant changes in its rules for representatives. These proposals are available at this NOSSCR link: 73 Fed. Reg. 51963 (9/8/2008) [PDF]
Comments were due by November 7, 2008. NOSSCR's comments are available here for your review. [PDF]
Rationale
SSA announced that the proposals are designed to reflect changes in representatives' business practices and to improve efficiency by enhancing use of the internet. Unstated but likely an additional important underlying rationale is the agency's need to comply with IRS requirements on reporting fees paid to representatives.
Appointment of Entity
The proposed rules would permit claimants to appoint a business entity as a representative. The agency's current interpretation of the statute is that only an individual person may be appointed as a representative. "In the decades since we adopted that policy, the business practices of those who represent claimants have changed significantly. Many representatives now practice in group settings and provide their services collectively to claimants. In addition, many claimants may prefer to hire a firm, rather than a single individual within the firm. Recognizing entities as representatives will make it easier to individuals to obtain the representation they want. We believe it is appropriate for us to propose to amend our rules to more accurately reflect the changes in the way representatives conduct their businesses."
"Principal Representatives"
The proposed rule sets out a somewhat confusing system of new overlapping categories: principal representative, professional representatives, and representatives. Under this proposal, SSA would require that each claimant have a "principal representative." If the claimant has appointed an individual as his or her representative, then that person is the "principal representative." If the claimant has appointed more than one person or an entity as his or her representatives, then the claimant must choose and appoint a "principal representative."
"Professional Representatives" and Electronic Filing
Contrast the "principal representative" with the "professional representative." A professional representative, according to the proposal, "includes any attorney, any individual other than an attorney, or any entity that holds itself out to the public as providing representational services before us (see §§ 404.1735 and 416.1535), regardless of whether the representative charges or collects a fee for providing the representational services." "Representational services" is a term not defined in the proposal.
Professional representatives will be required to use the internet for certain purposes. "We also propose to require that professional representatives conduct business with us electronically at the times and in the manner that we prescribe. For example, we intend to require a professional representative to use electronic media that we prescribe, such as the Internet, to register with us and to file certain requests for reconsideration and hearings before an ALJ." The proposed rules set out a waiver process if the electronic systems are not functioning. The proposed rules cite the electronic filing requirements of the federal court system as precedent. "Requiring professional representatives to file certain requests for reconsideration or an ALJ hearing via the Internet is a cost-effective measure that we expect will increase our efficiency and help reduce the disability determination backlog."
"Professional Representatives" and Registration Process
Contrast the proposed rules with the current registration process for representatives. In the proposal, professional representatives and their employees must complete an initial registration. "Access registration requires representatives and their employees to supply us with certain personal, professional, and business affiliation information that we will use to authenticate and authorize representatives and their employees to do business with us." It is a one-time process that must be updated when necessary.
Fee Payments and Direct Deposit
Who is eligible to receive direct payment? "To ensure that we only make direct payments for work done by attorneys and eligible non-attorneys, there are certain actions that must be taken before an entity may receive direct payments of fees. Any entity seeking direct payment of fees must maintain, and provide to us upon our request, a signed statement from each of the entity's attorneys and eligible non-attorneys who represent claimants before us. The statement must state that the attorney or eligible non-attorney is performing representational services on behalf of the entity. The statement must also assert that any fees should be paid directly to the entity and that the representatives receive any compensation directly from the entity. Any request for direct payment of fees made by an entity must include an attestation that the entity is in possession of this signed statement from each attorney or eligible non-attorney who has performed any representational services for the claim in question. Additionally, the entity must attest that all individuals who have performed representational services on the claim in question are individuals who qualify for direct payment under the Act or the SSPA [Social Security Protection Act, which established the demonstration project whereby non-attorneys may qualify for direct payment]. Such services include, but are not limited to, representing the claimant at any hearing or proceeding before the Agency or before a Federal court."
In this proposed new world, all fee payments would be made via electronic funds transfer. "This proposal will allow us to make direct payment of the representative's fee more efficiently, to more accurately report payments to the IRS, and to issue IRS Form 1099-MISC more quickly."
Initial Applications
The proposed rules address the filing problems that representatives have encountered in submitting initial applications electronically. Currently, SSA's practice is that only the claimants can press "Send" to submit an electronic application. This is because, currently, only claimants may sign applications. The proposed rules allow principal representatives to sign and file applications on behalf of claimants. "However, a claimant will have to expressly acknowledge on the Form SSA-1696 that he or she is responsible for the information provided to the principal representative for the application. We believe that this type of acknowledgement is necessary to ensure that the claimant remains responsible for the content of the application."
New Affirmative Duties
"We propose to add a new affirmative duty for professional representatives and individuals working on their behalf to provide us with specific attestations to ensure they know, understand, and will comply with our rules and regulations. As indicated above, these attestations will be provided during the access registration process. We also propose to add a new affirmative duty for professional representatives, and for non-professional representatives who choose to file the Appointment of Representative form electronically. These representatives must keep, and provide to us upon request, paper copies of the Form SSA-1696 with the original signature of the claimant, the electronic signature of the representative, and the respective dates of the signing. Further, we will require entities to maintain, and provide to us on request, a signed statement from each attorney, eligible non-attorney, and employee. In the statement, they must aver that they are performing all representational services on behalf of the entity, that any fees should be paid directly to the entity, and that they will receive compensation directly from the entity."
Requests for reconsideration and for hearings must be filed electronically.
"[W]e propose to clarify that an attorney or a non-attorney whom a claimant has not appointed as his representative but who works for or on behalf of the claimant's appointed representative and helps represent the claimant in his claim before us will also be subject to our rules of conduct and standards of responsibility and our sanctions procedures."
New Prohibited Actions
And three new prohibited actions: "refusing to comply with any of our regulations, violating any section of the Act for which a criminal or civil monetary penalty is prescribed and assisting another individual whom we have suspended or disqualified."
Appointments, Revoking Appointments, Fee Waivers
In an attempt to bring some standardization to current practice, the proposed rules mandate the use of the SSA-1696 to appoint or revoke an appointment of a representative. The SSA-1696 would also be required in the event a representative withdraws. Finally, any fee waiver or waiver of direct payment would need to be documented on the SSA-1696.
Comments
Your comments are due by November 7, 2008. The address for comments is noted above.
Some of these proposals do not seem controversial, but many certainly do. Please review the proposal and send your comments, especially with regard to the following:
- Recognition of entities and their receipt of direct payment of fees;
- Mandated use of electronic filing of certain appeals documents;
- Direct deposit of fees;
- Access registration process; and
- Maintaining paper copies of certain documents signed by claimants, apparently indefinitely.
SSA-1695 and Direct Fee Payments: Policy Fixed. – Posted: 9/29/08
Representatives seeking a fee payment from withheld funds must file form SSA-1695 (Identifying Information for Possible Direct Payment of Authorized Fees) before the favorable hearing is rendered. Only the servicing field office has access to the screens to associate the representative's tax data with the claimant's record. After entry, the field office should destroy the paper SSA-1695 and send a standard notice to the representative that these actions are complete.
In practice, however, the SSA-1695 is rarely acknowledged, leaving the representative with no way to know if the system entries occurred. In some cases, award notices have appeared that release all withheld funds to the claimant, contending (incorrectly) that the representative never filed a timely SSA-1695.
Referring directly to a "formal complaint" from NOSSCR, Social Security has issued Policy Instruction AM-08092, which should either prevent the problem or provide a remedy where the policy is violated:
When the claim is ready to effectuate/adjudicate a favorable decision; there is an SSA-1696, or written equivalent from a representative; the fee is not waived; and is otherwise eligible for direct pay:
NOTE: The link must be established before the claim is effectuated.
- Contact the representative
- Inform him/her that SSA has not received the SSA-1695, if the repre-sentative wants direct payment;
- Instruct the representative to fax the SSA-1695 immediately.
For access to the full Policy Instruction, Click Here
Forum Index Updated – Posted: 9/25/08
- The Disability Backlog
- Media Coverage – Updated: 9/12/08
- EAJA Fee Payee Legislation – Posted: 9/8/08
Rep. Peter DeFazio (D-OR) has introduced H.R. 5833, a bill that clarifies that an EAJA award is an attorney's fee payment. The bill has been referred to the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property. At this writing, the bill has 13 co-sponsors. To keep tabs on the progress of this legislation, Click Here.
Please urge your Representative to co-sponsor this important bill. Without it, we will see many fewer claimants able to have their cases reviewed in federal court because they won't be able to find lawyers.
- OIG Report: Hearing Office & ALJ Productivity – Posted: 8/26/08
The report has been issued and addresses: (1) factors that affect ALJ and hearing office performance; (2) ODAR management tools; and (3) SSA initiatives to increase ALJ productivity. Congressional Response Report: Administrative Law Judge and Hearing Office Performance, No. A-07-08-28094 (Aug. 2008).
What were the general conclusions? The average number of dispositions has increased over the last few years; however, “some ALJs continue to process cases at levels below Agency expectations.” But low productivity is not necessarily related to ALJ-specific traits – factors within the process, outside the control of ALJs, play a role. Interviews with a number of ALJs and hearing office staff, some Regional Chief ALJs, and the Chief ALJ disclosed that:
ALJs have varying levels of productivity (both high and low productivity) for internalized reasons, such as motivation and work ethic. However, we also identified factors that can impact ALJ and hearing office productivity and processing times that are part of the case adjudication process. These factors relate to disability determination services (DDS) case development, staff levels, hearing dockets, favorable rates, individual ALJ preferences, and Agency processes. [Executive Summary to OIG Report.]
- Acronyms and Special Terms – Added: 8/8/08
A new feature of NOSSCR Online: Acronyms and Special Terms used in Social Security claim processing. Please submit any additions or corrections.
- HIV Listings:
- June 2008 Final Rule: Comparison Chart [PDF] – Posted: 8/8/08
- Advance NPRM: HIV-Legal Joint Comments [PDF] – Posted: 5/29/08
- NOSSCR Election Process: Nominees Announced – Posted: 8/1/08
- Los Angeles Conference Schedule – Posted: 7/21/08
- "Closely Approaching Retirement Age" – Posted: 7/11/08
- New Favorable Decision Templates Available – Posted: 6/26/08
