A Brief Guide to Effective Representation in Cessation Cases
Your Client Calls Three Years Later and Says You Need To Help Him Because He Is Being “Cut Off”
Those veterans of the Social Security disability practice know what has been happening. Those of you with a little less experience need a dose of reality. During the 1990’s, the then Republican-controlled Congress earmarked progressively more money each year for the dreaded continuing disability review (CDR) program. Under this program, claimants who you fought so hard for when they filed for initial entitlement are medically reviewed by the Disability Determination Service (DDS). We received phone calls from distressed claimants who have either received a Notice of Continuing Disability Review, or, more frequently from frightened individuals who are stunned to learn that they have been “cut-off” and only have two months of benefits left.
As in any area of Social Security disability law, the most important decision that you will make is whether or not to take the case. I am always amazed to learn that there are many practitioners, even advanced practitioners, who shy away from cessation cases. As you will see below, the odds strongly favor the terminated claimant, and with a few pointers on screening and advocacy, this area of our practice can be a very fertile one. Indeed, a well-armed attorney can make all the difference in saving the ceased claimant from a life of poverty, and can insure a more dignified existence for the client–one with all medical benefits provided by law and a monthly pension.
The average success rate for a claimant in an initial entitlement case varies between 60-70%. But as you can see from the annexed chart, claimants who are medically reviewed after a favorable decision, are reinstated approximately 90% of the time (see attachment A).
Clients who are being reviewed or who have already been terminated frequently ask, “why me?” While various coding artifices are used by DDS and the Disability Hearing Units, perhaps looking for cases in which a listing was met; or where a younger individual was granted benefits; or where a particular judge was involved; my response is “I don’t know — and it really doesn’t matter.” What does matter is that Congress has increased funding for cessations and whatever excuse is used to terminate your client is the overture before the curtain rises.
This does not purport to be a law review article, and will not exhaustively cover all rules pertaining to cessations. However, every practitioner must be familiar with the essential regulations that apply to these cases. 20 C.F.R. §416.994 is annexed in its entirety as attachment B, and sets forth the key language. Unlike an initial entitlement case, in a cessation case, the government has the burden of proof. That burden is to demonstrate that there has been medical improvement in the claimant’s condition, and that such improvement is related to the claimant’s ability to work. (20 C.F.R. §416.994(b)). Of course, the relationship of the improvement to the ability to work is not part of the burden in a child’s case (416.994(a)). If there has been no medical improvement, a claimant can still be terminated under exceptions to this regulation. Such exceptions can occur where the claimant is working and has exhausted his trial work period or where the claimant fails to keep a consultative examination while being reviewed, or where the government can prove that his or her condition has not improved because the claimant is not following medical advice. (20 C.F.R. §416.994(4)(ii and iv)). Importantly, since the government is going to have to prove that the claimant’s condition has improved, it is obligatory that there must be a date certain in the past to which the claimant’s current condition is being compared. In typical government lingo, the date of the decision granting benefits is known as the comparison point decision. (20 C.F.R. §416.994(vii)). Please note, when conducting the review the government is not looking at the claimant’s earlier onset date which is found in the favorable decision. The crux of the matter is the difference, if any, in your client’s condition on the date of the latest favorable decision and his or her current condition. This is a crucial distinction.
There is one other key regulation that should be understood. Approximately ten times in the past twenty years of my Social Security disability practice, we have discovered that a claimant under review or one who has been ceased, is currently enrolled in a vocational rehabilitation program. 20 C.F.R. §404.316(c)(1) specifically provides that a ceased claimant who is enrolled in a state-run or state-approved vocational rehabilitation program shall be reinstated. We have found that a letter from the facility is sufficient to constitute proof of enrollment.
Procedurally, cessation cases proceed in the same manner as initial entitlement cases–with one important exception and with one bonus. Following the cessation of benefits, a claimant has 60 days to file a Request for Reconsideration. (Even in the 10 pilot states which have eliminated the reconsideration level for initial entitlement cases, a Request for Reconsideration is the proper appeal in a cessation case). However, and this is extremely important, if the claimant wants his benefits to continue pending the decision at the reconsideration level, he or she must file a Request for Reconsideration within 10 days of the date stamped on the Notice of Cessation. A written form or request for continuing payments and continuing medical benefits must accompany the appeal. Requests for benefits outside of the 10 day period will be entertained by the local office for good cause.
Cessation claimants do get a bonus at the reconsideration level. Following the filing of a reconsideration request, cessation cases are sent to the Disability Hearing Unit. A disability hearing officer conducts a face-to-face interview with the claimant and representative prior to rendering the reconsideration decision. Ten to fifteen years ago, we were only winning one out of five cases at the reconsideration level. As you can see from the annexed chart, the reversal rate is now closer to 50%. And quite a few favorable decisions at the reconsideration level are now being rendered on the record.
If the Disability Hearing Officer issues a denial, the proper appeal is the filing of a Request for Hearing. While the claimant has 60 days to file this appeal, benefits are only continued if the Request for Hearing is filed within 10 days of the reconsideration denial. A specific request for continuing payments while waiting for an administrative law judge hearing must be made again within those 10 days, regardless of whether or not such a request was made earlier when requesting a reconsideration. If timely requested, benefits will continue at least through the date of the administrative law judge decision.
While payment of financial and medical benefits during the appeal process helps your client fend off impending poverty, there may be a downside. A representative should always inform the client that if the appeals from the cessation do not ultimately result in reinstatement of benefits, the government is likely to pursue an overpayment action for benefits paid during the appeal. We note that the Social Security Administration has been very aggressive in this regard over the last several years.
The hallmark of successful representation in cessation cases involves the same trinity as in initial entitlement cases — screening, submission of medical evidence and development of a winning theory of the case. Let’s discuss each aspect.
As I have advocated for years, I believe that your most important decision in any case is whether or not to undertake representation. This especially holds true for cessations because the cases take so long to get to the ALJ. (A subject that will be discussed more below). If you want to know where the 10% of cessation cases that are denied at all levels come from, take all the children’s cases you can find. After much unhappy experimentation, we have only a few children’s cases — all involving the most extreme mental or physical problems. It simply stands to reason that there will be more medical improvement among the youngest members of the population than anyone else. With adults, we shy away from individuals not getting any treatment at all.
Development of medical evidence varies little from initial entitlement cases. The key however is to remember that the test for winning is to preclude the government from being able to show that there is medical improvement between the comparison point decision and the date of cessation. Accordingly, the more evidence you can martial around the date of cessation, the better chance you have of prevailing. This is a akin to gathering evidence to support a viable onset date in an initial entitlement case. Of course, current evidence of disability should be gathered as well.
It is essential to develop a theory of the case as soon as you accept representation, but certainly no later than the time that you attend the hearing at the Disability Hearing Unit. Of course, your theory may change during the pendency of the case, as the medical evidence evolves. Importantly, even if the medical evidence does demonstrate some medical improvement pertaining to the ability to work, you can still prevail. For example, a client may have initially been granted benefits because his or her medical condition met one of the Listing of Impairments. Now, the condition no longer meets a listing, but your client may have aged sufficiently since that decision was rendered. If your client is over 50 as of the cessation date, the Medical-Vocational Guidelines could still yield a finding of disabled. Or perhaps the client now has a combination of impairments that leads to total disability.
A few practical and procedural points may be helpful. We generally do not get called by the client during the review process, but rather after the cessation has already occurred. Given the fact that 92% of all reviews result in an initial decision to continue benefits, accepting representation at this early stage may prove fruitful. (A discussion of fees is found below).
Secondly, in all cessation cases, a few cogent words to the client can ameliorate a great deal of frustration. Cessation cases can and do take up to two years to be processed from the filing of the Request for Reconsideration to the date of the administrative law judge hearing. Your client needs to know this so that he or she is not calling your office every week. Most of the delays are at the Disability Hearing Unit, where files may sit around unassigned for over a year. We have recently sought to obtain an expedited hearing from the Disability Hearing Unit where the client suddenly developed cancer–and received a hearing promptly.
Finally, beware of decisions at the reconsideration level that are only partially favorable. While the client may be happy to continue receiving benefits, an overpayment notice may and probably will be issued for the period where SSA found the client not disabled. An appeal to the administrative law judge may be fraught with risk, since a less than friendly judge may contend that the entire case, including the favorably decided portion, is still at issue. I would be very careful before taking such an appeal, and a written statement from the client demonstrating his or her understanding of the potential risks should be kept in the file.
Difficulty in obtaining a reasonable fee in a cessation case is cited by some colleagues as the reason for not accepting representation. While I agree that fees are generally somewhat lower, they still help pay the rent.
99% of all cessation clients opt for continuing benefits during the pendency of the appeal. The other 1% opt not to receive continuing benefits, and only receive backpay from the third month after the date of cessation if the appeal is successful. These cases proceed by the typical fee agreement process with a $4,000 fee maximum and a 6.3% user fee deducted. But how can you earn a living on the other 99% of cessation cases?
Social Security Ruling 82-39 provides that an attorney may accept funds from a client during the pendency of an appeal, if that money is placed in a trust or escrow account. Thereafter, the escrowed funds may be taken as a fee, if a fee petition is approved. Accordingly, be prepared to file fee petitions in the vast majority of these cases, and be ready to wait, wait, wait for approval. The fee petition should be filed with that division of the Social Security Administration which ruled that the claimant was still disabled. We politely remind the administrative law judge about outstanding fee petitions every six months. I try to meet with the administrative law judge if a year has gone by. One administrative law judge recently responded to my reminder by holding a hearing on my fee where the clients were invited to attend! The result was that both fees were approved. At any rate, your fee petition must recite how much you are holding in escrow, and you must send a copy of that fee petition to the client. This is a tedious process, but eventually you will get paid.
Now that you know how to get money out of escrow, the key is getting it in. Prior to cessation, a fee of $500.00 appears very reasonable. Following cessation, we require each client who receives continuing benefits, to escrow 25% of each month’s check with us. Included in that 25% are benefits for the claimant’s children living at home. We do not ask the client to escrow funds for children living outside the home. Payment is to begin the month after we accept representation. We keep a chart in each cessation client’s file, thereby keeping a running total of escrowed funds. If we do not achieve even a partially favorable decision, the escrowed funds are returned to the client, minus any out-of-pocket expenses. In other words, we only accept a fee if we win. The client whose cessation has been affirmed will often be required to repay benefits paid during the appeal, so he or she will be looking for a refund of escrowed monies. In a partially favorable decision, we seek to collect a fee only for those months that the disability continued, and this readily calculable. (See client escrow chart, annexed hereto as attachment C).
What do you do if a client does not escrow money each month? Our standard cessation fee contract, (annexed as attachment D) calls for a minimum escrow balance of $750.00 by the time of the hearing at the Disability Hearing Unit, and a minimum balance of $1,500.00 by the date of the ALJ hearing. Following warnings to a recalcitrant client, we withdraw 10 days prior to the applicable hearing, and refund any escrowed monies, minus out-of-pocket expenses.
When a client has escrowed $4,000.00 with us, we inform them that they need not send anymore money. Of course, you may set whatever maximum you like, since the administrative law judge and RALJIC may approve fees above $4,000.00. This is simply my personal preference.
Should a decision be rendered on the record, we merely file a fee petition for the amount in the account. Efforts to get a delinquent client to escrow more money after a favorable decision are generally not welcomed. This process merely delays the filing of the fee petition.
Cessation cases are on the rise, and will probably continue to be up until six months prior to the next presidential election. (Excuse the skepticism). These cases are attractive because of a high rate of benefits being continued. If the petitioner can establish an organized system for keeping track of escrowed funds; can remember to screen the cases well; can submit compelling medical evidence; and can posit a winning theory of the case– then there is every reason to accept such cases. With the caveat that these cases move very slowly, a practitioner can effectively represent many claimants whose benefits are about to be or have been cut off. A life may be in the balance.