Mr. BURKE. Our witnesses today are from the Social Security Administration and the Civil Service Commission. We will hear first from James B. Cardwell, Social Security Commissioner, and Robert B. Trachtenberg, Director of the Bureau of Hearings and Appeals. I think it will expedite the hearing and provide for a better discussion of the issues if we then allow Mr. Dullea, representing the CSC to make his direct statement and then we will go to questions. STATEMENT OF HON. JAMES B. CARDWELL, COMMISSIONER, SOCIAL SECURITY ADMINISTRATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, ACCOMPANIED BY ROBERT L. TRACHTENBERG, DIRECTOR, BUREAU OF HEARINGS AND APPEALS, AND CHAIRMAN OF THE APPEALS COUNCIL; SAMUEL E. CROUCH, ACTING DIRECTOR, BUREAU OF DISABILITY INSURANCE; AND DONALD A. GONYA, DEPUTY ASSISTANT GENERAL COUNSEL FOR SOCIAL SECURITY, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Mr. CARDWELL. Thank you, Mr. Chairman.

Mr. Chairman, I appreciate the opportunity to appear before the subcommittee to discuss the appeals process as it affects the programs administered by the Social Security Administration-particularly the disability aspect of these programs.

I am accompanied by Robert L. Trachtenberg, the new Director of the Bureau of Hearings and Appeals and Chairman of the Appeals Council; Samuel E. Crouch, Acting Director, Bureau of Disability Insurance, and Donald A. Gonya, Deputy Assistant General Counsel for Social Security of the Department of Health, Education, and Welfare.

In order to place my statement in perspective, I would like to outline the major categories I will discuss: (1) The backlog at the hearings level and our perception of its causes; (2) our view of administrative, management, and programmatic initiatives needed to deal with the backlog; (3) the current status of the hearings process and the outlook for the future; and (4) a discussion of the reversal rate at the hearings level, a point that you have already mentioned, Mr. Chairman.

Before going into detail, it might be useful as background if we were to describe briefly the hearings and appeals process itself.

It all starts with the fact that a claimant who has been denied at the initial determination level, and again upon reconsideration, has a right to have his claim reviewed at an evidentiary hearing by an impartial individual who was not part of the initial and reconsideration process. It is this latter right that results in the hearings and appeals process. Depending on which program is involved-regular social security, black lung, or SSI--the impartial review will be conducted by either an administrative law judge or a hearing examiner-terms I will explain later in my statement.

At the hearing itself, the claimant is entitled to representation. In contrast, the Government is not represented by its own counsel.

A verbatim transcript of the hearing is taken, documentary evidence is received, and oral testimony is heard from the claimant. Often, at

the option of either the claimant or the hearings officer, testimony is heard from a vocational expert, a medical adviser, or both.

The hearings officer then issues a written decision, either affirming, modifying, or reversing the lower level decision. If the claimant is dissatisfied with the hearings officer's decision, he still has the right to a third and final level of administrative appeal-an appeal to the Social Security Appeals Council. The Council will review the case de novo if it involves OASDHI matters or on the basis of substantial evidence if it involves the SSI program. A decision by the Appeals Council represents the final administrative decision and is made on behalf of the Secretary of Health, Education, and Welfare.

If the claimant is still dissatisfied, he has the right to file a civil action in the appropriate U.S. District Court.

A claimant has 6 months within which to exercise his right to a reconsideration of any original adverse decision by SSA. He also has 6 months within which to exercise his right to a hearing within the hearings and appeals process and 60 days within which to exercise his right to be heard by the Appeals Council. Once all administrative remedies have been exhausted, he has another 60 days within which to appeal to the Federal court.

HEARINGS BACKLOG

With that brief background, permit me to move to the No. 1 problem of the moment--the backlog at the hearings and appeals level within the Social Security Administration.

We see the reasons for the backlog to be: (1) a one-time large volume of black lung cases and the advent of the SSI program at a time when the OASDHI program was experiencing rapid growth; (2) increased public awareness of social security programs in general, and the appeals process in particular, and increased representation by attorneys; (3) the individualized nature of the hearings, which causes a conflict between a high-volume workload and speedy case processing; and (4) looking at the matter from our own perspective within the Social Security Administration, impediments resulting from the way in which the Government assigns manpower to the process.

At the present time we have about 107,000 hearings requests pending before the Bureau of Hearings and Appeals. The median processing time for disability hearings in July 1975, for example, was about 7 months. Mr. Chairman, you have already pointed out that over half of those cases would obviously take longer than 7 months, and there are many extreme examples, including one that you pointed out, going beyond a year.

The backlog is the problem with which we must deal first. It is the problem to which we are giving our first attention through organizational, administrative, and management changes and improvements. Shorter processing time is our objective. The shorter the processing time, the sooner we will have eliminated the backlog.

I would now like to discuss in some depth the reasons for the backlog as outlined above.

ADVENT OF NEW PROGRAMS

In recent years, as you know, a number of important and extensive programs have been added to the responsibilities of the Social Security

Administration. These changes have impacted the hearings caseload. In 1965 came the Medicare program, and then, in rapid succession, the original black lung program in 1969, the amendments to it in 1972, and the supplemental security income program for the aged, disabled, and blind in 1974.

In the same period, of course, the social security cash benefits program was growing. Applications for social security disability benefits, for example, have increased substantially over the past several yearsfrom an annual rate of 780,000 in 1970 to an annual rate of 1.2 million in 1974.

Of course, it should have been expected that, as the responsibilities of the Social Security Administration have grown and the beneficiary population grew, the number of appeals it had to deal with would

grow.

The number of hearings requests filed has increased from 42,573 in fiscal year 1970 to 154,945 in fiscal year 1975, and we anticipate approximately 141,000 will be filed in fiscal year 1976. Pending hearing cases have steadily increased since 1973, reaching a total of 77,233 as of June 30, 1974, and a high of over 113,000 in April 1975.

A substantial part of the present backlog has been the result of a one-time large volume of black lung hearings requests. During fiscal years 1973, 1974, and 1975, we received 70,500 black lung requests for hearings. As you know, SSA responsibility for receiving and processing claims under the black lung program has terminated. However, we are still faced with hearing requests filed in connection with those claims, and we had a pending black lung hearings workload of 17,857 as of September 13, 1975.

In addition, with the advent of the SSI program in January 1974, a new workload has developed at the hearings level. More than 28,500 SSI hearings requests, plus an additional 24,200 SSI-OASDHI requests for hearings were filed in fiscal year 1975.

INCREASED PUBLIC AWARENESS

In examining causes of the backlog, we should not ignore the phenomenon of increased public awareness, as we find in other programs, of the existence of the social security programs, and the capacity of the Social Security Administration to be responsive to claims and appeals. For instance, disability hearings, which constitute, by far, the largest part of the hearings workload, showed receipts of 36,000 in fiscal year 1973 and 75,000 in fiscal year 1975.

The value of the benefits payable to most disabled workers and their families, as well as the availability of Medicare protection, once a person becomes entitled to a disability benefit have led not only to an increase in the number of applicants for disability benefits but also to persistence in the pursuit of claims. More claimants seek legal representation in pursuing their claims and attorney interest in taking such cases has clearly increased.

With respect to increased attorney representation and other forms of representation, it should be noted that there has been an increase of 14 percent in attorney representation since fiscal year 1973, and an increase of 20 percent in all forms of representation during the same period. There is now some form of representation in 48 percent of all cases. Moreover, we have seen an increase in representation by federally and State-supported legal services programs.