CURRENT OUTLOOK

Mr. Chairman, to use an oft used phrase, I hold a degree of guarded optimism based upon the preliminary results of our initiatives over the past 9 months. Mr. Chairman, I would like to emphasize at this point that if any significant change has occurred during that period it has really been as a result of the assignment of Bob Trachtenberg, the new Director of the Bureau, to the Bureau of Hearings and Appeals. The record shows that, since his assignment, things have begun to happen. To place this statement in perspective, one must recognize that the backlog as of April 1975 was over 113,000 and, frankly, many within SSA felt that the net backlog was destined to rise even further. Indeed, had not some bold and creative steps been taken by Bob and his staff beginning in January 1975, we could be faced today with a backlog of over 130,000 or more cases. That is the rate at which it was then growing. Instead, I can report that there has been not only a stabilization of the backlog but also a net decline, at the rate of 1,000 cases per month. Thus, we have now a backlog of slightly under 107,000 cases.

I certainly recognize that a decline of only 1,000 cases per month will not eliminate the backlog quickly enough and, likewise, will not reduce processing time to within reach of the goals that have been set.

I have hope that, with additional staff, productivity levels can be sustained at their current levels and indeed increased. What we do not yet know is the impact of the programmatic initiatives which I discussed earlier. We do not know if such procedures as informal remands and face-to-face interviews will significantly reduce the number of hearings requested. We assume that they will. If these efforts produce positive results, we can control the backlog sooner and also improve processing times more rapidly.

RATE OF DISABILITY REVERSALS AT THE HEARINGS LEVEL

Any discussion of the hearings backlog would not be complete without recognition of the relationship between a high reversal rate and heavy workloads. The committee has before it a good deal of information about this phenomenon.

In this regard, we cannot disregard the fact that, in disability cases, the claimant's condition worsens with time. Thus, the delay in rendering the hearing decision, in many cases, results in a claimant who is more disabled at the hearings level than he was when his claim was reviewed at the reconsideration level. We believe that improvements in the processing time will make the factual case decided at the hearings level more similar to the one which was reviewed upon reconsideration. The longer we stretch out the process time, the more likely we are to find differing circumstances. Also, I believe, as I have indicated earlier, that reducing the period in which an individual may request a hearing will improve the reversal rate.

The reversal rate-now approximately 50 percent is, of course, disturbing, since it seems to indicate, on its face, that there should be more favorable decisions at a lower level. However, the rate must be considered in the light of several important factors, not all of which are fully understood.

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First: In evaluating disability, various judgmental, interrelated medical, vocational, and educational factors must be considered. The multiplicity of these factors accounts for differing actions at differing times and differing levels.

Second: We are evaluating a particular person-not an average person, and each person is somewhat different-and the uniqueness of this individual can be brought into better focus in the individualized hearing process.

Third: In most instances the claimant and the decisionmaker first come face to face only at the hearings level. This provides the decisionmaker with the best opportunity to observe the claimant and to fully inquire into the person's condition. All these factors, in my opinion, play a significant role in the reversal rate, and thus a favorable decision at the hearings level does not necessarily mean that the prior decision was in error at the time made.

While these are the factors which I believe have an impact on the reversal rate, it should be observed that there are subtleties in the process which are undeterminable and largely uncontrollable, and which affect the reversal rate. The conditioning, the value set, the social outlook of the hearings officer in contrast to those same factors present in the original adjudicator can make a difference.

For instance, the education and background of the hearings officer is a factor. His concern about being reversed at the appeals council or district court level may also be a factor. For instance, there are such things as "paying" judges and "denying" judges. There are other such subtleties, all of which suggest that, in a system of jurisprudence and particularly in a disability program where the uniqueness of facts and not the law control the outcome of so many cases, we should expect a wide variance in judgmental decisionmaking.

We are striving to improve the consistency in decisionmaking at all levels by expanding the regulations to provide more definitive guidelines on the effect of adverse vocational factors in the evaluation of disability. Our hope is that by doing this we will smooth out some of the inconsistencies between regions and geographical centers and between individuals.

While we believe that this should provide more consistency, judgmental findings of fact will still have to be made and reasonable men can still arrive at different findings. We do not believe that truly consistent decisions can be achieved where findings of fact must be made as to an individual's residual capacity based on complex medical evidence, and other sometimes contradictory evidence. Based on the determined residual capacity, a judgmental finding must be made as to what jobs, if any, exist in significant numbers in the national economy which the particular individual can perform, considering age, education, and work experience. The courts in the various judicial districts have arrived at different decisions in cases where the pertinent facts were similar. We are, however, gratified that in fiscal year 1975, the courts found in favor of the Department in 84 percent of the disability cases decided.

CONCLUSION

Mr. Chairman, although we have taken a number of steps to reduce the current backlog and these steps have been fairly successful, we

are continuing to review the entire appeals process to determine what additional organizational, management, and administrative devices might be available to arrive at our goals more quickly.

The very size of the various social security programs, their social purposes, their applicability to all segments of the population, the effect benefits have on people's ability to provide for their basic needs, and many other reasons dictate that we provide an adequate and timely avenue of appeal where individuals do not agree with determinations made on their claims. The current processing time is unacceptable, but the potential for improvement exists if no new programs are added to the appellate processes and our initiatives prove to be as successful as, indeed, I hope they will be.

Mr. Chairman, that concludes may remarks. I would suggest that Mr. Trachtenberg and myself and the rest of us from Social Security make ourselves available for any questions that the committee might wish to ask.

Mr. BURKE. We will now recognize Mr. Dullea.

STATEMENT OF CHARLES J. DULLEA, DIRECTOR, OFFICE OF ADMINISTRATIVE LAW JUDGES, CIVIL SERVICE COMMISSION

Mr. DULLEA. Thank you, Mr. Chairman.

Mr. BURKE. Will you identify yourself for the record?

Mr. DULLEA. I am Charles J. Dullea, Director, Office of Administrative Law Judges, U.S. Civil Service Commission.

Mr. Chairman, my statement is quite brief. On the other hand, in the interest of time if you would care to have me just summarize or highlight what is in the statement I would be glad to do so.

Mr. BURKE. It is brief. You may take the time to read it.
Mr. DULLEA. Thank you.

Mr. Chairman and members of the subcommittee, I appreciate the opportunity to appear at this hearing this morning. The subcommittee's concern about the backlog of cases pending in the Bureau of Hearings and Appeals and the time required to process them is shared by the Civil Service Commission.

The Commission does not have direct authority with respect to the hearings and appeals procedures and the manner in which the agency administers and manages its disability program. However, it would like to provide the subcommittee with any pertinent information or assistance that may be of help in expediting the adjudication of cases and reducing the backlog.

The disability program, which constitutes the bulk of the Agency's case load, affects a larger number of citizens than the programs administered by most other Federal agencies. Information available to the Commission indicates that the disability cases received under title II of the Social Security Act amounted to approximately 73,570 disability hearing cases in fiscal year 1974.

The Agency's backlog has developed over a period of time that has witnessed a vast expansion in the number of section 11 APA hearing examiners-now called administrative law judges-in the Social Security Administration. After implementation of the personnel provisions of the Administrative Procedure Act, the Agency employed some 15 referees.

Since that time there has been a 30-fold increase in the number of its presiding officers. Expansion in the early years after enactment of the act was slow. However, the increase in the number of presiding officers has doubled in the last 5 years to the point where the agency now employs about 440 presiding officers who adjudicate cases under title II and XVIII and it now has a certificate of eligibles in hand looking to the appointment of an additional 55 presiding officers.

Shortly the Agency's staff will number 500-without regard to some 150 officers who decide other types of cases-this 500 will represent 60 percent of all of the section 11 administrative law judges in 26 Federal agencies. Actually, the corps of presiding officers adjudicating disability cases in the Social Security Administration is larger than the entire Federal judiciary.

1

Despite this expansion of staff, the agency continues to be confronted with a heavy backlog of disability cases numbering approximately 70,000, as of mid-August 1975. One-third of these on information available to the Commission have been pending for a period in excess of 6 months.

These factors have triggered the concern of many interested organizations, and recent years have witnessed a number of studies of the agency's processes seeking faster resolution of cases and the more effective utilization of its presiding officers. Within the last 5 years, for instance, two studies have been conducted by representatives for the Administrative Conference of the United States; one by a task force established at the direction of the Commissioner of Social Security; by the staff of the Committee on Ways and Means; by the Association of Administrative Law Judges in the Department; and by a study group established by the Civil Service Commission directed to the effectiveness of the utilization of administrative law judges. Additionally, an audit is presently being conducted by the General Accounting Office.

Since the expansion in presiding officer staff has been insufficient to cope with the intake of cases, most of these studies have focused on the procedures and processes followed in the adjudication of cases. Out of these studies have come a number of suggestions for changes in procedures in order to reduce the backlog, expedite adjudication, and achieve the more effective utilization of presiding officers. Among other things, the studies reflect the following concerns and recommendations:

One: The time periods provided claimants in which to seek review of the denial of an initial claim, and in which to request a formal hearing are unusually long-6 months after the initial denial in which to request reconsideration; and, if unsuccessful at the reconsideration level, an additional 6-month period in which to request a hearing.

Two: In recent years a reduction in the purchase of medical consultative examinations at the initial claims level. This has had an impact on the processing time and has been the cause for complaints by many of the agency's administrative law judges that they receive underdeveloped files prior to hearing which require the expenditure of their time on development work which should have been undertaken at the earliest stage in the claims process.

1 53,000 title II disability causes, 17,000 others with disability issues.

Three: The lack of any face-to-face meeting, interview of conference between the claimant and a responsible deciding official at the initial claim stage, or at the second level of review, the reconsideration stage. The initial claim and the reconsidered determination are decided on the basis of a cold record.

Four: Contributing to the backlog of disability cases is the fact that in 1974, 400 administrative law judges were assigned to hear and decide 40 cases each in a different program area at a lower level of responsibility-cases arising under Public Law 91-173-black lung. Five: A comprehensive questionnaire was submitted by the Civil Service Commission to 237 of the agency's presiding officers during the Commission's utilization study. A large number of these administrative law judges reported that a considerable amount of their time had to be expended in adequately developing case files which were underdeveloped at the two lower levels, that is, the initial claims stage and the reconsideration level.

Six: One study has questioned why administrative law judges cannot remand cases before a hearing when a new evidence is submitted and a decision on the record seems possible. We undertand, however, that HEW is now experimenting with an “informal remand” procedure.

In addition, there is concern about the rate of reversal at the third level or hearing stage, after initial consideration and reconsideration, which increased from 43 percent in 1972 to 51.5 percent of all cases heard in fiscal year 1973.

The Civil Service Commission is of the opinion that the public interest requires that these cases be resolved expeditiously and fairly. Since the Bureau's staff will shortly number approximately 500 administrative law judges, GS-15, the appointment of the additional 50 should contribute toward a reduction of the backlog of cases.

I would be pleased to answer any questions the subcommittee may have.

Mr. BURKE. Thank you.

Mr. DULLEA. Thank you.

Mr. BURKE. That completes the opening statements of the witnesses. Do you have questions, Mr. Archer?

Mr. ARCHER. Why are administrative law judge positions going unfilled, or did I understand your testimony incorrectly? I understood that you couldn't find the people to fill them?

Mr. CARDWELL. Our testimony was to the effect that the process itself does prove to be difficult when you start recruiting in the numbers which we are now recruiting. I think Mr. Dullea and Mr. Trachtenberg can speak to this. In my opinion, it has in part to do with the very stringent qualification requirements that the Administrative Procedure Act specifies.

I think that is probably the No. 1 cause. I would defer to those two gentlemen.

Mr. TRACHTENBERG. The Commissioner's reference was to filling 43 positions out of our last request for 75, which is what I think you refer to, Congressman. This basically occurred for a couple of reasons. There were some very good locations on the list and some locations that were hard to fill; for instance, some in cold climates in the Midwest. We got more than enough people off the register for the rather easy posi