05-729. Demonstration Project for Direct Payment to Non-Attorney Representatives

AGENCY:

Social Security Administration (SSA).

ACTION:

Notice.

SUMMARY:

Section 303 of the Social Security Protection Act of 2004 (SSPA), Public Law No. 108-203, requires the Commissioner of Social Security (the Commissioner) to develop and implement a five-year nationwide demonstration project that will extend to certain non-attorney representatives of claimants under titles II and XVI of the Social Security Act (the Act) the option to have approved representatives' fees withheld and paid directly from a beneficiary's past-due benefits. Currently, this option is available only to representatives who are attorneys. Non-attorney representatives who wish to participate in the demonstration project must meet the prerequisites specified in section 303 of the SSPA, and any additional prerequisites that the Commissioner may prescribe. The purpose of this notice is to provide information about the prerequisites that non-attorney representatives will be required to satisfy and about our plans for administering the prerequisites process. We will post further details about the prerequisites process (e.g., when and how to apply) on our Web site at http://www.socialsecurity.gov when they become available.

FOR FURTHER INFORMATION CONTACT:

Joanne Butler, Social Security Administration, Office of Hearings and Appeals, Suite 1608, 5107 Leesburg Pike, Falls Church, VA 22041-3255, [phone].

SUPPLEMENTARY INFORMATION:

Section 303 of the SSPA sets forth certain minimum prerequisites that non-attorney representatives must satisfy to be eligible to participate in the demonstration project on direct payment of fees to non-attorneys, and allows the Commissioner to establish additional prerequisites that must be satisfied. Section 303 also provides that the Commissioner may assess representatives reasonable fees to cover our costs in administering the prerequisites process.

In this notice, we provide certain details of the application process and announce that satisfaction of a representational experience requirement will be an additional prerequisite for participating in the demonstration project. The notice also advises the public of the amount of the fee that applicants will be assessed. In addition, we provide details concerning the specific criteria that we will use to evaluate whether the applicant has satisfied the following prerequisites:

• Qualifications equivalent to a bachelor's degree;
• Experience in representing claimants before SSA;
• Liability insurance or equivalent insurance adequate to protect claimants in the event of malpractice by the representative;
• Criminal background check that ensures a representative's fitness to practice before the Commissioner; and
• Examination testing knowledge of the relevant provisions of the Act and the most recent developments in Agency and court decisions affecting titles II and XVI of the Act.

We anticipate that we will use a commercial contractor to assist us in determining eligibility to participate in the demonstration project. A competitive process for selecting a contractor is underway. We will provide updated information regarding the contract award, and further information about the prerequisites process (e.g., when and how to apply) at our Web site at http://www.socialsecurity.gov.

The SSPA also requires non-attorney representatives to take continuing education classes, including courses in ethics and professional conduct. This requirement will pertain to those non-attorney representatives who have been found eligible to participate in the demonstration project. The SSPA gives us the authority to determine the minimum amount of continuing education required, and the standards for the classes. We intend to issue a subsequent Federal Register notice to address this requirement.

1. Application periods and completion of an application: We intend to structure the contract for administering the prerequisites process for the five-year demonstration project with an initial year and four option years. There will be two application periods during the initial year, with the second examination to take place four months after the first examination. During the four option years, there will be one application period and examination per option year. A non-attorney representative who is found not to be eligible to participate during one application period will be able to re-apply during any subsequent application period.

A person applying to participate in the demonstration project will have to complete an application form. We intend to have the form available online at the contractor's Web site for applicants to print out, sign (in ink), and submit. Within four weeks of the opening of the application period, the applicant must submit a complete application package. A complete application package consists of the completed application form and:

• Receipt from the applicant's insurance company for professional liability coverage or equivalent insurance in the minimum amount and type specified by us (see below);
• Official college and/or university transcript(s) showing the stamp or raised seal of the institution, or otherwise establishing that it is an official copy;
• Official high school transcript or GED certificate or an equivalent graduation record from an official source (e.g., board of education), if the applicant has not attended a college or university,
• Names and the last four digits of the Social Security numbers of five claimants for whom the applicant has provided representational services and the dates of such services (see section 4. below for details); and
• Fee payment of $1000 (see below).

Persons who fail to have their completed package materials postmarked by the application deadline will have their applications rejected. However, they may re-apply to participate in the demonstration project during a subsequent application period.

2. Application fee: SSPA section 303(c)(1) provides that the Commissioner may assess applicants a reasonable fee to cover the costs of administering the prerequisites process. We have determined that:

• The fee will be $1000 (in U.S. dollars) per applicant;
• Applicants must include the fee payment with their application package;
• The fee will be non-refundable except in the following circumstance: If the contractor fails to administer an examination and the failure is due to the contractor's fault, the contractor will be required, as a performance penalty, to refund the fee to those affected applicants who do not take the rescheduled examination;
• Acceptable forms of fee payment will be by certified check, money order, a check drawn from a private firm's account, or credit card;
• Applicants will pay their fees to the contractor; and
• Applicants who are not found to be eligible may reapply during the next application phase, but they will pay the full fee upon reapplying.

3. Education and equivalent qualifications: SSPA section 303(b)(1) establishes a bachelor's degree from an accredited institution of higher education as a prerequisite for participating in the demonstration project. However, this section also permits applicants who do not have a bachelor's degree to satisfy this prerequisite based on combinations of training and work experience that the Commissioner determines to be equivalent to a bachelor's degree. We have determined that any of the following combinations of education and experience shall be equivalent to having a bachelor's degree:

• If the applicant does not have a bachelor's degree, but has three years or more of undergraduate study at an accredited institution of higher learning, the applicant must have at least one year of relevant professional experience (as defined below), at least six months of which must have involved claims for benefits under title II or title XVI of the Act;
• If the applicant has at least two, but less than three years of undergraduate study at an accredited institution of higher learning, the applicant must have at least two years of relevant professional experience, at least one year of which must have involved claims for benefits under title II or title XVI of the Act;
• If the applicant has at least one, but less than two years of undergraduate study at an accredited institution of higher learning, the applicant must have at least three years of relevant professional experience, at least two years of which must have involved claims for benefits under title II or XVI of the Act; or
• If the applicant has less than one year of undergraduate study at an accredited institution of higher learning, or no undergraduate education, the applicant must have received a high school diploma or GED certificate and have at least four years of relevant professional experience, at least two years of which must have involved claims for benefits under title II or title XVI of the Act.

Relevant professional experience (for purposes of establishing qualifications equivalent to a bachelor's degree) is work through which the applicant has demonstrated familiarity with medical reports and an ability to describe and assess mental and/or physical limitations. Such experience may be from the fields of: Teaching, counseling or guidance, social work, personnel management, public employment service, and/or nursing or other health care professional services. Any work involving claims for benefits under title II or title XVI of the Act shall also be defined as relevant professional experience. We intend to have the contractor post on its Web site additional information regarding qualifying professional experience.

An applicant who fails to submit proof of a bachelor's degree or equivalent qualifications before the application period closes shall be precluded from establishing, based on his or her current application, eligibility to take the examination and to participate in the demonstration project. However, the applicant may re-apply to participate in the demonstration project during a subsequent application period.

An applicant may possess a law degree (e.g., juris doctor); however, attorneys who already qualify to have their approved representatives’ fees paid directly from their clients’ past-due benefits pursuant to sections 206 and 1631(d)(2) of the Act will be ineligible to participate in this demonstration project. In addition, attorneys who are suspended or disbarred by a State or Federal court or disqualified from appearing before a Federal agency or program will be ineligible to participate in this demonstration project.

4. Representational experience requirement: SSPA section 303(b) permits the Commissioner to establish additional prerequisites. We have determined that all participants in the demonstration project (with or without a bachelor's degree) must have demonstrated experience in representing claimants before SSA. Applicants must meet the following minimum representational experience requirement:

• The applicant must have provided representational services as the appointed representative for five claimants within a 24-month period;
• The services may include representing the claimant at the time at which SSA decided the case at any administrative level or, in cases that have not yet been decided, appearing as the claimant's representative at a hearing before an SSA Administrative Law Judge (ALJ); and
• The 24-month period must occur within the 60 months preceding the month in which the application was filed.

The following is an example of how to calculate the 24- and 60-month periods for establishing representational experience:

• The applicant files his or her application in March 2005.
• The 60-month period begins on March 1, 2000, and ends on February 28, 2005 (the last day of the month before the filing of the application).
• The 24-month period can occur at any time between March 1, 2000, and February 28, 2005. For example, the applicant would meet the requirement if he or she served as the appointed representative for five separate claimants during the period from January 2001 through December 2002.

Applicants are required to submit with their applications the names and the last four digits of the Social Security numbers of five claimants for whom the applicant provided representational services during the appropriate 24-month period. Applicants also are required to provide the dates of their service for each applicant (e.g., date of the hearing before the SSA ALJ).

5. Insurance requirement: SSPA section 303(b)(3) sets forth a requirement that non-attorney participants have professional liability insurance, or equivalent insurance, which the Commissioner has determined to be adequate to protect claimants in the event of malpractice by the non-attorney representative. We have determined that applicants must have professional liability insurance for coverage of errors and omissions committed by the non-attorney representative, with a minimum total annual amount of coverage of $1 million (for all incidents in that year) plus coverage of $250,000 per incident. The insurance policy must be underwritten by a firm that is licensed to provide insurance in the State in which the non-attorney representative conducts business. The policy also must provide coverage for professional liability insurance claims made in those States in which the non-attorney representative represents claimants before us.

An applicant who fails to submit proof of the required insurance before the application period closes shall be precluded from establishing, based on his or her current application, eligibility to take the examination and to participate in the demonstration project. However, the applicant may re-apply to participate in the demonstration project during a subsequent application period.

Non-attorney representatives who establish eligibility to participate in the demonstration project will be required to maintain their insurance coverage in order to continue to receive direct fee payments from SSA.

6. Criminal background investigation: SSPA section 303(b)(4) sets forth a requirement for a criminal background check of each non-attorney representative who applies to participate in the demonstration project to ensure his or her fitness to practice before us. We will reject any applicant who:

• Has been suspended or disqualified from practice before SSA;
• Has had a judgment or lien assessed against him/her by a civil court for malpractice and/or fraud;
• Has had a felony conviction;
• Engages in substantial misrepresentation in submitting his or her application and/or supporting materials for the application;
• Fails to pass an SSA administrative records check (check of SSN, etc.); or
• Fails to provide documentation as requested by SSA's contractor to perform the criminal background investigation.

An applicant who fails the criminal background investigation will have the opportunity to protest that finding to us. Our action in response to the protest will be final and not subject to appeal.

7. Passing an examination: SSPA section 303(b)(2) requires that applicants pass an examination testing their knowledge of the relevant provisions of the Act and the most recent developments in Agency and court decisions affecting titles II and XVI of the Act. With the assistance of contractor personnel, we will develop a 40- to 50-question, multiple choice examination. Examination details are as follows:

• A score of 70 will be a passing score;
• The examination instrument will be written in the English language only;
• We anticipate that the examination will be administered by the contractor and will be given only once, on a weekday, in association with each application period;
• During the examination, test-takers will have open-book access to certain reference materials that we will supply (see below for details);
• The examination will be based upon situations that arise from the subject areas contained in the reference materials; and
• Applicants will not be permitted to remove the examination instrument from the examination center.

Open-book reference materials: We will provide each test-taker with a copy of 20 CFR Ch. III (most recent edition), and the Compilation of the Social Security Laws, Volume 1 (most recent edition). We may provide additional materials; if so, we will provide details about the materials on the contractor's Web site. Applicants will not be permitted to bring any other items (including reference materials) to the examination center.

An applicant who fails to achieve a passing score may re-apply to participate in the demonstration project during a subsequent application period.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; and 96.006, Supplemental Security Income)

Dated: December 30, 2004.

Fritz Streckewald,

Assistant Deputy Commissioner for Program Policy for Disability and Income Security Programs.