Claimant entitled to try to persuade ALJ that report was not fraudulent
Tuesday, August 25, 2020

Claimant entitled to try to persuade ALJ that report was not fraudulent

By Payroll and Entitlements Editorial Staff

The claimant was part of group of individuals named by the agency’s Inspector General as having been represented by an attorney who secured disability and SSI benefits by submitting fraudulent reports to the SSA with the help of an ALJ and doctors who participated in the scheme. The SSA sent the claimant a letter stating that it would redetermine his eligibility for benefits. Following a hearing, a new ALJ rejected the claim for benefits. The claimant appealed, arguing that the ALJ also should have considered the original report of the physician who died before he could be prosecuted for his alleged role in the fraudulent scheme. The district court held that the exclusion of the report violated the claimant’s due process rights. Although the controlling statutes require the agency to redetermine every case that it finds may have been touched by fraud, they do not say that the step also requires the exclusion of evidence. Rather, only an internal claims-processing manual and ruling maintained that an ALJ cannot accept evidence that the Inspector General found is likely to be a product of fraud. Both documents lacked the force of law. The statutory authority did not prescribe procedures for redeterminations. To decide whether there was reason to believe that fraud was involved in the providing of the physician’s report, the ALJ needed to hear from both sides. The court acknowledged that the claimant may have a hard time in persuading an ALJ that there was not a reason to believe that the report was fraudulent, but he was entitled to try. The court disagreed with the district court’s remand based on constitutional grounds, however, and affirmed the decision based on ordinary norms of administrative law (Tyler N. Jaxson v. Saul, CA-7, Nos. 19-3011 & 19-3125, June 26, 2020).

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