I-1-2-49.Incorrectly Approved Fee Agreement

Last Update: 12/9/24 (Transmittal I-1-108)

A. Effectuating Component Actions

1. Referral Procedures

Occasionally, an administrative law judge (ALJ) in the Office of Hearings Operations (OHO) or an administrative appeals judge (AAJ) in the Office of Appellate Operations (OAO) may have incorrectly approved a fee agreement when the agreement does not meet the requirements of the Social Security Act (Act) or an exception to the fee agreement process applies, as described in the Hearings, Appeals, and Litigation Law (HALLEX) manual I-1-2-12. Processing center (PC) and field office (FO) personnel may not reverse a fee agreement decision made by an OHO or OAO decision maker. When the PC or FO authorizer responsible for effectuating a favorable or partially favorable decision by an OHO or OAO decision maker believes that the decision maker incorrectly approved a fee agreement, the authorizer will take the following actions with immediacy:

  • Process the claim to payment;

  • Continue withholding 25 percent of past-due benefits if the representative is eligible for direct fee payment;

  • For Title II only claims, request an “incomplete notice” to the claimant, deferring action on the fee agreement (See Program Operations Manual Systems (POMS) GN 03940.025B.5.);

  • Prepare a protest memorandum, addressed to the Regional Chief Administrative Law Judge (RCALJ) or the National Service Delivery Associate Chief ALJ (NSD ACALJ) if the decision maker was from OHO, or OAO's Attorney Fee Branch (AFB) if the decision maker was from OAO; and

  • Email the memorandum, and if the file is paper a copy of the decision, the appointment(s) of representative(s), the fee agreement, the order approving the fee agreement, and any relevant documents, to the Regional Office (RO) or the National Service Delivery central office control email box (See OHO Fee Contacts for the OHO RO email) or to the AFB at ^DCARO OAO ATTY FEE BR.

For detailed information about the PC or FO process for incorrectly approved fee agreements, see POMS GN 03940.025B.5. (Title II instructions) or GN 03940.046F (Title XVI instructions). For sample memoranda templates, see POMS GN 03905.065B.4. (for OHO decisions) or POMS GN 03905.065B.5. (for Appeals Council (AC) decisions).

If the effectuating component does not receive a response within 45 days, it will:

  • Follow up with the RCALJ (for OHO actions) or the AFB (for OAO actions)

  • Diary the claim pursuant to the timeframes specified in POMS GN 03940.025B.5. (Title II) or GN 03940.046F (Title XVI).

2. Procedures After OHO or OAO Acts on Referral

  • If the OHO or the OAO reviewer reverses the fee agreement determination, the PC or FO will diary the case for receipt of a fee petition and fee authorization from OHO or the AFB.

  • If the OHO or the OAO reviewer affirms the fee agreement determination, the PC will follow standard procedures for processing an approved fee agreement.

B. OHO and OAO Actions

If a PC or FO authorizer refers a case to OHO or the AFB because they believe the decision maker incorrectly approved a fee agreement, the following individuals have authority to review the issue:

  • For hearing level decisions, the RCALJ who has jurisdiction over the ALJ or a designee or, if issued by an NHC decision maker, the NSD ACALJ or a designee (see the NOTE in subsection A above); or

  • For AC decisions, the OAO Deputy Executive Director or designee.

Within 30 days, the RCALJ or NSD ACALJ or OAO Deputy Executive Director or one of their designees will review the disputed action to determine whether the agreement meets the provisions in section 206(a)(2)(A) of the Act (and is not excepted from the fee agreement process). These procedures are set forth in HALLEX I-1-2-12.

If the OHO or OAO reviewing official concludes the decision maker incorrectly approved a fee agreement, they will:

  • Issue an order to the claimant disapproving the fee agreement, advising that if the representative intends to charge and collect a fee, they must file a fee petition;

  • Send a copy of the order disapproving the fee agreement to the representative with a cover letter;

  • Advise the claimant and representative that they may request review of the disapproval of the fee agreement within 15 days of receipt of the notice;

  • If there is a valid assignment as described in POMS GN 03920.021, send a copy to the entity's point of contact (POC); and

  • Send notification that a copy of the corrective action is available in the claim(s) file or the Online Retrieval System (ORS) to the respective PC or FO and the decision maker who signed the prior order (see HALLEX I-1-2-96 for a list of PC email addresses).

NOTE 1:

In the limited circumstances described HALLEX I-1-2-53 A, the POC is the only individual able to submit a fee petition. Failure to provide a copy of the notice described above to the POC may frustrate the POC's effort to file a timely fee petition or notice of intent and cause SSA to fail to withhold past-due benefits for direct payment of the representative's fee to the entity.

Staff will use the appropriate order template in the Fee Action Tracking System (FAcTS) or Hearings and Appeals Case Processing System (HACPS) in OHO or the Office of Appellate Operations Case Processing System (OAOCPS) in OAO, and the samples in HALLEX I-1-2-112 as needed.

If the OHO or OAO reviewing official affirms the fee agreement approval, they will advise the PC or FO by memorandum to process the representative's fee under the fee agreement process. Staff will use the appropriate memorandum template in HACPS or OAOCPS and the sample in HALLEX I-1-2-113 as needed.

NOTE 2:

If staff in OHO or OAO otherwise become aware of a fee agreement they believe was erroneously approved, they will notify the Regional Chief ALJ (RCALJ) or NSD ACALJ if the decision maker was from OHO, or OAO's Attorney Fee Branch (AFB) if the decision maker was from OAO. The OHO or OAO reviewing official will then take the steps in HALLEX I-1-2-49 B above, the same as if they had received a protest memo from the effectuating component.