I-1-3-25.Processing Cases Under Sections 205(u) and 1631(e)(7) of the Social Security Act (Fraud or Similar Fault “Redeterminations”)
Last Update: 6/7/22 (Transmittal I-1-102)
A. In General
Under sections 205(u) and 1631(e)(7) of the Social Security Act (Act), the Social Security Administration (SSA) must immediately redetermine the entitlement or eligibility of individuals to monthly disability benefits if there is reason to believe that fraud or similar fault was involved in the individual's application for such benefits. A redetermination based on fraud or similar fault is a re-adjudication of the individual's application for benefits. See also Social Security Ruling (SSR) 22-1p: Titles II And XVI: Fraud and Similar Fault Redeterminations Under Sections 205(u) And 1631(e)(7) of the Social Security Act.
NOTE 1:
Redetermination procedures under sections 205(u) and 1631(e)(7) of the Act apply when an individual has received or is receiving monthly benefits. Additionally, under sections 205(u)(1)(B) and 1631(e)(7)(A)(ii) of the Act, SSA must disregard evidence when there is reason to believe that fraud or similar fault was involved in providing the evidence in any initial determination or decision.
NOTE 2:
Redeterminations are initiated by statutory mandate, not at the discretion of an individual SSA employee or adjudicator. For instructions on adjudicating cases involving fraud or similar fault that are not redeterminations under sections 205(u) and 1631(e)(7) of the Act, see Hearings, Appeals, and Litigation Law (HALLEX) manual I-1-3-15.
When redetermining entitlement to or eligibility for benefits, SSA must disregard any evidence if there is reason to believe fraud or similar fault was involved in providing the evidence. Before SSA disregards evidence pursuant to sections 205(u)(1)(B) and 1631(e)(7)(A)(ii) of the Act at the hearings level of the administrative review process, an administrative law judge (ALJ) will consider the individual's objection to the disregarding of that evidence. A reason to believe that fraud or similar fault was involved in an individual's application or in providing evidence to SSA does not constitute complete adjudicative action on a claim. SSA will consider the evidence previously submitted for the period being redetermined and, even if certain evidence is disregarded because there was a reason to believe fraud or similar fault was involved in providing that evidence, an individual may still be found entitled to, or eligible for, monthly benefits. Additionally, SSA can consider any new and material evidence that does not involve fraud or similar fault and is related to the period being redetermined. (For definitions of new, material, and related to the period at issue, see HALLEX I-2-9-40 C and I-3-3-6).
SSA may be required to redetermine entitlement to or eligibility for benefits under sections 205(u) and 1631(e)(7) of the Act when it receives information from the Office of the Inspector General (OIG) pursuant to section 1129(l) of the Act. As soon as OIG has reason to believe that fraud or similar fault was involved in the application of an individual for monthly insurance benefits under title II or for benefits under title VIII or XVI, section 1129(l) of the Act requires the OIG to make available information identifying the individual to SSA. The OIG will provide this information to the agency unless a prosecutor with jurisdiction over a potential or actual related criminal case(s) certifies in writing that providing the information or redetermining the entitlement or eligibility of an individual would jeopardize the criminal prosecution of any person who is a subject of the investigation from which the information was derived.
SSA may receive information from a Federal or State prosecutor that provides a reason to believe that fraud or similar fault was involved in the application for benefits or that fraud or similar fault was involved in providing certain evidence in an individual's application. As with OIG referrals, SSA will not act on this information when the prosecutor certifies in writing that SSA's use of the information will jeopardize criminal proceedings.
Finally, SSA may also uncover information when processing or reviewing a case(s) that provides a reason to believe that fraud or similar fault was involved in the application for benefits. In this situation, SSA may make its own fraud or similar fault findings and conduct a redetermination on that basis.
NOTE 3:
SSA's initiation of a redetermination under sections 205(u) and 1631(e)(7) of the Act is not an initial determination that is subject to administrative or judicial review. See SSR 22-1p.
B. Procedures
1. Identification of Cases
SSA will redetermine cases when there is reason to believe that fraud or similar fault was involved in an individual's application for monthly disability benefits. Unless the redeterminations apply only at the hearing or Appeals Council levels, redeterminations may be coordinated with other components.
2. Instructions for Processing Cases
Except in unusual circumstances where individual case instruction is more appropriate, Office of Appellate Operations (OAO) and Office of Hearings Operations (OHO) staff will draft specific processing instructions for any group of cases involving the same source(s) believed to have committed fraud or similar fault. To meet the “immediacy” requirement, OAO and OHO may initially release instructions in a temporary format, such as a memorandum or other established mechanism, but will usually finalize instructions in a HALLEX temporary instruction (TI). In cases where there is an ongoing criminal, civil, or administrative investigation, the case specific HALLEX TI may not be made publicly available. However, relevant information will be provided in notices and other SSA communications with the individual.
C. Special Adjudication Issues in Redeterminations
For each group of cases, the HALLEX TI will address the factual and legal basis for conducting the redetermination. The instructions will also address specific business processing needs, such as identification of the cases in the applicable processing systems, how to establish a case, which office will process the action, routing issues, and so forth. Additionally, the instructions will usually provide case-specific details for the following general issues:
1. Screening Identified Cases
The HALLEX TI will describe the facts or case characteristics common to the patterns of known or suspected fraudulent activity. This information will permit the ALJ to decide based on the totality of the circumstances if there is a reason to believe fraud or similar fault was involved in the provision of evidence in an individual case.
OAO or OHO will then screen the identified cases to determine whether, after excluding the suspect evidence, the original favorable decision is supported by a preponderance of the remaining evidence. If the prior decision remains supported, OAO or OHO will document the record and end further redetermination proceedings.
NOTE:
Staff will mark identified evidence as “potential fraud or similar fault (FSF)” during this screening process.
If the prior decision is not supported, OAO or OHO will proceed with further redetermination proceedings (as explained in following procedures).
2. Notice to Affected Individual
When the prior decision is not supported, OAO or OHO will send the individual an appropriate notice. The notice will include information regarding the factual and legal basis for the redetermination. The notice will also explain in clear terms the redetermination process, including where, when, and how the individual may submit new and material evidence that is related to the period at issue, and how SSA will consider requests for an extension of time. Additionally, the notice will explain how SSA will consider the individual's objections to the disregarding of evidence at the hearings level. If OIG has identified the individual pursuant to section 1129(l) of the Act, SSA will provide a summary of the OIG investigative findings, or a copy of the OIG 1129(l) referral, with the notice or in the claim(s) file. If a prosecuting authority identified the individual, SSA will provide a summary of the prosecutor's finding(s), as well as a copy of the indictment(s), plea agreement(s), or other court filing(s) relevant to the case.
If SSA determined that fraud or similar fault was involved in the individual's application, SSA will provide detailed information regarding relevant criminal, civil, congressional, or administrative investigative findings and how they relate to the individual's application for benefits. SSA will associate copies of any relevant material(s) with the notice and in the claim(s) file.
NOTE:
When a title II claim is being redetermined, SSA has the authority to suspend current benefits after giving proper notice to the individual. When appropriate, the adverse redetermination notice will clearly explain how SSA intends to handle payment of benefits during the pendency of the redetermination proceedings.
In most cases that are processed at the hearings level, OHO will also provide additional notice of the issue(s) by including special language in the acknowledgement of the hearing request and, if applicable, the notice of hearing.
3. Period of Adjudication
When redetermining a claim(s), an adjudicator will be directed to consider the claim(s) only through the date of the final and binding determination or decision on the individual's application for benefits (i.e., the original allowance date).
NOTE:
An adjudicator will give special attention to specific processing instructions for handling allegations of a disabling impairment(s) with onset after the date of the adjudication. See HALLEX I-1-3-25 C.4.c. below.
4. Evidence
a. Disregarding Evidence
Pursuant to sections 205(u) and 1631(e)(7) of the Act, SSA will provide detailed case specific information to permit adjudicators to decide if there is a reason to believe fraud or similar fault was involved in the provision of evidence in an individual case. An ALJ may find there is reason to believe that fraud or similar fault was involved in the providing of evidence based on the following:
OIG referrals of information pursuant to section 1129(l) of the Act; or
Information obtained during a criminal, civil, administrative, or other law enforcement investigation; or
A conviction (whether upon a verdict after trial or upon a plea of guilty or nolo contendere) of a Federal or State crime; or other sworn admissions, as in a pre-trial diversion agreement; or
An SSA investigation.
Under sections 205(u) and 1631(e)(7) of the Act, adjudicators must disregard evidence if they find there is reason to believe that fraud or similar fault was involved in the providing of evidence.
Before SSA disregards evidence pursuant to sections 205(u)(1)(B) and 1631(e)(7)(A)(ii) of the Act at the hearings level of the administrative review process, the ALJ will consider the individual's objection to the disregarding of that evidence and decide whether there is reason to believe that fraud or similar fault was involved in the providing of evidence in the individual's case.
If the ALJ determines that fraud or similar fault was not involved in providing the evidence, the ALJ will consider the evidence. However, if the ALJ disregards the evidence because there is reason to believe that fraud or similar fault was involved in providing the evidence, the ALJ will address the individual's objection in the decision. These procedures are outlined in SSR 22-1p: Titles II and XVI: Fraud and Similar Fault Redeterminations under Sections 205(u) and 1631(e)(7) of the Social Security Act.
Evidence that is disregarded will remain associated in the claim(s) file but will be clearly designated as disregarded evidence.
When considering other evidence in the claim(s) file, an ALJ will use the procedures in SSR 22-2p: Titles II and XVI: Evaluation of Claims Involving Similar Fault in the Providing of Evidence and applicable HALLEX provisions in I-2-10 and I-3-10 to determine whether to disregard other evidence.
b. Developing Evidence
During redeterminations based on fraud or similar fault, SSA will not generally develop evidence. However, development may be appropriate in circumstances such as the following:
Medical or vocational expert evidence is needed;
Evidence that is new, material, and related to the period at issue was received but is missing pages or is otherwise incomplete;
An individual requests assistance in developing records that they indicate are new, material, and related to the period at issue; or
The adjudicator finds it necessary to develop new sources of evidence for the period at issue (specifically limiting the request for information to the time period being adjudicated).
c. Additional Evidence Submitted
When an individual submits additional evidence after receiving notice of the redetermination proceedings, and the evidence does not raise any issues of fraud or similar fault, the adjudicator will consider the submitted evidence if it is new, material, and related to the time period at issue, as defined in HALLEX I-2-9-40 C and I-3-3-6. Evidence that post-dates the original determination or decision can relate to the period at issue if it is reasonably related to the time period originally adjudicated. For example, a medical source may submit a statement that post-dates, but specifically addresses, the time period at issue. OAO or OHO will associate and exhibit evidence that is new, material, and related to the time period at issue. Additionally, OAO or OHO will associate with the claim(s) file and exhibit any statements or arguments from the individual.
NOTE 1:
If the information is not new, material, and related to the time period at issue, the adjudicator will associate the information with the claim(s) file but will not exhibit the information.
If the individual submits evidence of an impairment that existed at the time of the original allowance date, but was not alleged on the application, SSA will generally consider that evidence. However, SSA may also disregard any newly submitted evidence if it finds there is reason to believe fraud or similar fault was involved in providing that evidence.
If the individual submits evidence of a new impairment unrelated to those alleged in the application being redetermined, and the onset date is after the original allowance date, the adjudicator will usually not consider or develop the evidence of the new impairment during the redetermination. However, the individual is not precluded from filing a new application under SSR 11-1p: Titles II and XVI: Procedures for Handling Requests to File Subsequent Applications for Disability Benefits. If additional evidence shows a new critical or disabling condition is present but began after the period at issue, or the individual inquires about filing a new application, OHO or OAO staff will inform them that they may file a new application. See HALLEX I-1-10-1 C for the definition of “critical or disabling condition” for filing a new application purposes. If OAO or OHO staff informs the individual of the opportunity to file a new application verbally, staff will document the conversation on a form SSA-5002, Report of Contact, and provide a copy to the individual.
NOTE 2:
If a new application is filed and a redetermination case is pending at the hearings level, an ALJ will usually not accept an escalated claim or consolidate the redetermination claim with the new application (see Program Operations Manual System (POMS) DI 12045.010A). The claim(s) generally cannot be consolidated because there is no “common issue” as defined in POMS (i.e., there are different issues and time periods involved in the redetermination claim and the subsequent application).
5. When a Hearing Is Needed
A hearing is not required if the evidence of record, excluding any disregarded evidence, supports a favorable decision by a preponderance of the evidence.
Under SSR 22-1p, before SSA disregards evidence pursuant to sections 205(u)(1)(B) and 1631(e)(7)(A)(ii) of the Act at the hearings level of the administrative review process, an ALJ will consider the individual's objection to the disregarding of that evidence. An ALJ will decide whether there is reason to believe that fraud or similar fault was involved in providing evidence in the individual's case. Thus, the individual is entitled to raise any objections to the disregarding of the suspect evidence to an ALJ.
Additionally, when a recipient is receiving payments under title XVI, SSA will offer the opportunity for a hearing prior to taking an action that would result in a termination of benefits, pursuant to Goldberg v. Kelly, 397 U.S. 254 (1970).
6. Appeal Rights and Special Decision Language
When SSA initiates redetermination proceedings on an OAO or OHO level case and the case is not “screened out” under the procedures in HALLEX I-1-3-25 C.1. above, an adjudicator must issue a decision on the case. Under no circumstances can an adjudicator dismiss a request for hearing or a request for review, even if the usual criteria for a dismissal are present.
NOTE:
This prohibition does not apply, however, to an appeal of a determination or decision redetermined under sections 205(u) and 1631(e)(7) of the Act at another administrative level. For appeal procedures, see HALLEX I-1-3-25 C.8. below.
In the decision, an adjudicator will clearly explain that an individual may appeal the decision regarding whether they were entitled to disability benefits or eligible for supplemental security income as of the original allowance date. Additionally, the adjudicator will clearly explain in the decision that SSA's initiation of a redetermination under sections 205(u) and 1631(e)(7) of the Act is not subject to administrative or judicial review. However, in conjunction with an appeal of a redetermination determination or decision, an individual may object to SSA's finding to disregard evidence under the Act.
If SSA conducted or initiated a continuing disability review (CDR) before notice of the redetermination proceedings, the adjudicator will explain in the decision that the redetermination proceedings supersede any findings made during the CDR.
The applicable HALLEX TI will address any additional special language that is required in the decision due to the unique circumstances involved.
7. Representative Fee Issues
Newly appointed representative fee issues will be handled on a case-by-case basis. However, in situations where SSA does not suspend benefits, there will be no past due benefits if a favorable decision is issued because the individual is receiving ongoing benefits. When there are no past due benefits, OAO or OHO must disapprove any fee agreement. See HALLEX I-1-2-12.
Any appointed or previously appointed representative can submit a fee petition for the services they provided, and OAO or OHO will use the applicable procedures in HALLEX I-1-2 for evaluating these requests and determining a reasonable fee. However, if a representative submits a contingency fee contract, the representative is not entitled to request a fee unless a favorable decision is issued on the redetermination proceedings. See HALLEX I-1-2-51.
8. Appeals of Redeterminations Performed at Another Administrative Level
Unique appeal processing issues will be set forth in a HALLEX TI, based on the particular circumstances involved. Regardless of the unique processing instructions, when dismissal criteria are present on an appeal after a redetermination, and a dismissal would otherwise be appropriate, an adjudicator may dismiss the appeal request. For the criteria for dismissing a request for hearing, see HALLEX I-2-4-5. For the criteria for dismissing a request for review, see HALLEX I-3-4-1.
9. Change(s) in Rules
In fraud redeterminations, adjudicators will apply the rules in 20 CFR, 404 Subpart P (20 CFR 404.1501-1599), and 416 Subpart I (20 CFR 416.901-416.999d) used to determine whether an individual was disabled or blind that were in effect at the time of the original determination or decision. See the Code of Federal Regulations (Annual Edition) for prior rules.
In particular, adjudicators:
Will apply the listings in the Listing of Impairments (20 CFR, Part 404, Subpart P, Appendix 1) that were in effect at the time of the original favorable determination or decision. See POMS DI 34100.000.
Will consider an individual's residual functional capacity and vocational background using the rules that were in effect at the time the agency made the original favorable determination or decision. See 20 CFR 404.1560-404.1569a and 416.960-416.969a.
Will use the education categories and grid rules that were in effect at the time the agency made the original favorable determination or decision. See HALLEX I-5-6-15 for a copy of the prior education categories and grid rules.