TN 17 (03-05)

GN 03940.036 Fee Agreement Process - FO and PC Procedures - Partial Adjudication Involving Deferred Development, Including Workers' Compensation or Public Disability Benefit Information

A. Introduction

SSA defers development of workers' compensation (WC) and public disability benefit (PDB) offset until issuing a favorable decision. Further, SSA frequently partially adjudicates claims based on unverified WC/PDB amounts, military service credits, date of birth evidence, or other deferred or delayed development that affects the past-due benefits amount. Therefore, special handling is required for claims involving a fee agreement and partial adjudication based on deferred development.

NOTE: The proof of age tolerance procedure in GN 00302.030 does not involve deferred date of birth development or partial adjudication because the tolerance procedure, when it applies, establishes a claimant’s date of birth.

B. Policy

In claims involving a fee agreement and partial adjudication based on deferred development, SSA will make a determination on the fee agreement, but will defer authorizing a fee until the deferred development is resolved, unless one of the exceptions below applies.

In claims involving WC/PDB offset, SSA considers the deferred development resolved for purposes of authorizing a fee when the status of the WC/PDB claim and, if applicable, any WC/PDB payment amounts are verified according to the procedures in GN 03940.036C.

EXCEPTIONS: SSA will not defer authorizing a fee in the following situations:

  1. The WC/PDB status and/or payment amounts are unverified, but the maximum WC/PDB payment amount applied as offset could not affect the amount of past-due benefits based on the claimant's average current earnings (ACE) and primary insurance amount (PIA).

  2. When both of the following criteria apply:

    • Based on the amount of past-due benefits resulting from a partial adjudication, SSA can authorize fees equal to the maximum dollar amount specified in a fee agreement; and

    • The deferred or delayed development, when obtained, could not cause the amount of the fee to change.

NOTE: For the statutory maximum amount of the fee for fee agreements, see GN 03940.003A.

C. Procedure — Using WC/PDB Information in Fee Authorization

1. Verifying WC/PDB Information

To verify the status of a WC/PDB claim and any WC/PDB payments made, use the applicable sources and procedures in DI 52145.001 - DI 52145.015.

Take care to obtain the best information available regarding a WC/PDB claim and payments within the time limits set in the procedures in this section. As stated in GN 03920.040A.1., after the date SSA notifies the claimant and representative of the authorized fee amount, any increase or decrease in the amount of past-due benefits (including WC/PDB offset adjustment) will not change:

  • the past-due benefits withholding amount; or

  • the authorized fee,

unless an exception in GN 03920.040A.1. or GN 03920.040B. applies.

2. Using WC/PDB Information in Fee Authorization

Determine whether to authorize the fee at the time you are effectuating the determination or decision by determining the status of the WC/PDB claim according to the following scenarios.

a. WC/PDB claim was denied and denial was not appealed

If the verified WC/PDB information at the time you are effectuating the determination or decision indicates that the WC/PDB claim was denied and the denial was not appealed, impose no offset when calculating past-due benefits. Authorize the fee when effectuating the determination or decision unless there are other unresolved issues that affect fee authorization.

b. WC/PDB payments have been made and no WC/PDB appeal or settlement is pending

If the verified WC/PDB information at the time you are effectuating the determination or decision indicates that WC/PDB payments have been made to the claimant and no WC/PDB appeal or settlement is pending, calculate past-due benefits and authorize the fee using the verified information about WC/PDB payments made to the claimant.

If WC/PDB payments are alleged but not verified, defer authorizing the fee. In the award notice, use the appropriate “neutral” language paragraph, A or B, in GN 03940.075 to address fee authorization. For the field office (FO) procedure, see GN 03940.036D. For the processing center (PC) procedure, see GN 03940.036E.

After you verify the WC/PDB payments, impose offset as appropriate and authorize the fee under procedure in GN 03940.036F. (unless there are other unresolved issues that affect fee authorization).

c. No initial decision has been made in the WC/PDB claim, or a WC/PDB appeal or settlement is pending

If the verified WC/PDB information at the time you are effectuating the determination or decision indicates any of the following:

  • no initial decision has been made in the WC/PDB claim;

  • the WC/PDB claim was denied and the denial was appealed; or

  • WC/PDB payments have been made to the claimant and there is a WC/PDB appeal or settlement pending,

consider whether the information indicates that the initial decision is likely to be made, or the appeal or settlement is likely to be resolved, within 60 days of the date you are effectuating the determination or decision. See GN 03940.036C.2.d. if resolution within 60 days is not likely. See GN 03940.036C.2.e. if resolution within 60 days is likely.

d. WC/PDB resolution within 60 days not likely

If the initial WC/PDB decision or an appeal of a denied WC/PDB claim is pending, and resolution is not likely in 60 days, impose no offset when calculating past-due benefits. Authorize the fee when effectuating the determination or decision unless there are other unresolved issues that affect fee authorization. Do not postpone fee authorization pending issuance of the WC/PDB decision or resolution of the appeal.

If the claimant has received WC/PDB payments but a WC/PDB appeal or settlement is pending, and resolution is not likely within 60 days, calculate offset and past-due benefits and authorize the fee based on the verified payment information. Do not postpone fee authorization pending the resolution of the appeal or settlement.

e. WC/PDB resolution within 60 days likely

If an initial WC/PDB decision or resolution of an appeal or settlement in a WC/PDB claim is likely within 60 days:

  • Defer authorizing the fee and use the appropriate “neutral” language paragraph, A or B, in GN 03940.075 to address fee authorization in the award notice. For FO procedure, see GN 03940.036D. For PC procedure, see GN 03940.036E.

  • Diary the case for 60 days.

Take the following actions at the end of the diary period, or, if earlier, when you learn that the initial WC/PDB decision was made or the appeal or settlement has been resolved:

  • Verify the outcome (if any) of the WC/PDB decision or appeal and any WC/PDB payments that have been made.

  • Impose offset as appropriate and authorize the fee under procedure in GN 03940.036F. (unless there are other unresolved issues that affect fee authorization).

  • Do not further defer authorizing the fee if the WC/PDB decision or appeal is still pending.

  • If you learn that an initial WC/PDB award was made, or an appeal or settlement was resolved, but you have not verified information about any payments made to the claimant, continue to defer authorizing the fee until you can verify payment information.

  • If you are unable to determine the status of the WC/PDB claim from any source, continue to defer authorizing the fee until you can verify status and, if applicable, payment information.

NOTE: The 60-day time limit is for purposes of fee authorization only. Adjusting the claimant's benefit amount for WC/PDB payments received as a result of an appeal is not subject to the 60-day time limit.

D. Procedure – FO Actions – District Office Final Authorization (DOFA) Claims

Take the following manual actions when the fee authorization cannot be released when the claim is effectuated:

1. MCS Actions

  • Enter Fee Agreement Type (FAT) - 3 (Undecided) on NOT2 screen;

  • Designate an incomplete notice (e.g., enter “Y” in answer to the INCOMPLETE item of the NOT3 screen) (see MSOM MCS 009.010 for coding of the NOT3);

  • Instruct the PC to delete the fee agreement paragraphs. Request the appropriate fee agreement approval paragraph (MCS EC ATY800 or ATY801) and use a “neutral” language paragraph to address the representative's fee (See GN 03940.075 for paragraphs);

  • Enter the appropriate Single Payment System (SPS) issue code (SM 00834.100, MCS Interface to SPS, DIT Section 18-E Development Worksheet);

  • Annotate the special message field (see MSOM T2PE 007.008 for instructions on completing the special message field) as follows: “Fee determination awaiting correct [WC/PDB rates or POA, etc]”; and

  • Annotate the appropriate claim(s) transmittal as follows: “Fee Agreement Approved – Fee Payment Amount Unknown - Manual Notice Required.”

2. Manual Award Actions (A101, EF101)

  • Enter Fee Agreement Type (FAT) U (Undecided) in Item 11;

  • Provide the fee agreement approval paragraphs (ATY800, ATY801) and the appropriate neutral language paragraph (see GN 03940.075 and NL 00720.050 for paragraphs);

  • Enter the appropriate SPS Issue Code (SM 00834.100, MCS Interface to SPS, DIT Section 18-E Development Worksheet) on the MCS DW01 screen;

  • Annotate the special message field (see MSOM T2PE 007.008 for instructions on completing the special message field) as follows: “Fee determination awaiting correct [WC/PDB rates or POA, etc]”; and

  • Annotate the appropriate claim(s) transmittal as follows: “Fee Agreement Approved – Fee Payment Amount Unknown - Manual Notice Required”.

E. Procedure — PC Actions – DOFA and NON-DOFA Claims

In DOFA and Non-DOFA claims, including Administrative Law Judge (ALJ) or Appeals Council decision claims, the PC will take the following actions when the fee authorization cannot be released when the claim is effectuated:

1. MCS Actions

  • Enter Fee Agreement Type (FAT) - 3 (Undecided) on NOT2 screen;

  • Designate an incomplete notice (e.g., enter “Y” in answer to the INCOMPLETE item of the NOT3 screen) (see MSOM MCS 009.010 for coding of the NOT3);

  • Delete the fee agreement paragraphs. Request the appropriate fee agreement approval paragraph (MCS EC ATY800 or ATY801);

  • Use the appropriate “neutral” language paragraph to address the representative's fee. (See GN 03940.075 for paragraphs A and B.);

  • Enter the appropriate Single Payment System (SPS) issue code (SM 00834.100, MCS Interface to SPS, DIT Section 18-E Development Worksheet); and

  • Annotate the special message field (see MSOM T2PE 007.008 for instructions on completing the special message field) as follows: “Fee determination awaiting correct [WC/PDB rates or POA, etc.].”

2. Manual Award Actions (A101, EF101)

  • Enter Fee Agreement Type (FAT) U (Undecided) in Item 11;

  • Provide the fee agreement approval paragraphs (ATY800, ATY801) and the appropriate neutral language paragraph (See GN 03940.075 and NL 00720.050 for paragraphs);

  • Enter the appropriate SPS Issue Code (SM 00834.100, MCS Interface to SPS, DIT Section 18-E Development Worksheet) on the MCS DW01 screen;

  • Annotate the special message field (see MSOM T2PE 007.008 for instructions on completing the special message field) as follows: “Fee determination awaiting correct [WC/PDB rates or POA, etc]”.

3. MACADE Actions

  • Enter the appropriate Attorney Payment Indicator on the ATT screen.

  • Annotate the APPREP line with a Fee Type – U (undecided).

F. Procedure – Actions After Resolution of Deferred Development

After the deferred development issue is resolved or, if applicable, after the 60-day diary in GN 03940.036C.2.e. has expired and there is no change in WC/PDB status, take the following actions:

  1. Compute the amount of the past-due benefits and calculate the amount of the representative's fee;

  2. Prepare a notice advising the claimant and affected auxiliary beneficiary(ies), if any, of the following:

    • the past-due benefit amount for the period through the month before the month in which SSA effectuated the original decision favorable to the claimant;

    • the past-due benefit amount payable;

    • the fee amount; and

    • the right to request administrative review of the amount of the fee within 15 days of receiving the notice;

  3. Send the notice to the claimant and a copy to the representative. Also send a copy to the decision maker if requested or required; and

  4. Certify direct payment to the representative who is eligible for direct payment and release any remaining past-due benefits to the claimant and any auxiliary(ies).

G. Procedure — PC Actions - Claims Involving Incorrectly Determined Past-Due Benefits Amount(s)

Give special handling to claims in which the PC identifies the following conditions:

  • partial adjudication is involved (e.g., WC or PDB offset);

  • an approved fee agreement is in file;

  • the past-due benefits amount used to authorize the representative's fee was based on unverified evidence such as WC or PDB offset amount; and

  • SSA determines that the WC or PDB offset amount was incorrect.

In these cases, SSA must adjust the amount of the authorized fee (see GN 03920.040B., first bullet). When you determine the correct amount of the WC or PDB offset or other previously unverified evidence, and recompute the amount of the past-due benefits, recalculate the amount of the representative's fee based on the revised amount of the past-due benefits.

Remember to withhold 25 percent of any additional past-due benefits towards direct payment of an authorized fee when the representative is eligible for direct payment (unless the maximum fee under the fee agreement already has been authorized).

Notify the claimant, affected auxiliary beneficiary(ies), if any, the representative, and the decision maker, if appropriate, of the following:

  • the revised past-due benefits amount for the period through the month before the month in which SSA effectuated the original decision favorable to the claimant;

  • the revised past-due benefits payable amount;

  • the revised fee amount; and

  • the right to request administrative review of the amount of the fee within 15 days of receiving the notice.

(See the discussion of adjustments to the past-due benefits and fee amounts in GN 03920.040B. and GN 03920.040D.)


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GN 03940.036 - Fee Agreement Process - FO and PC Procedures - Partial Adjudication Involving Deferred Development, Including Workers' Compensation or Public Disability Benefit Information - 12/13/2011
Batch run: 12/14/2011
Rev:12/13/2011