OHO received a list of non-redetermination cases that require SSA to disregard evidence from Dr. Escabi-Perez if SSA finds there is reason to believe that fraud or similar fault was involved in the providing of that evidence. The Special Review Cadre (SRC) in OHO has been assigned to process the cases described in this instruction. The SRC will identify cases in the Case Processing and Management System (CPMS) and Hearings and Appeals Case Processing System (HACPS) with the case characteristics “ESCB” (Escabi-Perez) and “FRD3” (Suspected Fraud No Prior Award) and process the cases using the following instructions.

Disregarded evidence must remain in the claim(s) file, and the ALJ must ensure that medical evidence from Dr. Escabi-Perez (or other disregarded evidence) is clearly identified.

In electronic cases, SRC staff will clearly designate the information as “DISREGARDED-FSF” in the Note field in eView or the Electronic Non-Medical (ENM) application. In a paper claim(s) file, SRC staff will add “DISREGARDED-FSF” on the first page of the information with the number of pages, and each subsequent page. To illustrate, a 2-page submission that the ALJ disregards would be marked as follows: page 1 “DISREGARDED-FSF 1/2” and page 2 “DISREGARDED-FSF 2/2.”

Prior to an ALJ determining there is reason to believe fraud or similar fault was involved in the provision of evidence in support of the claimant's application, the ALJ will offer the claimant an opportunity for a hearing. The ALJ must give notice to the claimant and their representative, if any, regarding the issues related to disregarding evidence. To give notice regarding the statutory basis for disregarding evidence, the ALJ will use specific language in the “It Is Important That You Attend Your Hearing” and “Issues I Will Consider” sections of the notice of hearing. See Attachment 5 for a sample Notice of Hearing. If the claimant or their representative objects to the disregarding of evidence, the ALJ will evaluate the objection and arguments using the procedures in SSR 22-2p.

If the ALJ decides to disregard other evidence based on fraud or similar fault from an individual or entity other than Dr. Escabi-Perez, the ALJ will also provide notice in the notice of hearing.

In all decisions, the ALJ will specifically explain in the decision that:

• •

  The United States Department of Justice and SSA's Office of the Inspector General (OIG) conducted an extensive criminal investigation that resulted in Dr. Escabi-Perez pleading guilty to wire fraud related to false statements or other misrepresentations made to SSA in connection with the Social Security benefit applications filed by some of his patients. Dr. Escabi-Perez also signed a Statement Under Penalty of Perjury outlining a scheme to defraud SSA by backdating the medical files of some patients who filed for Social Security disability benefits, and by providing to SSA psychiatric medical reports that did not accurately

  HA 01560.005A Puerto Rico (Luis Escabi-Perez, M.D. — Non-Redetermination Cases; ESCB) (Redacted)

  Table of Contents

  I	Purpose
  II	Background
  III	Hearings Level Procedures
  IV	Appeals Council Procedures
  V	Inquiries
  Attachment 1	Dr. Escabi-Perez's Plea Agreement
  Attachment 2	Dr. Escabi-Perez's Statement Under Penalty of Perjury
  Attachment 3	OIG's Section 1129(l) Referral
  Attachment 4	Escabi Report
  Attachment 5	Notice of Hearing

  Issued: February 2, 2017

  Revised: June 14, 2023

  I. Purpose

  This Temporary Instruction advises Office of Hearings Operations (OHO) and Office of Appellate Operations (OAO) in the Office of Analytics, Review, and Oversight (OARO) employees of the procedures for processing certain “non-redetermination” cases that do not have a final determination or decision, (i.e., the case was not a closed case subject to readjudication under Hearings, Appeals, and Litigation Law (HALLEX) manual HA 01560.005). In these non-determination cases, the applications include evidence from Luis Escabi-Perez, M.D. (Dr. Escabi-Perez), and the Office of the Inspector General (OIG) of the Social Security Administration (SSA) identified these cases in a referral under section 1129(l) of the Social Security Act (Act) See HALLEX HA 01130.026.

  This instruction relates to a plea agreement of Dr. Escabi-Perez, entered in a federal criminal action in Puerto Rico, as well as a statement he made under penalty of perjury that discusses the fraudulent evidence he submitted to SSA on behalf of some of his patients. See the background section below for more information.

  This instruction replaces any prior instruction and will be modified as additional information becomes available.

  NOTE 1: 

  SSA has identified applications that include evidence from Dr. Escabi-Perez which were not identified by OIG in a referral under section 1129(l) of the Act. Instructions regarding these “Escabi non-referral” cases are provided in HALLEX HA 01560.005B.

  NOTE 2: 

  Nothing in this instruction precludes OHO or OAO staff or adjudicators from referring suspected instances of fraud or similar fault to OIG using the procedures in HALLEX HA 01130.006 or HA 01130.009.

  II. Background

  In 2015, after an extensive investigation by SSA's OIG and the Department of Justice, a Federal Grand Jury in Puerto Rico indicted psychiatrist Luis Escabi-Perez, M.D. (Dr. Escabi-Perez), as well as several beneficiaries who were Dr. Escabi-Perez's patients, for creating and submitting fraudulent evidence in support of the beneficiaries' applications for Social Security benefits. Dr. Escabi-Perez later pleaded guilty to wire fraud related to the transmission of fraudulent psychiatric reports to SSA. Several beneficiaries pleaded guilty to theft of government funds and property, in the form of receipt of disability benefits to which they were not entitled. See Attachment 1 for a copy of Dr. Escabi-Perez's plea agreement.

  In October 2015, subsequent to the entry of Dr. Escabi-Perez's plea agreement, he signed a Statement Under Penalty of Perjury in which he admitted the following:

  1. 1. 

     He pleaded guilty to committing fraud against SSA;

  2. 2. 

     As part of the fraud scheme, he backdated medical files of patients who applied for Social Security disability benefits;

  3. 3. 

     The backdating consisted of representing to SSA in his Psychiatric Medical Reports appointments that never took place in order to represent that the patients had a longer history of medical treatment;

  4. 4. 

     The backdated cases could be identified by looking at the date of the privacy notice form in the patient's medical file, and comparing it to the dates reported in Dr. Escabi-Perez's Psychiatric Medical Report;

  5. 5. 

     The date of the patient's actual first visit was the date indicated on the privacy notice form;

  6. 6. 

     In the backdated cases submitted to SSA, the patients always knew and agreed to the backdating;

  7. 7. 

     Dr. Escabi-Perez charged a “special fee” to the patients for the backdating;

  8. 8. 

     In the backdated cases, the information included in Dr. Escabi-Perez's Psychiatric Medical Report submitted to SSA contained template language that represented symptoms and medical conditions that the patients did not actually experience;

  9. 9. 

     In the backdated cases, Dr. Escabi-Perez's medical opinion submitted in his Psychiatric Medical Report was not based on a formal evaluation of the patients; and

  10. 10. 

      Dr. Escabi-Perez never notified SSA of the above.

  See Attachment 2 for a copy of Dr. Escabi-Perez's Statement Under Penalty of Perjury dated October 23, 2015.

  Under section 1129(l) of the Act, as soon as OIG has reason to believe that fraud was involved in the application of an individual for monthly insurance benefits under title II or for benefits under title VIII or XVI, OIG will make available to SSA information identifying the individual(s) and general information about the conduct at issue. OIG will provide this information to the agency unless a prosecutor with jurisdiction over potential or actual related criminal cases certifies in writing that providing the information or redetermining the entitlement of a beneficiary would jeopardize the criminal prosecution of any person who is a subject of the investigation from which the information was derived.

  On February 24, 2016, OIG notified SSA that it had reason to believe fraud was involved in the application of individuals seen by Dr. Escabi-Perez for monthly disability insurance benefits under title II of the Act (the OIG section 1129(l) referral). OIG referred specific cases to SSA under section 1129(l) of the Act where it appeared that the individuals' medical files were backdated. (The referred cases did not include the cases of individuals indicted for fraud). OIG further indicated that no prosecutor has stated that redeterminations in these cases will jeopardize a criminal prosecution. See Attachment 3 for a copy of the OIG section 1129(l) referral.

  Based on the referral from OIG under section 1129(l) of the Act, as well as Dr. Escabi-Perez's plea agreement and Statement Under Penalty of Perjury, SSA is required under section 205(u) of the Act to take action in cases identified by OIG.

  In cases processed under this instruction, OHO and OAO adjudicators will use the procedures in Social Security Ruling (SSR) 22-2p: Titles II and XVI: Evaluation of Claims Involving the Issue of Similar Fault in the Providing of Evidence when deciding whether to disregard evidence because of fraud or similar fault. Before SSA disregards evidence under section 205(u)(1)(B) of the Act at the hearings level of the administrative review process, it will consider the individual's objection to the disregarding of evidence.

  NOTE: 

  This instruction does not apply to beneficiaries who pleaded guilty to and/or were convicted of making false statements and representations to SSA. In those cases, SSA will redetermine entitlement to benefits. See NOTE in HALLEX HA 01560.005 II.

  III. Hearings Level Procedures

  A. General

  OHO received a list of non-redetermination cases that require SSA to disregard evidence from Dr. Escabi-Perez if SSA finds there is reason to believe that fraud or similar fault was involved in the providing of that evidence. The Special Review Cadre (SRC) in OHO has been assigned to process the cases described in this instruction. The SRC will identify cases in the Case Processing and Management System (CPMS) and Hearings and Appeals Case Processing System (HACPS) with the case characteristics “ESCB” (Escabi-Perez) and “FRD3” (Suspected Fraud No Prior Award) and process the cases using the following instructions.

  NOTE 1: 

  If OHO staff encounter a case containing evidence from Dr. Escabi-Perez, they will verify whether the case was referred by OIG in the February 24, 2016 referral, requiring processing under this instruction, or whether the case is an “Escabi closed” case requiring processing under HALLEX HA 01560.005 or an “Escabi non-referral” case requiring processing under HALLEX HA 01560.005B. In either case, OHO will ensure the case is routed to the SRC, rather than the individual's servicing hearing office, by permanently transferring the case to the SRC (Hearing Office code 5ZU).

  NOTE 2: 

  If a case processed under this instruction involves facts and evidence requiring processing under a separate instruction in HALLEX HA 01560.000, SRC staff will add the case characteristic “FHYB” (Fraud Hybrid) in addition to the above and any other applicable case characteristics directed by the separate instruction.

  B. Evidence

  1. Screening

  Designated adjudicators will review the file to determine whether it contains any of the following:

  • •

    Medical evidence supplied, prepared, or signed by Dr. Escabi-Perez.

  If the file contains any of the evidence as outlined above, or if the adjudicator suspects that fraud or similar fault was involved in the provision of any other evidence, the adjudicator will determine whether there is an issue of fraud or similar fault that requires adjudication in accordance with SSR 22-2p.

  If an issue of fraud or similar fault requires adjudication, the adjudicator will offer the individual an opportunity for a hearing and continue processing the case. At the hearing, the individual will have the opportunity to object to the disregarding of evidence. The adjudicator will process the case using the instructions below.

  2. Fraud or Similar Fault Identified as an Issue for Adjudication

  If, after screening, the adjudicator determines there is an issue of fraud or similar fault requiring adjudication, SRC staff will add the Possible Fraud or Similar Fault (Special F) flag in eView or attach the flag to the front of a paper claim(s) file.

  Additionally, if it is not already part of the record, SRC staff will add a copy of Dr. Escabi-Perez's plea agreement, Statement Under Penalty of Perjury, the OIG section 1129(l) referral, the Escabi Report, and any other relevant document(s) to the claim(s) file. In paper cases, staff will add the documents to Part B- Jurisdictional Documents/Notices (red tab) of the claim(s) file. In electronic cases, staff will upload the documents using document type 7011-Misc. Jurisdictional Documents/Notices to Part B- Jurisdictional Documents/Notices (red tab) of the claim(s) file. See Attachments 1, 2, 3, and 4 for copies of these materials.

  3. Reason to Believe Standard

  Under section 205(u)(1)(B) of the Act, SSA must disregard evidence when there is reason to believe that fraud or similar fault was involved in the providing of such evidence. See HALLEX HA 01130.015 C.1. for the definition of “reason to believe.”

  In determining if there is a reason to believe fraud or similar fault exists, the adjudicator may consider, among other evidence, Dr. Escabi-Perez's plea agreement and Statement Under Penalty of Perjury, the OIG referral, and the Escabi Report.

  Before the administrative law judge (ALJ) disregards the evidence under section 205(u)(1)(B) of the Act at the hearings level of our administrative review process, the ALJ will consider the individual's objection to the disregarding of that evidence. See HALLEX HA 01130.026. After considering any objections, the ALJ will decide whether there is reason to believe that fraud or similar fault was involved in providing evidence in the individual's case.

  If, after the hearing and considering any objections, the ALJ finds there is reason to believe that fraud or similar fault was involved in the provision of the evidence, the ALJ will disregard such evidence under section 205(u)(1)(B) of the Act.

  If the ALJ does not find there is reason to believe that fraud or similar fault was involved in the provision of the evidence, the ALJ will not disregard the evidence under section 205(u)(1)(B) of the Act. Rather, the ALJ will evaluate it in accordance with SSA's existing policies regarding the evaluation of symptoms and medical evidence. The ALJ will consider any internal inconsistencies in the individual's statements, as well as inconsistencies with other evidence. See 20 CFR 404.1513a, 404.1527, and SSR 16-3p: Titles II and XVI: Evaluation of Symptoms in Disability Claims.

  NOTE 1: 

  SSA generally does not develop evidence of a claimant's intent. Therefore, a finding of similar fault in accordance with SSR 22-2p is sufficient for the ALJ to disregard the evidence at issue. See HALLEX HA 01295.010 A.

  NOTE 2: 

  If the agency disregarded evidence at another level of the administrative process after finding fraud or similar fault, the ALJ will use the information in SSR 22-2p to determine whether there is a reason to believe that fraud or similar fault was involved in the provision of evidence, and will consider the individual's objection to the disregarding of that evidence. If there is not a reason to believe fraud or similar fault was involved in the provisions of the evidence, the ALJ will add the information into the record and consider it when adjudicating the claim.

  4. Other Evidence

  In some cases, it may also be appropriate to disregard evidence provided by a source who was not involved in Dr. Escabi-Perez's fraudulent scheme. For example, if a physician relies on medical evidence from Dr. Escabi-Perez that the ALJ disregards, then the ALJ must also disregard the parts of the physician's report relying on the disregarded evidence, or, when based solely on the disregarded evidence, the entire document. When the degree of reliance on medical evidence from Dr. Escabi-Perez is unclear, the ALJ will evaluate the evidence in accordance with SSA's existing policies regarding the evaluation of medical evidence.

  C. Exhibiting and Marking Issues

  Disregarded evidence must remain in the claim(s) file, and the ALJ must ensure that medical evidence from Dr. Escabi-Perez (or other disregarded evidence) is clearly identified.

  In electronic cases, SRC staff will clearly designate the information as “DISREGARDED-FSF” in the Note field in eView or the Electronic Non-Medical (ENM) application. In a paper claim(s) file, SRC staff will add “DISREGARDED-FSF” on the first page of the information with the number of pages, and each subsequent page. To illustrate, a 2-page submission that the ALJ disregards would be marked as follows: page 1 “DISREGARDED-FSF 1/2” and page 2 “DISREGARDED-FSF 2/2.”

  NOTE 1: 

  To ensure that claimants and any representative with access to the electronic file can identify and object to the disregarding of the evidence in question, SRC staff will exhibit the evidence, even if the ALJ determines that it should be disregarded.

  NOTE 2: 

  If the ALJ disregards only certain portions of evidence from a source, SRC staff will remove the information using the same procedures for removing personally identifiable information that is not properly associated with a claim(s) file. The ALJ will retain both versions of the evidence (the original and the redacted) in the claim(s) file, exhibiting both, but identifying the non-redacted version as above with the caption “PORTIONS DISREGARDED-FSF – See Ex. [**].”

  NOTE 3: 

  If another administrative level previously disregarded evidence, or the hearings level in a remanded case previously disregarded evidence, and the ALJ subsequently determines that the agency should not have disregarded the evidence, SRC staff will update eView, ENM, or the paper claim(s) file to reflect the evidence was not disregarded.

  D. Notice of Hearing

  Prior to an ALJ determining there is reason to believe fraud or similar fault was involved in the provision of evidence in support of the claimant's application, the ALJ will offer the claimant an opportunity for a hearing. The ALJ must give notice to the claimant and their representative, if any, regarding the issues related to disregarding evidence. To give notice regarding the statutory basis for disregarding evidence, the ALJ will use specific language in the “It Is Important That You Attend Your Hearing” and “Issues I Will Consider” sections of the notice of hearing. See Attachment 5 for a sample Notice of Hearing. If the claimant or their representative objects to the disregarding of evidence, the ALJ will evaluate the objection and arguments using the procedures in SSR 22-2p.

  If the ALJ decides to disregard other evidence based on fraud or similar fault from an individual or entity other than Dr. Escabi-Perez, the ALJ will also provide notice in the notice of hearing.

  E. Decision Language

  In all decisions, the ALJ will specifically explain in the decision that:

  • •

    The United States Department of Justice and SSA's Office of the Inspector General (OIG) conducted an extensive criminal investigation that resulted in Dr. Escabi-Perez pleading guilty to wire fraud related to false statements or other misrepresentations made to SSA in connection with the Social Security benefit applications filed by some of his patients. Dr. Escabi-Perez also signed a Statement Under Penalty of Perjury outlining a scheme to defraud SSA by backdating the medical files of some patients who filed for Social Security disability benefits, and by providing to SSA psychiatric medical reports that did not accurately reflect those patients' symptoms and medical conditions.

  • •

    As required by section 1129(l) of the Social Security Act (Act), the OIG notified SSA that it had reason to believe fraud was involved in the application for disability benefits of individuals seen by Dr. Escabi-Perez.

  • •

    Under section 205(u) of the Act, SSA must disregard evidence when there is reason to believe fraud or similar fault was involved in that individual's application for benefits.

  • •

    OIG referred specific cases to SSA under section 1129(l) of the Act in which medical evidence from Dr. Escabi-Perez had been submitted.

  • •

    Dr. Escabi-Perez provided evidence in the case, and the ALJ was required to make a finding regarding whether there was a reason to believe that fraud or similar fault was involved in the providing of the evidence from Dr. Escabi-Perez [and/or evidence in which a source relied on evidence from Dr. Escabi-Perez].

  • •

    The ALJ allowed the claimant the opportunity to object to the disregarding of evidence from Dr. Escabi-Perez. [If applicable] The ALJ considered the claimant's objections to the disregarding of evidence. [Explanation for the finding].

  • •

    [If evidence was disregarded] The ALJ found a reason to believe fraud or similar fault was involved in the providing of evidence from Dr. Escabi-Perez and disregarded that evidence. [Explanation for the finding].

  • •

    [If some of the evidence was not disregarded] The ALJ found no reason to believe fraud or similar fault was involved in the providing of the following evidence from Dr. Escabi-Perez and did not disregard those pieces of evidence. [Explanation for the finding].

  • •

    [If no evidence was disregarded] The ALJ found no reason to believe fraud or similar fault was involved in the providing of evidence and did not disregard any evidence. [Explanation for the finding].

  • •

    The ALJ considered all of the evidence of record, [if applicable] excluding any disregarded evidence, and decided the case on the remaining evidence.

  • •

    The claimant may appeal the ALJ's decision regarding the issue of disability and the disregarding of evidence.

  For all evidence, other than medical evidence from Dr. Escabi-Perez, the ALJ will use the procedures in SSR 22-2p to determine whether to disregard evidence because of fraud or similar fault. See also HALLEX HA 01130.015 D. If the ALJ disregards other evidence based on a fraud or similar fault issue, the ALJ must clearly address the other evidence and explain why it was disregarded. See HALLEX HA 01295.014. The claimant may appeal the fraud or similar fault finding.

  IV. Appeals Council Procedures

  The instructions below apply to cases before the Appeals Council (AC) in which OIG has identified the applications as including evidence from Dr. Escabi-Perez and where the case was not redetermined (i.e., was not a closed case subject to a readjudication under HALLEX HA 01560.005 and is not an “Escabi non-referral” case subject to adjudication under HALLEX HA 01560.005B).

  A. Handling Requests for Review When the Disregarding of Evidence Is an Issue

  If the AC receives a request for review in a case in which a prior adjudicator disregarded evidence at another administrative level under subsection III. above, the AC will assess whether the evidence was properly disregarded and follow its usual request for review procedures. In processing requests for review in these cases, the AC will keep in mind that under SSR 22-2p, before an adjudicator disregards evidence at the hearings level, they will consider the individual's objection to the disregarding of that evidence. The AC will generally grant review and remand cases where the claimant has not yet been afforded that opportunity.

  1. Documenting the System and the Record

  OAO staff will ensure any non-redetermination cases referred by OIG as involving evidence from Dr. Escabi-Perez, as described in subsection III.B.1. above, include the case characteristic “ESCB” (Escabi-Perez) in the Appeals Review Processing System (ARPS).

  NOTE 1: 

  If OAO staff encounter a case that does not have the case characteristic “ESCB” and which contains evidence from Dr. Escabi-Perez that was not identified at another administrative level, they will consult with the Executive Director's Office (EDO) by sending an email to ^DCARO OAO Fraud Redetermination to verify whether the case was referred by OIG under section 1129(l) of the Act, or whether the case requires processing as an “Escabi non-referral” case under HALLEX HA 01560.005B.

  NOTE 2: 

  If a case processed under this instruction involves facts and evidence requiring processing under a separate instruction in HALLEX HA 01560.000, OAO staff will ensure that the case characteristic “FHYB” (Fraud Hybrid) has been added to the case in addition to the above and any other applicable case characteristics directed by the separate instruction.

  If it is not already part of the record, OAO staff will add a Possible Fraud or Similar Fault (Special F) flag in eView or attach the flag to the front of a paper claim(s) file.

  Additionally, if not already part of the record, OAO staff will add a copy of Dr. Escabi-Perez's plea agreement, Statement Under Penalty of Perjury, the OIG section 1129(l) referral, the Escabi Report, and any other relevant document(s) to the claim(s) file. In paper cases, staff will add the documents to Part B- Jurisdictional Documents/Notices (red tab) of the claim(s) file. In electronic cases, staff will upload the documents using document type 7011-Misc. Jurisdictional Documents/Notices to Part B- Jurisdictional Documents/Notices (red tab) of the claim(s) file. See Attachments 1, 2, 3, and 4 for copies of these materials.

  2. Evidence

  Under section 205(u)(1)(B) of the Act, SSA must disregard evidence when there is reason to believe that fraud or similar fault was involved in the providing of such evidence. Before SSA disregards evidence under section 205(u)(1)(B) of the Act at the hearings level of the administrative review process, it will consider the individual's objection to the disregarding of the evidence.

  NOTE: 

  In some cases, it may also be appropriate to disregard evidence provided by a source who was not involved in Dr. Escabi-Perez's fraudulent scheme. For example, if a physician relies on medical evidence from Dr. Escabi-Perez that the AC disregards, then the AC must also disregard the parts of the physician's report relying on the disregarded evidence, or, when based solely on the disregarded evidence, the entire document. When the degree of reliance on medical evidence from Dr. Escabi-Perez is unclear, the AC will evaluate the evidence in accordance with SSA's existing policies regarding the evaluation of medical evidence. However, before the AC disregards any evidence, the AC must ensure the claimant had previously been provided the opportunity to object to the disregarding of that evidence at the hearings level.

  3. Exhibiting and Marking Issues

  Disregarded evidence must remain in the claim(s) file, and the AC must ensure that medical evidence from Dr. Escabi-Perez (or other disregarded evidence) is clearly identified. Generally, the ALJ should have exhibited disregarded evidence, and the AC must ensure that disregarded evidence is clearly identified as disregarded. In electronic cases, the AC will ensure staff identified the information as “DISREGARDED-FSF” in the Note field in eView or ENM. In a paper claim(s) file, the AC will ensure staff added “DISREGARDED-FSF” on the first page of the information with the number of pages, and on each subsequent page. To illustrate, a 2-page submission that the AC disregards would be marked as follows: page 1 “DISREGARDED-FSF 1/2” and page 2 “DISREGARDED-FSF 2/2.”

  NOTE: 

  To ensure that claimants and any representative with access to the electronic file can identify and object to the disregarding of the evidence in question, SRC staff will exhibit the evidence, even if the ALJ determines that it should be disregarded. The AC will not identify evidence as “disregarded” unless the claimant had previously been provided the opportunity to object to the disregarding of the evidence at the hearings level. If the AC subsequently determines that the agency should not have disregarded the evidence, OAO staff will update eView, ENM, or the paper claim(s) file to reflect the evidence was not disregarded.

  4. Fraud or Similar Fault- Finding at Another Administrative Level

  a. Evidence Automatically Disregarded

  If the AC receives a request for review in a non-redetermination case processed under this instruction in which an ALJ, under now rescinded SSR 16-2p: Titles II and XVI: Evaluation of Claims Involving the Issue of Similar Fault in the Providing of Evidence, automatically disregarded the evidence without a fraud or similar fault finding, the AC will generally grant review. The automatic disregarding of evidence is an error of law that requires the AC to grant review to issue a fully favorable decision or remand.

  b. Cases with Fraud or Similar Fault Findings

  If the AC receives a request for review in a non-redetermination case processed under this instruction, and the ALJ made a finding regarding whether there was reason to believe that fraud or similar fault was involved in the providing of evidence under now rescinded SSR 16-2p or under SSR 22-2p, then the AC will assess whether the ALJ properly followed the instructions in section III. and follow its usual request for review procedures. If a grant review action is appropriate after reviewing the remaining evidence, the AC will follow the instructions in subsection IV.A.5. below.

  c. Cases without Fraud or Similar Fault Findings

  If the ALJ did not address an issue of fraud or similar fault, but the AC identifies that issue on review, the AC will generally grant review and either remand the case to an ALJ or issue a decision using the language in subsection IV.A.5.c. below.

  5. AC Actions

  In all cases, the AC will use the standard notice from the Document Generation System (DGS) with modifications as noted below, using Spanish notices and special notice options when appropriate.

  a. Dismissal of Request for Review

  The AC may dismiss requests for review for cases involving fraud or similar fault identified at a prior level of adjudication under the circumstances set forth in HALLEX HA 01340.001. When appropriate, no change to the standard notice is required. However, if the dismissal criteria are present but would result in the payment of benefits, the AC will consult with the EDO before taking any action.

  b. Denial of Request for Review

  As provided in subsection IV.A.4., the AC will not deny requests for review in cases in which a prior adjudicator automatically disregarded suspect evidence without determining whether there is a reason to believe fraud or similar fault was involved in the provision of the evidence, or the adjudicator did not provide the claimant the opportunity to object to the disregarding of the evidence. The AC may otherwise deny a request for review provided there is no basis under the regulations for granting or dismissing the request (see HALLEX HA 01330.001).

  c. Grant Review Action

  A grant review action is appropriate if any basis for granting review is present.

  The AC may issue a decision to resolve an issue of fraud or similar fault when the file contains sufficient evidence to determine whether there is reason to believe the fraud or similar fault was involved in the provision of evidence, the claimant was provided the opportunity to object to the disregarding of the evidence at the hearings level, and a remand is not necessary to decide all adjudication issues involved in the claim.

  The AC will evaluate whether it can issue a fully favorable decision in the absence of the suspect evidence. If the record supports a fully favorable decision, the AC will issue the decision following its usual procedures in HALLEX HA 01380.000 and the instructions below on evaluating fraud or similar fault in the decision, as appropriate.

  If the AC is unable to issue a decision, the AC will remand the case for a new hearing and decision.

  For example, if the hearing decision did not address whether evidence was being disregarded, but the evidence is identified as “disregarded” in the claim file, and the individual has had the opportunity to object to the disregarding of evidence at the hearings level, the AC may issue a corrective unfavorable decision that disregards evidence from the source(s) identified in subsection III.B.1. The AC may also issue a favorable decision when an ALJ erred in disregarding evidence and consideration of that evidence warrants a favorable decision (see HALLEX HA 01395.005). When reopening issues are involved, see HALLEX HA 01395.007.

  1. 1. 

     Remand

     If the AC remands the case, the remand order will identify the suspect evidence and instruct the ALJ to make a finding as to whether there is a reason to believe that fraud or similar fault was involved in the provision of evidence.

  2. 2. 

     Decision

     When issuing a decision on a case with a record that contains evidence from Dr. Escabi-Perez, the AC will use the procedures in SSR 22-2p to determine if there is a reason to believe that fraud or similar fault was involved in the provision of the evidence.

     In determining if there is a reason to believe fraud or similar fault was involved in the provision of the evidence, the AC may consider, among other evidence, Dr. Escabi-Perez's plea agreement and Statement Under Penalty of Perjury, the OIG referral, and the Escabi Report.

     NOTE: 

     SSA generally does not develop evidence of a claimant's intent. Therefore, a finding of similar fault in accordance with SSR 22-2p is sufficient for the AC to disregard the evidence at issue.

     The AC will also use the procedures in SSR 22-2p and HALLEX HA 01395.005 to determine whether to disregard, based on fraud or similar fault, any other evidence individuals or entities, other than Dr. Escabi, submitted, supplied, or sourced. If the AC disregards other evidence based on a fraud or similar fault issue, the AC must ensure the claimant was previously provided the opportunity to object to the disregard of this other evidence, and in the AC decision, clearly address the other evidence, and explain why it disregarded that evidence.

     In all decisions, the AC will specifically explain in the decision that:

     • •

       The United States Department of Justice and SSA's Office of the Inspector General (OIG) conducted an extensive criminal investigation that resulted in Dr. Escabi-Perez pleading guilty to wire fraud related to false statements or other misrepresentations made to SSA in connection with the Social Security benefit applications filed by some of his patients. Dr. Escabi-Perez also signed a Statement Under Penalty of Perjury outlining a scheme to defraud SSA by backdating the medical files of some patients who filed for Social Security disability benefits, and by providing to SSA psychiatric medical reports that did not accurately reflect those patients' symptoms and medical conditions.

     • •

       As required by section 1129(l) of the Social Security Act (Act), the OIG notified SSA that it had reason to believe fraud was involved in the application for disability benefits of individuals seen by Dr. Escabi-Perez.

     • •

       Under section 205(u) of the Act, SSA must disregard evidence when there is reason to believe fraud or similar fault was involved in that individual's application for benefits.

     • •

       OIG referred specific cases to SSA under section 1129(l) of the Act where it appeared that the claimants' medical files were backdated, in the manner described in Dr. Escabi-Perez's Statement Under Penalty of Perjury.

     • •

       Dr. Escabi-Perez provided evidence in the case, and the ALJ was required to make a finding regarding whether there was a reason to believe that fraud or similar fault was involved in the providing of the evidence from Dr. Escabi-Perez [and/or evidence in which a source relied on evidence from Dr. Escabi-Perez].

     • •

       [If applicable] The ALJ allowed the claimant the opportunity to object to the disregarding of evidence from Dr. Escabi-Perez. [If applicable] The [ALJ/AC] considered the claimant's objections to the disregarding of evidence. [Explanation for the finding].

     • •

       [If evidence was disregarded] The Appeals Council found a reason to believe fraud or similar fault was involved in the providing of evidence from Dr. Escabi-Perez and disregarded that evidence. [Explanation for the finding].

     • •

       [If some of the evidence was not disregarded] The Appeals Council found no reason to believe fraud or similar fault was involved in the providing of the following evidence from Dr. Escabi-Perez and did not disregard those pieces of evidence. [Explanation for the finding].

     • •

       [If no evidence was disregarded] The Appeals Council found no reason to believe fraud or similar fault was involved in the providing of evidence and did not disregard any evidence. [Explanation for the finding].

     • •

       The Appeals Council considered all of the evidence of record, [if applicable] excluding any disregarded evidence, and decided the case on the remaining evidence.

     • •

       The claimant may appeal the Appeals Council's decision regarding the issue of disability and the disregarding of evidence.

  6. Routing

  The SRC will handle all AC remand orders for the non-redetermination Escabi cases processed under this instruction. When closing out a case in ARPS, OAO staff will ensure that the remand is routed to the SRC and not the originating hearing office.

  OAO staff will update the hearing office code under “Final Routing Information” to 5ZU for “Title 2 Routing,” when closing the case in ARPS and send an email to the SRC at |||DA SRC to alert the SRC of the remand. For paper cases, OAO staff will mail the claims file to the following address:

  Special Review Cadre
  1718 Woodlawn Drive
  Woodlawn, MD 21207

  V. Inquiries

  OHO staff will direct all program-related and technical questions through appropriate management channels.

  In OAO, staff and adjudicators will direct any program-related or technical questions to the EDO at ^DCARO Fraud Redetermination.

  Attachment 1. Dr. Escabi-Perez's Plea Agreement

  Escabi Plea Agreement

  Attachment 2. Dr. Escabi-Perez's Statement Under Penalty of Perjury

  Escabi Statement Under Penalty of Perjury

  Attachment 3. OIG's Section 1129(l) Referral

  OIG Formal Memorandum

  Attachment 4. Escabi Report

  Escabi Report

  Attachment 5. Notice of Hearing

  Notice of Hearing

  Notice of Hearing (Spanish)

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  To Link to this section - Use this URL: http://policy.ssa.gov/poms.nsf/lnx/2501560005AR

  HA 01560.005AR - Puerto Rico (Luis Escabi-Perez, M.D. — Non-Redetermination Cases; ESCB) (Redacted) - Batch run: 06/16/2026 Rev: