2019 Q3 Newsletter

3 T h2019 AGENDA u r sNETWORKING day 10/24 PRESIDENT: M e e t n ' G4r e eAt NOTE - T hFROM e L i nTHE q H o t e l 7 - 8GREG p m CATES 5

2020 CONFERENCE AGENDA

FINTRODUCTION r i d a y 1 0 / 2TO 5 OUR NEWEST BOARD MEMBERS G r11o u pFEE B EROSION r e a k f a sWEBINAR t 8-9am Keynote Speaker 9-10:15am Jerod Smith, Attorney and Professional Poker Player Break 10:15-10:30am Speed Networking 10:30am-12:00pm Lunch on Your Own

THIRD QUARTER 2019

IN THIS ISSUE:

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CONTENTS

NADR NEWSLETTER THIRD QUARTER 2019

IN THIS ISSUE 3

2019 NETWORKING AGENDA

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A NOTE FROM THE PRESIDENT: GREG CATES

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2020 CONFERENCE AGENDA

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INTRODUCTION TO OUR NEWEST BOARD MEMBERS

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FEE EROSION WEBINAR

Thursday 10/24 Meet n' Greet - The Linq Hotel 7-8pm Friday 10/25 Group Breakfast 8-9am Keynote Speaker 9-10:15am Jerod Smith, Attorney and Professional Poker Player Break 10:15-10:30am Speed Networking 10:30am-12:00pm Lunch on Your Own Free Afternoon - Enjoy the Vegas Strip!

Group Dinner at Virgil's BBQ - 7-9pm High Roller Patio ($60/ticket) Saturday 10/26 Enjoy Vegas sites! Gamble, shop, dine, drink - take a ride on the High Roller Observation Wheel ($45)!

Group show: Cirque du Soleil's Mystere - 6:30pm ($73)

A NOTE FROM THE PRESIDENT Greetings NADR colleagues

overturn the appointments clause, ALJs making rational decisions and the new Social Security bill that was recently introduced in Congress. So, let’s grow our professional outreach through service.

I first want to thank those of you that have the confidence that I am suited for the office of NADR President. Although, I’m not completely overwhelmed, I am intrigued by the potential opportunities and challenges of the next two years.

I have served on the Board of Directors with three outstanding former Presidents and I hope to be as successful as each of them in navigating all of the issues.

Please reach out to me with your ideas (gcates@ musedisability.com) or stop me at the networking event or annual conference. I want to know what you are thinking and what we can do as an organization to grow our positive reputation.

Those of you that know me well, understand that I am a collaborator, more than anything else. Thus, I am asking for each of you to collaborate with me to make NADR the best organization of its kind. Any business success that I have achieved has been by putting service first. This has resulted in a relatively successful 40+ year career in advocating for the disabled population. Based on this model, I am asking each of you to be of service to NADR. I am asking that each of you provides one hour per month (12 hours a year) in service to NADR. I don’t care how…post a positive story on Facebook, send an email, share a success story on the Forum, encourage a fellow professional, tell someone or some group about NADR, volunteer on a committee or at a conference, write your Congressional Representative or any other method you choose. I enjoy creativity and tangential thinking. So, surprise NADR with your service ideas. Over the next 24 months, I’d like for many more citizens outside of NADR to know about what we do and why. We have weathered some significant setbacks in recent years. But I hear some positive things happening…support to NADR NEWS

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NADR 2020 AGENDA

20/20 NAdR NADR NEWS

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NADR 2020 AGENDA

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20/20 NAdR NADR NEWS

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NADR 2020 AGENDA

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20/20 NAdR NADR NEWS

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NADR 2020 AGENDA

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20/20 NAdR NADR NEWS

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THIRD QUARTER 2019

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NADR NEWS

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THIRD QUARTER 2019

INTRODUCTION TO OUR NEWEST BOARD MEMBERS MEREDITH MARCUS Meredith has been a NADR member since 2014 when she attended the networking weekend in Memphis, TN. She is a Senior Associate with Daley Disability Law. Meredith is looking forward to working to support NADR in any way possible including advocating for its members and ensuring that ongoing changes to policies, rules and regulations positively impact our clients.

CARL GROVES Carl has been a member of NADR since 2009. He is the owner of Disability Consulting, LLC with two offices in middle Tennessee, and handles cases throughout the Southeast. He is concerned with SSA’s onslaught of Rulings and policy changes seemingly designed to make it harder for advocates to practice and, more importantly, for the Disabled to obtain the benefits they need.

SHERRELL RODGERS Sherrell has been representing disability claimants for over 20 years, and she is currently the owner of Rodgers Disability Group. She has been a member of NADR almost since its inception and an EDPNA since the pilot program began in 2005. She is excited to serve as a director-at-large to help make NADR ever more responsive to the to the needs of our members and, in turn, the people we represent.

NADR NEWS

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THIRD QUARTER 2019

FEE EROSION WEBINAR Expect Lower Hearing Level Fees

Expect lower hearing level fees if faster processing time Average monthly SSDI benefit payment (PIA) is a little over $1,300 a month, so a 25% representative fee of just one month of retro pay is a little over $300. So each 30 days of lost retro could cost a rep over $300 in lost fees. At our firm hearing level cases and fees make up about 70% of our total revenue.

Most SSD representatives have no idea about a huge threat to our business just over the horizon because many are having the best revenue months ever. Higher than expected revenue in 2019 is a symptom of the hearing backlog being eliminated faster than planned, and it also means lower average fees are likely coming soon. Recently NADR hosted a Fee Erosion Webinar on this topic that was well attended. With this article, and our efforts to raise awareness on this issue, we’re hoping that after we get the conversation going, more contributors begin to help offer solutions and as a result we all become better prepared for what’s coming.

If lower average fees are coming to our hearing level wins, what can we do together to be ready for a less revenue, lower average fee environment?

Let’s get back to this topic of getting proactive in our business after we review the data that will allow you to continue to monitor this issue over time, and to monitor how it may affect your local area OHOs.

At Heard & Smith we believe we’re colleagues with fellow Social Security Disability representatives and not competitors. We’re in this together; there are enough potential clients and clients for all of us to have a healthy business. We want to increase awareness on this issue since the solutions to this problem are not all known.

Recent History of Pending Backlog and Average Processing Time In recent years the backlog has grown and grown, only since 2017 has it started to decrease. Here are the numbers. SSA’s pending hearings backlog grew from about 705,000 cases at the end of FY 2010 to approximately 1.1 million cases at the end of FY 2016. The pending backlog finally turned from that peak and decreased in FY 2017 and FY 2018 where it ended at 858,000 cases. Thru June 2019 the backlog is now a little over 639,000 cases.

First things first, let’s acknowledge that this is “good news” for claimants. It’s a blessing that SSA has gotten their act together and made progress on long hearing wait times. We’re happy that many claimants will suffer less as a result of shorter hearing wait times. We’re also happy that many clients will pay lower fees to representatives (when faster hearings offer less retroactive benefits.) But this presentation is about how reps can continue to help people who desperately need assistance. To help our clients we need a margin, or a profitable business.

Average processing time, from request for hearing until decision issued, grew from FY 2012 through FY 2017. Average processing time was 353 days in FY 2012, the most recent bottom of peaks and valleys. From that point it climbed each year, until it peaked at 605 days in FY 2017 and then stayed almost flat through the next year when it was 595 days at end of FY 2018. Through June 2019 average processing time is now 495 days, a drop of 110 days in 9 months.

Here is the problem, SSD representative’s average fees will drop over time as hearing wait times quickly decrease. From FY 2017 close to the present SSA has made big progress on backlog reduction (number of claims waiting for a hearing), and reducing average processing time (number of days from request for hearing date until date decision issued.) Reducing average processing time appears to largely come from reducing waiting times for hearing. SSA’s national average processing time is expected to drop over 100 days a year for the next several years.

NADR NEWS

For many representatives like me who have worked as a rep only 10 years, average processing time is a metric that has year over year quietly helped the business in recent history. This metric got better over time for reps from 2012 through 2017, and didn’t materially change in 2018. So for roughly six years in a row it helped firms by making fees get larger on average as wait times increased. Now in 2019 average processing time is dropping fast.

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FEE EROSION WEBINAR (CONTINUED)

Representatives need to be prepared for what this material drop in average processing time may do to hearing level fees.

‘Dispos. Total’ figure to get a ratio of how much output (decisions) OHO is completing compared to how many inputs (requests for hearing) OHO is getting. If you crunch the numbers for all of 2019 you’ll find year to date OHO completed 1.56x more decisions than it was fed new cases requesting a hearing. In June you’ll see OHO performed better than the 2019 year average at 1.66x inputs.

How to Monitor Pending Backlog and Average Processing Time SSA publishes a national monthly report called ‘caseload analysis report’ that reports on both pending hearing backlog, and average processing time, among more than 20 other data points. This report is easily found in a Google search. Each report shows how last FY ended, and shows each month so far of this FY, along with a cumulative total for how this FY will end up.

Where does this end?

Several years ago SSA headlined a report with this quote “We plan to eliminate the hearing backlog by the end of FY 2021.” If you monitor their recent progress, and make estimates going forward you’ll find they are ahead of plan on this estimate.

To read the chart for pending hearing backlog data, find the row labeled ‘closing pending total.’

You’ll find that in FY 2018 it ended at 858,383 and then through June 2019 it is at 639,627 a reduction of 218,756 cases in 9 months. SSA is making fast progress on backlog, they have already beat their initial estimates they published several years ago.

On average processing time, SSA has published these estimates in their ‘CARES Plan.’ Here are the SSA estimates by year: FY 2019 averages 515 days, but last month ends at 460 days, FY 2020 average 390 days, but last month ends at 330 days, and FY 2021 averages 280 days, but last month ends at 270 days.

To read the chart for average processing time, find the row labeled ‘average proc. time.’ You’ll see that FY 2018 closed at 595 days, and through June 2019 average processing time is now at 485 days, a 110 days eliminated in 9 months.

SSA assumptions within their estimates One would assume SSA made some assumptions with their long term estimates on the two figures cited above. Our best guess is that these SSA estimates imply the national economy will remain strong, with no major recession or high unemployment, leading inputs (new applications) to remain similar to current levels, and for ALJ rate of output (decisions) to remain far greater than inputs for several years.

What would 3 months cut out of a hearing level fee be worth to you?

There are other data points you may also want to monitor on this report. I like to monitor the ‘ALJ dispos. daily per avail. ALJ’ you’ll see it is a ratio that takes into account many data points on the report. This metric shows you how SSA got more output growing month over month in late 2018 and early 2019 as the last batch of ALJs that were hired were trained up to full production. I also like to watch the ‘total O/T hours’ row to see how much overtime OHO is using. Recently we heard on ‘ALJ Pro Board’ that OHO overtime was reduced or eliminated, and the June report appears to validate this rumor. Note how much it’s down in June compared to earlier months.

But what if we change some facts, would it give us updated estimates? One could imagine many things that may blow up SSA’s estimates. What about if a recession comes and a lot more claimants apply for disability? What if lots of ALJs quit or take early retirement? Or if OHO productivity drops fast, maybe people at OHO get worried about “working themselves out of a job.” Yes, the SSA estimates could be revised if facts change, but check the numbers to model your scenario.

What will this cost a representative?

One of the critical numbers you should be monitoring on this report requires you to make a ratio of two numbers reported. You want to compare the ‘adjusted receipts’ figure to the NADR NEWS

There are lots of variables in how different representatives run their business. We cannot say 12

THIRD QUARTER 2019

FEE EROSION WEBINAR (CONTINUED)

exactly how much this will hurt a typical rep. Or what will be the likely erosion on a representative’s average fee. Or when will fees start to erode as a result of faster average processing time.

topics that we could each do in the face of this challenge. Maybe increasing percentage of agency level claims may help. Many reps may consider saving 2019 profits for tougher times ahead, or talking to their bank about a line of credit to have ready in case you need it in the future. We noted that it’s in your interest to monitor these SSA metrics on pending backlog, and average processing times, to have a better idea what this will do to your business going forward. These are leading indicators to watch both on a national level, and on an OHO level where you practice, the data does vary by OHO to some extent.

Reps could be affected differently based on the geographic make up of their cases, there is variation among OHOs on these metrics. A rep’s case selection criteria, or percent of hearing level cases are both things that could be reasons this fee erosion could affect a rep more or less.

What about your business? Ask yourself what if my business lost 10% of the revenue from hearing level fees? What about 20%, or 30%? What can we change to lessen the problem? What could we change to be better ready for less revenue from hearing level claims?

Offer for Local OHO Data for NADR Members To help you see how the pending backlog and average processing speed has changed over time in your part of the country we’re willing to share some localized data by OHO. We use SSA national monthly data which contains details down to the OHO level to build a report for you that shows by month, pending backlog, average processing time, and hearing wait time. On average processing speed you will find most OHOs look similar to the national average, but when you look OHO by OHO you can find some OHOs going much faster than average and others that are still taking longer to hold a hearing.

Let’s get through this together To get ahead of potential problems from fee erosion we asked for participation from the group on the webinar and we got some great suggestions to add to the lists we offered as a starting point. We discussed what we could each do in our own office in these large areas: increasing revenue, decreasing expenses, and updating business processes.

On ways to increase revenue we noted it may be time to diversify, and seek more revenue from non SSA sources like Medicare Advantage and other options. A great idea about the Ticket to Work program was mentioned by a participant. Maybe more referrals of potential clients you do not accept made to other reps? Consider asking clients for reimbursement of medical or other hard cost case expenses? Maybe start to cover hearings for a fee in your local area for non-local firms. What else are good options for new revenue for an SSDI rep?

Send an email to jeyestone@heardandsmith.com and let me know what local OHOs and we’ll send you the localized reports

On ways to decrease expenses we discussed more efficient staff or labor utilization, more efficient marketing and intake (new client acquisition), lower costs per hearing, or maybe updating the geographic region serviced to align with less overnight travel (to lower the cost to serve an area.)

What else would be reasonable places to save money for a rep that would not impair your ability to deliver great service to clients?

We also discussed a few process changes, or other NADR NEWS

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NADR NEWS

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NADR NEWS

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NADR MENTORING GUIDE (For MENTO R

S and MENT

EES)

Board of Director s 2014-2015 President Robert McDowell Elizabethtown, KY Vice President Steve Skinner Redding, CA

Mentor Guide Sub-Committee, Earline

Secretary Philip Litteral Ashland, KY

Marchand, and the following folks on her

Treasurer Michael Wener Memphis, TN

Committee for their hard work on the production of the NADR Mentoring Guide.

Directors-at-Large Karen Starr Grand Rapids, MI Greg Cates Memphis, TN

Please consider signing uptio as a Mentor or a NADR Na

Patty Sexton Wauna, WA

Mentee after

Barbara Manna Pittsburgh, PA

nal Office PO Box 96503 #3 0550 Washithrough reading the guidelines. ngton, DC 2009 0-6503

We are hopeful that this will be another

NADR National Offi ce Administrators Eva Sirman 202-822-2155 eva@nadr.org Julie Phelps 202-822-2155 admin@nadr.or g

NADR PO Box 96503 Washington, DC 20090-6503 Phone: (202) 822 -2155 Fax (972) 245-67 01 Web Site: www.n adr.org

NADR NEWS

NADR would like to thank the chair of the

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invalualbe NADR member benefit.

Mentor Guide Sub-Committee Earline D. Marchand Carol Balderee Sherrell Rodgers Steven Gragg Brandy Bowdry Dedra Wood THIRD QUARTER 2019

a Sirman 2-822-2155 a@nadr.org

lie Phelps 2-822-2155 min@nadr.org

ADR

Box 96503 ashington, DC 20090-6503 one: (202) 822-2155 x (972) 245-6701 eb Site: www.nadr.org

BOARD OF DIRECTORS 2018 - 2019

President C. Greg Cates, EdD., ADR Memphis, TN

Vice President Michael Wener, ADR Memphis, TN

Secretary Clifford Berkley, ADR Fullerton, CA

Treasurer Christopher Mazzulli, ADR Baltimore, MD

Director At Large Kelly Blad, ADR Cook, MN

Director At Large Melissa Smith, ADR St. Louis, MO

Director At Large Meredith Marcus

Director At Large Sherrell Rodgers

Director At Large Carl Groves

NADR News is published by NADR and is the property of the National Association of Disability Representatives. Copyright 2016, NADR. The articles appearing in the NADR News do not necessarily reflect the opinions of NADR. The accuracy and content of each article is the responsibility of the individual writer.

NADR NEWS

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