The opinion of the court was delivered by: VANARTSDALEN
This is an action under the Social Security Act (Act), 42 U.S.C. §§ 405(g) and 1383(c) (3), to review the final decision of the Secretary of Health and Human Services (Secretary) terminating claimant Musgrove's Supplemental Security Income (SSI) benefits and denying her application for Social Security Disability (SSA) benefits. For the reasons which follow, the decision of the Secretary to terminate SSI benefits will be reversed and the decision of the Secretary to deny SSA benefits will be remanded for further proceedings.
SSI Benefits -- Termination
Claimant Musgrove began receiving SSI benefits at the time of the inception of the SSI program in January 1974. On June 3, 1980, she was notified that her medical condition was not disabling as of August 1979 and that she was last disabled for SSI benefits in October 1979. As a result, her SSI benefits were terminated. The claimant appealed and on February 2, 1981, a hearing was held before an ALJ. Claimant and her attorney attended that hearing. Following the hearing, the ALJ determined that, for purposes of SSI benefits, the claimant could not return to her former employment as a sewing machine operator but did retain the residual functional capacity to do sedentary work as defined by the Act. He determined that she was therefore not disabled under the Act as of August 1979. Subsequently, the Appeals Council upheld the decision of the ALJ and the decision became the final one of the Secretary as of July 21, 1981.
The issue of what must be shown before the Secretary may terminate disability benefits has not yet been addressed by the court of appeals for this circuit. I have in a previous opinion been guided by the Court of Appeals for the First Circuit in Miranda v. Secretary of Health, Education and Welfare, 514 F.2d 996 (1st Cir. 1975). See Shaw v. Schweiker, 536 F. Supp. 79 (E.D. Pa. 1982). The Miranda court held that
once having found a disability, the Secretary may not terminate the benefits without substantial evidence to justify so doing. This will normally consist of current evidence showing that a claimant has improved to the point of being able to engage in substantial gainful activity; but it might also consist of evidence that claimant's condition is not as serious as was at first supposed.
Miranda, supra at 998 (emphasis added). Miranda thus permits termination only upon the Secretary presenting substantial evidence that proves either (1) improvement to the point where the claimant is able to engage in substantial gainful activity or (2) claimant's condition is "not as serious as was first supposed." In Shaw, supra, I concluded that the second ground for termination applies only to those situations involving newly discovered evidence or a clearly erroneous interpretation of evidence in the initial granting of benefits. After a final determination of disability, if a termination of benefits is effected without a showing of either improvement or newly-discovered evidence, such a termination must necessarily be based on whim, caprice or an impermissible relitigation of facts and determinations already finally decided.
Elsewhere in this circuit, Judge Ziegler of the Western District of Pennsylvania held in accord with the First Circuit when he determined that, before benefits may be terminated, there must be substantial evidence amounting to a showing of improvement. Timblin v. Harris, 498 F. Supp. 1107, 1108 (W.D. Pa. 1980).
Early this year, the Court of Appeals for the Ninth Circuit addressed the issue of the appropriate legal standard in "cessation" or "termination" cases. See Patti v. Schweiker, 669 F.2d 582, 586-87 (9th Cir. 1982). The Ninth Circuit held that, once the Secretary has determined that a claimant's disability has ceased, the burden of proof to establish otherwise lies with the claimant, since the claimant's burden is a continuing one which does not shift after an initial ruling of disability. However, "in an appropriate case . . . a prior ruling of disability can give rise to a presumption that the disability still exists. 'Once evidence has been presented which supports a finding that a given condition exists, it is presumed in the absence of proof to the contrary that the condition has remained unchanged.'" Id. at 586-87, quoting Rivas v. Weinberger, 475 F.2d 255, 258 (5th Cir. 1973). Thus, the burden of proof does not shift from the claimant, but the existence of the presumption following an initial determination of disability serves to "impose 'on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption.'" Patti, supra at 587, quoting Fed. R. Evid. 301. See also Rivas, supra, and Prevette v. Richardson, 316 F. Supp. 144, 146 (D.S.C. 1970) (Once claimant meets initial burden of proving disability, in the absence of proof to contrary, there is presumption that the condition of the claimant remains unchanged).
I find the Patti decision to be consistent with my holding in Shaw and the decision of the First Circuit in Miranda. Assuming that a valid initial determination of disability was made by the Secretary in regard to Mrs. Musgrove, she is entitled to a presumption that her disability still exists, although the burden is still on her to prove her case:
This determination as to the appropriate standard of law to be applied in cessation cases does not, however, resolve the dispute before me.
Because of the circumstances surrounding Mrs. Musgrove's entry into the SSI program, an issue is raised as to whether there was, in fact, an initial determination by the Secretary of Mrs. Musgrove's disability. Mrs. Musgrove was officially put on the Pennsylvania state disability rolls in late 1973. At the inception of the federal SSI program in January 1974, Mrs. Musgrove was transferred to the federal SSI disability rolls as a result of a one-time transfer of persons disabled under state programs to SSI. A brief review of the legislative history of the SSI program and this one-time transfer under which individuals like Mrs. Musgrove became SSI recipients provides necessary background.
In October 1972, Congress repealed the categorical assistance program which had provided federal grants to state-administered disability programs. Finnegan v. Matthews, 641 F.2d 1340, 1342 (9th Cir. 1981); 42 U.S.C. § 1351-55, Pub. L. No. 92-603, 86 Stat. 1484 § 303 (repealed October 30, 1972). At the same time Congress provided for a program entitled Supplemental Security Income for Aged, Blind and Disabled (SSI), in which the federal government assumed the burden of providing benefits directly to certain disabled individuals and established uniform eligibility criteria. The SSI program became effective in January 1974. 42 U.S.C. §§ 1381-83.
In its original form, the SSI program included a "grandfather clause," which provided that persons who, in December 1973, were receiving benefits under a state plan which had been in effect as of October 1972 would automatically be considered disabled for purposes of the SSI program. Pub. L. No. 92-603; Finnegan, supra at 1342; Tatum v. Mathews, 541 F.2d 161, 163 (6th Cir. 1976); Ryan v. Shea, 525 F.2d 268, 270 (10th Cir. 1975). On December 31, 1973, one day before the SSI program was to go into effect, the grandfather clause was amended in response to the perceived "wholesale" number of persons who had been entered onto state disability rolls in anticipation of the automatic transfer to SSI rolls. The amendment or so-called "roll-back" provision required that, in order to qualify for automatic disability status under SSI, an applicant had to have received benefits under a state plan for at least one month before July 1, 1973, as well as in December 1973, and been continuously disabled under the state plan. Pub. L. No. 93-233, § 9 (December 31, 1973); Ryan, supra at 274; Johnson v. Mathews, 539 F.2d 1111, 1115 (8th Cir. 1976). In other words, after this amendment, individuals who were receiving state disability benefits as of December 1973 were conclusively presumed to meet federal standards only if they had also been receiving those benefit for at least one month prior to July 1973 and remained continuously disabled. Ryan, supra at 271; Johnson, supra at 1114. Thus, Mrs. Musgrove, who was admitted to the state disability program in late 1973 would not be automatically entitled to SSI benefits as a "grandfatheree" ("grandmotheree"?) and would not be conclusively presumed to be disabled under SSI.
The Secretary was then faced with the disposition of those individuals like Mrs. Musgrove, termed "rollback cases," who had been on state disability rolls as of December 1973 but not before July 1, 1973. In order to avoid a harsh result to these individuals, the Secretary utilized a statutory provision, "ostensibly aimed at initial applicants who were found presumptively disabled, to continue payments to persons who had not yet been initially determined to be qualified." Johnson, supra at 1115; see 42 U.S.C. § 1383(a) (4) (B). By regulation, the Secretary classified rollback cases as presumptively disabled, which permitted them to receive benefits for up to three months until an initial determination of eligibility could be made. See 20 C.F.R. § 416.954. When it became apparent that three months was not a sufficient time within which to process rollback cases and make initial determinations of SSI eligibility, Congress, recognizing that abrupt cessation would be harsh, provided that pending determination of eligibility the Secretary could continue to pay presumptive benefits to rollback cases until the end of 1974. Pub. L. No. 93-256, § 1 (Mar. 28, 1974); Ryan, supra at 271. Under the presumptive disability status of rollback cases, once the Secretary made a determination that an individual was not disabled under SSI ...