The impact of claimant representation fee schedules on the disability applicant process and recipient outcomes

Abstract

The paper found that: (1) After the maximum representative fee threshold increases in 2002 and 2009, claimants for whom these fee thresholds were more likely to be binding initially observed increases in the number of months they waited between entitlement and award date on the order of 0.7 and 0.4 months respectively. (2) After the maximum representative fee increases, estimated representative benefits also increase for these same claimants. (3) There is also bunching or heaping in the number of months claimants wait from entitlement to award around the point where wait times would push 25 percent of past due benefits over the maximum representative fee threshold. This is the point where representative marginal revenue becomes zero. (4) The policy changes occur in 2002 and 2009, which also happen to correspond to national economic recessions. We find similar patterns when we control for gender by education, by region-specific employment-to-population ratios, and claimant region and education. This would suggest the patterns are not driven by secular economic trends.