McCoy v. Commissioner of Social Security Administration

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Regina Mae McCoy,
Plaintiff,
v.
Commissioner of Social Security
Administration,
Defendant.
No. CV-25-02060-PHX-SPL (JZB)
REPORT AND RECOMMENDATION
TO THE HONORABLE STEVEN. P. LOGAN, UNITED STATES DISTRICT
JUDGE:
Plaintiff seeks judicial review of a decision by the Commissioner of the Social
Security Administration (“SSA”) ceasing her Social Security Disability Insurance
(“SSDI”) benefits.1 (Doc. 1 at 2.) Plaintiff also seeks a decision “reinstat[ing her] Medicare
and remov[ing] the overpayment of $144,000.” (Doc. 14 at 2.) Plaintiff has filed her
Opening Brief (doc. 14), and Defendant filed a Response (doc. 22). Plaintiff did not file a
Reply, and the time to do so has passed. See LRCiv 16.1(d).
Because the parties agree that the Administrative Law Judge (“ALJ”) committed
harmful legal error when “the ALJ did not properly consider whether medical improvement
had occurred,” (doc. 22 at 2), the Court recommends that the ALJ’s decision be reversed.
Because there are “outstanding issues on which further proceedings in the administrative
court would be useful,” Leon v. Berryhill, 880 F.3d 1041, 1044 (9th Cir. 2017), the Court
1 The Court issues the instant Report and Recommendation pursuant to the June 27,
2025, Order of the District Court. (Doc. 11.)
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recommends reversal of the Commissioner’s decision for further proceedings.
Furthermore, because Plaintiff’s request for reinstating Medicare and removing the
$144,000 overpayment are not properly before the Court, the Court recommends these
claims be dismissed without prejudice.
I. Background.
Plaintiff was born in 1969. (Administrative Record (“AR”) at 23.) Plaintiff’s highest
level of education was two years of college. (Id. at 41.) Plaintiff “has no past relevant
work.” (AR at 23.)
On December 21, 2007, Plaintiff “was found to have a closed period of disablilty
[sic.] beginning on December 5, 2003 through March 31, 2005 and then was found disabled
beginning on November 14, 2006.” (Id. at 16.) This decision was known as the Comparison
Point Decision (“CPD”).2 (Id. at 18.)
“On January 17, 2018, [the Commissioner] determined that [Plaintiff] was no longer
disabled since January 17, 2018.” (Id. at 16.) This decision was upheld upon
reconsideration in 2018. (Id. at 26–27.) Following the decision on reconsideration, Plaintiff
sought an administrative hearing and decision on her terminated benefits, which
culminated in an adverse decision on December 14, 2022, upholding the Commissioner’s
findings that Plaintiff was no longer disabled. (Id. at 25–28.)
Plaintiff appealed the December 14, 2022, ALJ decision in McCoy v. Comm’r of
Soc. Sec. Admin., 2:23-cv-01531-JAT (D. Ariz. 2023). (Id. 1164–67.) In her original
2 As the AR notes:
At the time of the CPD, the claimant had the following medically
determinable impairments: mood disorder, panic disorder, fibromyalgia,
migraine headaches, and mild sleep apnea. These impairments were found to
result in the residual functional capacity to the claimant had the residual
functional capacity to perform a full range of work at all exertional levels but
was unable to perform activities within a schedule, maintain regular
attendance, and be punctual within customary tolerances; sustain an ordinary
routine without special supervision; work in coordination with or proximity
to others without being distracted by them; get along with coworkers or peers
without distracting them or exhibiting behavioral extremes; and be aware of
normal hazards and take appropriate precautions.
(AR at 18) (emphasis removed).
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appeal, Plaintiff sought remand for a new hearing and appointment of counsel. (Id. at
1169.) Defendant agreed that remand was warranted but argued that appointment of
counsel was unwarranted. (Id. at 1170.) The District Court reversed the Commissioner’s
decision and remanded the case for further proceedings. (Id. at 1170); McCoy v. Comm’r
of Soc. Sec. Admin., 2:23-cv-01531-JAT, at *2 (D. Ariz. Feb. 2, 2024).
On March 26, 2025, the ALJ, upon remand, upheld the Commissioner’s
determination that Plaintiff’s disability ended on January 17, 2018. (AR at 1093–107.)
II. ALJ’s Eight-Step Process.
To be eligible for SSDI benefits, a claimant must show that: (1) they suffer “from a
medically determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of not less than
twelve months”; and (2) “the impairment renders [them] incapable of performing the work
[they] previously performed and incapable of performing any other substantial gainful
employment that exists in the national economy.” Tackett v. Apfel, 180 F.3d 1094, 1098
(9th Cir. 1999) (citing 42 U.S.C. § 423(d)(2)(A)). If both elements are fulfilled, the
claimant is disabled under the meaning of the Social Security Act. Apfel, 180 F.3d at 1098.
Because Plaintiff is presenting a Title II claim, the Court will apply the requisite
eight-step evaluation process. See 20 C.F.R. § 404.1594(f)(1)–(8). The eight-step
evaluation process proceeds as follow:
At step 1 of the Title II evaluation, the ALJ determines whether the
claimant is engaging in substantial gainful activity. 20 C.F.R. §
404.1594(f)(1). If so, the claimant is no longer disabled. Id. If not, the ALJ
proceeds to step 2 (step 1 for the Title XVI evaluation). Id. § 404.1594(f)(2).
At step 2, the ALJ determines if the claimant has an impairment or
combination of impairments which meets or equals the severity of an
impairment listed in Appendix 1 to 20 C.F.R. § 404, subpart P. Id. If so, the
claimant is still disabled. Id. If not, the ALJ proceeds to step 3. Id. §
404.1594(f)(3).
At step 3, the ALJ determines if there has been medical improvement
as shown by a decrease in medical severity. Id. If so, the ALJ proceeds to
step 4. Id. If not, the ALJ skips to step 5. Id.
At step 4, the ALJ determines if the medical improvement is related
to the claimant’s ability to do work, i.e., if there has been an increase in the
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claimant’s residual functioning capacity. Id. § 404.1594(f)(4). If so, the ALJ
skips to step 6. Id. If not, the ALJ proceeds to step 5. Id.
At step 5, the ALJ determines whether any exceptions in 20 C.F.R. §§
404.1594(d), (e) apply. Id. § 404.1594(f)(5). If none apply, the claimant is
still disabled. Id. If an exception in 20 C.F.R. § 404.1594(e) applies, the
claimant is no longer disabled. Id. If an exception in 20 C.F.R. § 404.1594(d)
applies, the ALJ proceeds to step 6. Id.
At step 6, the ALJ determines whether all of the claimant’s current
impairments in combination are severe. Id. § 1594(f)(6). If not, the claimant
is no longer disabled. Id. If so, the ALJ proceeds to step 7. Id.
At step 7, the ALJ assesses the claimant’s residual functioning
capacity and determines whether the claimant can perform past work. Id. §
404.1594(f)(7). If so, the claimant is no longer disabled. Id. If not, the ALJ
proceeds to step 8. Id. § 404.1594(f)(8).
At step 8, the ALJ determines whether the claimant can perform any
other work given the claimant’s residual functioning capacity, age,
education, and past work experience. Id. If so, the claimant is no longer
disabled. Id. If not, the claimant is still disabled. Id.
Martinez v. Comm’r of Soc. Sec. Admin., No. CV-22-01644-PHX-DJH, 2024 WL
1298433, at *1–2 (D. Ariz. Mar. 27, 2024) (cleaned up).
At step one, the ALJ found that Plaintiff “ha[d] not engaged in substantial gainful
Activity. (AR at 1098.) At step two, the ALJ found that Plaintiff had “not had an
impairment or combination of impairments which met or medically equaled the severity of
an impairment listed in 20 CFR Part 404, Subpart P, Appendix 1.” (Id. at 1099.) At steps
three and four, the ALJ found that medical improvement occurred on January 17, 2018,
and this improvement made it so Plaintiff “had the residual functional capacity to perform
light work.” (Id. at 1102.)
The ALJ then proceeded to step 6, noting that “[s]ince January 17, 2018, the
claimant has continued to have a severe impairment or combination of impairments.” (Id.)
At step seven, the ALJ found that Plaintiff “had the residual functional capacity to perform
light work[.]” (Id. at 1103.) At step 8, the ALJ found that based off of the evidence in the
record, Plaintiff was no longer disabled as of January 17, 2018. (Id. at 1106–07.)
III. Standard of Review.
“In reviewing a decision of the Commissioner, the Court only reviews issues raised
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by the party challenging the decision.” King v. Comm’r of Soc. Sec. Admin., No. CV-19-
05669-PHX-SPL, 2020 WL 5587429, at *2 (D. Ariz. Sept. 18, 2020) (citing Carmickle v.
Comm’r of Soc. Sec. Admin., 533 F.3d 1155, 1161 (9th Cir. 2008)). The Court will only set
aside a “denial of Social Security benefits only when the ALJ decision is based on legal
error or not supported by substantial evidence in the record.” Trevizo v. Berryhill, 871 F.3d
664, 674 (9th Cir. 2017) (cleaned up).
Regarding legal errors, the Court will uphold the decision where that error was
harmless. See Treichler v. Comm’r of Soc. Sec. Admin., 775 F.3d 1090, 1099 (9th Cir.
2014). “An error is harmless if it is inconsequential to the ultimate nondisability
determination . . . or if the agency’s path may reasonably be discerned, even if the agency
explains its decision with less than ideal clarity.” Id. (cleaned up) (citing Alaska Dep’t of
Env’t Conservation v. Env’t Prot. Agency, 540 U.S. 461, 497 (2004)). Additionally, “[w]e
review only the reasons provided by the ALJ in the disability determination and may not
affirm the ALJ on a ground upon which he did not rely.” Garrison v. Colvin, 759 F.3d 995,
1010 (9th Cir. 2014).
IV. Discussion.
There are three matters at issue in the parties’ submissions. First, whether the case
should be remanded due to harmful legal error. Second, whether this case should be
remanded for further proceedings or for payment of benefits under the credit-as-true
standard. Third, whether this Court may reinstate Plaintiff’s Medicare and remove the
$144,000 overpayment.
A. Harmful Legal Error.
Both parties submit that the ALJ committed harmful legal error by improperly
considering whether medical improvements have occurred. See (doc. 14 at 2); see also
(doc. 22 a 2.) While neither party provides a detailed explanation of how the ALJ erred in
improperly considering whether medical improvements have occurred, considering the
parties’ agreement on this matter, paired with the Court’s review of the record, supports
such a finding.
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A recipient of social security benefits may have those benefits revoked “if there is
substantial evidence of medical improvement that makes the individual able to engage in
substantial gainful activity.” Uribe v. Comm’r of Soc. Sec. Admin., No. CV-24-01210-
PHX-DGC, 2025 WL 2152891, at *2 (D. Ariz. July 30, 2025). “Medical improvement is
defined as ‘any decrease in the medical severity’ of a recipient’s impairment, and requires
a ‘comparison of prior and current medical evidence which must show that there have been
changes (improvement) in the symptoms, signs or laboratory findings associated with that
impairment.’” Attmore v. Colvin, 827 F.3d 872, 875 (9th Cir. 2016) (cleaned up) (quoting
20 C.F.R. § 404.1594(b)(1), (c)(1)).
The Commissioner has the burden of establishing that medical improvement has
occurred. See Murray v. Heckler, 722 F.2d 499, 500 (9th Cir. 1983). “When assessing
whether there has been medical improvement in a closed period case such as this one, the
ALJ ‘should compare the medical evidence used to determine that the claimant was
disabled with the medical evidence existing at the time of asserted medical improvement.’”
Uribe, 2025 WL 2152891, at *2 (quoting Attmore, 827 F.3d at 874). The ALJ must
examine such evidence in “the broader context of [Plaintiff’s] impairment.” Attmore, 827
F.3d at 877. The ALJ should not base its decision on an isolated period, considering that
“[i]mprovement[s] in such impairments that [are] only temporary will not warrant a finding
of medical improvement.” 20 C.F.R. § 404.1594(c)(3)(iv) (“In some cases the evidence
shows that an individual’s impairments are subject to temporary remission. In assessing
whether medical improvement has occurred in persons with this type of impairment, [the
Commissioner] will be careful to consider the longitudinal history of the impairments,
including the occurrence of prior remission, and prospects for future worsenings.”).
In analyzing the record and the ALJ’s determination, the Court finds that the ALJ
improperly considered medical improvements based on isolated instances. For example,
the ALJ noted that initially, Plaintiff “showed stiffness on range of motion testing, 18/18
positive fibromyalgia tender points, migraine headaches, and mild sleep apnea,” but that
“[m]ore recent examinations revealed only eight or 12 out of 18 positive tender points.”
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(AR 1102.) The ALJ likewise reviewed isolated points for all of Plaintiff’s conditions,
physical and mental. See (id.)
Reviewing these isolated instances of medical improvement as opposed to sustained
improvement amounts to legal error, especially regarding mental impairments. See Uribe,
2025 WL 2152891, at *2 (“Isolated signs of improvement are not sufficient. The evidence
must show sustained improvement. This is particularly important in cases involving mental
impairments, which often wax and wane over time. Improved functioning while being
treated and while limiting environmental stressors does not always mean that a claimant
can function effectively in a workplace.”) (cleaned up).
Because the parties agree that the ALJ improperly analyzed medical and mental
improvement, and considering the administrative record supports this finding, the Court
recommends the case be remanded.
B. Credit-as-True.
The issue in dispute is whether this matter should be remanded for further
proceedings or for payment of benefits under the credit-as-true standard. Generally, “the
proper course, except in rare circumstances, is to remand to the agency for additional
investigation or explanation.” Benecke v. Barnhart, 379 F.3d 587, 595 (9th Cir. 2004)
(emphasis added) (quoting Immigr. & Naturalization Servs. v. Ventura, 537 U.S. 12, 16
(2002)). However, when an ALJ has committed reversable error, the Court may “remand
for further proceedings or for an award of benefits is within our discretion.” Holohan v.
Massanari, 246 F.3d 1195, 1210 (9th Cir. 2001); Garrison, 759 F.39 at 1019 (“[I]n
appropriate circumstances[,] courts are free to reverse and remand a determination by the
Commissioner with instructions to calculate and award benefits.”). However, “[a] claimant
is not entitled to benefits under the [Social Security Act] unless the claimant is, in fact,
disabled, no matter how egregious the ALJ’s errors may be.” Strauss v. Comm’r of the Soc.
Sec. Admin., 635 F.3d 1135, 1138 (9th Cir. 2011) (citing Briscoe ex rel. Taylor v. Barnhart,
425 F.3d 345, 357 (7th Cir. 2005) (“Obduracy is not a ground on which to award benefits;
the evidence properly in the record must demonstrate disability.”)).
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To determine whether it is appropriate to remand back to the ALJ to calculate and
award benefits, the Court applies the credit-as-true standard, which requires that:
(1) the record has been fully developed and further administrative
proceedings would serve no useful purpose; (2) the ALJ has failed to provide
legally sufficient reasons for rejecting evidence, whether claimant testimony
or medical opinion; and (3) if the improperly discredited evidence were
credited as true, the ALJ would be required to find the claimant disabled on
remand.
Garrison, 759 F.3d at 1020.
In evaluating a claimant’s case under the credit-as-true analysis, the Court
“consider[s] whether the record as a whole is free from conflicts, ambiguities, or gaps,
whether all factual issues have been resolved, and whether the claimant’s entitlement to
benefits is clear under the applicable legal rules.” Treichler, 775 F.3d at 1103–04.
Accordingly, where it is “clear from the [AR] that the ALJ would be required to award
benefits if the claimant’s” proffered evidence was credited-as-true, the Court “may
remanded for an award of benefits instead of further proceeding[s.]” Id. at 1100.
The Court only has to reach the first Garrison step here to find that remanding for
further proceedings is warranted. For example, while Plaintiff asserts that she has “severe
asthma, . . . osteoarthritis, . . . scoliosis, [and] leaking hear valve[,]” (doc. 14 at 4), the
administrative record conflicts with this finding. See (AR. at 628, 630–31, 633–34, 789,
801–03, 808, 812, 815, 820, 938, 946, 952, 1445–46.) For example, these records note that
Plaintiff’s lungs appeared “[c]lear to auscultation, non-labored respiration, speaking full
sentences,” her musculoskeletal system presented “[n]ormal range of motion and strength
to all extremities, [and] no tenderness or swelling” and her heart had a “[n]ormal rate,
regular rhythm, [and] no murmur.” See, e.g., (doc. 918.) Such largely normal findings
include Plaintiff’s metal health, pulmonary health, and control of emotions. See, e.g., (AR
at 580, 606, 609, 636, 700.)
For the foregoing reasons, the Court finds that the administrative record is not free
from “from conflicts, ambiguities, or gaps,” and, accordingly, Plaintiff’s entitlement to
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benefits is” unclear “under the applicable legal rules.” Treichler, 775 F.3d at 1103–04.
Hence, the Court recommends the case be remanded for further proceedings.
C. Removal of Overpayment.
The last issue the Court will address is whether the Court may reinstate Plaintiff’s
Medicare and remove the $144,000 overpayment. For the following reasons, the Court
finds that reinstating Medicare and removing the overpayment is unwarranted here.
As an initial matter, the Court notes that the Social Security Act makes it clear that
whether an individual is entitled to benefits, whether overpayments exist, and whether
overpayments must be repaid, are separate “initial determinations.” See 20 C.F.R. §
404.902(a), (j), (k). Because they are separate initial determinations, “each initial
determination requires independent review and full exhaustion of administrative remedies
prior to seeking judicial review.” Manitsas v. Astrue, No. C 11-2691, 2012 WL 2503267,
at *2 (N.D. Cal. June 28, 2012), aff’d sub nom. Manitsas v. Colvin, 565 F. App’x 652 (9th
Cir. 2014); Romero v. Colvin, No. 13-CV-02471-MEJ, 2014 WL 573649, at *5 n.5 (N.D.
Cal. Feb. 12, 2014) (same).
There is a dearth of evidence before the Court that Plaintiff exhausted her
administrative remedies prior to seeking judicial review of her removal of Medicare or
overpayment. Because of this failure to provide any evidence of exhaustion of
administrative remedies on these matters, the Court recommends Plaintiff’s request for
reinstatement of Medicare and removal of overpayment be dismissed without prejudice.
Accordingly,
IT IS RECOMMENDED that the March 26, 2025, decision of the ALJ be
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.
IT IS FURTHER RECOMMENDED that Plaintiff’s request for reinstatement of
Medicare and removal of overpayment be DISMISSED WITHOUT PREJUDICE.
This recommendation is not an order that is immediately appealable to the Ninth
Circuit Court of Appeals. Any notice of appeal pursuant to Fed. R. App. P. 4(a)(1) should
not be filed until entry of the District Court’s judgment. The Parties shall have 14 days
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from the date of service of a copy of this recommendation within which to file specific
written objections with the Court. See 28 U.S.C. § 636(b)(1); see also Fed. R. Civ. P. 6,
72. Thereafter, the Parties have 14 days within which to file a response to the objections.
Failure to file timely objections to the Magistrate Judge’s Report and
Recommendation may result in the acceptance of the Report and Recommendation by the
District Court without further review. See United States v. Reyna-Tapia, 328 F.3d 1114,
1121 (9th Cir. 2003). Failure to file timely objections to any factual determinations of the
Magistrate Judge may be considered a waiver of a party’s right to appellate review of the
findings of fact in an order or judgment entered pursuant to the Magistrate Judge’s
recommendation. See Fed. R. Civ. P. 72.
Dated this 9th day of March, 2026.
Honorable John Z. Boyle
United States Magistrate Judge
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