REPORT AND RECOMMENDATION
LEONARD T. STRAND, Magistrate Judge.
Plaintiff Charity Figgins seeks judicial review of a final decision of the Commissioner of Social Security (the Commissioner) denying her applications for Social Security Disability Insurance benefits (DIB) and Supplemental Security Income benefits (SSI) under Titles II and XVI of the Social Security Act, 42 U.S.C. § 401 et seq. (Act). Figgins contends that the administrative record (AR) does not contain substantial evidence to support the Commissioner's decision that she was not disabled. For the reasons that follow, I recommend that the decision be reversed and remanded for further proceedings.
Figgins was born in 1984 and was 25 years old on her alleged disability onset date of November 5, 2010. AR 11, 232. She has a GED and past relevant work as a nurse aide and residential aide. AR 32, 352. She protectively filed her applications for DIB and SSI on November 5, 2010. AR 11. The applications were denied initially and on reconsideration. Id. Figgins then requested a hearing, which was conducted May 14, 2012, by Administrative Law Judge (ALJ) John Sandbothe. Id. Figgins testified during the hearing, as did her counselor and a vocational expert (VE). AR 30-59. The ALJ issued a decision denying Figgins's application on June 13, 2012. AR 11-21. On February 20, 2013, the Appeals Council denied Figgins's request for review. AR 1-3. As such, the ALJ's decision is the final decision of the Commissioner. AR 1; see also 20 C.F.R. §§ 404.981, 416.1481.
On April 16, 2013, Figgins commenced an action in this court seeking review of the ALJ's decision. This matter has been referred to me pursuant to 28 U.S.C. § 636(b)(1)(B) for the filing of a report and recommended disposition of the case. The parties have briefed the issues and the matter is now fully submitted.
III. DISABILITY DETERMINATIONS AND THE BURDEN OF PROOF
A disability is defined as the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which 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. 42 U.S.C. §§ 423(d)(1)(A), 1382c(a)(3)(A); 20 C.F.R. §§ 404.1505, 416.905. A claimant has a disability when the claimant is "not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists... in significant numbers either in the region where such individual lives or in several regions of the country." 42 U.S.C. §§ 423(d)(2)(A), 1382c(a)(3)(B).
To determine whether a claimant has a disability within the meaning of the Social Security Act, the Commissioner follows a five-step sequential evaluation process outlined in the regulations. 20 C.F.R. §§ 404.1520, 416.920; see Kirby v. Astrue, 500 F.3d 705, 707 (8th Cir. 2007). First, the Commissioner will consider a claimant's work activity. If the claimant is engaged in substantial gainful activity, then the claimant is not disabled. 20 C.F.R. §§ 404.1520(a)(4)(i), 416.920(a)(4)(i).
Second, if the claimant is not engaged in substantial gainful activity, the Commissioner looks to see "whether the claimant has a severe impairment that significantly limits the claimant's physical or mental ability to perform basic work activities." Dixon v. Barnhart, 353 F.3d 602, 605 (8th Cir. 2003). "An impairment is not severe if it amounts only to a slight abnormality that would not significantly limit the claimant's physical or mental ability to do basic work activities." Kirby, 500 F.3d at 707; see 20 C.F.R. §§ 404.1520(c), 404.1521(a), 416.920(c), 416.921(a).
The ability to do basic work activities is defined as "the abilities and aptitudes necessary to do most jobs." 20 C.F.R. §§ 404.1521(b), 416.921(b). These abilities and aptitudes include (1) physical functions such as walking, standing, sitting, lifting, pushing, pulling, reaching, carrying, or handling; (2) capacities for seeing, hearing, and speaking; (3) understanding, carrying out, and remembering simple instructions; (4) use of judgment; (5) responding appropriately to supervision, co-workers, and usual work situations; and (6) dealing with changes in a routine work setting. Id. §§ 404.1521(b)(1)-(6), 416.921(b)(1)-(6); see Bowen v. Yuckert, 482 U.S. 137, 141, 107 S.Ct. 2287, 2291 (1987). "The sequential evaluation process may be terminated at step two only when the claimant's impairment or combination of impairments would have no more than a minimal impact on her ability to work." Page v. Astrue, 484 F.3d 1040, 1043 (8th Cir. 2007) (internal quotation marks omitted).
Third, if the claimant has a severe impairment, then the Commissioner will consider the medical severity of the impairment. If the impairment meets or equals one of the presumptively disabling impairments listed in the regulations, then the claimant is considered disabled, regardless of age, education, and work experience. 20 C.F.R. §§ 404.1520(a)(4)(iii), 404.1520(d), 416.920(a)(4)(iii), 416.920(d); see Kelley v. Callahan, 133 F.3d 583, 588 (8th Cir. 1998).
Fourth, if the claimant's impairment is severe, but it does not meet or equal one of the presumptively disabling impairments, then the Commissioner will assess the claimant's residual functional capacity (RFC) to determine the claimant's "ability to meet the physical, mental, sensory, and other requirements" of the claimant's past relevant work. 20 C.F.R. §§ 404.1520(a)(4)(iv), 404.1545(a)(4), 416.920(a)(4)(iv), 416.945(a)(4). "RFC is a medical question defined wholly in terms of the claimant's physical ability to perform exertional tasks or, in other words, what the claimant can still do despite his or her physical or mental limitations." Lewis v. Barnhart, 353 F.3d 642, 646 (8th Cir. 2003) (internal quotation marks omitted); see 20 C.F.R. §§ 404.1545(a)(1), 416.945(a)(1). The claimant is responsible for providing evidence the Commissioner will use to make a finding as to the claimant's RFC, but the Commissioner is responsible for developing the claimant's "complete medical history, including arranging for a consultative examination(s) if necessary, and making every reasonable effort to help [the claimant] get medical reports from [the claimant's] own medical sources." 20 C.F.R. §§ 404.1545(a)(3), 416.945(a)(3). The Commissioner also will consider certain non-medical evidence and other evidence listed in the regulations. See id. If a claimant retains the RFC to perform past relevant work, then the claimant is not disabled. Id. §§ 404.1520(a)(4)(iv), 416.920(a)(4)(iv).
Fifth, if the claimant's RFC will not allow the claimant to perform past relevant work, then the burden shifts to the Commissioner to prove that there is other work that the claimant can do, given the claimant's RFC as determined at Step Four, and his or her age, education, and work experience. See Bladow v. Apfel, 205 F.3d 356, 358-59 n.5 (8th Cir. 2000). The Commissioner must prove not only that the claimant's RFC will allow the claimant to make an adjustment to other work, but also that the other work exists in significant numbers in the national economy. Eichelberger v. Barnhart, 390 F.3d 584, 591 (8th Cir. 2004); 20 C.F.R. §§ 404.1520(a)(4)(v), 416.920(a)(4)(v). If the claimant can make an adjustment to other work that exists in significant numbers in the national economy, then the Commissioner will find the claimant is not disabled. If the claimant cannot make an adjustment to other work, then the Commissioner will find that the claimant is disabled. 20 C.F.R. §§ 404.1520(a)(4)(v), 416.920(a)(4)(v). At Step Five, even though the burden of production shifts to the Commissioner, the burden of persuasion to prove disability remains on the claimant. Stormo v. Barnhart, 377 F.3d 801, 806 (8th Cir. 2004).
IV. SUMMARY OF ALJ'S DECISION
The ALJ made the following findings:
(1) The claimant meets the insured status requirements of the Social Security Act through June 30, 2013.
(2) The claimant has not engaged in substantial gainful activity since November 5, 2010, the alleged onset date (20 CFR 404.1571 et seq., and 416.971 et seq. ).
(3) The claimant has the following severe impairments: hepatitis C, bipolar disorder, anxiety, obesity, borderline personality disorder, and history of substance abuse (20 CFR 404.1520(c) and 416.920(c)).
(4) The claimant does not have an impairment or combination of impairments that meets or medically equals the severity of one of the listed impairments in 20 CFR Part 404, Subpart P, Appendix 1 (20 CFR 404.1520(d), 404.1525, 404.1526, 416.920(d), 416.925, and 416.926).
(5) After careful consideration of the entire record, the undersigned finds that the claimant has the residual functional capacity to perform medium work as defined in 20 CFR 404.1567(c) and 416.967(c), as she is able to lift or carry 50 pounds occasionally and 25 pounds frequently but is limited to simple, routine, repetitive work with superficial contact with the public and no more than a regular pace.
(6) The claimant is unable to perform any past relevant work (20 CFR 404.1565 and 416.965).
(7) The claimant was born on November 21, 1984 and was 25 years old, which is defined as a younger individual age 18-49, on the alleged disability onset date (20 CFR 404.1563 and 416.963).
(8) The claimant has at least a high school education and is able to communicate in English (20 CFR 404.1564 and 416.964).
(9) Transferability of job skills is not material to the determination of disability because using the Medical-Vocational Rules as a framework supports a finding that the claimant is "not disabled, " whether or not the claimant has transferable job skills (See SSR 82-41 and 20 CFR Part 404, Subpart P, Appendix 2).
(10) Considering the claimant's age, education, work experience, and residual functional capacity, there are jobs that exist in significant numbers in the national economy that the claimant can perform (20 CFR 404.1569, 404.1569a, 416.969, and 416.969a).
(11) The claimant has not been under a disability, as defined in the Social Security Act, from November 5, 2010 through the date of this decision (20 CFR 404.1520(g) and 416.920(g)).
AR 13-21. At Step Two, the ALJ found all of Figgins's claimed impairments (hepatitis C, bipolar disorder, anxiety, obesity, borderline personality disorder, and history of substance abuse) to be severe, as they cause more than minimal limitations in her ability to perform work-related activities. AR 13. At Step Three, the ALJ found that none of Figgins's impairments, individually or in combination, met or equaled one of the listed impairments in 20 CFR Part 404, Subpart P, Appendix 1. AR 14. With regard to the physical impairments of hepatitis C and obesity, the ALJ noted that no evidence indicates limitations or complications sufficient to satisfy any listing. Id. Figgins does not challenge this finding.
As for mental impairments, the ALJ stated that he considered listings 12.04, 12.06, 12.08 and 12.09, and concluded that Figgins's impairments do not meet those listings. Id. He first analyzed the "paragraph B" criteria, noting that to satisfy these criteria the impairments must cause at least two "marked" limitations or one "marked" limitation and "repeated" episodes of decompensation. Id. A "marked" limitation is one that is more than moderate but less than extreme. Id. The ALJ found that Figgins had no restrictions concerning activities of daily living, mild difficulties in social functioning and moderate difficulties with regard to concentration, persistence or pace. Id. The ALJ also found that Figgins had experienced no episodes of decompensation which have been of extended duration. Id. Therefore, the ALJ found the paragraph B criteria were not satisfied. AR 15. He also stated that he had considered the "paragraph C" criteria and that the evidence failed to establish those criteria, as well. Id. Figgins does not challenge any of these findings.
At Step Four, the ALJ provided a residual functional capacity (RFC) assessment and found that Figgins had the RFC to perform medium work except that she is limited to simple, routine, repetitive work with superficial contact with the public and no more than a regular pace. Id. In explaining this determination, the ALJ first addressed the credibility of Figgins's statements concerning the disabling effects of her impairments. AR 15. He referenced the relevant factors for weighing a claimant's credibility and concluded that her statements were not credible to the extent that they were inconsistent with his RFC determination. Id. He provided the following reasons for this finding: (1) Figgins's allegations of total disability are inconsistent with the objective medical evidence, (2) her own statements concerning her activities indicate that her symptoms are not as severe as alleged, (3) Figgins's ability to work on a part-time basis and her efforts to find full-time employment were inconsistent with her allegations and (4) the medical opinions, as weighted by the ALJ, do not support Figgins's allegations. AR 16-19.
With regard to the medical evidence, the ALJ acknowledged that it "reflect[s] a long history of depression, bipolar disorder, borderline personality disorder, and substance use including methamphetamines, cocaine, marijuana, and alcohol." AR 16. He noted, however, that she completed addiction treatment in August 2010 and that she receives ongoing therapy to manage her mental health symptoms. Id. The ALJ pointed out that Figgins's treating psychiatrist, Dr. Ramos, managed her symptoms with medication and, in December 2010, found that she demonstrated a good mood, full affect, no suicidal or homicidal thoughts and no paranoia. Id. At the same time, however, Dr. Ramos expressed concern about Figgins's use of marijuana. AR 548. Indeed, she had stopped taking her prescription medication (Risperdal) and instead was smoking marijuana three times a day, declaring it to be "the wonder drug." Id. Dr. Ramos counseled Figgins to stop using marijuana and prescribed Invega as an alternative. Id.
The ALJ next discussed Figgins's visits to the emergency room in January 2011, where she reported anxiety and feelings of hopelessness and worthlessness. AR 16. Figgins denied having suicidal ideation but indicated that she was still smoking marijuana daily. AR 556. After her second visit in three days she was admitted to the hospital and discharged one day later. AR 556-66. The Minnesota Multiphasic Personality Inventory-2 test was administered but produced invalid results "due to a rather exaggerated response pattern." AR 564.
The ALJ noted that Figgins was admitted again, this time for several days, in June 2011. AR 17. This resulted from a suicide attempt involving an overdose of Tylenol. AR 17, 614, 680-81, 687-90. Upon admission she was having a very difficult time controlling her emotions but had stabilized enough to be released five days later. AR 682. She returned to the emergency room in August 2011, stating that she was out of her prescription medication and was feeling anxious and angry. AR 669.
The ALJ next noted that progress reports during 2011 by Dr. Ramos and Judy Johnson, a nurse practitioner, indicated Figgins was doing reasonably well while on her medications. AR 17. By December 2011, Figgins reported that she was feeling much better and was hoping to be reunited with her children, who were in foster care. AR 17, 653. She also stated that she was looking for work and was attending school online on a full-time basis. AR 17, 654.
As for Figgins's reports of her daily activities, the ALJ noted that she acknowledged being able to "do everything at times." AR 19. He also described Figgins's reports that she likes being around people she knows, cares for her personal hygiene, prepares meals, shops, performs household chores and drives a car. Id. In addition, the ALJ noted that Figgins watches movies and television, takes part in arts and crafts activities, plays video games with friends and enjoys putting on makeup and singing. Id. Moreover, by the time of the hearing Figgins had custody of her children and testified that her daily activities include taking care of them and going to the store. AR 19, 41-42.
With regard to opinion evidence, the ALJ first discussed questionnaires completed by Nurse Johnson in May 2012, in which she reported that Figgins has difficulty managing stress in the workplace, has only fair-to-poor work-related abilities and should be limited to no more than part-time work. AR 17, 716-21. The ALJ found that this opinion was not entitled to great weight because (a) Nurse Johnson is not an acceptable medical source and (b) her assessment is not supported by either the evidence of record or Nurse Johnson's own treatment notes. AR 17.
A psychologist, Dr. Harper, provided opinions based on an evaluation of Figgins in August 2011 regarding her parenting abilities. Id. He diagnosed major depressive disorder, generalized anxiety disorder, borderline personality disorder and marijuana dependence. AR 17, 593-605. Dr. Harper found that Figgins was not capable of caring for her children and that she needed intensive mental health treatment. AR 603. He opined that her mental health issues were likely to interfere with her ability to maintain employment and recommended that she seek disability benefits. AR 604. The ALJ determined that Dr. Harper's opinions were not entitled to great weight. AR 18. He noted that the evaluation was conducted to determine Figgins's parenting abilities, not her ability to function in the workplace. He also found that Dr. Harper's opinion as to Figgins's ability to work was inconsistent with the evidence of record. Id.
Dr. Vos, a social worker, saw Figgins for regular therapy sessions beginning in February 2011. AR 17. In May 2012, Dr. Vos prepared a written opinion indicating that Figgins has serious limitations in her ability to function and noting that Figgins suffered from considerable stress and anxiety while working part-time for two months. AR 18, 707-09. Like Dr. Harper, Dr. Vos concluded that Figgins's mental health problems would continue to interfere with her ability to be employed. AR 709. The ALJ found that Dr. Vos's opinions were not entitled to great weight. AR 18. He noted that Dr. Vos's own records indicated that Figgins was stable and was making excellent progress. Id. He also found that Dr. Vos's opinions were inconsistent with other evidence in the record. Id.
The ALJ then discussed opinions provided by state agency consultants based on their review of Figgins's records. A medical consultant, Dr. Weis, found that Figgins's physical impairments of hepatitis C and obesity did not prevent her from being able to perform medium work. AR 19. Two psychological consultants, Dr. Wright and Dr. Tashner, found that Figgins had no more than moderate functional limitations, including moderate limitations in (a) the ability to carry out detailed instructions, (b) the ability to work in coordination with or in proximity to others without becoming distracted, (c) the ability to complete a workday and workweek without interruptions from psychological symptoms and (d) the ability to perform at a consistent pace without an unreasonable number and length of rest periods. AR 19, 80-83, 587. The ALJ found that the opinions of the psychological consultants were entitled to substantial weight because they were supported by the medical evidence, Figgins's work activities and her daily activities. AR 19.
After determining Figgins's RFC, he found that the limitations included in that RFC prevent her from performing any of her past relevant work. Id. This required the ALJ to proceed to Step Five and determine whether Figgins is able to perform other jobs that exist in significant numbers in the national economy. AR 20. Based on the VE's answers to hypothetical questions that incorporated Figgins's age, education, work experience and RFC, the ALJ found the answer to be "yes." AR 20-21. The VE's testimony indicated that Figgins was capable of performing such positions as ...