MEMORANDUM AND RECOMMENDATION

ROBERT B. JONES, JR., Magistrate Judge.

This matter is before the court on the parties' cross-motions for judgment on the pleadings [DE-12, -16] pursuant to Fed. R. Civ. P. 12(c). Claimant filed this action pursuant to 42 U.S.C. §§ 405(g), 1383(c)(3) seeking judicial review of the denial of his application for a period of disability and Disability Insurance Benefits ("DIB"). The time for filing responsive briefing has expired, and the pending motions are ripe for adjudication. Having carefully reviewed the administrative record and the motions and memoranda submitted by the parties, it is recommended that Claimant's Motion for Judgment on the Pleadings be allowed, Defendant's Motion for Judgment on the Pleadings be denied, and the matter be remanded to the Commissioner for further proceedings.

I. STATEMENT OF THE CASE

Claimant protectively filed an application for a period of disability and DIB on May 23, 2014, alleging disability beginning October 1, 2013. (R. 294-95). His claim was denied initially and upon reconsideration. (R. 163-90). A hearing was held before the Administrative Law Judge ("ALJ") on November 4, 2015, when Claimant, represented by counsel, testified, and the hearing was continued to allow for expert testimony and for the submission of additional medical evidence. (R. 113-62). A second hearing was held on March 10, 2016, at which Claimant, represented by counsel, a medical expert ("ME"), and a vocational expert ("VE") appeared and testified. (R. 46-108). On February 1, 2017, the ALJ issued a decision denying Claimant's request for benefits. (R. 22-45). On April 17, 2017, the Appeals Council denied Claimant's request for review. (R. 1-6). Claimant then filed a complaint in this court seeking review of the now-final administrative decision.

II. STANDARD OF REVIEW

The scope of judicial review of a final agency decision regarding disability benefits under the Social Security Act ("Act"), 42 U.S.C. § 301 et seq., is limited to determining whether substantial evidence supports the Commissioner's factual findings and whether the decision was reached through the application of the correct legal standards. See Coffinan v. Bowen, 829 F.2d 514, 517 (4th Cir. 1987). "The findings of the Commissioner . . . as to any fact, if supported by substantial evidence, shall be conclusive. . . ." 42 U.S.C. § 405(g). Substantial evidence is "evidence which a reasoning mind would accept as sufficient to support a particular conclusion." Laws v. Celebrezze, 368 F.2d 640, 642 (4th Cir. 1966). While substantial evidence is not a "large or considerable amount of evidence," Pierce v. Underwood, 487 U.S. 552, 565 (1988), it is "more than a mere scintilla . . . and somewhat less than a preponderance." Laws, 368 F.2d at 642. "In reviewing for substantial evidence, [the court should not] undertake to re-weigh conflicting evidence, make credibility determinations, or substitute [its] judgment for that of the [Commissioner]." Mastro v. Apfel, 270 F.3d 171, 176 (4th Cir. 2001) (quoting Craig v. Chater, 76 F.3d 585, 589 (4th Cir. 1996), superseded by regulation on other grounds, 20 C.F.R. § 416.927(d)(2)). Rather, in conducting the "substantial evidence" inquiry, the court's review is limited to whether the ALJ analyzed the relevant evidence and sufficiently explained his or her findings and rationale in crediting the evidence. Sterling Smokeless Coal Co. v. Akers, 131 F.3d 438, 439-40 (4th Cir. 1997).

III. DISABILITY EVALUATION PROCESS

The disability determination is based on a five-step sequential evaluation process as set forth in 20 C.F.R. § 404.1520 under which the ALJ is to evaluate a claim:

Albright v. Comm'r of the SSA, 174 F.3d 473, 475 n.2 (4th Cir. 1999). "If an applicant's claim fails at any step of the process, the ALJ need not advance to the subsequent steps." Pass v. Chafer, 65 F.3d 1200, 1203 (4th Cir. 1995) (citation omitted). The burden of proof and production during the first four steps of the inquiry rests on the claimant. Id. At the fifth step, the burden shifts to the ALJ to show that other work exists in the national economy which the claimant can perform. Id.

When assessing the severity of mental impairments, the ALJ must do so in accordance with the "special technique" described in 20 C.F.R. § 404.1520a(b)-(c). This regulatory scheme identifies four broad functional areas in which the ALJ rates the degree of functional limitation resulting from a claimant's mental impairment(s): understand, remember, or apply information; interact with others; concentrate, persist, or maintain pace; and adapt or manage oneself. Id. § 404.1520a(c)(3). The ALJ is required to incorporate into his written decision pertinent findings and conclusions based on the "special technique." Id. § 404.1520a(e)(4).

In this case, Claimant alleges the following errors by the ALJ: (1) failure to classify Claimant's mental impairments as severe impairments; (2) improper assessment of Claimant's residual functional capacity ("RFC"); and (3) failure to pose a hypothetical that adequately reflected Claimant's RFC. Pl.'s Mem. [DE-13] at 12.

IV. ALJ'S FINDINGS

Applying the above-described sequential evaluation process, the ALJ found Claimant "not disabled" as defined in the Act. At step one, the ALJ found Claimant had not engaged in substantial gainful employment during the period from his alleged onset date through his date last insured. (R. 27). Next,' the ALJ determined Claimant had the following severe impairments: status-post left (nondominant) rotator cuff repair by history, and status-post lumbar spine decompression. (R. 28). The ALJ also found Claimant had the following non-severe impairments: depression secondary to pain; adjustment disorder; post-traumatic stress disorder; and major depressive disorder. Id. However, at step three, the ALJ concluded these impairments were not severe enough, either individually or in combination, to meet or medically equal one of the listed impairments in 20 C.F.R. Part 404, Subpart P, Appendix 1. (R. 29-30). Applying the technique prescribed by the regulations, the ALJ found that Claimant's mental impairments had resulted in mild limitation in understanding, remembering, or applying information, interacting with others, concentrating, persisting, and maintaining pace, and adapting or managing himself. (R. 28-29). Prior to proceeding to step four, the ALJ assessed Claimant's RFC, finding Claimant had the ability to perform light work1 with postural and environmental restrictions as follows:

(R. 30-38).

At step four, the ALJ concluded Claimant did have the RFC to perform the requirements of his past relevant work as a manager, financial institution or a branch manager. (R. 38). Accordingly, the ALJ concluded that Claimant was not disabled from October 1, 2013, through the date of the decision. Id.

V. DISCUSSION

A. The ALJ's severity determination is not supported by substantial evidence.

At step two of the sequential evaluation process, the claimant bears the burden of demonstrating a severe, medically determinable impairment that has lasted or is expected to last for a continuous period of at least twelve months. 20 C.F.R. §§ 404.1509, 404.1520(a)(4)(ii); Bowen v. Yuckert, 482 U.S. 137, 140, 146 n.5 (1987). The Act and regulations describe "a physical or mental impairment" as "an impairment that results from anatomical, physiological, or psychological abnormalities which are demonstrable by medically acceptable clinical and laboratory diagnostic techniques." 42 U.S.C. § 423(d)(3); 20 C.F.R. § 404.1508.2 The regulations further require that physical or mental impairments must be established by medical evidence consisting of signs, symptoms, and laboratory findings, not only by [a claimant's] statement of symptoms." 20 C.F.R. § 404.1508. An impairment is "severe" unless it "has such minimal effect on the individual that it would not be expected to interfere with the individual's ability to work, irrespective of age, education, or work experience." Evans v. Heckler, 734 F.2d 1012, 1014 (4th Cir. 1984). As such, the "severity standard is a slight one." Stemple v. Astrue, 475 F.Supp.2d 527, 536 (D. Md. 2007); see also McDaniel v. Bowen, 800 F.2d 1026, 1031 (11th Cir. 1986) (describing the burden of proving the severity of an impairment as "mild" and stating "only claims based on the most trivial impairments" are rejected).

In his discussion at step two, the ALJ considered Claimant's mental impairments but determined they were non-severe. (R. 28). The ALJ cited only the opinions of Michele King, Psy.D., a psychological examining consultant, and Dr. Anderson, the ME, to conclude that Claimant's depression secondary to pain, adjustment disorder, post-traumatic stress disorder, and major depressive disorder do not cause more than minimal limitation in Claimant's ability to perform basic mental work activities and therefore are non-severe. Id. Specifically, the ALJ stated the following:

Id. Substantial evidence does not support the ALJ's finding that Claimant's mental impairments had such a minimal effect on Claimant that they would not be expected to interfere with his ability to do basic work activities. See Evans, 734 F.2d at 1014-15; 20 C.F.R. § 404.1521(a).

Claimant's medical history contains evidence that his depression and PTSD are severe impairments. In reviewing the records, the court notes the following: on August 13, 2014, Dr. Keplinger noted Claimant's dysthymic, congruent affect, and diagnosed Claimant with unspecified depressive disorder (R. 578-81); on August 19, 2014, Dr. McGrath noted Claimant's dysthymic, consistent mood/affect and diagnosed Claimant with major depressive disorder, moderate (R. 569); on September 10, 2014, Dr. Mankad noted that Claimant "look[ed] more depressed than anxious" and diagnosed Claimant with unspecified depressive disorder based on mental status alone (R. 563); on December 30, 2014, Dr. Hong diagnosed Claimant with depression and treated Claimant through October 2015 (R. 668, 671, 676, 691, 720-21, 724, 760-61, 763, 780, 803, 877, 900); and on May 5, 2015, Dr. Ruffin diagnosed Claimant with PTSD (R. 1110-13). Claimant has been prescribed Bupropion, Sertraline, Trazodone, Prazosin, and Diphenhydramine to treat his mental impairments (R. 1281-94), as well as attended one-on-one treatment, (R. 668, 671, 676, 691, 720-21, 724, 760-61, 763, 780, 803, 877, 900).

At the hearing, Claimant testified that he stopped working due to his back pain, as well as not being "able to focus anymore on anything" and "the anxiety . . . getting worse." (R. 123). Further, the ALJ specifically asked Claimant about his depression, which he rated as an eight out of ten in the last two years with medication. (R. 134-35). However, at the outset of the ALJ's examination of Claimant regarding his mental impairments, the ALJ noted that evidence cited by Claimant was missing from the record, and directed the rest of his questions at Claimant's counsel regarding a supplemental hearing. (R. 135-45). In response to questions from his counsel, Claimant testified that he "hear[s] things quite a bit," that he asked the hearing reporter about his seating location because he is "kind of cautious of people blowing in doors or people just walking in doors and something happening," he only sleeps up to four hours a night due to nightmares, and he spends his days sitting around waiting for his wife to return home from work. (R. 151-55). At the supplemental hearing, the ALJ called a psychological ME to testify regarding Claimant's mental impairments. (R 56-73). Upon questioning, the ME agreed with the diagnosis of PTSD in the record-the ME was never explicitly asked by the ALJ if he agreed with the diagnosis of depression- and assigned only mild limitation in the paragraph B criteria. (R. 59-61). The ME testified that he "saw that [Claimant] was . . . prescribed Prazosin, which is often very effect[ive] with working this kind of case," (R. 64), and that "the depression was [Claimant's] primary symptom," (R. 66). In response to counsel's questioning, the ME stated that he found Dr. Crowe's opinion that Claimant "would do better with simple tasks" credible. (R. 68).

"Courts have found that treatment of anxiety and depression with prescription medication may suggest the presence of a medically determinable impairment." Jones v. Berryhill, No. 5:17-CV-91-D, ` WL 774035, at *4 (E.D.N.C. Jan. 24, `) (citations omitted). The evidence shows that Claimant sought treatment, reported his anxiety and depression symptoms to his medical providers, and his providers routinely prescribed medications. His diagnoses and treatment by providers with prescription medications, coupled with Claimant's testimony regarding how these conditions affect his social functioning, establish that there is evidence not addressed by the ALJ at step two that could support a finding that his depression and PTSD are severe impairments. See id at *5.

Generally, an error at step two in failing to properly consider whether an impairment is severe may be harmless where the ALJ considers that impairment in subsequent steps. Jones v. Astrue, No. 5:07-CV-452-FL, 2009 WL 455414, at *2 (E.D.N.C. Feb. 23, 2009). Provided that the claimant has at least one severe impairment, the ALJ must consider the combined effect of all of the claimant's impairments, irrespective of whether they are severe, in determining the claimant's RFC. 20 C.F.R. § 404.1545(e); Walker v. Bowen, 889 F.2d 47, 49 (4th Cir. 1989). Here, the ALJ cursorily discussed Claimant's mental impairments in the RFC section of the decision, and his conclusion that they required no limitation in the RFC are not supported by substantial evidence. The ALJ noted Claimant's testimony, and stated that it was not supported by the record, as discussed above. He then cited medical records from Dr. McGrath, Dr. Mankad, Dr. McVay, Dr. Walker, and Claimant's DD Form 214. (R. 35). However, the ALJ focused his discussion exclusively on potential contradictions in Claimant's account of what he experienced in Turkey during his military service in the United States Army. Id. Nowhere in this discussion does the ALJ discuss the doctors' diagnoses, treatment plans, or prescriptions. Rather, the ALJ parses through these records to determine whether or not Claimant has told a cohesive story about a perceived trauma he experienced during his military service, and then concludes by stating the following:

(R. 35-36). The ALJ's analysis does not comport with S.S.R. 16-3p regarding evaluation of Claimant's symptoms, which requires an ALJ to consider the "objective medical evidence, daily activities, allegations of pain and aggravating factors, functional limitations, and treatment in evaluating the claimant's subjective symptoms," S.S.R. 16-3p, 2016 WL 1119029 (Mar. 16, 2016) (effective Mar. 28, 2016), rather than the coherence of Claimant's account of his military service.

Further, on July 2, 2015, the Department of Veterans Affairs ("VA") rated Claimant 100% disabled due to his PTSD with persistent depressive disorder and persistent major depressive episode based on: (1) total occupational and social impairment; (2) difficulty in adapting to work; (3) neglect of personal appearance and hygiene; (4) difficulty in adapting to stressful circumstances; (5) inability to establish and maintain effective relationships; (6) disturbances of motivation and mood; (7) difficulty in establishing and maintaining effective work and social relationships; (8) impairment of short- and long-term memory; (9) forgetting to complete tasks; (10) retention of only highly learned material; (11) forgetting directions; (12) forgetting recent events; (13) forgetting names; (14) depressed mood; (15) chronic sleep impairment; (16) anxiety; and (17) suspiciousness. (R. 460-61). The ALJ discussed the 100% disability rating from the VA, although he did not address what particular impairments formed the basis of the VA's decision. (R. 33). Instead, he discounted the 100% disability rating, assigning it "some weight," and stated that the "VA impairment chart does not consider any vocational effects the impairments might produce," and therefore "the VA's conclusion that the claimant is 100% disabled . . . is not interpreted as meaning that the claimant can absolutely do no work." Id. In Bird, the Fourth Circuit noted that "both the VA and the Social Security programs serve the same governmental purpose of providing benefits to persons unable to work because of a serious disability." 699 F.3d at 343 (citation omitted). "Thus, . . . in making a disability determination, the SSA must give substantial weight to a VA disability rating" unless the record clearly demonstrates that a lesser weight is appropriate. Id. ("[B]ecause the SSA employs its own standards for evaluating a claimant's alleged disability . . . an ALJ may give less weight to a VA disability rating when the record before the ALJ clearly demonstrates that such a deviation is appropriate."). Here, the ALJ's explanation for deviation from the "substantial weight" presumption is insufficient where he failed to demonstrate how the record supports a lesser weight.

Lastly, the ALJ discussed the opinion evidence of record. (R. 36-37). With respect to Claimant's mental impairments, the ALJ assigned "significant weight" to the opinion of the ME, Dr. Anderson, stating that his "testimony was uncontradicted, consistent with the evidence, and, given the psychologist's professional credentials, persuasive." (R. 36). The ALJ noted that Dr. Anderson "has had no contact with the claimant and his focus on the medical evidence alone produced unbiased testimony." Id. Yet, the regulations provide that medical opinion evidence from treating providers are ordinarily assigned more weight, "since these sources are likely to be the medical professionals most able to provide a detailed, longitudinal picture" of a claimant's medical impairment. 20 C.F.R. § 404.1527(c)(2). The ALJ assigned "little weight" to the Initial Post Traumatic Stress Disorder Report by Dr. Crowe, stating that "it is based on facts that are not substantiated in the file." (R. 37). The ALJ does not specify the unsubstantiated facts. See Monroe v. Colvin, 826 F.3d 176, 190 (4th Cir. 2016) (holding cursory analysis of medical opinions precludes meaningful review by the court). However, as discussed above, Claimant's treatment records from the VA reflect clinical findings, damages, and treatment of Claimant's PTSD and depression. The ALJ accorded no limitation in the RFC to address Claimant's mental impairments where there is evidence in the record that would support such limitations. Accordingly, the court finds that the ALJ's error at step two was not harmless where the ALJ's findings and conclusions regarding Claimant's mental impairments at the subsequent steps are not supported by substantial evidence, and it is recommended this matter be remanded for further consideration of Claimant's mental impairments at step two and the subsequent steps.

The issues raised in Claimant's remaining assertions of error-improper assessment of Claimant's RFC and failure to pose a hypothetical that adequately reflected Claimant's RFC-may be impacted by the ALJ's further consideration of Claimant's mental impairments at step two. Accordingly, it is recommended that these issues receive additional consideration on remand, as necessary. See Jones v. Astrue, No. 5:11-CV-206-FL, 2012 WL 3580482, at *8 (E.D.N.C. Apr. 19, 2012) ("Because this court finds that remand on the issue of the treating physician's opinion will affect the remaining issues raised by Claimant, it does not address those arguments."), adopted by 2012 WL 3580054 (E.D.N.C. Aug. 17, 2012).

VI. CONCLUSION

For the reasons stated above, it is RECOMMENDED that Claimant's Motion for Judgment on the Pleadings [DE-12] be ALLOWED, Defendant's Motion for Judgment on the Pleadings [DE-16] be DENIED and the matter be remanded to the Commissioner for further proceedings.

IT IS DIRECTED that a copy of this Memorandum and Recommendation be served on each of the parties or, if represented, their counsel. Each party shall have until May 10, ` to file written objections to the Memorandum and Recommendation. The presiding district judge must conduct his or her own review (that is, make a de novo determination) of those portions of the Memorandum and Recommendation to which objection is properly made and may accept, reject, or modify the determinations in the Memorandum and Recommendation; receive further evidence; or return the matter to the magistrate judge with instructions. See, e.g., 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3); Local Civ. R. 1.1 (permitting modification of deadlines specified in local rules), 72.4(b), E.D.N.C. Any response to objections shall be filed within 14 days of the filing of the objections.

If a party does not file written objections to the Memorandum and Recommendation by the foregoing deadline, the party will be giving up the right to review of the Memorandum and Recommendation by the presiding district judge as described above, and the presiding district judge may enter an order or judgment based on the Memorandum and Recommendation without such review. In addition, the party's failure to file written objections by the foregoing deadline will bar the party from appealing to the Court of Appeals from an order or judgment of the presiding district judge based on the Memorandum and Recommendation. See Wright v. Collins, 766 F.2d 841, 846-47 (4th Cir. 1985).