The city of North Las Vegas is staffing a new division to handle workers’ compensation cases after the city’s budget for the claims ballooned over the past five years.
From fiscal years 2014 to 2019, the city’s budget for workers’ compensation rose from about $2.8 million to more than $8 million, records provided by the city show.
The city had to continually increase reserves for workers’ compensation payments over the past several years, North Las Vegas spokeswoman Delen Goldberg said.
Goldberg said Mayor John Lee’s administration had to focus on stopping the financial bleed in North Las Vegas for years, but now that the city’s economy has stabilized, officials can focus on fixing other issues.
Officials blame the rising costs on the high price of litigation, a lack of understanding from employees on the claim-filing process, a growing workforce, inadequate investigations of claims and a 2017 change in Nevada law.
Shaun Meng, a workers’ compensation attorney who is consulting with the city, said the law in part changed the tables used to calculate permanent disability by the state division that oversees workers’ compensation claims. It was the first change in 30 years, he said, causing the interest calculation to increase.
“The permanent disability awards went up substantially because of that change in the law,” Meng said.
Dalton Hooks, Meng’s partner, said the change in the law also allows for injured employees to seek more than one medical evaluation after filing a claim.
The intent, he said, was to streamline the process and close cases more quickly. But now some cases that were near closure are being revived by getting additional medical evaluations. Meng said these evaluations are not for medical treatment, but are tools for litigation.
Goldberg said another major reason for the increased costs came from payouts in two deaths of public safety workers.
About $3.8 million over the past two fiscal years was dedicated to two cases where public safety workers died, including North Las Vegas Police Department detective Chad Parque, who was struck and killed by a wrong-way driver in 2017. Months earlier, a North Las Vegas Fire Department captain, Yaphet Miller, died after collapsing in the line of duty.
Goldberg also said the city has added several hundred employees since 2013, resulting in more cases. The total number of claims for fiscal years 2014 to 2018 ranged between 85 to 144.
Although most people do the right thing, a small minority tried to take advantage of previous system, she said.
Officials also noticed disproportionate responses to some minor claims, such as taking an ambulances for minor injuries. The city also found cases of employees claiming they could not perform their work duties while doing equally strenuous activities outside of work, Goldberg said.
In part, those types of cases fell through the cracks because the city did not have systems in place to thoroughly review the claims, Goldberg said.
“In the past, our ability to investigate cases was not as robust as it could have been,” she said.
There is no way for the city to quantify suspected fraudulent cases from the past, but officials have not referred any cases to the attorney general’s office since it began looking into rising workers’ compensations costs last year, she said.
Goldberg said some claims were not so much deception as they were about employees not knowing the process of filing a claim. That’s where the new division comes in.
Newly hired Risk and Liability Manager Alonzo Johnson told council members he plans to take the approach to the claims back to the basics and improve customer service for employees. The new division will focus on education before an injury occurs and assistance throughout the claim process in case of an injury.
Under the previous workers’ compensation system, information was spread across multiple departments, Goldberg said. A $300,000 contract the City Council approved with a risk management software developer this month will centralize all workers’ compensation information.
“It was a weak system and we recognized that and we fixed it,” Goldberg said.