Changes proposed for ‘broken’ workers comp system

Nevada’s “broken” agency that handles the appeals process for injured workers’ compensation cases is in the midst of undergoing some major changes that could fix the problems in the department.

In September 2022, the Review-Journal reported issues including a backlog of cases in which injured workers wait months, if not years, to get the health care they need, an inefficient record system and complaints of staff not working as much as they should.

Since then, the department began to schedule hearings on Friday mornings to reduce the backlog, and proposed legislation could help give injured workers more options to resolve cases.

As of March 3, there are 12,689 open cases that the appeals office’s eight officers are reviewing, according to documents obtained by the Review-Journal through a public records request. In February 2023, appeals officers closed 433 cases.

New leaders have also taken over the department and hope to make changes. Jack Robb is the newly appointed director of the Department of Administration, which oversees the Hearings and Appeals Divisions, and hopes to make it run more efficiently.

Newly hired Senior Appeals Officer Dean Hardy, who took over after his predecessor retired, started on the role five days ago. Hardy came out of retirement to take the job, having previously worked in workers’ compensation.

“We are going to try to make this division efficient and responsive,” Hardy said during a public hearing Friday. “We cannot just simply allow the things that haven’t worked in the past to continue without looking at them and attempting to rectify them so that we can all succeed going forward.

The hearing was held in response to Republican Gov. Joe Lombardo’s executive order requiring all executive branch agencies, departments, boards and commissions to review their regulations by May 1 with a report on how their regulations can be streamlined, clarified or reduced.

Robb said Lombardo had returned to Carson City from a weekend in Las Vegas and handed him a copy of the Review-Journal’s story highlighting the inefficiencies in the department.

“If he took the time to bring me back a hardcopy of the paper, it’s high on my radar,” Robb said. “It needs to be there,” not just because of the media attention, but “because we owe the citizens, the employers and the insurance companies, we owe them better.”

Changes proposed

One issue with the system is the prevalence of repeatedly postponing a hearing for a different date. The proposed changes would make it so hearing can be continued only by the hearing officer with reasonable notice to the parties, or by the parties no less than five days before the scheduled hearing for good cause.

Deadlines for cases could also change with the new regulations, requiring all evidence to be produced within 90 days of the order granting discovery. Rulings on motions would also be streamlined.

If there is no activity by the parties during the course of the appeals process for 12 months, the appeals officer may dismiss the appeal without prejudice, the proposed regulations say.

The regulations also propose that if a hearing has not been conducted within three years after the initial filing, the appeals officer may dismiss it or impose sanctions for failing to comply with the regulations.

Some of the changes proposed in the regulations include issuing a fine of $500 per violation to be paid to the Division for the Fund for Workers’ Compensation and Safety if a party refuses to comply with regulations with the appropriate District Court.

Responses

Both those representing insurance companies and those representing injured workers expressed concerns with the proposed changes, although they all agreed the system needs to be changed.

“I think everybody’s a little bit unhappy with the way that the system is currently running,” said Shaun Meng, a Las Vegas attorney who focuses on workers’ compensation. “I think all parties are.”

Dalton Hooks, an attorney representing the Nevada Self Insurers Association, called the proposed changes regarding continuances “convoluted,” saying there would be a lot of arguing back and forth.

Jason Mills, the president-elect of the Nevada Justice Association’s board of governors, which is an organization of trial lawyers in Nevada, said the association opposes the proposed changes. He argued they are premature, as the Nevada Legislature is in session and will look at proposed legislation that would make changes to the system. He also argued the proposed changes are not robust enough and could weaken the hearings division.

Mills outlined problems such as the backlog of cases, an ineffective calendar system that is “broken,” a dysfunctional discovery process, years of no or insignificant pay raises for staff and insufficient institutional guidance and performance standards for the administrative law judges.

“We commend the hearings division, the appeals officers, the hearing officers in this valiant attempt … to finally begin to address these issues that we have been screaming about for years to the prior administration,” Mills said.

Herb Santos Jr., who is also with the Nevada Justice Association, suggested that a volunteer commission made up of stakeholders be created to address possible regulations with the goals of ensuring timely administration of justice.

“The current proposed regulations completely fail to adequately address the needs of the division,” Santos said. “And they fail to consider the impact of the regulations on the system as a whole and the parties.”

The proposed regulations will be submitted to the governor’s office for review by May 1, and the formal process of changing the regulations will start in July, Robb said. The Legislative Counsel Bureau will then take those changes to a workshop, followed by a hearing for adoption.

“There are so many shots at this process. It’s not even done,” Robb said. “This is a start, but it’s a good start.”

Contact Jessica Hill at jehill@reviewjournal.com. Follow @jess_hillyeah on Twitter.