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‘Purgatory’: Nevada’s injured workers outraged over case backlog

Updated October 6, 2022 - 10:25 am

Part-time Washoe County resident Kim Frankel decided it was time to go public with her story after she read the Las Vegas Review-Journal report on the backlog of injured worker cases.

“This really hit home with me. I have been in this broken system for approximately two years and three months. I understand why they wanted to remain anonymous, but it also fueled me to speak out. Injured workers should not be re-victimized, ashamed, scared and bullied into not having a voice,” said Frankel, who splits her time between Washoe County and staying with family in Oregon.

While she was on duty as a detective for the Washoe County sheriff’s office on June 25, 2020, a drunk driver hit her. The 16-year veteran of the department was taken to the emergency room, and a workers’ compensation claim was generated.

After delays in office referrals and treatments, Frankel was diagnosed about six months later with dystonia, a condition where muscles involuntarily contract and cause repetitive or twisting movements.

Although she won her workers’ comp case in the Nevada Department of Administration hearings and appeals offices as well as through the District Court, Frankel says she still has not received treatment for dystonia. Her case is ongoing and pending further litigation.

“I have been told by medical experts that dystonia treatment within the first three years was imperative, but I have been repeatedly denied the right to get the medical treatment I desperately need despite court orders,” Frankel said in an email interview. Because of her condition, she felt uncomfortable speaking and preferred writing her answers.

The Review-Journal talked with multiple injured workers who are waiting for their cases to be resolved. Some were waiting long before the pandemic slowed the process. One injured worker sent a letter to the Review-Journal writing that he has waited about five years for a determination in his case.

Nevada’s Department of Administration’s Hearings and Appeals Division, which handles those cases, says there is a backlog of about 3,274 cases as of mid-August, on top of another 10,568 open cases. (Backlogged cases are those which have yet to be scheduled for a hearing.) The division says it’s working to process the cases and eliminate the backlog.

While the department is run by the state — and its senior appeals officer is appointed by the governor — state officials do not have many concrete plans to reform the department. The delays, as the Review-Journal previously reported, may in part be due to officers in the hearing and appeals division not working as much as they should be.

But there are deeper problems within the worker compensation system that would require a systemic change, injured workers say.

Changes made

The Nevada Department of Administration’s hearings and appeals division, which handles the appeals that injured workers or their attorneys file when their claims get rejected, has made changes to address the backlog of cases.

Since the Review-Journal published its first article on the matter, the department announced it would schedule hearings on Friday mornings starting in early November, said Stephanie Klapstein, the public information officer for the Nevada Department of Administration, in an email to the newspaper.

The department, as previously reported, will get two additional hearing officers and two legal staff. Once those positions are filled, the department expects it can clear the backlog within three to four months, Klapstein said.

Hearings previously were not scheduled for Fridays, but according to an email Senior Appeals Officer Michelle Morgando sent to staff Sept. 24 that was obtained by the Review-Journal, Friday morning hearings “will continue until the backlog has been cleared.”

“Adding additional cases to the Hearing Officers’ current and future calendars will not sufficiently address the backlog,” Morgando wrote to the staff.

“The only viable option to address the backlog is to schedule Friday morning hearings. Thank you for your understanding and cooperation.”

The Department of Administration is also looking to move away from its dependence of paper files and toward an electronic filing and document management system. The department expects the request for funds to be on the legislative Interim Finance Committee’s agenda in October.

“The attorneys who practice before Hearings and Appeals have asked for this improvement, and we agree that it is important to make this investment in technology to improve efficiency and ease of customer interaction,” Klapstein said in the email. She declined to be interviewed by phone.

As the Hearings and Appeals Division at the Nevada Department of Administration is one of the only judicial organizations in the state still using paper filings, the electronic system will allow attorneys and others to file new cases electronically, saving workers, attorneys, insurance companies and other parties from compiling large paper packets that are filed in person at the offices, Klapstein said.

“You will note that we did not wait until the next regular legislative session to move to address the backlog. While the caseloads have been increasing over time, the big jump and when the backlog hit a critical point was from fiscal year 2021 to 2022,” she said.

A bigger problem

Those changes may decrease the backlog, but injured workers such as Frankel say the system as a whole is “broken.”

One injured worker said there is an issue with third-party administrators, insurance companies that self-insured employers hire to handle workers’ comp claims.

Some companies, especially large ones, including casinos, use third-party administrators so there is no appearance of impropriety. The city of Henderson, for instance, uses Cannon Cochran Management Services Inc. as a contractor to administer its workers’ compensation program, according to the city’s website.

The 31-year-old Las Vegas resident was working at Chick-fil-A on June 13, 2020, when he got hurt. He went to urgent care, where staff told him to see a specialist.

After three months of waiting with no contact from Sedgwick, a third party administrator for his employer’s insurance, he hired attorneys who helped him get an appointment with a hand specialist. The doctor told him there was nothing he could do and released him back to full duty at work. The worker got an independent medical examiner appeal, and a second doctor diagnosed him with trigger finger, a condition that makes your fingers or thumb catch or lock when you bend them.

“Because it was untreated and undiagnosed for so long, it developed into carpal tunnel syndrome,” said the 31-year-old, who requested he remain anonymous out of fear that identifying himself could hurt his case.

The second doctor recommended surgery, but coverage was denied. Then the worker received letters from Sedgwick that said because he did not see a doctor in a couple of months, it threatened to close his case and end his Temporary Total Disability payments, which compensate injured workers for lost wages due to work injury at about 66 percent of their monthly wages.

He tried to schedule doctor’s visits multiple times over a period of months, but they were denied. Finally, the worker saw a doctor who scheduled a surgery for his carpal tunnel, as well as tendinitis and nerve reconstruction for Sept. 22, 2022. Three and a half hours before his surgery, he got a phone call saying coverage for the procedure was denied. He is starting the process all over again.

“It feels like I’ve been abandoned, not able to use my right hand as I was before the accident. It makes me angry that insurance companies can use loopholes like hiring (third-party administrators) to use insurance in the state of Nevada,” the 31-year-old said.

He recommended to anyone who gets hurt on the job to find and hire an attorney immediately.

Sedgwick did not return requests for comment.

Frankel also has had issues with Washoe County’s third-party administrator, Cannon Cochran Management Services Inc., which did not return requests for comment.

Five days after her crash, a doctor diagnosed her with cervical whiplash, lumbar strain, ulnar neuropathy and vertigo. Referrals were sent to Cannon Cochran for physical therapy and an ear, nose and throat doctor. But Cannon Cochran did not secure an appointment for the referral for the ear, nose and throat physician, and a few months later, Frankel’s husband took her to the emergency room because she was vomiting, had vertigo and had developed claw hands.

When she finally found a doctor who would take workers’ compensation, Frankel was diagnosed with vertigo, upper extremity weakness and post-concussion syndrome. The ear, nose and throat specialist then put in a referral to a neurologist. On Dec. 2, 2020, six months after her crash, a neurologist diagnosed Frankel with vertigo, a concussion and dystonia.

“Washoe County should not have the right to act against doctors and court orders to provide treatment or compensation for industrial injuries. In my case, resulting in permanent, life-altering disability. Dystonia is like living in hell. Dystonia combined with being in the work comp system is purgatory,” Frankel said.

Washoe County Media and Communications Manager Bethany Drysdale said in an email that the matter is being handled by legal representation so she could not comment.

The bad faith clause

Problems with the workers’ compensation program in Nevada could stem from one change made decades ago: In 1993, the system was privatized.

Previously, the program was public and called the State Industrial Insurance System. Once it was privatized, private insurance companies could write policies, and an employer could be insured by Sedgwick, Farmers and others.

The privatization also removed what is called the “bad faith clause,” which refers to an insurer’s attempt to renege on its obligations to its clients, either through refusal to pay a policyholder’s legitimate claim or to investigate and process a claim within a reasonable period, according to investopedia.

Injured workers and their attorneys can file a complaint with the Department of Industrial Relations when insurance companies issue de facto denials or don’t respond to requests, but that is the only recourse they have.

Frankel wants to see recourse for “bad faith” claims handling that would include civil remedies, such as punitive damages charged against self-insured employers and third-party administrators.

Frankel has not received her disability payments, and on April 1, 2022, she was put on administrative leave without pay, requiring her to pay 100 percent of her health insurance premium, amounting to $957 per pay period, which is every two weeks.

“If injured workers had recourse for Bad Faith claims handling … third-party administrators and workers’ compensation insurers would do the right thing, including promptly, fairly and in good faith processing of claims including, medical treatment and financial assistance,” Frankel said.

Will state government do anything about it?

Asked what sort of changes, if any, members of the Legislature are planning to propose at the next legislative session to help address the backlog and the larger issues with the system, Assemblyman Steve Yeager, D-Las Vegas, pointed to the two new hearing officer positions and two new legal secretary positions that were approved Aug. 17.

“We certainly want to ensure that injured workers receive care in a timely manner,” Yeager said in an email. “I can’t really say what other solutions the 2023 Legislature might consider because we need to assess whether the above helps address the delays or whether there is further work to be done.”

Gov. Steve Sisolak was unavailable for an interview, but his spokesperson Meghin Delaney said in an email that the governor’s office is working to help decrease the backlog. It has worked with both the Department of Administration and attorneys in the field to help “find creative and meaningful solutions,” she said.

The governor’s office supported the request to fund two additional hearing officer positions and two legal support staff positions to increase the number of hearings available per week, Delaney said. She also mentioned the electronic calendaring system that will be proposed to the Interim Finance Committee.

The governor’s office corresponds regularly with the department, lawyers and other interested parties to “formulate collaborative strategies to make the entire system work quicker and better,” Delaney said.

But Frankel and others who were injured on the job want to see more changes to the system.

“I know there are treatments available,” Frankel said. “I also know my condition is now a permanent disability. I will never know if I would have recovered had I gotten the treatment recommended by medical experts. The workers’ comp system denied me this answer.”

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

A previous version of this story misstated the number of backlogged cases pending before the Department of Administration Hearings and Appeals Division.

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