Last year when I contacted the Research and Analysis Supervisor of the Workers' Compensation Section of the Industrial Insurance Regulation Section of the DIR, I was told that only 31 benefit penalties were issued in 2011. I just received statistical information for Fiscal Year 2013 (July 1, 2012 to July 1, 2013), and over this past year, only 8 benefit penalties were issued. Investigations were requested 963 times in the past fiscal year for the entire state of Nevada.
I was told that of the 779 DIR investigations that were completed in the last fiscal year, DIR found only 184 violations of the law by an insurer or TAP (third-party administrator). 70 complaints resulted in administration fines assessed, and only 8 resulted in a benefit penalty in some amount awarded to an injured worker I've asked some follow-up questions to determine how much money was actually collected in fines, and how much was actually paid to injured workers on assessed benefit penalties. I know from my discussions with other claimants' attorneys that most of those 8 benefit penalty cases are still in the appeals process, with the insurer and/or TAP fighting the penalty.
Filing a DIR complaint to allege that the industrial insurer is violating Nevada law governing work injuries is the only remedy available to an injured worker in Nevada. See NRS 616D.030. An injured worker cannot sue his employer or they employer's insurer for bad faith or negligence in paying benefits or delaying medical care. The Nevada legislature thought that injured workers would be adequately compensated by DIR awarding them benefit penalties, and that insurers would follow the law if they were subject to administrative fines. However, if only 70 fines were assessed in the 184 cases where insurers or TPA's violated the law, and only 8 benefit penalties were imposed, the current DIR complaint system does not provide any real incentive for insurers and their TPA's to administer workers' compensation claims correctly.