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Indy Q&A: New DETR director Heather Korbulic on working through huge backlog of unemployment claims

Michelle Rindels
Michelle Rindels
CoronavirusEconomyState Government

Heather Korbulic was appointed to lead the Nevada Department of Employment, Training and Rehabilitation last week, as the agency grapples with record-shattering levels of unemployment claims and antiquated technological resources.

She’s no stranger to agencies with notorious technology problems. Beginning in 2016, she headed the Silver State Health Insurance Exchange — an agency plagued by high-profile IT failures and one that ultimately dumped a $75 million contract with vendor Xerox in 2014.

Since then, she’s led the state to regain control over its exchange technology infrastructure, saving money and giving Nevada the flexibility to take steps such as opening a special enrollment period during the pandemic. The federal government has declined to adopt such a measure and Nevada would have been bound to that approach had it not broken away from its previous model of partial federal control.

Her latest challenge is running an agency that has logged more than 412,000 initial claims for unemployment so far this year — a figure that represents more than 26 percent of the workforce in Nevada.

In March and April, the agency made about 219,000 “first payments” to claimants. That figure is about half the number of initial claims that have been filed.

Claimants, some of whom report no payments seven weeks after filing, have sharply criticized the department. They’re desperate for funds to pay their bills and put food on the table and exasperated at their inability to get through to staff when they call the agency.

In an interview on Tuesday, Korbulic discussed what her agency is doing to bring help to those stuck in limbo. Questions and answers have been lightly edited for length and clarity.

Why did you take this job at DETR? There are hundreds of thousands of people that are frustrated with the system right now.

I accepted the position when the governor asked me to kind of step in and help. Wasn't going to say no. And I've been talking to his staff over the duration of the COVID emergency and really asking if there was anything more I could do. And when he called me and asked me if I would do this, I absolutely agreed.

I'd suggest that my experience with state government and really understanding everything affiliated with managing and operating an agency is going to come in very handy. I understand the process and understand the legislative session. I understand policy. I know about HR at the state. So I think there's a lot of really good insight that comes from that.

What makes you qualified to lead this agency?

I think that my track record at the exchange, in terms of being a leader that was brave and creative thinking, is going to be pretty applicable over here.

The Affordable Care Act is [nothing] short of complicated. There's just a million different eligibility pivots that happen in the world of the Affordable Care Act. And it's very similar here. I'm learning quickly about all of the Department of Labor rules and the nuances of guidance for unemployment benefits. And I think that I'm well-equipped to learn quickly and ... lead through a crisis period.

And let's just not leave the elephant in the room about technology. I think the demonstrated project that we did at the exchange this last year where we transitioned from as a real trailblazing state — thankfully that was a successful endeavor and ended up saving the state money and really giving us the control we were looking for. 

I think that whether I wanted it or not, that technology chops that I built up has really become valuable and absolutely applicable to this world.

Gov. Steve Sisolak has said DETR is building capacity to handle the increased volume of claims. Last we heard, there were about 200 workers who can handle claims. Has that number gone up or down?

I don't know the exact numbers, but I can tell you what I know about how we're building capacity and how we're thinking through things. We're really kind of working on three strains right now, which are the three most critical parts of the COVID crisis and what it's created for DETR.

So we have the overwhelming and unparalleled volume that is basically hitting a legacy, archaic system that has been problematic from launch. Right there we're working on not only stabilizing the existing systems, but building code … to address the backlog of claims that need adjudication.

There are very stringent requirements from the Department of Labor for traditional UI benefits. And I'm talking traditional versus the Pandemic Unemployment Assistance. For the traditional UI benefits, you must adjudicate … a very specific menu of items.

And one of the things that is clear is that there are opportunities for us to try to find ways to approve those claims that are sitting, waiting for adjudication — because that pile grows daily, in an automated way — and then try to do some of the adjudication on the back end. 

So two of the major automated jobs that we've done over the last two weeks has been clearing out a bunch of our claims that were being held up because … there was some problem related to how they answered their questions about availability for work — which of course is not applicable during the COVID time.

And so that that was something that we were able to process, in an automated fashion, a massive amount of claims by basically coding. We're in a real interesting tech place. So we're ... writing code to find out how to alleviate and process claims.

And then there were a bunch of people who had put in information which they needed to indicate that their employer paid them out vacation or sick leave. And that generates a requirement for DETR to do an adjudication. 

We have cleared a bunch of those claims that will come back to adjudication on the back end rather than having that claimant wait for that. 

So should there be an issue in that adjudication process on the back end, is it possible that some of these folks would have to pay back the benefits that they were wrongly paid? *

We’re being very careful in our cost/benefit analysis on adjudicating claims on the back end. We want to get claimants connected to benefits, but until we adjudicate we will not know precisely what they’re eligible for.

Rather than delaying their claim, we are prioritizing connecting them to funds with the risk that some people who are in this category will be owed additional funds, or will have been given more than they are owed.

It looks like some other states have already gotten their modules up and running for the Pandemic Unemployment Assistance (PUA) program for independent contractors. Others, like Nevada, haven’t. Why is that? And what goes into launching that program?

I don't really know the details of why … but I can tell you about what I do know. We have executed on a contract for our PUA deployment. I just got off the call getting a status update on that.

It is a cloud-based system that's outside of our UI system. So it's not sitting on our mainframe, which is very good. It is set for deployment mid-May, and we're on track for that.

We were very interested in making sure that this was going to be a successful launch, and that we had other states to turn to, to talk about their experience with that.

The vendor that we selected is called Geographic Solutions … They're deployed successfully in other states for the PUA module.

It is a complicated technology project because ... even though it's standalone and outside of our system, it does need to use what are called APIs to access our system, which is like a pathway ... into accessing the insurance modules that we host here at DETR.

So we're working through all of that and getting them connected through APIs, and that's in progress and it's set for a mid-May launch. 

The state has brought on a call center run by the contractor Alorica that the state has said will help with the Pandemic Unemployment Assistance Program. Right now they are answering general questions but can’t resolve specific claims issues. When the PUA program goes live, are the Alorica employees going to have more authority to work through these claims?

Yes. So the guidance that the Department of Labor has put out around PUA allows for non-merit staff — so, individuals who don't have the same level of training or requirements on training — to help and conduct that business. So Alorica staff will be helping with all of that functionality. 

The way that we're launching the PUA deployment is that when people apply and answer their eligibility questions and meet the threshold of eligibility based on their application, then we will be sending out cards and payments immediately, and adjudicating all of those claims on the back end.

The Department of Labor rules allow for that in the PUA module. They do not allow, and they have not offered, any flexibility on that in traditional and standard UI. 

You talked about merit staff. I think one of the questions that comes up is why can't we just add another 500 UI call center employees immediately? 

That was my first question. And it's something that I'm learning quickly.

The Department of Labor has not issued any rules that allow for flexibility there. These are very old Department of Labor requirements that they have thus far been unwilling to negotiate or waive. Although I will tell you that we are actively seeking solutions for the time period of this crisis to find ways to apply that guidance in a different way.

I don't mean to be murky on that, but I'll just tell you that that's something that is a top priority for me to work on, because clearly getting more adjudicators involved and appeals staff involved will speed up the process of getting people paid. And I'm really laser-focused on that.

What advice do you have to people that are reaching out on Twitter or via email saying ‘it's been seven weeks and I haven't gotten paid?’ What do you tell people if you run into them on the street and they tell you that?

Well, I don't know a single person in this office who isn't frantically working all day, every day.

That's something that has been remarkable to me is the team of professionals at DETR who are extremely committed and concerned about making sure people get the payments that they are eligible for and deserve. We all have family and friends who are a part of that group of people who are waiting on payment.

And I just want to point out that we're working as fast and as hard as we can, and thinking through what parameters are set for us and trying to be creative about that. 

I also think it's important to note that unemployment insurance is really insurance. So if your employer didn't pay into unemployment insurance, meaning you're one of our potentially PUA eligible folks … you're not going to be eligible for standard UI benefits.

And unfortunately, you're going to have to wait until PUA gets launched. But again, I'll tell you, we're working as fast and as hard as we can to get that up and running here in the next couple of weeks. And I do try to let people know that we will backdate, pay to the date of your eligibility. And I can confidently say that I'm seeing that happen regularly and daily.

In terms of getting through the backlog that exists, can you commit to a certain date you would be able to fulfill and respond to all the claims that have been filed since mid-March?

No. There is no certain date that I can provide. All I can do is ensure that we are working creatively and quickly to find ways to process these as fast as we possibly can, and again, go back to providing that assurance that we will pay your benefits back to the date of your eligibility.

Is there anything that you are doing about the phone system? I know you had mentioned going to a cloud-based system. 

There's two phone system conversations. The first is Alorica. And I want it to make sure to hammer here that Alorica is going to be primarily responsible for helping with the PUA deployment and answering questions for PUA claimants. 

But I also wanted to say that the Alorica team has been fielding thousands of informational questions successfully over the last several weeks. And to give you one example — people asking questions about where is my $1,200 [stimulus] check? They don't need to go to a UI professional. And Alorica has been helping, in a lot of ways, provide information.

The other thing that we were discussing is around our existing call center that's currently staffed with all of our UI team. That call center is built on the very old state phone system. And basically the volume of calls that are coming to that call center is just stretching beyond capacity the state's infrastructure. 

So we are looking at finding a way to simultaneously be staffing up our team and also working toward getting a cloud-based phone system that's scalable and will ... free up the state system, but will also allow for more calls to make it through.

In terms of the big picture, when we're looking at maybe having 30 percent or 20 percent unemployment for a long term, what's your kind of vision for what DETR's going to be doing in the months and years ahead as we try to get through this? 

That's something that I'm trying very hard to think about. Not only the major disruption and the stress that's on the existing infrastructure, but what can we do so that we're not ever in this position again. 

I'm not only looking at the friction points right now with our existing system and trying to find solutions and resources and asking for those resources. But I'm also thinking long term, what is the best way to process claims? Our current system is extremely limited in its ability. And is it practical to continue to add, with nuts and bolts, different pieces to a system that has been problematic from the start?

What other options exist? What are other states doing? How do other states handle this? Who are the most successful states? What can we learn from them? Because I think there's a way for us to find efficiencies and maybe even potentially cost savings if we think strategically about how we use technology in this world.

How is the staff holding up? Are people staying on board or are people really getting frustrated with the pressure of this job and leaving?

I haven't heard that we're seeing attrition, but that doesn't mean that the pressure isn't real. I think that there are a lot of people in Nevada who are waiting on their benefits and they're very frustrated and are understandably so, but they're taking it out on people who they get on the call and it wears on you to get verbally abused in that way. 

I think we have a morale issue, and I want to make sure that I'm addressing not only the claimants’ needs, but internal needs for a team that is under an enormous amount of pressure and is doing phenomenal work, under this pressure.

* Updated at 3:30 p.m. on May 5, 2020 to reflect Korbulic revised her answer on a question about adjudication after further research.


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