Learn Spanish (Spain): Lo complicado es que ella nunca escucha. - The complicated thing is that she never listens.

Lo is the neuter article. When you put lo in front of a masculine singular adjective like complicado, it turns the adjective into a noun phrase meaning 'the complicated thing' or 'the complicated part'. We use this shortcut to talk about abstract ideas rather than specific physical objects.

Could I just say la cosa complicada instead?

Yes, you absolutely could! Saying la cosa complicada (the complicated thing) is grammatically correct. However, using lo + adjective is a very natural, everyday Spanish shortcut to express the exact same idea.

Why is the verb es used instead of está?

We use es (from the verb ser) here because we are defining what the problem is. The sentence essentially says 'A equals B': The complicated thing (A) is (equals) that she never listens (B). Whenever we define, identify, or equate things like this, we always use ser.

Does nunca always have to go before the verb escucha?

Putting nunca (never) right before the verb is a very common way to do it. However, you can also put it after the verb. If you do, Spanish grammar requires a double negative, so you must add no before the verb: ella no escucha nunca. Both ways are correct and mean the exact same thing!