How is grade 3 shoulder arthritis and frozen shoulder typically treated?

Varies. The goal of treatment is to relieve pain and restore function. This can be accomplished by oral non-steroidal anti inflammatory agents and physical therapy to mobilize the shoulder. The next step is a steroid injection into the joint space. Last resort is manipulation under anesthesia. Depending on your age, pain and need for mobility with end stage arthritis, a joint replacement may be indicated.
Takes time. Frozen shoulders respond slowly to range of motion therapy but usually take 12-18 months to resolve. The presence of arthritis makes prognosis much worse. When severe or affecting sleep it may indicate the need for arthroscopy to clean out the damaged joint and carry out a capsular release. This can greatly speed up recovery..But should be done by an experienced shoulder surgeon.