WSI audit excluded record that prompted review

BISMARCK — The director of North Dakota’s workers’ compensation agency assured the governor that no claims involving unexplained deletions of claims file records involved denied benefits.

But Bryan Klipfel failed to make clear in his recent report to Gov. Jack Dalrymple that the deleted electronic record that prompted an internal review did, in fact, involve a claim in which some benefits were denied.

The issue of deleted electronic notepad entries from injured workers’ claims files surfaced publicly in February after a whistleblower who works for Workforce Safety and Insurance reported a deletion she said was ordered because it “weakens” the agency’s denial of certain claim benefits.

The North Dakota Bureau of Criminal Investigation is investigating the deletion, which the whistleblower contends is an illegal destruction of a public record, and her allegations that the agency then tried to hide important details about the deleted record.

After the allegations were reported by The Forum on Feb. 26, Dalrymple, who has ultimate oversight of the state’s workers’ compensation agency, asked its director for a report.

The March 1 memo in response to the governor from Bryan Klipfel, director of WSI, reported on the findings of an internal audit review of electronic notepad entries documenting workers’ claims.

Internal auditors found 20 deleted notepad entries during the one-year review period. Most were deleted because notes had been placed in the wrong claim file, according to the internal review.

Six notepad entries were deleted without explanation during the review period, July 1, 2010, to June 30, 2011 — a period that did not include the deleted notepad entry that provoked the whistleblower’s concern and the subsequent review.

In his memo to Dalrymple, Klipfel stressed that all of the six unexplained notepad deletions involved accepted claims, and the workers had returned to their jobs.

“I want to emphasize that none of these six claimants was denied benefits,” Klipfel wrote the governor, “and there is no indication that anyone at WSI deleted a notepad entry for an improper reason such as the intent to deny benefits.”

Klipfel’s memo did not specify, however, that the dates of the internal review findings he was passing along did not include the Aug. 18, 2010, deletion that triggered the review.

In receiving the memo, a spokesman for Dalrymple highlighted that statement by Klipfel about no deleted notepad entries involving denied claims.

The fact that the deleted notepad entry that sparked the review — and ultimately the BCI investigation — actually did involve denial of certain benefits came to light later in roundabout fashion.

The discovery was made public after a friend of the worker whose record was deleted had read details about the claim on a blog, NorthDecoder, and put his friend in touch with Chad Nodland, a Bismarck lawyer and the author of the blog post.

The worker, Stanley Buzalsky, Jr., of Fargo has said he would not have proposed a settlement with WSI involving denial of certain benefits if he had known about the deleted record, which indicated WSI’s medical director did not review conflicting medical evidence.

Buzalsky suffers recurring headaches, anxiety and other mental health problems his treating physicians have linked to a head injury he suffered on the job in 2010.

His claim was denied after an outside medical examiner hired by WSI concluded his mental health symptoms were not connected to his physical injury.

Klipfel has said the deletion contained improper comments from a nurse case manager and was legally deleted. He told Dalrymple the record’s content appeared “duplicative in terms of its factual content and in addition was rambling and contained running thoughts of the medical case manager.”

Klipfel continued: “The notepad entry was inconsistent with WSI’s standards and the employee who had created the entry was notified and coached to more consistently follow practices for form and content.”

But the WSI worker who reported the deleted record as a suspected crime, Barbara Frohlich, viewed the record as factual and important to the claim. In a memo to the BCI, Frohlich disputed Klipfel’s characterization of the record as “rambling” or containing “running thoughts.”

“I consider the information in the notepad to be factual and detailed,” she wrote, “containing substantive information regarding how the claim was adjudicated, which is important to both the injured worker’s and WSI employees right and ability to track the decision making process.”

Although Klipfel has repeatedly said the factual content of the notepad exists elsewhere in Buzalsky’s claim record, he acknowledged that WSI considers at least some of that information privileged “work product” of its attorneys, meaning it is unavailable to Buzalsky.

Neither the WSI internal audit report, dated Oct. 25, 2011, nor its supporting working papers divulged any details of Buzalsky’s deleted notepad.

Instead, the report noted that the nurse case manager who made the notation received training to avoid future problems.

The 99 pages of working papers did, however, provide a breakdown of the 20 identified notepad deletions during the one-year review period.

The analysis of Buzalsky’s deleted notepad entry was in a separate “special report” that was not disclosed to The Forum under an open records request, but later was made available because Buzalsky has authorized The Forum to access to his claim file.

Asked why the description of the deleted record was kept separate from the report, Klipfel said it was excluded because it contained information about the worker.

The working papers did, however, contain claims file information of a different worker, whose name and claim number were redacted, but whose age and employer appeared in the records. When asked about that disclosure, Klipfel said through a spokesman that it was inadvertent.

Frohlich, in comments about WSI’s internal audit of deleted notepad entries made to the BCI, noted that there is “seemingly no reference” to the “special report” in the audit report or its working papers.

Frohlich has told the BCI agent in writing that there might be another deleted notepad entry, as yet uninvestigated.

“It is my understanding that the deletion of this notepad occurred sometime in 2009 per the directive of a member of the WSI legal staff,” Frohlich wrote in a letter sent last week to the investigator.

A spokeswoman for Attorney General Wayne Stenehjem, whose office oversees BCI, said she could not confirm or deny any investigation, much less discuss details of any investigation.

Klipfel said he welcomes the BCI investigation and his agency is cooperating fully.

Jeff Zent, a spokesman for Dalrymple, who has jurisdiction over WSI, issued a statement when asked by The Forum for comment on Klipfel’s memo and questions raised by Frohlich.

“The Governor is interested in learning all the facts and finding out if any procedures have been handled improperly,” Zent said in the statement. “There is a process underway to do just that and we look forward to any information that sheds further light on the questions raised.”

Patrick Springer is a reporter at The Forum of Fargo-Moorhead, which is owned by Forum Communications Co.

Tags: north dakota, news, wsi