Auditor to Probe N.D. Workers’ Comp Safety Grants, Medical Reviews

An outside auditor will examine whether the board of directors of North Dakota’s workers compensation agency is following its own rules, a state audit manager says.

The review also will examine the Workforce Safety and Insurance agency’s handling of independent medical examinations of workers’ injuries and how some benefit payments are evaluated, said Gordy Smith, a manager in state Auditor Robert R. Peterson’s office.

State officials say the audit firm will be hired in the next few weeks, and should finish its report in August. Previous reviews have been done by Octagon Risk Services Inc. of Oakland, Calif., which is part of a Memphis, Tenn., company, Sedgwick Claims Management Services Inc.

State law requires the review every two years and orders the study of specific topics, including the results of the agency’s on-the-job safety initiatives and its efforts to combat workers compensation fraud.

It says the actions of WSI’s board, which oversees the work of the agency’s chief executive officer, must be reviewed for members’ compliance with the board’s own bylaws.

The examination may go beyond those subjects. Smith said this year’s review will include scrutiny of the evaluation of “permanent partial impairment” grants and independent medical reviews of some workers’ injury claims.

Auditors will choose a number of independent medical exam and permanent partial impairment files “and follow them from beginning to end, and tell us if there are any areas in there that could be improved,” Smith said.

Rep. Rick Berg, R-Fargo, chairman of the Legislature’s interim Industry, Business and Labor Committee, said lawmakers also may suggest subjects that should be probed.

Permanent partial impairment grants are intended to compensate for an injured worker’s loss of body function resulting from an on-the-job injury. The payment is in addition to medical and rehabilitation benefits.

Independent medical reviews of workers’ injury claims often cause friction if the reviewer disagrees with the worker’s own doctor. Sebald Vetter, of Bismarck, who is an advocate for injured workers, said the issue prompts a number of complaints.

“We’ve been fighting this for years. Our doctors have got no say-so,” Vetter told lawmakers last week. “There’s so many of our doctors that I’ve talked to, they don’t want nothing to do with workmen’s comp, because all there is, they said, is a bunch of papers, and they don’t believe us anyway.”

At the urging of Gov. John Hoeven, WSI has already hired two separate groups of consultants to review its claims handling and personnel management procedures. Their reports are due later this month.

Mark Armstrong, a Workforce Safety spokesman, said there would be some redundancy with the performance evaluation and the consultants’ reviews of claims handling and personnel. “We have no control over that,” Armstrong said.

Supporters of Workforce Safety and Insurance, which has seen its chief executive officer dismissed and three board members resign in recent months, say agency time spent responding to outside reviews is distracting employees from their primary job of serving workers who are hurt on the job.

“Let’s take care of the injured worker, and let’s stop some of this political nonsense that’s going on,” said Dave MacIver, president of the Greater North Dakota Chamber of Commerce. “We need to address the issues of the injured worker and stop having however many audits we’ve had in the last five years. It’s a pail full.”

Smith said WSI has had only two audits recently, an annual audit of its financial statements and a “performance audit” of its operations, which found morale problems and a number of irregularities at the agency. It was the first such review done at WSI.

The review that is coming this summer is required by a state law that Workforce Safety officials themselves pushed in the Legislature, Smith said.

“The rest of all these things that are happening out there, it might be a review, it might be a study, a lot of them are generated by WSI themselves,” Smith said. “They’re not responding to a lot of audits, because they don’t have a lot.”