A flap between Secretary of State Tom Schedler and the Jindal administration over destruction of state health insurance program records boiled over Thursday.

The state Office of Group Benefits this summer stopped sending Schedler’s office original copies of member medical claims for preservation. OGB oversees health insurance for nearly a quarter million state employees, public school teachers, retirees and their families.

And Schedler said he had “reason to believe” that the records had been destroyed without prior approval in violation of state law.

On Thursday, Commissioner of Administration Kristy Nichols said records are still available, they just were not being shared with Schedler’s office because of OGB member privacy concerns.

“We can reinstate (the records sharing) until we reach some other agreement, if we do,” Nichols said.

The administration is working with Schedler’s office to come up with a long-term solution. She said the Legislature may want to consider a state law change addressing privacy issue when it comes to records retention by the secretary of state, she said.

Schedler said Thursday it would take some time, as well as continued communication, to come to a “full resolution” of the situation. He said he is cautiously optimistic.

OGB stopped sending the personal data to Schedler’s office this summer after Nichols said the firm of Alvarez and Marsal that reviewed OGB operations expressed surprise that personal health and medical data was being shared.

That started a series of letters in which Schedler became ever more insistent that OGB was running afoul of the records preservation law.

“The Office of Group Benefits operates under a binding retention schedule that requires all health claims to be kept for the life of the agency and to be imaged upon arrival,” Schedler wrote. “The schedule also provides that, after three years, original claim records may be microfilmed and shredded — but the records may only be shredded after receiving written approval” from his office’s records management chief.

“This Office has reason to believe that some original claim records may have been destroyed without prior approval … and in direct violation of Louisiana Revised Statutes,” he continued.

By state law, Schedler said he had to report to the attorney general “when actual, impending, or threatened destruction of records” comes to his attention.

Schedler said it would be “prudent” for OGB to put a hold on further records destruction until issues surrounding the major revamp of health plans being offered and the maintenance of eligibility records are resolve.

Nichols said all records dealing with the upcoming changes in insurance plan offerings, as well as those dealing with OGB operations are still being shared. None of them have been destroyed, she said.

“In an effort to limit unnecessary access to member data, OGB stopped sharing files that contained personal health information,” Susan West, OGB chief executive officer, said. “However, no records have even been destroyed without first backing them up electronically on OGB’s FileNet system. “Storing the files electronically complies with (federal) HIPAA guidelines and allows OGB to easily search member records when necessary.”

West said her office is complying with Schedler’s request to identify the files that were destroyed after they were scanned into the OGB systems. She advised Schedler that no records had been destroyed after his initial Aug. 28 letter warning of potential problems.

Follow Marsha Shuler on Twitter @MarshaShulerCNB. For more coverage of the state capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog/