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HealthCare Checkup

The Seattle Times health-care team tracks the local impact of the Affordable Care Act.

June 4, 2014 at 1:13 PM

Beleaguered insurance judge to speak at upcoming Senate session

Patricia Petersen, recently suspended as the state insurance office’s chief hearings officer, will break her silence to speak at a Senate work session later this month.

Her lawyer, Phil Talmadge, a former state Supreme Court justice who as a state legislator helped create a state office for administrative hearings, said she will speak about judicial independence, as well as her role in an errant email that caused a high-profile case before her to grind to a halt.

Sen. Mike Padden, a Spokane Valley Republican, has called for a June 16 work session — with the “potential for legislation” — on the issue in the Law & Justice committee he chairs.

In a letter to Insurance Commissioner Mike Kreidler, Padden requested a full report from the agency on the matter. The independence of hearings officers must be must be “maintained and respected,” he said, because such hearings “represent the only opportunity many of the people and businesses impacted by state agencies get to have a neutral tribunal decide matters which impact their lives, liberty, and property.”

Petersen’s allegations, Padden said, were “extremely disturbing.”

In a whistle-blower complaint to the State Auditor’s Office and in a notice filed in the case before her, Petersen had complained that her supervisor, Chief Deputy Commissioner Jim Odiorne, was pressuring her to decide cases in favor of the insurance commissioner’s office, and threatening her job if she did not comply.

She argued that her job is to be an independent arbiter of disputed insurance cases, despite being employed by the insurance office.

Her situation quickly became more complicated when a lawyer for Seattle Children’s hospital in the case before her on May 14 — the hotly contested issue about whether health-insurance plans are required to include Seattle Children’s in their provider networks — said he had received an emailed copy of her whistle-blower complaint. Such “ex parte” contact is forbidden in legal cases.

That day, Petersen was abruptly removed from her position and placed on paid leave.

It was not known who sent the email until this week, when Petersen, in a letter to Kreidler, said she had inadvertently had an Office Depot employee email a hard copy of the complaint to the lawyer — one of more than 20 lawyers she said she was considering hiring to represent her in what appeared to be her own worsening employment conflict.

She said she didn’t recognize his name at first, and sent him the copy “to give him a notion of my problem so we could discuss the issues I was facing should I seek to retain him personally.”

Michael Madden, the lawyer, said it’s plausible he would be on a list of lawyers with expertise in health care and employment, and said it’s not unusual for people seeking help to send out “broadcast emails fishing for counsel.”

Talmadge called the focus on the inadvertent disclosure “a sideshow,” and said the real issue is independence of administrative-law judges who work for agencies.

“Some agencies have argued for the need for hearings officers with specialized expertise,” Talmadge said. “I believe OIC is one of those agencies.”

However, he said, officers such as Petersen “should not be answerable to an executive branch official like the deputy [insurance commissioner] for their job performance, nor should their decisions be subject to review by the agency head.”

Kreidler’s office maintains that Odiorne, as Petersen’s supervisor, was allowed to talk to her about her job performance and reasoning in rulings that did not appear to follow the law. Odiorne remains on the job, and Kreidler has said there’s no proof he did anything wrong. But he insisted the office would do a “fair and thorough” investigation of Petersen’s allegations and has hired an independent investigator from Ogden Murphy Wallace, a Seattle law firm, to do so.

The office also has hired George Finkle, a former King County Superior Court judge, to take over cases in Petersen’s absence, although it appears likely that the turmoil may derail the Seattle Children’s case, at least as it applies to current health-insurance plans.

Comments | Topics: Jim Odiorne, Mike Kreidler, Office of the Insurance Commissioner

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