Whistleblower In Children's Hospital Hearing Alleges Pressure In Ruling

Jun 17, 2014

If you have a dispute with a government agency, chances are, your complaint will go through a process called an administrative hearing. These hearings usually haven’t attracted public attention — until recently.

Last October, Seattle Children’s Hospital challenged the Office of Insurance Commissioner for allowing health plans to exclude providers like Children’s from their networks.

The case was moving along. But last month Patricia Petersen, the presiding hearing officer, blew the whistle on the OIC, saying her supervisor was trying to influence her decisions. She filed a complaint against her supervisor, the agency’s second in command, which alleges he contacted her numerous times for months to pressure her to issue rulings favorable to the commissioner’s policies.

Petersen didn’t elaborate further, saying she’s under gag order.  The OIC has hired an outside lawyer to investigate Petersen’s allegations, and other personnel matters related to complaint.

Petersen has been on administrative leave since filing the complaint. The OIC has contracted an independent judge to handle Petersen’s cases during her leave.

She spoke Monday for the first time in public before a state Senate committee, where the issue at hand focused on how much judicial independence hearing officers have.

Petersen has been the presiding hearing officer at OIC for more 20 years. She told the committee independence is crucial to her work. And it’s spelled out in detail under state law.

“For this reason, I have provided appellants fair hearings and impartial decisions,” Petersen said at the hearing. “However, the benefits of having an embedded officer quickly disappear if an agency seeks to influence a presiding officer with ex-parte communication and influences such as threats to employment.”

Annalisa Gellerman of the OIC told the committee that hearing officers need to be independent, unbiased and open-minded to the facts.

“They need to independently evaluate those facts, but there’s no question in my mind that when you’re hearings officer working in the executive branch, you are bound to understand the policy of the executive branch, and to apply that,” Gellerman said.

The Senate committee is considering a number of proposals to prevent future interference. One would require complaints to go through a separate agency that handles administrative hearings. Another would make it a crime to influence the officer’s decision.

Phil Talmadge is a former state senator and Supreme Court justice. He’s currently in private practice and representing Petersen. When he was part of the Senate, he helped draft rules that govern hearing officers and administrative law judges. He said it’s important that the public not only get a fair shake but also perceive that the process is fair.

“This would be like judges of the Washington Supreme Court being subject to review by the Chief of Staff of the Governor. It simply doesn’t work in terms of separation of powers and the respect for the three parts of the government that we have,” Talmadge said.