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ProvidenceWatch Exclusive:
January 17, 2007

Former Providence Executive Sues for Denied Benefits

Timeline New details in Walker’s complaint against his former employer’s Executive Benefit Plan describe the circumstances leading to his departure from Providence Health System. The following chronology is directly from that document: September 2003: Walker takes medical leave at the request of his peers who "observed Mr. Walker’s deteriorated mental condition and work performance." While on medical leave, Providence Health System assigns William D. Zieverink, MD, to "determine the cause of Mr. Walker’s seriously deteriorating performance." After more than 30 hours of interviews and more than 20 hours of "direct contact" with his patient, "Dr. Zieverink concluded Mr. Walker’s medical condition rendered him unable to function in his former position as CEO." March 1, 2004: Walker resigns as CEO. March 31, 2004: Walker applies for disability benefits from the Providence Health System Long Term Disability Plan, a plan subject to federal regulation. He bases his claim on the assertion that he remains "disabled from performing all the duties of his occupation as CEO." CIGNA, the insurer that administers the plan, appoints a psychiatrist, Dr. Robert Galak, to examine Walker. He meets with Walker on one occasion for about one hour, "and concluded Mr. Walker had never suffered from the conditions diagnosed by those physicians, and was able to return to his occupation as CEO of a multi-billion dollar business entity." September 27, 2004: CIGNA denies Walker’s claim for benefits on behalf of the plan. March 25, 2005: Walker submits an appeal to CIGNA. He includes documents and letters from Dr. Zeverink; Frederick Wise, a neurophysiologist; Dr. Robert Fraser, a vocational rehabilitation expert; and Providence CEO John Koster, MD. October 25, 2005: CIGNA grants Walker’s appeal only for the period between March 21, 2004 and August 31, 2004, saying that after that date "medical evidence did ‘not support any functional deficits that would have precluded Mr. Walker to perform his own occupation." April 12, 2006: Walker appeals again. He submits a decision from another insurance company that had accepted his claim for benefits under a separate disability plan through "at least December 28, 2004." He also includes a copy of the Independent Medical Examination by Luci Carstens, Ph.D., who had concluded that Walker was, "unprepared to return to his previous occupation at this time or any time in the foreseeable future." June 28, 2006: CIGNA denies Walker’s second appeal and advises him of his right to "file a suit in federal court to determine his right to benefits."

In those same filings with U.S. District Court for the Western District of Washington, Walker’s attorneys say he was forced to leave Providence by fellow executives who believed him mentally unfit to run a multi-billion dollar company. Far from defending his mental competence, Walker’s complaint asserts that he was medically "unable to perform the important duties of his own occupation" at the time of his ouster and that he remains disabled.

Walker’s suit alleges Providence Health System Long Term Disability Plan improperly denied his claim for up to $25,000 per month in on-going disability benefits. Under the Providence Plan’s Executive Benefit Program, Walker could collect monthly payments for up to 10 years of disability, totalling $3 million.

Walker received a salary of $1.04 million for the two months he was on Providence Health System’s payroll in 2004, although he had been on leave since October 2003 and did not work through his March resignation. He also received a $5.6 million lump sum retirement payout, for a total compensation of $6.6 million for 2004.

In the complaint initiating the federal lawsuit, Walker states that the five-month leave, which press had labeled a sabbatical, was in fact a medical leave. He took the leave, according to the complaint, because Providence officials had observed his "deteriorated mental condition and work performance." Walker resigned March 1, 2004, "at the request of Providence."

The complaint alleges that CIGNA, the insurance company that administers the plan, recognizes an obligation to pay benefits through August 31, 2004. Walker argues that he is entitled to continuing benefits because his medical condition leaves him "unprepared to return to his previous occupation at this time or any time in the foreseeable future."

According to Walker’s complaint, CIGNA denied his claim for long-term disability benefits based on an examining physician’s finding that he was capable of performing "his own occupation." Walker says that his successor, John Koster,MD, CEO of Providence Health & Services, personally supports his claim for disability.

To date, the Providence Health System Long Term Disability Plan has not responded to the complaint. ProvidenceWatch will follow the case as it develops.

Today, Hank Walker is a partner at Andrade / Walker Consulting, a trustee at St. Joseph Health System, a member of the National Board of Advisors for the University of Arizona, Chairman of the Board of Directors of Consolidated Catholic Healthcare, and a member of the board of directors of two for-profit companies, Rural Metro Corporation and Employee Solutions, Inc.