Sanger woman dies, but her legal battle with HealthComp continues

Debora Rose of Sanger was a hardworking single mother who enjoyed a good laugh and never missed a sports event involving her grandchildren.

When Rose died last month at age 60, she was in the midst of a legal fight with HealthComp Inc., a health-plan administrator for private companies.

In her Fresno County Superior Court lawsuit, Rose contended that when her liver started to fail, she thought her employer, Harris Ranch Beef Co. in Selma, and its health-plan administrator, HealthComp, were trying to help her by assigning a case manager to assist her in wading through the complicated paperwork.

But in December 2012, one week after HealthComp told Harris Ranch that Rose needed a $265,000 liver transplant, she was fired, said Fresno attorney Amanda Whitten, who represents Rose.

Rose sued Harris Ranch in Fresno County Superior Court in March 2013 for wrongful termination and disability discrimination, and later reached a confidential settlement that has no admission of liability, Whitten said.

Her lawsuit against HealthComp is as important, Whitten said, because it charges the health-plan administrator with invasion of privacy for giving confidential information about Rose’s health to Harris Ranch in violation of the Health Insurance Portability and Accountability Act of 1996, commonly known as HIPAA.

Rose also sued for unfair business practice; Whitten contends that HealthComp should not be allowed to profit from an alleged illegal act – giving someone’s private medical information away.

Judge Mark Snauffer, however, has indicated that he likely will dismiss Rose’s lawsuit because federal law exempts HealthComp from those state claims.

The legal fight is intertwined with the federal Employee Retirement Income Security Act, also known as ERISA, which regulates health benefit plans provided by private employers. ERISA encourages private companies to provide health benefits for employees. In exchange, the act offers private companies many exemptions from liability in state courts.

Snauffer said as much in a tentative ruling on Thursday when he said Harris Ranch has a self-funded health-care plan that is covered by ERISA. Therefore, Harris’ health-plan administrator, HealthComp, can’t be sued by Rose in state court for invasion of privacy and unfair business practice.

In addition, Snauffer said, HealthComp could share Rose’s information with Harris in its role as health-plan administrator.

HealthComp’s attorney, Steven McQuillan, said he agreed with Snauffer’s analysis.

Whitten said otherwise, telling the judge: “If the court chooses to adopt its tentative ruling, it will be sending a dangerous message.”

In Whitten’s opinion, a ruling for HealthComp “would say that companies are allowed to use consumer-protection statutes as a sword to create a profit-generating shell game, a money-making scheme that profits off the private health information of real people – a venture that cost Debbie Rose her life.”

But McQuillan said that if the judge rules in Rose’s favor, it would set a dangerous precedent that could erode federal protection to companies that offer health benefits to workers.

‘Working too much’

Both sides agree that Rose began working for Harris Ranch in September 2004. She was an employee in the Human Resources Department.

“She enjoyed working at Harris and did her job well,” Whitten said. “The only write-ups she ever received were for working too much, working through her lunch and not taking lunch at all.”

In 2011, Rose was diagnosed with Budd-Chiari syndrome, which causes blood clots in the liver. It occurs in one out of a million individuals. In December of that year, she spent a week in the hospital before returning to work while she underwent treatment, Whitten said.

In her legal argument, Whitten said companies that are self-insured don’t always act in the best interest of workers. That’s because those companies pay employees’ health costs “out of pocket rather than paying a premium that covers the costs.” In essence, Whitten said, those companies bet on their employees to stay healthy, so “when an employee like Debbie Rose comes along, needing a $265,000 transplant, the company loses.”

In court papers, Whitten contends Harris Ranch hired HealthComp not only to keep Harris’ medical payments low, but to spy on its employees.

“They created a ‘nurse case management program’ as a way to help employers like Harris Ranch stack the deck against its employees,” Whitten told Snauffer.

According to Whitten, HealthComp told Rose that the program was “an added benefit” to help her wade through the overwhelming medical system. Rose signed a consent form “to release private medical information to the nurse case manager based on that representation,” Whitten said.

Over the next few months, the case manager wrote reports of Rose’s medical condition, including her prognosis and increasing need for a costly liver transplant, Whitten said.

When it was learned that Rose was about to see a specialist for a transplant operation, she was fired within one week of HealthComp providing that information to Harris Ranch’s Human Resources Department.

“The person who fired Debbie Rose is the same person who received information about her,” Whitten told Snauffer.

Whitten said Rose was fired “for allegedly making a mistake that cost Harris Ranch a few hundred dollars.”

Afterward, Rose couldn’t find a job, and once her costly COBRA benefits ended, she applied for Medi-Cal. Whitten said Med-Cal made Rose “jump through hoops” before she finally was approved for a liver transplant.

‘Already too weak’

“But it was too late. She was already too weak,” Whitten said.

Rose, a lifelong resident of Sanger, died July 24.

In addressing Snauffer, Whitten said ERISA is supposed to be a consumer-protection statute. Under ERISA, consumers may recover benefits that were denied, enforce their rights under their health plans and clarify the rights to benefits, but that doesn’t address what happened to Rose.

“Justice can only come from her lawsuit,” Whitten said, noting that Rose’s daughter will take up the lawsuit on her mother’s behalf.

Whitten told the judge it would be unfair to give HealthComp “blanket immunity.”

“Debbie Rose has a remedy under California law,” Whitten said. “The state of California has decided that her privacy is important enough to be addressed in the state’s Constitution.”

Under HIPAA, Rose is entitled to sizable damages, including HealthComp’s profits, “if she shows they intentionally violated her privacy in order to make a profit,” Whitten said.

But Snauffer, who said he will make a final ruling soon, said he was likely bound by federal law that gives HealthComp an exemption. If he sticks to his tentative ruling, Whitten said she will appeal it.

This story was originally published August 13, 2016 at 5:00 PM with the headline "Sanger woman dies, but her legal battle with HealthComp continues."