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Florida dad of disabled child settles with Humana for $2.2 million

After a six-year struggle to sue an HMO giant for dropping his severely disabled daughter from its special program for the chronically ill, Mark Chipps of Florida has settled his lawsuit against Humana Health Insurance Co. for $2.2 million. The settlement is less than 3 percent of the original $78.5 million verdict awarded to the family in January 1999, the largest individual punitive damage award in the state's history and the second-largest managed care verdict in United States history. The settlement does not include payment of the Chipps family's legal fees.

"My client made the right decision based on the best interests of his children."

Chipps' attorney Theodore J. Leopold says his client was "forced" to settle the lawsuit because Humana attorneys threatened to seek a $425,000 judgment against the family for costs related to a bond posted by the HMO during the appeal of the original verdict. According to Leopold, Humana gave Chipps, a Palm Beach County sheriff's deputy, until Feb. 11, 2002, to settle the lawsuit or face a protracted court battle over the money. "Under the threat of personal bankruptcy, my client made the right decision based on the best interests of his children," says Leopold.

Humana officials admit no wrongdoing in the Chipps case and deny the attorneys' latest allegations. "At no point did Humana threaten Mark Chipps with bankruptcy," says Humana spokesperson Pamela B. Gadinsky. "Nor was there any point during the negotiations in which Mark Chipps or his lawyer could have believed that bankruptcy was a possibility."

Humana officials say they are pleased the matter is concluded and that "we offer our best wishes for further progress to Caitlyn and her family."

Caitlyn Chipps is no longer insured by Humana. She switched to another health insurer when her father's employer changed health insurance plans. Ed Ricci, another of Chipps' attorneys, says that while he cannot divulge the current payment arrangement — if any — between his client and the law firm, he can say that his firm took the original case for free.

The original verdict

In the initial verdict against the health insurer, Humana was ordered to pay nearly $80 million for improperly ceasing treatment for Caitlyn Chipps, who has cerebral palsy, and for lying to her parents. The award was a default judgment made by Circuit Judge James Carlisle, who ruled that Humana had not handed over documents to the Chipps' family attorney in a timely manner.

Humana "exhibited a reckless disregard for human life, a conscious indifference to the suffering of the children."

Leopold says Humana insured Caitlyn through its high-intensity Medical Case Management Program until it "summarily dismissed" the cases of Caitlyn and about 100 other chronically ill children. He says Humana told Chipps his daughter's records had been reviewed and she no longer needed such intensive treatment. (Cerebral palsy is a birth defect that impairs motor control and coordination.) When the family filed suit in 1996, Caitlyn, then 5, was returned to the treatment program. Her father says that she regressed during the time she was not in treatment.

In 1999, the jury ruled that Humana had violated its own rules when it removed Caitlyn from the special program. After the jury returned the nearly $80 million verdict, Judge Carlisle wrote: "The clear and convincing evidence establishes that the defendant's conduct was particularly reprehensible, flagrant, deliberate, and intentional. It exhibited a reckless disregard for human life, a conscious indifference to the suffering of the children Humana insured. Its conduct warrants a substantial punitive damage award. The verdict appropriately expresses the outrage on the part of the jury at the greed and arrogance of the defendant, and the results of its conduct — actual and threatened physical and emotional injury to catastrophically ill children whose care and treatment Humana had contractually assumed and then abandoned."

Carlisle's ruling was overturned Sept. 20, 2001, by an appellate court, which said Carlisle erred when he characterized Humana's conduct as "gross and flagrant" in his instructions to the jury. In his opinion, the appellate judge wrote that Carlisle had shirked his obligation to take care "to let the jury arrive at its own decision regarding the egregiousness of the defendant's conduct."

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