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The family of a girl with cerebral palsy has settled a case against Humana Health Care for $2 million — a fraction of the record-setting $79.5 million a jury awarded the family two years ago over reduced health benefits. The plaintiffs’ lawyers charge that the family was strong-armed into the settlement because of a threat by the health care company to make the family pay $410,000 in costs associated with a bond the company posted when it filed for an appeal of the jury verdict. The insurer has denied the allegation. The case has led to an action against Humana and other managed care companies. The settlement came after the Florida appeals court overturned the verdict — the second-largest managed care verdict in U.S. history and the largest individual punitive damages award in Florida history — citing errors by the trial court judge. The case was brought after Mark Chipps, a police officer in Palm Beach County, Fla., had his health plan switched to Humana in 1993 by his employer. Chipps’ daughter Caitlyn, who was born with cerebral palsy in December 1990, was originally covered by the company for the same benefits. But in December 1995, Caitlyn was dropped from Humana’s medical case management program, which would have ended her speech, occupational and physical therapy benefits. Chipps’ lawyers argued that the move was part of an effort by the company to reduce benefits to many children, in an attempt to save the company millions of dollars a year. The jury agreed and awarded the family $1 million in compensatory damages and $78.5 million in punitive damages. The Florida 4th District Court of Appeal overturned the jury verdict, citing, among a number of errors, that the judge had given the jury inflammatory instructions about Humana’s conduct and the discovery of errors in the plaintiffs’ pleadings. Humana Health Insurance Co. of Florida v. Chipps, No 4D00-866. LARGER ISSUES Plaintiffs’ counsel Theodore Leopold of Ricci, Hubbard, Leopold, Frankel, Farmer & McAfee in West Palm Beach, Fla., said that he was pleased with the settlement because the money will cover Caitlyn’s expenses, but said the outcome was particularly important because of the larger issues it brought to the public’s attention. “It exposed the internal workings of managed care companies of putting their own personal profits ahead of the care of their insureds,” he said. Discovery in the case led Leopold and a team of lawyers to file the current national managed care class action against Humana and other managed health care companies over the treatment of the chronically and catastrophically ill. In re managed care litigation, No. 1334 C:00-1334-MD-Reno (S.D. Fla.). Humana issued a statement disputing the impact of the plaintiffs’ account of its actions, asserting, “Undisputed testimony in the trial showed that coverage for Caitlyn Chipps was never discontinued. Caitlyn’s own physician testified she progressed while a Humana member.” Leopold charged that attorneys for Humana in the Tampa, Fla., office of Carlton Fields were seeking to execute a judgment against Chipps for the reimbursement of the bond, which would have bankrupted him. ‘HARDBALL’ “It’s an example of the hardball Humana has played throughout the litigation,” Leopold alleged. Humana insisted that it did not threaten the police officer with bankruptcy and that the $2.2 million settlement included a waiver for the bond fees. “Humana posted a bond when it appealed the Circuit Court verdict,” Humana said. “We had asked plaintiffs’ attorney to waive the bond but he refused. Upon Humana winning the appeal, the plaintiff stood to be obligated to pay those costs [the bond and court costs] which amounted to more than $400,000.”

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