Martin
For many elder law attorneys, there is a real love/hate relationship with long-term care (LTC) policies. If every policy had robust coverage that paid for at least five years of care, then it would just be a “love” relationship. But the reality is often disappointing. For elder law attorneys preparing Medicaid applications, any benefits from a long-term care policy must be accurately accounted for. Significant complications can arise if the claim is later denied after being included in the eligibility calculations. This article explains the ins and outs of LTC claim management and provides best practice guides to get an approval, so you can avoid the “hate” part of LTC insurance.
LTC Claim Challenges
The challenge of LTC insurance is that it has very little standardization. Health insurance (including Medicare) is adjudicated from machine-readable codes (ICD9 or ICD10 codes). This is not how LTC claims work. In long-term care, each claim must be crafted from a wide array of documents. The complexity of this documentation is partly because each insurance company has its own internal requirements regarding what type of documents they need. Further, the names of the documents will vary depending on whether the claim is for home care, assisted living facility care, or skilled nursing facility care. Last, but certainly not least, people often buy policies in one state but end up using them elsewhere, so state variations on vocabulary can be confusing. For instance, an assisted living facility in one state is called a “personal care home” in another. When you toss in a scenario of multiple care providers (say, a rehab stay, then home care, then a facility), the level of complexity and frustration goes up.
The process to open a claim appears simple. Someone calls the insurance company or logs on to an online portal. There is a HIPAA release that must be signed by the policyholder (or attorney-in-fact) and returned to the insurance company. Note that if the attorney-in-fact is signing, the durable power of attorney (DPOA) document must be on file with the insurance company. So far it seems pretty simple. Most people think this is the end of what they need to do for the claim to be approved. Their family member is in an assisted living facility, so of course the policy will pay — right? Wrong. Policy language and benefit triggers must always be verified.
Documentation Is Key
Once the claim is opened, the claim adjuster at the insurance company will request a list of documents from each care provider. As noted earlier, the list may vary slightly, but typically this is what is requested from each type of care provider:
- Skilled Nursing Facility and Home Rehab (i.e., Medicare-Billed Care): OASIS report; admission, ongoing, and discharge minimum data sets (MDS); license and/or facility questionnaire; medication administration record (MAR); UB-04 or HCFA/CMS-1500 claim form.
- Home Health and Non-Medical Home Care (i.e., Private Pay): plan of care (sometimes called a “service plan”); license and/or provider questionnaire; invoices and daily care notes.
- Informal and Independent Care Providers (Private Pay): provider questionnaire; copy of the professional license or certificate; copy of state or federal ID; plan of care; invoices and care notes.
- Assisted Living Facility (Private Pay): plan of care; nurse assessment; facility questionnaire and/or license; invoices; monthly verification form.
- Physician: clinical records and/or a form to confirm the claimant is “chronically ill.”
Not every company will ask for the entire set of documents — some ask for only a subset in the lists above. It is also worth noting that not every policy will allow or approve all those types of care providers. This is where the claim must be crafted to fit the policy as well as the care history of the claimant.
We always tell people to read the policy. It will tell you both the types of care providers it will allow and the criteria by which someone is medically eligible. You have to clear both of these hurdles: the care provider must be eligible according to the contract and the policyholder must be medically eligible. Eligibility in every instance is based on (you guessed it!) documents. If any document is missing from any single care provider, it may delay or deny the claim altogether. This bears repeating — if any document is missing from a single care provider, it could result in a delay or a denial of the claim.
Elder law attorneys are usually quite good at documentation. In this regard, you will have an advantage over folks who live and work in less-document-intensive specializations. Nevertheless, a best-practice strategy is to have someone tracking what documents were ordered by the insurance company and what documents they have received. This allows you to track and resolve any documents that may linger as outstanding.
Best-Practice Tips
- Change the “address on file” for the policy to that of the DPOA or similar family member. That way, all the letters and other documentation will go to a responsible party.
- Assign a person to manage the claim. This person is the one who tracks to be sure all documents are getting where they need to be in a timely fashion.
- Only put one or two physicians on the claim form. More physicians usually means more of a delay or even conflicting information in the file. Handpick the doctor(s) you want to use to attest to the need for care.
- Never let the insurance company talk to the policyholder without a family member present. In particular, the nurse assessment is a dangerous moment in any claim. We recommend that family members always be present for the nurse assessment to ensure accurate information is conveyed.
- Know the definition of “chronically ill” in the policy. Most of the time, it will be “help with 2 of the 6 activities of daily living or clinical scores showing a severe cognitive impairment.” Note that a person must need this care for 90 days or longer. So, a short recovery window is not going to be “long-term” care.
If your head is spinning by now, know you are not alone. LTC claims are document-intensive with a steep learning curve on vocabulary and industry jargon. The most document-intensive times are initiation; when care providers change; and at recertification, six months to a year after approval. Claims are never a once-and-done item. Invoices and other documents must be in each billing cycle to ensure payments are made. Someone must dedicate time and energy to focus on managing the claim, so it does not derail because of documentation problems. There is simply too much money at stake for this process to be allowed to organically happen.
All of this may make it sound like an LTC policy is more headache than it is worth. Not correct. LTC policies are very much worth the effort. Insurance companies are willing to pay legitimate claims. What they will not do is pay fraudulent or poorly documented claims. Thus, if you can “gird your loins” to the intensive documentation, you will be very glad you have an LTC policy at play when it comes time for care. That love/hate thing you had at the start? It becomes all love once you clear the documentation hurdles.