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• Activities of Daily Living (ADL) trigger – The individual is unable to perform (without “substantial assistance” from another individual) at least 2 activities of daily living for a period of at least 90 days due to a loss of functional capacity. Activities of daily living are: bathing, dressing, continence, eating, toileting, transferring. At least 5 ADLs must be used in tax-qualified policies.
– Substantial assistance means both hands-on and standby assistance. Hands-on assistance means the physical assistance of another person without which the individual would be unable to perform the ADL. Standby assistance means the presence of another person within arm’s reach of the individual which is necessary to prevent, by physical intervention, injury to the individual while the individual is performing the ADL.
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Policy Claim Eligibility Triggers Health Insurance Portability and Accountability Act of 1996 (HIPAA)
• Cognitive Impairment – the individual requires “substantial supervision” to protect such individual from threats to health and safety due to “severe” cognitive impairment.
– Severe cognitive impairment means a loss or deterioration in intellectual capacity that is (a) comparable to Alzheimer’s disease and similar forms of irreversible dementia, and (b) is measured by clinical evidence and standardized tests that reliably measure impairment in the individual’s short-term or long-term memory; orientation as to person, place, or time; and deductive reasoning.
– Substantial supervision means continual supervision (which may include cueing by verbal prompting, gestures, or other demonstrations) by another person that is necessary to protect the individual from threats of his/her health or safety.
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Reimbursement vs. Indemnity Reimbursement
– Policy reimburses insured for covered services
– Benefits paid up to the daily or monthly benefit limit
– Policy may allow a pool of money
– Design less expensive and less risk to company than indemnity
Indemnity
– Policy pays a flat dollar amount per day or month as long as:
• Insured meets benefit eligibility criteria
• Services are being rendered
• Services are covered under the policy
– Claimant may receive benefit payment in excess of their cots of care
– Claimant manages pool of money
– Higher risk to insurer
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LTC Claimants – Who and When
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0
1
2
3
4
5
6
7
8
9
Claim Incidence Rates by Attained Age
SOA LTC Experience Intercompany Study 1984-2007; June 2011
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LTC Claimants – Who and When
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Claim Incidence Rates (%) by Issue Age and Policy Duration
SOA LTC Experience Intercompany Study 1984-2007; June 2011
Duration <50 50-59 60-69 70-79 80+
1 0.03 0.05 0.15 0.77 2.63
2 0.02 0.06 0.21 1.00 3.18
3 0.02 0.08 0.27 1.26 3.85
4 0.03 0.09 0.33 1.54 4.62
5 0.03 0.10 0.39 1.79 5.19
6 0.03 0.12 0.47 2.09 5/74
7 0.04 0.13 0.56 2.37 6.18
8 0.04 0.15 0.65 2.65 6.55
9 0.04 0.16 0.75 2.89 7.02
10 0.04 0.19 0.86 3.12 6.70*
*<25,000 exposure years
LTC Claimants – Who and When
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0
20
40
60
80
100
120
140
160
Ratio of Female/Male Claim Incidence Rates by Attained Age
SOA LTC Experience Intercompany Study 1984-2007; June 2011
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Sample Policy Provisions Waiver of Premium
– Insured does not have to pay premiums while
Alternate Plan of Care
– Allows for flexibility in services covered
Respite Care Coverage
– Provides for hiring paid caregiver to allow a break for an unpaid caregiver
Informal Caregiver
– Allows payment to an untrained, unlicensed caregiver
Homemaker Services
– Pays for services such as housekeeping, meal preparation, laundry
Bed Reservation Benefit
– Will pay to hold facility bed while insured is away (e.g., hospitalization)
Care Coordinator
– Works with insurer to coordinate best care at best price
Restoration of Benefits
– Restores benefit pool if insured goes off claim for specified period of time. Any subsequent claim must be a distinct event from the prior claim.
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The LTC Care Continuum
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Home
Home health care
Community-based
services
Home care
Adult day care
Homemaker services
Board and care home
Assisted living facility
Nursing home
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Claims Process Overview
Notification of desire to file a claim
Often involves centralized call center
Call made by insured, family member or power of attorney
Begins process of claim
Provides information/answers questions
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ClaimInitiation
IntakeCare
Coordination
InitialBenefit
Eligibility
OngoingBenefit
Eligibility /Management
Claims Process Overview
Details of insured’s current situation/diagnosis
Review of coverage and policy provisions
Review of claims process
Discuss current care needs and services in place
Offer assistance in finding care/services/facilities
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ClaimInitiation
IntakeCare
Coordination
InitialBenefit
Eligibility
OngoingBenefit
Eligibility /Management
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Claims Process Overview
Local Care Coordinator (field)
– In-home or facility assessment
– Medical, physician, medication information
– Evaluation of environment and current support system
– Assessment of ADLs, IADLs, cognitive status (cognitive screening test)
– Review current care situation
Care Coordination Supervision (vendor or in-house)
– Develop plan of care (services needed and level of intensity)
– Deliver referrals to local services
– Monitor ongoing needs
– Update plan of care periodically or as insured’s status/situation changes
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ClaimInitiation
IntakeCare
CoordinationInitial
BenefitEligibility
Ongoing Benefit
Eligibility /Management
Claims Process Overview
On-site assessment as a tool to help determine benefit eligibility
[Minimum Data Set (MDS) for nursing home residents]
Information from health care providers
Medical records as needed
Benefit eligibility determined (various models)
– Benefit analysts
– Nurses
– Medical director
Eligible services matched to plan of care
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ClaimInitiation
IntakeCare
CoordinationInitial
Benefit Eligibility
OngoingBenefit
Eligibility /Management
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Claims Process Overview
Periodic review of current status and care needs
Assist claimant and family in maintaining continuity of care
Revision of plan care as needs change – increase or decrease
Timely payment of claims
Management of policy provisions related to claim
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ClaimInitiation
IntakeCare
CoordinationInitial
BenefitEligibility
OngoingBenefit
Eligibility /Management
Facility Eligibility
Policy defines
– Home care services (licensed, unlicensed, informal, formal)
– Assisted living facility
– Nursing home
States define care services and facilities differently
– For example, facility definition may include assisted living as well as nursing home
States license home care providers and facilities differently
– Licensure may or may not be required and requirements for licensure vary
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Service Providers and Facilities Must Meet Policy Definitions for Benefit Eligibility
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Opportunities for Fraud Claimant
– Misrepresentation of Loss
• Existence of loss
• Severity of loss
• Inflated home modification benefit
Caregiver
– Ineligible provider presenting as eligible provider
– Services billed, but not provided
– Inflated/padded hours
– Excessive hourly charges
– Broad/weak documentation
– Victimization of claimant
Claimant-Caregiver Collusion
– Side deal between claimant and provider to share reimbursement
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Summary Dementia, cancer and musculoskeletal disorders account for a large
portion of LTC insurance claims
Majority of claimants are elderly women receiving care at home
Tax qualified policy benefit trigger language based on HIPAA
language
LTC claims processing is multi-faceted
Claimant must qualify under contract language as well as the provider
Care coordinators create plan of care
Covered services must fall within the plan of care