Navigating the Challenges of Long-Term Care Insurance Claims

In the US alone, Long-Term Care Insurance is estimated to have covered 8 million people. LTCI policies come in many varieties. The  language of the policies and the  technical requirements for filing a successful claim can be very confusing.

The attorneys at Robinson Warncke have  a great deal of experience in presenting LTCI claims and in overcoming disputes. Very few attorneys handle these claims, and the work is very specialized.

This article will cover the challenges faced in the claim presentation process. The cost of long term care has greatly outpaced inflation over the past few decades. Anyone seeking assistance for an elderly loved one knows the cost can quickly wipe out a lifetime of savings.  Therefore, the success of your LTCI claim can make all the difference in getting the care you or loved ones may need. Read on about the trends and challenges of presenting long-term care insurance claims.

Long-Term Care Insurance: What Is It?

Long-term care insurance is a type of coverage for those who can no longer care for themselves due to a disability, chronic sickness, cognitive impairment, or loss of functional capacity. Although anyone can file a claim on a long-term care coverage, the elderly are most in need of these policies. Policies for long-term care may include in-home nursing assistance with daily activities. They also include care in nursing homes and assisted living centers. Long-term care insurance policies cover a range of treatments that are not covered by standard health insurance policies or Medicare.

People have grown increasingly conscious in recent years of the ease with which long-term care may wipe out the life savings of older individuals. LTC insurance can be costly and frequently provides limited benefits, with restrictions and conditions that may cover only a tiny proportion of overall long-term care costs. Therefore, it is crucial to have an LTC attorney evaluate your policy to ensure that you understand the details of your plan and the benefits you may or may not be entitled to receive.

Long-term care insurance policies have specific requirements that you must be aware of, such as the following:

1. Many policies require that the caregiver be a licensed professional caregiver who is not a member of the insured’s family.
2. Some policies allow you to remain in your own home while receiving long-term care benefits, while others require the recipient to reside in a facility.
3. Many policies will not provide benefits unless you cannot perform two out of six activities of daily living without assistance or are cognitively disabled

Trends and Challenges In the Claim Presentation Process

The purpose of long-term care insurance is to pay for all long-term care expenses that regular insurance typically does not.

A registered health care professional must find that you have a significant cognitive impairment or have lost the functional capacity to conduct at least two out of the six Activities of Daily Living (ADLs) for a minimum of 90 days in order for you to be eligible for benefits.

The Six ADLs are below:

1. Bathing is the act of washing oneself with a sponge or in a tub or shower, including the process of entering or exiting the tub or shower.
2. Maintaining control over bowel and bladder function, or executing associated personal hygiene while unable to maintain control over bowel or bladder function.
3. Dressing entails donning and removing all appropriate clothing as well as any required braces, fasteners, or prosthetic limbs.
4. Eating is the act of ingesting food into the body either orally, through a feeding tube, or intravenously.
5. Using the restroom, including getting on and off, as well as carrying out any necessary personal hygiene
6. Transferring is the act of getting into or out of a chair, bed, or wheelchair.

A variety of in-home care services, including skilled nursing, various forms of therapy, and personal care help, may be covered by long-term care insurance coverage. Additionally, some expenses for care in a nursing home, Alzheimer’s disease special care facility, assisted-living facility, adult day care facility, or hospice care facility may be covered by LTCI.

It is well-documented that, from the 1970’s until today, LTC insurers have lost billions of dollars on these policies. This is primarily due to two factors:  (1) the life expectancy of American seniors has been much greater than insurers estimated when pricing and selling these policies; and (2) the cost of assisted living and related services has greatly outpaced what the insurers expected. This has resulted in the cost of claims greatly exceeding what the insures expected.

Over time, the insurance industry tried to adapt by increasing the price of coverage and reducing the benefits offered.  Even these adaptations were insufficient to prevent huge losses on LTC insurance.

Eventually the vast majority of insurers left the LTC market entirely. Many of those insurers who no longer write these policies are still stuck with older, money-losing policies. Some of them have responded to these losses by becoming more aggressive and more demanding in the claims process.  In short, they look for – and sometimes invent – reasons to deny claims.

Consequently, this has led to a rise in the number of rejected claims due to inadequate medical/functional evidence or for other even more technical reasons.

Common Reasons For Denied Long-Term Care Insurance Claims

When you purchase and pay premiums for long-term care insurance, you expect to have the necessary coverage when you need it. Unfortunately, a disproportionate number of long-term care insurers will deny claims and coverage for any reason. Common reasons for denials include the following:

1. Alleged premium nonpayment – If the insurance company believes that you missed a payment or paid late, it may declare that your policy has lapsed and that it owes you no benefits, despite your having paid premiums. These companies are required to adhere to stringent procedures regarding nonpayment of claims, and we can attempt to demonstrate that your coverage should still be in effect.
2. Licensure of the facility – Some insurance companies will question whether the care facility qualifies as a properly licensed and qualified care provider, and claimants must provide evidence of the facility’s or caretaker’s qualifications.
3. Some older long-term care policies have provisions that require a policyholder to have a prior hospitalization, stay in a care facility, or other treatment before receiving long-term care coverage.
   Denying benefits for personal care – Some long-term care insurance companies attempt to deny coverage for personal care, such as a caregiver running errands, cleaning the house, or preparing meals for the policyholder.
4. Claims of cognitive impairment – Some policyholders with cognitive impairment forget to pay premiums if they have not set up automatic withdrawals. Within a given time frame, we can help demonstrate through physician statements and testing that the lapse in payment was due to cognitive impairment; therefore, the insurer should reinstate the policy so that the policyholder can receive the assistance for which they have paid so dearly.
5. Insufficient skills – For many long-term care policies to apply, a policyholder must be unable to perform activities of daily living such as cooking, using the restroom, dressing, toileting, changing, transferring, bathing, or even walking. Even though independent living is no longer a safe situation, some insurance companies will deny benefits if a policyholder has limited abilities to perform daily tasks.
6. Various medical perspectives – Some insurance companies have their own physicians examine a policyholder’s treatment records and determine their capabilities without physically examining them. Frequently, these physicians lack the training and/or specialization required to provide a qualified diagnosis. The insurance company may deny the claim if the insurer’s paid medical consultant determines that the policyholder does not require care.
7. Condition improvement – If certain individuals receive consistent care, their condition and abilities may improve. This does not necessarily imply that they should be able to live independently, but a long-term insurer could argue that their improved condition disqualifies them from receiving continued benefits.
8. Excluded medical conditions – A long-term care policy’s fine print may contain exclusions for certain conditions, such as self-inflicted injuries, illnesses related to substance abuse, and preexisting conditions. An attorney can examine your policy language to determine whether an exclusion should or should not apply.

Practical Considerations In Claim Presentation

To ensure a successful LTCI claim, the insured individual must present evidence tailored to the technical definitions in your policy.  Even well-meaning doctors and helpful caregivers often fail to connect the dots between the patient’s situation and the insurance policy requirements.

Sometimes the patient hasn’t seen a physician  often enough to establish the need for assistance.  And even when they do, many doctors don’t keep detailed enough notes about their physical examinations to prove the need for assistance.  Sometimes both problems arise. There are ways to overcome sparse medical notes. However, it is not always easy to do so, especially for the inexperienced.

To reinforce the proof, we can arranged testing that objectively evaluates and measures a claimant’s physical and/or cognitive functioning.  This can be done through functional capacity evaluations and/or neuropsychological testing. The quality of these tests can vary from one provider to the next.  An experienced LTCI lawyer should know how to evaluate the quality of a given test and report – basically doing the claims adjuster’s job before the evidence is submitted to the insurer.  If any deficiencies are identified, they can be fixed in advance and before a problem arises with the claim.

Another helpful tactic is to arrange a licensed nurses or home care aides to conduct a pre-claim, in-home evaluations. This helps to objectively prove the insured’s need for assistance.

The Elimination Period In Long-Term Care Insurance

The insured must pay out-of-pocket expenses for a specified period before benefits begin. This period varies from insurer to insurer but typically ranges between 0 and 180 days. The elimination period is a contractual allowance that may be included in some long-term care insurance policies. It is a trap for the unwary, as we have seen policyholders present a claim without first hiring the services they need.  Under those circumstances the Elimination Period does not even start to run.  Meanwhile, the insurer starts requesting other information and dragging out the process.  If you don’t ever hire the services, the insurer can drag out the “investigation” forever.  Once you finally do hire the services you need, only then does the policy waiting period start.

Misuse of Alternative Plans of Care

Lastly, it’s important to note that insurers often misuse alternative care plans for their benefit.  Most LTC policies provide for APC’s, and they certainly can be a good thing.  An APC allows the parties to craft an agreed-upon solution where the insurer pays for services that may not be within the technical limits of coverage.

However, we have also seen insurers abuse the APC process.FOr instance, we have seen insurer deny coverage for services that are clearly covered in the policy, and then place a proposed APC in front the client for signature.  The agreement then contains terms that will modify and water down the coverage the insured has been paying for.

In our view an insured should never sign an APC without first seeking expert insurance counsel.,

Insurance Law Done Right

As a Long-Term Care Insurance Denials Attorney, I have seen the challenges faced by policyholders in the claim presentation process. The growing popularity of Long-Term Care Insurance (LTCI) policies has resulted in increased demand for coverage and a wider gap between what insurers are willing to pay and what policyholders expect as reasonable reimbursement rates. At the same time, insurers have implemented stricter criteria and reduced the number of benefits offered, resulting in a rise in rejected claims due to inadequate medical or functional evidence.

As a policyholder, it is critical to present evidence of physical or intellectual incapacitation in two Activities of Daily Living, such as eating, bathing, and dressing. However, proving the essential need for assistance can be challenging, especially when the policyholder’s cognitive issues prevent them from even realizing their own limitations. To reinforce the evidence, testing can be conducted, such as functional capacity and neuropsychological evaluations, and in-home evaluations can be conducted by licensed nurses or home care aides.

It is important to note that medical professionals are primarily focused on treating patients and not creating evidence for insurance claims. Therefore, a lawyer versed in this coverage can make all the difference. Policyholders must ensure that they have provided all necessary documentation, including doctors’ notes and letters from care providers, to support their claims.

We are here to assist policyholders in navigating the complex claim presentation process and securing the best, most efficient possible outcome.