Do Long-Term Care Insurance Carriers Pay Their Claims? You Bet!

A US Department of Health and Human Services, Office of Disability, Aging and Long-Term Care Policy (April 2010) study sought answers to the following:

Is the denial of benefits to policyholders making claims on their policy appropriate?

Is the approval of benefits to policyholders making claims on their policy appropriate?

Their findings are based on the analysis of 1,200 claims from companies accounting for 70% of industry claims.

“An estimated 200,000 policyholders are currently claiming benefits.”

“The review indicated that everyone who was eligible to receive a payment for benefits under their policy, in fact received it, and those who the insurance company determined did not meet their policy triggers did not rceive payments.”

“There are many reasons that a payment might be denied or delayed after an insurer is approved for benefits based on the clinical criteria of their policy. These reasons include provider ineligibility, elimination period not met, coordination of benefits (other payment source), and lack of documentation about service costs or bills.”

“Insurance companies tend to err slightly on the side of approving claims that may not meet policy eligibility criteria.”

“The clinical audit team found that 19% of the sample had not met their elimination period within six months of notification of clinical benefit eligibility, while another 14% had not submitted bills within the same timeframe.”

“Upon a blind review of cases, clinical auditors would have approved 65% of the cases for benefits, denied 30% and would have required additional or clarifying information in 5% of the cases. Put another way, the clinical auditors would have approved 5% fewer cases than the insurance company adjudicators…”

Re-published from the 2012-2013 Sourcebook for Long-Term Care Insurance Information (Thousand Oaks, CA: American Association for Long-Term Care Insurance,  2012).