Claims Clinic: LTC tools, case studies

After several years of sales, claims under LTC policies are beginning to materialize. The role of the claims adjudicator is to educate the claimant about the policy benefits, while paying special attention to what will be required to determine whether the claimant’s limitations and restrictions meet the definition of Activity of Daily Living (ADL) dependency.

It is very important that the adjudicators have a clear understanding of the policy definitions and what constitutes “substantial assistance or supervision”. When a new claim is received, the adjudicator, through an intake call, should gather as much information as possible and review the policy benefits with the claimant. This will help to set the stage as to whether this will be a LTC claim. If the claimant wants to pursue a claim following this intake, claim forms which typically require documentation from the claimant and physician, are sent for completion.

The next steps in the adjudication process should all occur simultaneously upon receipt of the claim forms. The adjudicator should request complete medical records, service provider records (if available) along with an in-person Benefit Determination Assessment. These documents will allow the adjudicator to make a decision as to the level of ADL impairment and level of “substantial assistance or supervision” required.

As always, careful attention should be paid to claims within the contestability period from the effective date. If this occurs it is important to bring the underwriting staff in early to participate in the review process to assist in your assessment.

A benefit determination assessment is important to the adjudication process as this provides for an independent evaluation of medical history and functional status. The interview typically includes both the claimant and his/her caregiver. A health care professional (typically a nurse) gathers specific information regarding all portions of the ADLs covered under the policy — bathing, dressing, toileting, transferring and continence and feeding — to ensure that the amount of assistance required is clearly outlined. The health care professional will ask the claimant, where possible, to demonstrate how he/she handles routine activities.

It is important for the health care professional to have an in-depth understanding of the extent of any limitations and restrictions and how they impact the insured’s ability to perform their ADLs. Once all the information has been gathered, the health care professional will prepare a report regarding his/her observations. This will detail the claimant’s current ability to perform ADLs and how functional or cognitive disabilities interfere with the claimant’s independence. The assessment is then sent to the adjudicator to be used in conjunction with medical and provider records to determine if the claimant meets the definition required by the policy.

It is important to note that a diagnosis alone is not a predictor of ADL dependency, nor is the physician aware of the policy criteria required to establish entitlement to benefits. Policy structure will determine if the health care professional will be required to develop a plan of care for the claimant. This may be helpful to the adjudicator in determining a follow-up schedule based upon expected improvement — as 60% of home care claims last approximately 135 days and 49% close due to the claimants recovery (if reason known). It is important that the adjudicator closely monitors all claims for both improvement and decline to ensure that the claimant is receiving appropriate care and benefit payment.

Case Study A

A LTC policy was issued on February 10, 2006 to a 79-year-old male. He had a known history of stable osteoarthritis, diverticulosis and anxiety, treated with a daily dose of Paxil. The underwriter recommended that the policy be issued.

The insured initiated a claim based on an inability to care for himself since May 2008. According to his claim statement, he had signs of mental deterioration, required total assistance with bathing and toileting and wore incontinence pads on a daily basis. The insured’s nephew was a nurse who managed a private care home where the insured resided. He provided his uncle’s care, which included assistance with bathing and meal preparation, along with toileting supervision. The insured’s physician indicated a diagnosis of Hyperlipidemia and Alzheimer’s disease (treated with Aricept) and mental deterioration, noted as of April 20, 2008.

The claimant saw his physician in April 2007 for an annual check-up. Cognitive testing indicated mild Alzheimer’s dementia, but no new medication was prescribed. In November 2007 the claimant started wearing incontinence pads, at which time his nephew moved him into his licensed private care home.

In April 2009, the claimant’s physician completed additional cognitive testing that indicated a significant decline in cognition and in addition to Aricept, Namenda was prescribed. During the same physician’s visit, it was identified that substantial assistance with bathing, dressing and incontinence care were necessary and that he was unable to be left alone because of his level of confusion and forgetfulness.

A diagnosis of Alzheimer’s Disease does not necessarily indicate that the claimant meets policy triggers for “substantial supervision for safety”. A benefit determination assessment is very helpful to the adjudicator as this will provide a baseline cognitive screen score which can be monitored over time. The most common tool used in the LTC industry today is the Folstein Mini Mental Status Exam (MMSE). After completing his initial Benefit Determination Assessment the client was found to meet the policy triggers and the claim was approved with a touch base call to the facility every 6 months and an annual follow-up visit recommended.

Case Study B

A LTC policy was issued to a 69-year-old female on June 10, 2005. She had a known history of hypertension treated with Atenolol. The underwriter recommended that the policy be issued.

The insured initiated a claim for LTC benefits on October 20, 2007 due to a stroke she suffered on October 5. The daughter reported her mother required total care with all ADLs, was participating in a daily physiotherapy program and was scheduled for ultrasound and other tests.

The adjudicator followed up with the hospital discharge coordinator who advised that the claimant required rehabilitation services and possible long-term placement. The claimant required a walker to ambulate, with one person to provide assistance. She needed minimal assistance for bathing but required assistance with transfer and toileting.

She fed herself and did not dress (due to the hospital setting). Medical information from the physician confirmed she had a stroke on October 5, 2007 and was in the hospital awaiting a home care placement.

A Benefit Determination Assessment (BDA) was not needed at the onset of claim as the discharge planner was able to provide a thorough overview of the claimants ADL status and medical records confirmed her history.

The claim was approved due to the need for substantial assistance with bathing, transferring and toileting and the adjudicator was monitoring for transfer to a rehab facility and was planning a 6 month BDA follow-up to monitor improvement in status.

The follow-up assessment revealed the claimant had improved to the point where she was able to ambulate independently with her walker, bath independently with the use of a shower bench and hand-held shower, and only required occasional assistance with dressing (if she wore tie shoes). The facility was working with the daughter to transition the claimant back into her home with the required medical equipment to maintain independence.

The claim was closed and the daughter understood that if there was any change in status she should notify the insurer for future benefits.

Unfortunately, not all facility claims show improvement. According to an LTC Intercompany Study, the average length of stay in a facility is slightly shorter than two years and 65% are closed due to the claimants death (if reason known).

Hélène Michaud is assistant vice-president, marketing, at Munich Re .