A congressional committee investigating the long term care insurance claims practices of Conseco Inc. and Penn Treaty American Corp. could ultimately take a look at the claim procedures of the whole industry, according to a source close to the committee.
Investigators for the Committee on Energy and Commerce, headed by Rep. John Dingell, D-Mich., and Bart Stupak, D-Mich., chairman of the committee’s Oversight and Investigations Subcommittee, announced the investigation late last month.
The congressmen launched the investigation because of concern about a March 29 New York Times article alleging that many consumers had their legitimate LTC claims denied or seriously delayed by carriers after years of paying premiums.
However, a trade group that reports life and health insurance claims to the California Department of Insurance now says the high LTC claim denial rates in the state, which were quoted by the Times, are inaccurate.
A spokeswoman for the California DOI also said the department expects to report on the extent of denied LTC claims. The DOI had asserted that 24% of LTC claims submitted in the state were denied.
“The industry as a whole and Penn Treaty vehemently felt [that figure] was incorrect,” said an executive for Penn Treaty, Allentown, Pa.
He made his comment before the Association of California Life and Health Insurance Companies, which had submitted the claims data, said it planned to amend its figures.
In addition to the disputed data, the Times article recounted other evidence to back its assertion that thousands of LTC claims had been denied unfairly by insurers.
In letters to both Conseco, Carmel, Ind., and Penn Treaty, Dingell and Stupak stated their concerns about the Times’ accounts of problems with the way insurers treat some LTC insurance claims.
Some insurers “may have developed procedures that make it difficult–if not impossible–for policyholders to get paid,” Dingell and Stupak wrote.
Although LTC insurance is regulated by the states, the committee’s attention is focused on the net impact of excessive claims denial on Medicare and Medicaid.
Both Conseco and Penn Treaty have 3 weeks following receipt of the May 23 letter to provide the requested information.
Results of the investigation are expected this fall, according to the source familiar with the probe.
Commenting on the negative publicity for the industry, Cameron Waite, executive vice president of strategic operations for Penn Treaty, says LTC insurance is very important to the elderly, and that is Penn Treaty’s reason for being in the business.
“We hope Congress’s inquiries will educate the public even more about the importance of long term care insurance. It will also help Congress understand its importance to reducing Medicaid financing,” Waite says.