Grassley Probes LTC Insurers' Claim Handling Practices

Sen. Charles Grassley, R-Iowa, has opened an investigation of the claims-handling practices of long term care insurers.

Grassley, ranking minority member of the Senate Finance Committee, sent a letter on Oct. 1 to 11 LTC insurers seeking detailed information on how they handle claims.

In April, Grassley asked the U.S. Government Accountability Office to review the LTC insurance industry, particularly its claims policies and practices, and also whether state insurance regulators are adequately investigating claim denials. That investigation is continuing.

In the letter to top executives of the insurers, Grassley refers to a New York Times article in March that said some LTC carriers had put burdensome requirements on claimants in receiving coverage.

“For instance, the article notes that many long term care policyholders are confronted with draconian policies that deny claims for minute administrative errors such as failing to submit unimportant paperwork, filling out wrong forms after receiving them from the insurance company, and the company failing to recognize an approved facility,” Grassley stated in his letter.

In addition to the Times article, Grassley said his committee’s investigation was spurred in part by a recent report he received from the National Association of Insurance Commissioners, Kansas City, Mo., showing that LTC complaints nationwide have shown a steady increase.

Complaints rose from 1,467 in 2001 to 2,830 in 2005, the report showed.

In a letter to Grassley, Catherine J. Weatherford, executive vice president and CEO of the NAIC, said much of the increase could be explained by rising numbers of individuals filing claims.

But “the data shows a more troubling trend,” Weatherford stated. “Over the past four years there has been a marked increase in the number of complaints that involve claims denials (from 254 in 2003 to 442 in 2006), and those complaints now make up almost 18% of all complaints.”