Sellers of private long-term care insurance (LTCI) may wish that private savings and private LTCI were paying for most long-term care (LTC) services in the United States — but you may also wish that the Tooth Fairy were putting diamond rings under your pillow every night. That’s not what’s happening.
Someday, private LTCI might pay for a majority of U.S. LTC services.
Today, all private insurers combined pay only about 11 percent of LTC bills, according to the Robert Wood Johnson Foundation. Residents and their families pay about 22 percent. Medicaid and other public programs pay about 67 percent.
But one point about “public programs” that observers often miss is that the government buys most of the acute health care, LTC and plan administration services it uses from outside vendors, through procurement processes that are often announced on state or local community procurement websites.
Even if a government agency, or a big, formidable nonprofit agency that might as well be a government agency, is providing the services, that outside agency might hire outside subcontractors.
If nothing else, few of the agencies are using robots, or government-owned slaves, to staff their programs. They bring in independent contractors or hire people to do the work required by the contracts.
Traditionally, Medicare paid for some home health care services. Medicaid paid for nursing home care for the (wink wink) indigent. (More accurately: For the truly needy, along with people with skilled Medicaid planners.) States set up “long-term care ombudsman” offices to help consumers handle problems with nursing homes.
In recent years, the federal government has pushed state Medicaid managers to shift from providing long-term care through nursing homes to providing “long-term services and support” (LTSS) that still pay for some nursing home care, but also pay for home care, home-based respite care for family caregivers, and adult daycare services. Because those LTSS programs are operating more like insurance companies, and often use private companies to manage people’s use of care, the Centers for Medicare & Medicaid Services (CMS) requires them to set up LTSS ombudsman programs — programs that focus on helping consumers resolve problems with the new LTSS system.
In other words: The new Medicaid managed LTSS programs need the public plan equivalent of claim advocates.
In the past year, for example, the Ohio Department of Medicaid has been talking about hiring a provider organization to help people who are starting to use the state LTSS system know where to go for help.
The Louisiana Department of Health and Hospitals has been talking about hiring an independent LTSS ombudsman for managed care for people with intellectual and developmental disabilities.
The New York State Department of Health solicited bids for a statewide managed LTSS ombudsman program.
For some ideas about what LTCI specialists should consider when thinking about ombudsman opportunities, read on.
1. An LTSS mindset
When you see a request for proposals (RFP) for an LTSS ombudsman program, rather than an LTCI customer service program, you know you’re not dealing with people who live to close sales.
The LTCI specialists who even want to consider looking at ombudsman RFPs are probably the ones who naturally enjoy learning about the care facilities and home care providers in their area and are already spending a fair amount of their time helping consumers cope with billing problems, claim problems and decisions about where to get care.
See also: Real acronyms: LTC or LTSS?
LTCI specialists who are looking at the LTSS ombudsman RFP market will have to recognize that they may have to think hard about the politics in the agency putting out the RFP; the relationships of the individual humans actually working in the procurement office; the politics of any existing care coordination, navigation or ombudsman programs that have no interest whatsoever in seeing a new LTSS ombudsman office invade their turf; and, of course, higher-level developments at the local, state and federal level.
Trying to win an LTSS ombudsman contract would be a poor fit for an LTCI specialist who’s wired to turn a lead into a client in a week and hasn’t voted in 30 years because all politicians are crooks.
Bidding would make more sense for an LTCI specialist who is already active in insurance industry legislative councils and has been involved enough with aging- and LTC-related government advisory councils to know many of the government officials and nonprofit agency officials would be interacting with an LTSS ombudsman.
3. Monopsony power
A monopoly exists when one seller in a market controls just about all sales of a product or service in that market.
A monopsony exists when one buyer in a market controls just about all purchases of a product or service in the market.
The owner of a small agency that gets an LTSS ombudsman contract or similar contract may have to face the reality that it’s dealing with a huge, unpredictable, monopsonistic client. For that reason, bidding on an LTSS contract might make sense for a relatively big agency, or for an LTCI specialist who has a plan for what to do if the LTSS contract comes in one year and leaves the next year.
See also: LTCI sales boosters: 5 tools.
LTCI specialists who take the time to look at ombudsman RFPs will often see provisions that shut out insurance and brokers, or shut out all for-profit companies. Would-be bidders who have been active on related advisory councils and oversight boards might understand what I’s they have to dot to get over the moats.
See also: Escape from HealthCare.gov: New Mexico shops for an enrollment system.
5. Lack of realism
For a caring person, one drawback to moving to the nonprofit LTSS world from the for-profit LTCI world may be shifting from using a little carefully regulated puffery to dealing with people who have created regulatory requirements for luxurious, fantasy long-term care palaces but have only rounded up enough funding to pay for tin roof shacks.
LTCI specialists who are thinking about bidding on LTSS ombudsman or navigator contracts in a community may want to think how big the gap between expectations and resources is in that community and how well they could deal with that gap within the contract framework.