Long-term care insurance (LTCI) company executives, and representatives from their advisors and vendors, will be converging on Chicago Sunday for the latest Intercompany Long Term Care Insurance Conference, to find out what’s really going on in the LTCI market.
David Rinehart has a completely different, up-close perspective on how the LTCI business works: His company, Family Solutions for Care, is helping hundreds of families collect LTCI benefits.
The Lee’s Summit, Missouri-based company serves as an advocate for policyholders collecting benefits from stand-alone LTCI policies, and from features sold with life insurance policies or annuities that can help the purchasers pay for long-term care services.
Wendy Rinehart — David Rinehart’s wife — began selling LTCI coverage in 1997. When her clients began using the benefits, she discovered that they had trouble with paperwork. In 2011, Wendy Rinehart and a sister-in-law started a firm, ClaimJockey, to help with the paperwork.
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The firm changed its name to Family Solutions for Care in late 2018.
Wendy Rinehart is the chief executive officer.
David Rinehart is a principal.
The Rineharts estimate that they and their employees have helped clients collect about $100 million in LTCI and LTC hybrid benefits.
Here’s a look at nine things they have discovered, drawn from a recent interview with David Rinehart.
1. They like the LTCI issuers.
Wendy Rinehart stopped selling LTCI soon after getting into the patient advocacy business, and David Rinehart said he and his wife now try to keep an arm’s length relationship with LTCI issuers, to ensure their independence.
But David Rinehart said his experience is that issuers are sincere about wanting to pay complete, clean, well-substantiated claims promptly.
“There’s no doubt about it,” he said. “Insurers will pay legitimate claims.”
Rinehart said his experience is that the insurers that have gotten out of the LTCI business are about as good at paying claims as the active issuers.
When state guaranty associations take over failed issuers, they pay the claims they have guaranteed about as well as solvent insurers do, Rinehart said.
2. The real clients are not the usually the coverage purchasers.
Rinehart said his firm usually works with the adult children of the insureds.
The adult children may know little or nothing about any LTC benefits that might be available, and they often live far away from their parents, he said.
The agents who sold the LTCI coverage are rarely able to provide much help, because, by the time the clients file the LTCI claims, the agents have often retired from the business, Rinehart said.
3. The adult children need help finding Family Solutions for Care.
Rinehart said the firm depends heavily on referrals from agents, or retired agents, and from LTC services providers, such as home care agencies, nursing homes or assisted living facilities.
4. The LTC providers are not good at helping families file claims for LTCI or LTC hybrid benefits.
Rinehart said that one problem is that LTC service providers often try to avoid burdening clients by billing the clients for less care than they actually provide.
That can hurt families that are trying to show that elderly parents or other loved ones are eligible for benefits, Rinehart said.
Another common problem, he said, is that LTC providers and other people unfamiliar with stand-alone LTCI often assume that the coverage eligibility period begins when the insured enters a facility, or begins receiving extensive home care.
In reality, he said, the eligibility determination clock for the typical policy starts ticking when the insured begins to need regular help with two activities of daily leaving (ADLs).
A failure to understand that the clock starts ticking when the insured has trouble with two ADLs, and a failure to document the initial problems with ADLs, may mean that the insurer will start paying benefits many months later than the benefits stream really should start, under the terms of the policy, Rinehart said.
5. The ‘insurers’ that Family Solutions for Care works with are usually not the insurers.
Rinehart said his experience is that most insurers have hired a “third party administrator,” or outside company, to process claims.
6. Policy variations are not actually that big of a problem for Family Solutions for Care.
Rinehart said he has heard that consumers have used about 400,000 LTC benefits forms and form variations.
In theory, simplifying the forms could simplify Rinehart’s life.
In the real world, Rinehart said, most of the LTCI and LTC hybrid benefits administrators want roughly the same kinds of documentation.
Simplification might help the claim administrators reduce costs, but it would not do all that much for the patient advocates, he said.
7. Movement away from the age of the facsimile machine might help a lot.
Offices outside of the worlds of law, medicine and insurance are moving away from routine use of fax machines.
Rinehart said his own world still revolves around fax machines.
Medical offices and insurance claim administrators still want faxes, possibly because of data security considerations and other compliance considerations, he said.
“You have to follow up,” Rinehart said.
If Family Solutions for Care faxes a 180-page document to a claim administrator, and one important page is missing, the insurer is probably not going to say that something is missing, Rinehart said.
8. Easier access to health records in general might help.
Federal regulators at the Centers for Medicare and Medicaid Services have tried to give patients easier access to their health records, but, in the real world, getting records from a provider still takes an average of about seven telephone calls, Rinehart said.
9. Diagnosis codes reflecting a patient’s need for help with activities of daily living might help.
Rinehart said he thinks that, if doctors could assign patients standardized, respected codes that would reflect those patients’ need for long-term care services, that would simplify the LTCI claims process quite a bit.
A doctor can use the ICD-10 system to classify a patient as having had a heart attack, or a broken arm.
One reason Family Solutions for Care has to spend so much time getting and faxing medical records is that gathering a large file of records is the only way to document how much care a patient needs, Rinehart said.
— Read The Largest Individual LTCI Claim of 2018, on ThinkAdvisor.