Harley says claims are reviewed on a case by case basis by one or multiple adjustors, depending on the status of claim and paperwork filed with the claim. Incomplete claims are the most confusing for both the insurance company and for complainant."I have significant experience with long term care and Prompt Pay laws," says Harley. "Depending upon which state you reside in, there are certain laws that govern the handling of initial claims and continuation claims." She points out that these two kinds of claims are completely different, particularly in terms of information required and time frame. Obviously, initial claims are the most difficult for claimants because everything has to be set up—one of the most common complaints by policy holders is that this process takes too long. Even though continuation claims are reviewed on a regular basis, they are already set up.
Prompt Pay Laws
"The Prompt Pay laws govern the insurance company and they have a duty to notify clients once the proof of loss has been submitted to the company," says Harley, "and it is dependent upon what state the policy was issued in or where the policy holder resides."
Harley says many people are unaware of all these laws. Even more frustrating is that some insurance companies are unaware of them! "Policies and procedures are not set up to adhere to these laws," Harley says. "With most states the Prompt Pay laws were designed for normal health insurance and they have been in place for several years. Many State Departments of Insurance have determined that these laws are applicable to long term care--previously the industry was having issues adhering to these claims."
Harley worked on the team that was involved with the 44-state corrective action plan for the national assoc of insurance commissioners, called the Multi-State Action Working Group (MAWG), which has been referred to in some LawyersandSettlements long term care insurance articles. "A lot of lawyers who read this document may not understand the compliance component of prompt pay and how it may help their clients," adds Harley.
Common Mistakes
"A lot of folks don't understand their policies, and that is not their fault," Harley says. "Legal jargon within the fine print and the claim forms themselves can be confusing. They have to be filed to each state insurance department, according to state regulators. A common problem is that folks aren't going through a state-certified agency to provide health services. Most policies pay when a physician deems the insured necessary to have home care services. Most claim forms, especially for initial claims, require that significant amounts of information have to be collected to set up the claim.
In my experience, when a policy holder calls to request a claim form, a list of certified agencies or providers can be provided at that time. So the claimant should ask for that list. However, it is not required by any state law to provide the list, even though most people ask that question when reviewing procedures and policies. The insurance representatives don't have access to all health care agencies because there is no database. For instance, an agency could have been certified last year but may have lost their license recently. Most of the time the determination [of a health care facility] happens when the claim is submitted. And that goes back to Prompt Payment laws—the clock is ticking for the insurance company and they have to explain whether or not a claim is accepted in a certain amount of time.
A normal processing time frame does not always adhere to the Prompt Payment law. For instance, a claimant submits a claim and something is missing, such as an ADL (activities of daily living) and the physician has to say this person can or cannot meet these activities of daily living. Then the claim adjustor compares what the doctor said to the claim. In certain states the company has an obligation to follow up with the claimant or sometimes the provider, and pay the claim promptly.
There are so many different moving parts on these initial claims. It is important for lawyers and claimants to understand the difference between initial and ongoing claims. For example, if you ask the company what the normal processing time frame will be, they are going to average initial and continuing claims together. A continuation claim, once set up, can take a few days. But an initial claim can take up to a few months to get all the documentation together.
A claim can take longer than anticipated, often depending on the policy and how long that physician says the claimant needs services (POC or plan of care) and how long the physician and other health care providers are medically required. Some companies set up a review based on the POC, and other times based on their normal operating procedures.
Lawyers sometimes need assistance, so it is important to find a lawyer specializing in long term care insurance. My professional career includes side-by-side and directly reporting to attorneys. I can understand the law and the back office operation process and how to apply that law to long term care claims. In my experience, I think lawyers, firms and the public often need help in reviewing the claim and understanding the Prompt Pay laws. Depending upon their level of expertise with long term insurance, people may not be asking the right questions regarding policy and procedure."
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Heather Harley has extensive experience and professional certifications with long term care and supplemental health, Medicare supplement, life and annuity insurance. She has directly reported to the General Counsel and Chief Compliance offices and for more than 12 years she has worked with a health insurance company, 7 of those years in the Legal and Compliance departments. Last year, she created a consulting business named Harley and Associates, LLC.