100+ Tricks Used By Long Term Care Insurers To Deny, Delay, & Underpay Claims

If you told me 10 years ago that long term care insurers have developed dozens, if not hundreds of ways to avoid paying claims, I probably would’ve had a hard time believing you. I might've asked for some type of evidence.

So, I started compiling a list of tactics the LTC insurers have been caught using. Lawsuits and investigations have uncovered more than 100 variations, although the insurers cook up new ones every year. Financial disclosures from the insurers have also demonstrated their effectiveness from year to year, with insurers increasing average reimbursement by hundreds of dollars per year while their own statistics show that care typically goes up by thousands per year.

As you read the list, you’ll find that many of the tactics are variations of each other that occur at different stages of the claims process. That's because they ensure that completing one stage of the process does not “mission accomplished.”  Most often, that means you’re in for a new set of hoops and hurdles. Often times, a family member or provider will get through the initial application process, only to be thwarted by a biased assessment, an irrational denial, needless delays, or payments that have been chiseled down.

Each stage is merely part of a wider strategy to shortchange and mistreat policyholders for their own financial gain. The goal is to overwhelm you and they know that time is on their side. They know that in many cases, all it takes is one of their tactics to work.

The actions below are all violations of the 10 legal duties insurers have to policyholders, and they’re precisely what we work so hard to avoid or swiftly resolve. In our view, it’s better to either prevent or quickly resolve issues, rather than leave policyholders with no other option but to file a lawsuit. Keeping insurers on the straight and narrow is the best way to hold them accountable, rather than allowing them to get away for mistreatment for longer periods of time.

Knowingly sending claims applications to the wrong address or manipulating the document process

• Sending either an outdated or mismatched claim application, so that they can then blame you for submitting an invalid claim;
• Failing to acknowledge a change of address form; &
• Knowingly or negligently sending documents to a prior address (claims handlers routinely send documents to the policyholder’s original address they used at the time insurance was purchased; often 10-20 years prior).

Any contact with the policyholder after being notified in writing that an authorized representative must be present

• Claiming they never received the document;
• Claiming there was an innocent miscommunication (“Oops! Sorry. It won’t happen again!);
• Calling when no one else is around;
• Sending letters that instruct the policyholder to call;
• Using private investigators to determine when the policyholder is alone;
• A staff member posing as a passerby of the policyholder’s residence; &
• Staff members posing as visitors at a facility who coincidentally encountered the policyholder.

Methods to ignore or disrupt communications made by the policyholder or representative (typically designed to be plausibly deniable), such as:

• Increasingly common 45+ minute hold times (current employees at many insurers state the the average wait time is nearly an hour);
• "Accidental” dropped calls;
• Being excessively shuffled from employee to employee to elongate calls;
• Claiming they did not receive a representative authorization;
• Stating they must speak to the policyholder in addition to their representative;
• Failing or refusing to give a direct return line for the assigned claims handler;
• Excessively requiring you to repeat unnecessary details every time you call back (making you be a “broken record” to waste time or in hopes you’ll make an inconsistent statement they can exploit);
• Claims handlers not calling back after stating they will;
• Stating one claim requirement but withholding others, which requires you to call them back excessively “this is the last thing we need” and “Oh. One more thing.” “I forgot. There’s one more thing.”)
• Repeatedly claiming they must speak to a supervisor who is not on duty;
• Speaking with a manager who knowingly makes a misstatement regarding documents on hand (such as stating the handler made an innocent/correctable error)
• Manager knowingly stating that he/she must speak to the claims handler to make sure he/she has information that has been received); &
• Some insurers use deliberately early closing times during the week and closed offices on the weekend because they know the policyholder’s representative is often an adult child who works full-time.

Misrepresenting or lying about policy language or benefit-triggering conditions (one of the most common forms of misconduct)

• Claims handlers are trained to look at the lowest paying or most restrictive policies by default, routinely not having your policy in front of them (requiring you to figure that out, send your policy, and point out the relevant terms and provisions);
• Stating that an elimination Period is the same as a deductible and applies to a dollar amount, not a time period;
• Any attempt to claim that company claims handling policy deviates from the terms of the contract (“I’m sorry, I feel for you but I’m just following the rules here at the company and I’ll get fired if I violate them”); &
• Any intentional misstatement of the law, particularly when they have been informed of it (effectively leaving you no option but to file an appeal).

Knowingly leading a policyholder or representative to fax or mail documentation to  the wrong fax number, wrong physical address, or wrong staff member

Knowingly ignoring communications that significantly substantiate a claim

• Ignoring reception of documents from primary or long term care providers;
• Ignoring letters and supporting documents sent from the policyholder or authorized representative;
• Repeatedly ignoring voicemails to confirm their reception of claim-substantiating information;
• Claiming the misread or didn’t understand documents;
• Falsely claiming the documents were submitted in the wrong format; &
• Destroying any document in the claim file.

Improper assessment activities

• Leading questions designed to disqualify coverage;
• Writing statements differently from what the policyholder said;
• Failure to acknowledge legitimate functional impairments;
• Suggesting accommodations such as slip-on shoes or buttonless blouses to avoid determining that those activities are impaired (the standard is that you can’t perform them in a “usual” manner, such as being able to put on socks and tie shoes);
• Intentionally asking embarrassing questions designed to lead the policyholder into not acknowledging legitimate needs (particularly regarding personal hygiene);
• Accepting disqualifying answers to bathing questions, including counting sponge baths as a fully adequate method of bathing. Many older people begin using sponge baths because they either are concerned about falling in the bath/shower or view assistance as a sign of lost dignity or a violation of privacy. The choice of sponge baths vs. bathing is legally independent of the actual need, just how any person can perform a risky activity alone a few times and are lucky not to get hurt;
• Using an alternative interpretation of statements made by the policyholder;
• Failing to acknowledge qualifying documentation from the policyholder’s licensed providers;
• Improper interpretation of a physician or nurse practitioner’s assessment and certification;
• Improper application or interpretation of the mini-mental exam for cognitive impairment (tossing out questions the policyholder correctly answered or making an intentional misinterpretation)
• Knowingly skipping parts of the assessment that would likely trigger benefits;
• Failing to recognize the existence of a “medical necessity” trigger when the policy allows for it instead of functional impairment or cognitive impairment (one of the most valuable and easy to trigger provisions of older, unlimited-benefit policies);
• Coaching the policyholder into making extraordinary or dangerous one-time physical efforts to rule out functional impairment. An example would be “try as hard as you can to get out of your chair.” Another example is “show me how you get in the bathtub,” when a policyholder might be able to do it once. And “show me how you prepare food,” while ignoring the fact that the policyholder can’t drive and get to the grocery store.
• Suggesting implementation of durable equipment as a complete substitute for receiving assistance (equipment such as handrails or anything to reduce falls can be an addition to assistance and increase safety overall). Another example is Life Alert, wearable 911 alert remotes (they can be helpful in addition to assistance and particularly if the caregiver is momentarily absent and an emergency such as a fire or break-in occurs). Another is a wearable, perimeter or GPS bracelet or anklet. With dementia patients, they can be a useful addition if the individual has a pattern or risk of walking outside and getting injured or lost, but they are not a substitute for supervision.
  

  Unreasonable denial of claim approval

• Stating that coverage can’t be triggered without the policyholder having a previous hospital stay (this is a common term of policies from the 1980s and 1990s that has been widely struck down by law);
• Any type of rejection that falsely claims that documents were not received;
• Any type of rejection that ignores previous assessments or certifications from primary care providers
• Making a rejection decision using their nurses whose findings conflicted with the policyholder’s providers and not providing reasonably detailed justification;
• Ignoring additional evidence/documents they requested;
• Claiming that they haven’t received proof of licensure from caregivers (after they have received the documents); &
• Claiming that the caregiver does not meet licensing requirements if they are in a state that either does not require or does offer a route for obtaining a license that type of caregiver for the particular service they provide (common with homemaker services and lower-tier home health services). Claims handlers are often trained to state they make no exceptions, despite them having to make exceptions in states with unique laws or licensing exemptions.

Failing to initiate and complete a full and diligent investigation of the claim

• Stating that an investigator has been assigned to a claim when they haven’t
• Claiming that the assigned investigator is out of the office (on vacation, a family emergency, etc.)
• False statements that a higher level/more qualified investigator must be assigned to the claim or stating it is extremely complex when it isn’t
• Falsely stating that previously acknowledged documents slipped through the cracks and didn’t make their way to investigators
• Claiming that the investigator made an error and that a new investigation is necessary

Knowingly ignoring communications that significantly substantiate a claim

Unreasonably delaying the claims process

• Knowingly ignoring communications that significantly substantiate a claim
• Any attempt to make or lead the policyholder or representative into abandoning their claim. This is a variation on denials, except insurers wash their hands clean because they argue that the policyholder or representative did not complete the claims process.
• Making the policyholder start a claim over for arbitrary reasons
• Giving arbitrary and excessive “normal” timelines
• Feigning confusion and saying it’s “out of their hands” and they’re not sure how long processing will take (often promising to call back but not doing so)
• Returning calls at a time the policyholder or representative has stated he/she would not be available)
• Intentionally calling from an unknown/masked/VoIP/foreign number and either not leaving a voicemail or leaving a voicemail that asks for the individual to call back at an arbitrary time (such as “call back in one week and we’ll have an update”)
• Leaving a voicemail with any intentionally false information (“please call back within the next 30 minutes because I am going on vacation for the next week”)

Failing to deny a claim within a reasonable period of time

• Often waiting to deny a claim until a pre-determined appeal period has already elapsed

Failing to provide a reasonable, evidence-based explanation, with a baseless , or providing an explanation that is intentionally difficult to understand

Unreasonably delaying payments due

• Stating that payment is made after an arbitrary period (45 days, 60 days, 90 days, etc.)
• Delaying payments until after an appeal window has elapsed and then requiring the policyholder or representative to repeat steps of the claim or reconstruct invoices
• Sending physical payments to the wrong address
• Transmitting electronic payments to either the wrong address or via an incorrect routing number
• Sending post-dated checks that can’t be cashed until a future date
• Sending accurate checks in an accurately, electronically stamped envelope that they waited to mail;
• Sending a check that is not properly signed and can’t be cashed; &
• Correctly dating checks but sending them at a period so far in the future that the check can’t be cashed (such as the backside of the check stating “this check is void after 90 days”). One claims handler stated that all checks must be stored in a vault and only removed and mailed after 30 days.

Knowingly underpaying a claim inconsistent with the agreed-upon amount

• One of the most common tactics is sending a payment that is only slightly below the required about ($3-5 dollars per day) that will make some policyholders believe it’s not worth the effort of an appeal)

Failing to respond to a policyholder or representative’s attempts to reveal an underpayment

• Not responding or claiming not to have received appeals documents;
• Falsely stating that an appeal determination was sent to a previous address; &
• Waiting to respond until an appeal window has closed (“I’d love to help you but you had to appeal underpayment within a certain time period and that period has passed”).

Responding but failing to provide a reasonable explanation for a payment amount

• Stating over the phone that an appeal was denied but refusing to send a written explanation;
• The claims handler stating that the appeal was denied and that he/she was unsure of why;
• Falsely stating that they are researching why an underpayment was made;
• Failing to run an underpayment complaint up the command chain if doing so is necessary;
• Sending a no-explanation statement (“Your underpayment request has been denied”);
• Needlessly requiring you to file an appeal when they have evidence of underpayment; &
• Stating that the company either doesn’t or isn’t required to give an explanation

Failing to maintain adequate investigative procedures for continual benefits

• The claims handler falsely stating that they made a correctable error but are waiting for it to be resolved by a supervisor;
• Claiming that they aren’t trained or it’s the first time they’ve had to investigate continual benefits disputes;
• Falsely claiming the investigation was complete when it wasn’t;
• Misrepresenting the stages of investigation (typically either leaving steps out or adding in needless steps designed to disqualify benefits);
• Only initiating an investigation after payments have been made; &
• Falsely stating that a “secondary” or “confirming” investigation either disqualified the claim or proved that overpayment was made.

Failure to promptly and properly investigate and approve or deny requests for changes of benefits (typically an addition of care needs and related benefits)

• Stating that a re-certification investigation was required but not conducting one;
• Claiming that a re-certification investigation was necessary but intentionally missing a deadline that would disqualify benefits;
• Falsely claiming a re-certification claim was invalid (another form of unreasonable denial);
• Denying reception of change of benefits documentation from the policyholder or representative;
• Falsely claiming that primary or long term care providers aren’t responding to requests for documentation;
• Stating that they are waiting for an “independent investigator” to evaluate the change in benefits;
• Requiring a new certification for permanently disabling factors (Alzheimer’s, blindness, deafness, paralysis, amputated limbs or extremities, ALS, etc.); &
• Any false statement regarding backlogs or being overworked and needing more time.

Failing to engage in negotiations over benefit payment disputes

• After a successful appeal, failing to discuss or making a decision regarding the proper adjustment of payments; &
• Unilaterally making a benefit payment decision without allowing you to present your side;
• Ignoring legitimate calculations you made; &
• Applying bogus financial/accounting calculations.

Failing to correct benefit payment amounts when liability is clear

• Sending more payment one month but reverting to underpayment the next month; &
• Consistently making payments in arrears (payments lagging by 60 or 90 days, etc.).

Deceptive practices to avoid reliably and continuously paying claims

• Consistently making payments in arrears (payments lagging by 60 or 90 days, etc.);
• Claiming that the provider sent invoices on an outdated form;
• Claiming that the provider sent invoices on an outdated form;
• Claiming that the provider sent invoices on an outdated form;
• Stating that they can’t make payments because the provider marked the wrong type of assistance with ADLs when in fact they did not;
• Claiming that invoices were sent and they simply made a mistake in not sending payment (“Oops. We’ll get after that right away! Thanks for your patience.”);
• Falsely stating that invoices contained errors;
• Denying that they received invoices;
• Failing to acknowledge Assignment of Benefits Certification that allows the provider to receive direct payment; &
• Shock-stops in payment without explanation or containing irrational explanations (admitted to under oath by one major insurance executive).