Assuring the Quality of Long-Term Care Insurance Benefits Through Care Management

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Assuring the Quality of Long-Term Care Insurance BenefitsThrough Care ManagementAndrew Scharlach PhD a , Teresa S. Dal Santo PhD b

& Kelly Mills-Dick MSW ba Center for the Advanced Study of Aging Services ,University of California, School of Social Welfare. ,Berkeley, USAb Center for the Advanced Study of Aging Services ,University of California , Berkeley, USAPublished online: 11 Oct 2008.

To cite this article: Andrew Scharlach PhD , Teresa S. Dal Santo PhD & Kelly Mills-Dick MSW (2005) Assuring the Quality of Long-Term Care Insurance Benefits ThroughCare Management, Journal of Aging & Social Policy, 17:3, 39-59, DOI: 10.1300/J031v17n03_03

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Assuring the Qualityof Long-Term Care Insurance Benefits

Through Care Management:The California Partnership

for Long-Term Care

Andrew Scharlach, PhDTeresa S. Dal Santo, PhDKelly Mills-Dick, MSW

University of California, Berkeley

ABSTRACT. Despite recent improvements in long-term care insurance(LTCI) policies, concerns have been raised regarding just how wellLTCI benefits actually meet elderly consumers’ health and financialneeds. In this case study, we examined the quality assurance (QA) provi-sions in a state-sponsored LTCI program, the California Partnership forLong-Term Care (CPLTC). CPLTC invests the primary responsibility

Andrew Scharlach is the Kleiner Professor of Aging and Director, Center for theAdvanced Study of Aging Services at the University of California, Berkeley, School ofSocial Welfare.

Teresa S. Dal Santo is Senior Research Associate, Center for the Advanced Study ofAging Services.

Kelly Mills-Dick is a graduate student researcher, Center for the Advanced Study ofAging Services, University of California, Berkeley.

Address correspondence to: Dr. Dal Santo, University of California, Berkeley,School of Social Welfare, 120 Haviland Hall #7400, Berkeley, CA 94720 ([email protected]).

Grant support for this research was provided by the California Department ofHealth Services, the Retirement Research Foundation, the AARP Andrus Foundation,and the Kleiner Family Foundation.

Journal of Aging & Social Policy, Vol. 17(3) 2005Available online at http://www.haworthpress.com/web/JASP

2005 by The Haworth Press, Inc. All rights reserved.doi:10.1300/J031v17n03_03 39

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for QA with care management networks, which assure quality servicesthrough care monitoring, quarterly service record reviews, and annualdocumentation of care manager clinical competence. Study findingssuggest a number of limitations in existing QA policies and procedures,which can undermine the ability of care managers and other third partiesto identify and rectify potential unmet needs among LTCI policyholders.These findings, while based on an intensive analysis of QA provisions ina particular, state-sponsored LTCI program, are likely to have implica-tions for other LTCI programs and policies, most of which have lesswell-developed QA provisions. [Article copies available for a fee from TheHaworth Document Delivery Service: 1-800-HAWORTH. E-mail address:<[email protected]> Website: <http://www.HaworthPress.com> 2005 by The Haworth Press, Inc. All rights reserved.]

KEYWORDS. Quality assurance, case management, long-term care in-surance

INTRODUCTION

The purchase of long-term care insurance (LTCI) has grown dramati-cally in recent years, increasing from fewer than one million policiessold in 1987 to almost seven million by the end of the century (HIAA,2002). Despite substantial improvements in policy quality and provi-sions, including National Association of Insurance Commissioners’development of model policy standards and passage of the Health Insur-ance Portability and Accountability Act (HR 3103), concerns have beenraised regarding the ability of LTCI to meet policyholders’ health andfinancial needs, especially in the context of a complex and fragmentedlong-term care service delivery system (General Accounting Office,1993; Lewis, Wilkin, & Merlis, 2003). Indeed, long-term care has beencited as a classic example of market failure, whereby consumers seldomhave the physical and intellectual capacity, knowledge of benefits andrights, nor acceptable options that are prerequisite for advocating effec-tively on their own behalf with payers and service providers (Baldock,1997). Therefore, adequate quality assurance (QA) mechanisms andconsumer protections are likely to be important for assuring that indi-viduals who purchase LTCI policies receive the care they need and thebenefits they have paid for (Scharlach, Giunta, Robinson, & Dal Santo,2003; Lewis, Wilkin, & Merlis, 2003).

40 JOURNAL OF AGING & SOCIAL POLICY

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California is one of four states that participate in a public-privatepartnership with LTCI carriers in an effort to make LTCI more availableto middle-income persons, improve the quality of available LTCI prod-ucts, and provide consumer protection. The partnership, supported bythe Robert Wood Johnson Foundation, is known in California as theCalifornia Partnership for Long-Term Care (CPLTC). The program isdesigned to allow policyholders to protect their assets while remainingeligible for Medicaid if their long-term care needs exceed the amountcovered by their private insurance. In the long run, the program also isintended to help reduce growing Medicaid long-term care costs.

A key feature of CPLTC LTCI policies is the use of care managementas a quality assurance (QA) mechanism designed to match services topolicyholder need and monitor the quality of care. CPLTC policies re-quire care management to be provided under the auspices of a care man-agement provider agency (CMPA), which administers a network of caremanagement organizations and independent care managers. CMPAscontract with, but are administratively independent of, the insurancecarriers that sell the LTCI policies. The use of care managers for QA inLTCI is consistent with the assertion by Kane, Kane, and Ladd (1998)that: “case managers from outside the long-term care system can pro-mote quality and minimize poor quality through the way they performtheir regular functions” (p. 206). However, Kane and colleagues alsonote: “Some skeptics question whether case managers can really havethis function if they also have responsibilities for conserving LTCI dol-lars through parsimonious care planning” (p. 206).

This study examines the QA provisions mandated under the Califor-nia Partnership for Long-Term Care (CPLTC), with particular attentionto the role of care management organizations in implementing the spe-cific QA policies and procedures required by CPLTC regulations.While this study addresses a particular LTCI QA program, its findingsare apt to have implications for other LTCI programs, most of whichhave less extensive QA provisions (McSweeney, 1995).

CPLTC QA provisions are examined in light of three domains tradi-tionally used for assessing quality (Donabedian, 1980): (1) the structureof the QA program specified in CPLTC regulations, (2) the proceduresactually used to implement the intended QA program, and (3) consumeroutcomes. The analysis is based on reports from CMPAs, an examina-tion of case records, and interviews with policyholders, CMPAs, insur-ers, and care management providers.

Scharlach, Dal Santo, and Mills-Dick 41

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METHODOLOGY

Our examination of the CPLTC QA program included the following:(1) a review of all relevant QA policies and procedures, includingCPLTC QA regulations included in the California Health and WelfareCode, insurer and CMPA policies and procedures filed with the Califor-nia Department of Health Services (DHS), and CMPA annual programreports; (2) an examination of policyholder case files; (3) interviewswith policyholders; and (4) interviews with family caregivers, caremanagers, CMPA staff, and insurance company representatives.

Review of Policies and Procedures

We reviewed all state legislation relevant to CPLTC QA require-ments, initial insurer applications, and CMPA policy manuals filed withthe California Department of Health Services (DHS), and CMPA an-nual program reports. CPLTC regulations require CMPAs to submit an-nual reports that “summarize all findings and recommendations resultingfrom [the] quality assurance activities,” including annual program eval-uations, policy manual updates, and quarterly service record reviews(CPLTC Regulations § 58074, 1999). We obtained from DHS and re-viewed the annual reports submitted by CMPAs during the period from1994 to 1999.

Case Record Reviews

Case records were reviewed for CPLTC policyholders who attemptedto activate benefits between August 1, 1998, and June 30, 1999. Of theeight insurers who sold CPLTC policies, only three had policyholderswho attempted to activate benefits during this period. From these threeinsurance companies, a total of 45 policyholders were eligible to partici-pate in this study, and 35 agreed to do so. Two of the 35 policyholderswere denied benefits by their LTCI insurance carrier, and one policy-holder died before the data collection period was complete, resulting ina final study sample of 32 participants.

Insurance companies and CMPAs supplied complete case records forthese 32 policyholders, including eligibility assessments, care plans,progress notes, and insurance claims data. These case records were re-viewed to determine their adequacy and comprehensiveness in light ofCPLTC QA regulations and established care management practices.


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Policyholder Interviews

Nineteen of the 32 CPLTC policyholders who agreed to participate inthe study lived within 100 miles of either San Francisco or Los Angelesand participated in personal interviews in addition to the case record re-views (see Table 1). The interview portion of the research consisted ofan initial in-person interview, four monthly telephone interviews, andan in-person exit interview approximately six months after the date ofthe policyholder’s initial eligibility assessment. The in-person inter-views were conducted by trained licensed clinical social workers, whilea trained PhD student conducted the telephone interviews.

Each initial in-person interview included questions pertaining to thetypes and amount of care management services utilized; participation incare plan development, implementation, and monitoring; satisfactionwith services received to date; knowledge of long-term care policy provi-sions (e.g., coverage and limitations); and, satisfaction with other compo-nents of the long-term care insurance benefit process. The in-person exitinterview included open-ended questions designed to assess positive andnegative aspects of policyholders’ experiences with care managementand other services received under long-term care insurance. Monthlytelephone interviews with policyholders gathered information regardingchanges in the policyholder’s condition, use of specific services listed inthe care plan, use of services not listed in the care plan, and frequency andcontent of monitoring activities conducted by care managers.

Caregiver and Stakeholder Interviews

With the permission of policyholders, family caregivers were inter-viewed directly after the initial policyholder interview and again at the


TABLE 1. Project Participant Sample Summary

Participants Who Completed In-Person Interviews 19

Non-Interviewed, Out of Area Participants 13

Participants Who Were Denied LTCI Benefits 2

Deceased Prior to In-Person Interviews 1

Total Number of Participants in Study 35

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end of the six-month study period. The family interviews augmentedinformation from policyholders and gathered additional information re-garding the adequacy of care management and other services. Individ-ual care managers, care management provider agency staff, and insurancecompany representatives were interviewed regarding their QA activi-ties and to clarify specific questions that arose throughout the study.

RESULTS

CPLTC regulations call for a QA system that involves multiple part-ners: (1) Care Management Provider Agencies (CMPAs) and their pro-vider networks, (2) insurers, and (3) policyholders and their families.For each of these systems, we examine: (1) relevant CPLTC QA regula-tions, (2) how the CPLTC QA regulations are operationalized, and(3) apparent policyholder outcomes.

Care Management Provider Agencies

CPLTC regulations invest the primary responsibility for QA withthree statewide Care Management Provider Agencies (CMPAs), whoare contracted by LTCI carriers with the approval of CPLTC. CMPAsare charged with developing a provider network composed of care man-agers who, either individually or as part of a team, are “responsible forperforming assessments and reassessments, developing Plans of Care,coordinating the provision of care, and monitoring the delivery of ser-vices” (CPLTC Regulations § 58008, 1999). CMPAs assure the qualityof care management services through quarterly service record reviews,annual program evaluations, and annual documentations of clinicalcompetence (see Figure 1).

Care Management Activities

Care managers are responsible for arranging the delivery and coordi-nation of services, as well as monitoring their quality, when “desired bythe individual and determined necessary by the CMPA” (CPLTC Regu-lations § 58068, 1999). Our review found that care monitoring was pro-vided in those 19 cases where coordination and monitoring were coveredas an administrative expense by the insurance carrier’s standard policies(the other 13 policies charged monitoring against total policy benefitamounts), unrelated to evidence of desire or assessed need. Initial moni-


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FIGURE 1. CPLTC Quality Assurance Regulations

CPLTC 1993 and 1999, § 58073. (a) “A Care Management Provider Agency shallhave a written quality assurance program which shall include but not be limited to:

1) Annual program evaluation. The agency’s board of directors (or their appointeddesignees) shall, at least Annually, review policies and make recommendations on:(A) admission and discharge criteria; (B) Plans of Care and records; (C) personnelqualifications; (D) quality assurance program; (E) delivery of Care Managementservices; and (F) methods for assuring the quality of direct services providedincluding whether clients’ needs as identified in the Plans of Care were met,assessing client satisfaction and incorporating client suggestions. The writtenminutes of this annual program evaluations meeting shall document the dates ofthe meeting(s), attendance, agenda, and recommendations.

2) Quarterly service record review. At least Quarterly, the agency’s board ofdirectors, or a committee appointed by the board, shall, observing all confidentialityprotocols, review a random sample of active and closed case records. Each recordreview shall be documented on a record review form and shall include, but not belimited to, verification that:(A) agency policies are followed in the provision of services to clients and families;(B) clients and families actively participate in the care planning process, includingthe decision regarding how much coordination and monitoring is necessary anddesirable; (C) client, family and other community resources are integrated into theCare Plan; (D) Care Management services are effective in maintaining anappropriate environment for the client; (E) the provision of services is coordinatedwith those provided by other agencies to avoid duplication of services, and tointegrate acute care with chronic care; (F) action is initiated by the CareManagement Provider Agency when unmet client service needs are identified.Pattern of unmet needs should be documented and reported to the Department ofHealth Services; (G) the agency's sampling methodology shall be defined in itsquality assurance program policies and procedures. The sample of client recordsreviewed each Quarter shall be according to the following ratios: 1. eighty or lesscases; eight records; and 2. eighty-one or more cases; ten percent of caseload forthe Quarter to a maximum of twenty-five records.

3) Annual documentation of clinical competence. At least Annually, a writtenevaluation report shall be prepared on the clinical competence of each Care Managerby the employee’s professional supervisor. Each of which shall remain in theemployee’s personnel folder. The evaluation report shall include but not be limited to:(A) coordination, assessment and monitoring skills (including clinical counseling,ability to elicit client input and act upon client feedback, problem solving, and abilityto build rapport with clients, families and other providers); (B) recording in clientcase records; and (C) participation in the agency’s in-service educationalprograms.”

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toring was provided by care managers, with LTCI carriers or theirthird-party administrators typically providing subsequent monitoring.Nearly all contacts for monitoring purposes were made by telephone,typically one or two times per month, with only two instances of in-per-son monitoring visits. The care managers we interviewed provided anumber of examples of policyholders who might have benefited fromhome visits in order to better assess and respond to their needs; how-ever, the care managers believed that they did not have the authority tomake these home visits. As one care manager noted, “I could providemore care management when people need it, but it wouldn’t be what Iam supposed to do, and [the insurance carrier’s third-party administra-tor] wouldn’t like it. Anyway, I wouldn’t get paid for it.” Interviewswith CMPAs revealed that these limitations on care manager activitieswere attributed to the economic pressures imposed by cost-focusedcompetitive bidding for contracts with LTCI carriers, who were consid-ered by CMPAs to be their “customers.”

Quarterly Service Record Reviews

According to the CPLTC regulations, “at least Quarterly, the agency’sboard of directors, or a committee appointed by the board, shall, observ-ing all confidentiality protocols, review a random sample of [at least10% of] active and closed case records” (CPLTC Regulations § 58073a2,1999). The record reviews are intended to verify whether (1) agencypolicies are followed; (2) clients and families actively participate in thecare planning process; (3) the care plan integrates client, family, andcommunity resources; (4) an appropriate environment is maintained forthe client; (5) service provision is coordinated to avoid duplication ofservices and to integrate acute care with chronic care; (6) action is takenin response to unmet client service needs; and (7) patterns of unmetneeds are reported to DHS (see Figure 1).

Although one of the three CMPAs reported having seven CPLTCLTCI cases between 1996 and 1999, the agency did not conduct quar-terly service record reviews, stating in each of its annual reports:“[CMPA] did not provide care management services to any CaliforniaPartnership clients during this period. As a result, no cases were re-viewed.” Because of this apparent misunderstanding of CPLTC regula-tions by this CMPA, little is known about its QA activities. The othertwo CMPAs described their general case record review procedures andsampling methodologies in their annual reports, and included summa-ries of the results of their record audits. These audit results were com-


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pared with our examination of actual case records, with regard to eachof the seven QA areas specified in CPLTC regulations.

Agency Policies and Procedures. CMPA record reviews found gen-eral compliance with policies and procedures, and we found no appar-ent evidence to the contrary. However, it was not always clear whatcriteria CMPAs were using to determine compliance. The record reviewaudit form utilized by one CMPA, for example, simply asked the audi-tor to indicate whether “Agency policies were followed in the provisionof services to clients and families.”

Client and Family Involvement. The CMPAs reported that all of thecase records they reviewed documented client or family participation inthe care planning process. Of the 32 case records we reviewed, however,only eight contained any evidence of policyholder participation indeveloping the plan of care, and only four contained any evidence of poli-cyholder participation in decisions about coordination and monitoring.

Resource Integration. CMPA record reviews indicated that, in all butone case, care plans adequately integrated client, family, and other com-munity resources, although it was not clear how this was determined.Eighteen of the 32 care plans we reviewed from our sample included arole on the care plan for informal supports, whereas 14 did not.

Maintaining an Appropriate Environment. CMPA record reviews in-dicated that, in all but one case, care management services were effec-tive in maintaining an appropriate environment for the client, althoughit was not clear what criteria were used to make this determination. Ourreview of the case records of policyholders in our sample did not yieldsufficient assessment information to identify what would be consideredan “appropriate environment” for each policyholder, making it difficultto determine whether care management services were effective in main-taining such an environment.

Service Coordination. CMPAs reported that, in all but one case, co-ordination with other agencies was adequate, although the reviews didnot specify how this was determined nor whether service coordinationwas effective in avoiding duplication of services as specified in CPLTCregulations (CPLTC Regulations § 58073a2, 1999). Case records didnot contain sufficient detail for our reviewers to determine whether ser-vice coordination was adequate.

Responding to Unmet Needs. CMPA record reviews did not identifyany unmet policyholder needs. However, unmet needs were identifiedin 12 of the 19 policyholder interviews we conducted; in another fourcases, documentation was not sufficient to determine whether or not allof the policyholders’ needs were met. Among the unmet needs identi-


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fied by policyholders were: a policyholder who apparently had beenvictimized by her independent provider and was not receiving neededassistance with IADLs; a policyholder who was left alone despite theapparent need for continual supervision; family caregivers who werephysically or emotionally exhausted; independent providers who didnot show up, were tardy, or did not provide adequate care; and policy-holders experiencing depression, anxiety, and other mental health prob-lems. In a number of cases, progress notes indicated that care managerswere aware of these needs; yet, there was no documentation that actionwas taken to resolve them.

Reporting Patterns of Unmet Needs. No unmet needs were identifiedby the three CMPAs in their quarterly service record reviews or annualreports, although one CMPA had identified an unmet need for respitecare in an annual report prior to the study period. Our analysis of caserecords and policyholder interviews, however, revealed that a numberof policyholder needs were unmet. These included problems with home-care providers, service coordination, transportation, mental health, andfalls. However, none of these problems occurred in more than 25% ofthe cases we reviewed, making it difficult to conclude that they repre-sented a “pattern” requiring reporting to DHS.

Annual Program Evaluation

CMPAs are required, at least annually, to review policies and makerecommendations with regard to methods for assuring the quality of di-rect services, including meeting client needs, assuring client satisfac-tion, and incorporating client suggestions (see Figure 1). Each of thethree CMPAs conducted program review meetings at least annually andprovided annual reports that included a summary of their QA activities.However, minutes of these meetings included few specific recommen-dations for modifications in CMPA policies or procedures, and result-ing annual reports typically stated that existing policies and proceduresremained unchanged.

Meeting Client Needs. Mechanisms for assessing whether clientneeds were met, identified in CMPA policy manuals and annual reports,primarily included care monitoring and quarterly service record re-views (described above). Two CMPAs utilized staff referred to as“quality specialists,” “quality assurance care managers,” or “home of-fice care managers” to review progress notes by field care managers.

Assuring Client Satisfaction. All of the CMPAs indicated that theyevaluated client satisfaction, relying primarily on care manager obser-


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vations. One CMPA utilized a client satisfaction survey, a mailed ques-tionnaire asking policyholders to rate three areas of care management:(1) contact with the care manager, (2) whether or not referrals met theirneeds, and (3) frequency of specific care manager traits (e.g., courtesy,caring, knowledge). None of the CMPAs apparently assessed satisfac-tion with direct services received by their clients.

Incorporating Client Suggestions. All of the CMPAs reported thatclient suggestions were incorporated into their programs when possible.One CMPA reported specific steps for reviewing client suggestions, in-cluding review by the director of Long-Term Care Clinical Operationsand, if deemed appropriate, review by a program evaluation committee.Only one CMPA reported actual program modification as a result of cli-ent feedback: the development of a new form for respite benefit requestsin response to information that both clients and care managers wereunclear of procedures related to receiving respite benefits.

Assuring Clinical Competence

Care Manager Qualifications. CPLTC regulations require that caremanagers either hold RN degrees or be graduates of an accreditedfour-year college or university with a degree in nursing, health, socialwork, gerontology, or other related area; and have a minimum of twoyears’ experience in the human service field. If the care manager has asocial service background, the agency is mandated to consult with clini-cal health care staff; likewise, if the care manager has a clinical healthcare background, the agency must have social service staff available forconsultation. Our review found that all of the care managers had the re-quired educational background; however, the case records contained noevidence of cross-disciplinary consultation.

Clinical Supervision. CMPA care management supervisors are re-sponsible for evaluating each care manager’s performance and provid-ing annual documentation of each care manager’s clinical competence,assessed through a review of case records, observations of client visits,supervisory conferences, and productivity measures (CPLTC Regula-tions § 58069, 1999). CMPA annual reports affirmed the clinical com-petence of their care managers, although there was no evidence thatsupervisors actually observed any client contacts.

Insurance Carriers

Insurance carriers are responsible for determining eligibility andmonitoring policyholder service use. Insurance carriers determine eligi-


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bility for LTCI benefits by assessing whether policyholders meet func-tional, cognitive, and/or medical criteria, based on information gatheredby care managers. The regulations contain no provisions for third-partyreview of insurance carrier eligibility decisions, although policyholderscan appeal or take legal action if they believe that they have been deniedeligibility unfairly.

Thirty-three of the 35 policyholders in our sample who sought bene-fits were determined by insurers to meet eligibility criteria, while twopolicyholders were determined not to meet eligibility criteria. We re-viewed benefit eligibility assessments completed by the care managersand other available documentation regarding each policyholder’s levelof functional and cognitive impairment. Of the 33 policyholders re-ported as having experienced an insured event, our review of availabledocumentation found that 30 appeared to meet the CPLTC benefit eligi-bility criteria, while in three cases it was unclear whether they actuallymet completely the CPLTC criteria. Neither of the two policyholdersdenied eligibility by insurers was found to meet the CPLTC eligibilitycriteria.

Insurers are supposed to monitor service use in light of the servicesauthorized in each care plan and submit on a semiannual basis a reportto DHS that includes “. . . the services or benefits paid during the report-ing period” (CPLTC Regulations § 58077e, 1999). We found thatclaims data for all covered policyholders were reported to CPLTC byinsurance carriers on a quarterly basis, and maintained as part of a Uni-form Data Set (UDS). In addition, reports were sent to policyholders ap-prising them of the cost of benefits expended on their behalf, which oftheir assets could count toward the Medi-Cal property exemption, aswell as the remaining amount of coverage under their long-term care in-surance policy.

In comparing UDS records with care plans, we found that 10 of the32 policyholders had used all of the service types listed on their careplans; 11 had used only some of the services; and 11 policyholders ap-parently had used none of the services, although they had been assessedas needing them by a care manager. Services included on care plans butapparently not used included: adult day care, support groups, nutritionalsupplement, transportation, diabetic education, and Meals on Wheels.There was no information from insurers, and typically no progress notesin the case records, explaining why these services were not used. Ourinterviews with policyholders also revealed a number of covered ser-vices that policyholders reported receiving, but for which claims werenot reported on the UDS, including home health care, personal care,


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transportation, Meals on Wheels, medical equipment, and support groups.At the same time, there were at least two examples of services for whichclaims were reported but not authorized by the policyholder’s plan ofcare.

Policyholders

Rights and Responsibilities. Policyholders are supposed to receive acomprehensive written list of rights and legal responsibilities at the timeof assessment or as soon as possible thereafter (CPLTC Regulations§ 58072, 1999). Our review found evidence that the policyholder and/orrepresentative received a list of rights and responsibilities in 13 of the 32case files reviewed. Lists of rights and responsibilities typically in-cluded basic information regarding available care management ser-vices, the right to participate in care plan development and to haveaccess to case records, confidential treatment of client information, andthe right to a discharge plan. However, policyholders did not typicallyreceive information regarding which care management services wereand were not covered or how much they cost, criteria for discharge fromcare management, the right to receive a written care plan and participatein care plan implementation, the right to a transition plan for Medi-Caleligibility, and specific procedures for filing appeals.

Policyholder Knowledge. Almost all policyholders knew whethertheir policies covered formal nursing home care (18 of 19) or home care(17 of 19), and most (12) knew the overall amount of coverage they hadpurchased. Regarding informal care, most (16) knew that their policiesdid not cover care provided by family members, and nine knew that careby neighbors or friends was covered. Only three of the 19 policyholdersunderstood the asset protection feature of their policies, even thoughthis is considered the primary rationale for purchasing a PartnershipLTCI policy.

Only six of the policyholders knew that insurer decisions regardingwhether or not to pay for specific services were based on the care plandeveloped by their care managers. Eight policyholders knew how to ap-peal an eligibility decision, but only four knew how to file an appealabout the care plan or the services authorized by the care plan. Policy-holders indicated that their care managers were not knowledgeableabout benefits issues, and therefore could not always help them in mak-ing decisions about the most effective use of their benefits. Interviewswith care managers revealed that they typically had received no training


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regarding LTCI benefits, and some had been told explicitly not to discussbenefits issues with policyholders.

DISCUSSION

According to Kane and Degenholtz (1997), quality assurance re-quires “clear standards for good care, formal methods for assessing thequality of care, and policies and procedures for dealing with problemswhen detected” (pp. 22-23). In many ways, the CPLTC QA programmeets these criteria, specifying a comprehensive set of standards de-signed to protect LTCI policyholders by assuring that they receive theservices to which they are entitled and that those services meet theirneeds. However, our findings also suggest a number of limitations inexisting QA policies and procedures, accompanied by apparent gaps inthe identification of unmet needs among LTCI policyholders.

Structure of the CPLTC QA Program

CPLTC regulations invest the primary responsibility for QA withcare management networks (CMPAs), which play an intermediary rolebetween the policyholder and the insurance carrier. CMPAs oversee anetwork of care managers, who receive training and supervision and aresupposed to have access to consultation around specific issues. CMPAsassure quality services through care monitoring, quarterly service re-cord reviews, and annual documentation of care manager clinical com-petence. Insurers and policyholders also have responsibility for someQA activities. Insurers determine eligibility for benefits and monitorbenefit utilization; policyholders are expected to know the benefits towhich they are entitled and advocate on their own behalf with insurancecarriers, CMPAs, and providers if necessary.

The basic QA provisions specified in CPLTC regulations appear tobe considerably more comprehensive than the consumer protections in-cluded in most LTCI policies (McSweeney, 1995), and exceed typicalgovernment oversight of home and community-based services. How-ever, CPLTC QA policies and procedures focus primarily on care man-agement, rather than on the direct services policyholders receive. Itremains an empirical question whether better care management by itselfcan result in better services (Cohen, 2003; Kane & Degenholtz, 1997).


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Implementation of QA Policies and Procedures

Care monitoring and quarterly service record reviews are the primaryprocedures for implementing CPLTC QA regulations. However, ourcase reviews and policyholder interviews revealed an absence of caremonitoring in a substantial number of cases; moreover, the care moni-toring that did occur consisted almost entirely of periodic telephonecontacts. While there is some evidence that periodic telephonic moni-toring and assessment can be cost-effective (McGrew & Quinn, 1997),more intensive care management, including in-person visits, may benecessary for assuring positive outcomes for clients with complex andunstable situations (Challis, 1999; Quinn, Prybylo, & Pannone, 1999;Scharlach, Giunta, & Mills-Dick, 2001; Schwartz, Stone, Camp, Mulvey,Kane, & Plough, 2000). Limitations in the nature and extent of caremonitoring appear to reflect administrative practices rather than thecase-by-case negotiated process envisioned by CPLTC regulations. Thecare managers we interviewed provided a number of examples of poli-cyholders who would have benefited from home visits in order to betterassess and respond to their needs; however, the care managers believedthat they were not authorized to take the time to make these in-personcontacts, because of economic pressures associated with CMPA con-tracts with LTCI carriers.

The limited nature of care monitoring contributed to informationgaps in case records, which undermined CMPAs’ ability to conductquarterly service record reviews. Inadequate documentation, while notnecessarily reflecting inadequate care, makes it virtually impossible forCMPAs or any third party to assess the adequacy of services or assurethat policyholder needs are being met, fundamental aspects of anyquality assurance effort.

Consumer Outcomes

CPLTC QA provisions attempt to assure that policyholders’ needsare met, that they are able to remain in an appropriate living environ-ment and are satisfied with the services they receive, and that their as-sets are protected. Outcome criteria such as these represent improvementsin the structural and process indicators typically used to assess long-term care quality (Cohen, 2003; Wunderlich & Kohler, 2000). How-ever, our findings raise concerns regarding the ability of CPLTC QAprovisions to assure consistently positive policyholder outcomes. Poli-cyholder needs appeared not to be met consistently, and gaps were ob-


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served in CMPAs’ ability to identify and rectify unmet needs when theydid occur.

Policyholder Needs. Policyholders generally were satisfied with theservices they received. No one was denied benefits inappropriately, andpolicyholders’ critical care needs appeared to be met. However, two-thirds of policyholders were found to have at least some unmet needs orservice problems, about which care managers frequently were unaware.The 2000 National Claimant Study, conducted by Lifeplans, Inc., forthe United States Department of Health and Human Services Office ofDisability, Aging, and Long-Term Care, also found that 35% of LTCIpolicyholders reported unmet needs in at least one ADL or IADL activ-ity (Cohen, 2003). Furthermore, although one-third of policyholdersused none of the services they were originally assessed as needing, andone-third used only some of these services, there apparently was littleeffort to find out why or adjust care plans accordingly. Moreover, prog-ress notes almost never included evaluations of the effectiveness of rec-ommended services or assessments of client progress toward meetingthe goals identified in care plans. Without such information, it is diffi-cult for CMPAs and other third parties to assure that services are beingutilized, that they are having their intended effect, and that policyholderneeds are being met.

Appropriate Living Environment. The objective of maintaining anappropriate environment is a central goal of long-term care insurance,consistent with the intent of the Olmstead decision that people with dis-abilities be served “in the most integrated setting appropriate to theirneeds” (Olmstead, 1999). At the same time, it is a particularly vagueconcept, which neither CPLTC regulations nor insurer policies norCMPA procedures provide guidelines for operationalizing. Further-more, care plan documents seldom identified desired and appropriateenvironments, or indicated activities and services required to maintainor achieve those environments, or documented whether or not thoseactivities were successful in enabling policyholders to live in thoseenvironments.

Client Satisfaction. CPLTC policyholders, like those receiving bene-fits through other LTCI products, generally report being satisfied withthe benefits they receive (Cohen, 2003). However, as noted above, cli-ent satisfaction was assessed primarily through infrequent telephonecontacts, which apparently failed to identify numerous instances of pol-icyholder dissatisfaction with services. More useful client satisfactioninformation requires a multi-faceted evaluation approach, conducted ona periodic basis and incorporating open-ended questions regarding spe-


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cific aspects of care provision as well as standardized measures, such asthe Home Care Satisfaction Measures (Geron, 2000) and the use ofimpartial third-party assessors wherever possible.

Asset Protection. Although asset protection is a primary reason forpurchasing long-term care insurance (CPLTC, 2002), insurer and CMPApractices did not apparently include mechanisms for assuring that poli-cyholders received the services for which claims were submitted, or thatclaims were submitted for all covered services. Assuring that assets areprotected and benefits used properly requires consistent care monitor-ing to be sure that policyholders receive the services they need, as wellas a process for comparing submitted claims with actual service use.

Implications

Is QA Necessary? QA places additional demands on professional andadministrative staff, adding to the cost of care management and ulti-mately reducing the LTCI benefit dollars available to purchase directservices or else prompting higher insurance premiums. Moreover, somehave argued that external QA is unnecessary and that consumers shouldhave maximum freedom to develop and enforce their own notions ofquality care (Stone, 2001). However, reliance on consumer-directedcare and the protections of free market forces require that consumers areable to monitor the quality of the services they receive and advocate as-sertively on their own behalf to obtain the services they need (Simon-Rusinowitz et al., 2000).

The need for QA in LTCI is predicated on concerns that many policy-holders may not always have the capacity, knowledge, or options forprotecting their own interests because of the very physical and cognitivelimitations that make them eligible for LTCI benefits (Baldock, 1997;Cohen & Kumar, 1997). In our study, for example, few policyholderswere found to have a full understanding of the appeals procedure or ofsome key features of their policies, making it difficult for them to be ac-tive partners in the process of monitoring their own care and advocatingfor their own needs. Given this reality, there may always be a need forQA policies and procedures to assure that vulnerable consumers receivethe services to which they are entitled, and that those services meet theirneeds (Kane & Degenholtz, 1997).

Recommendations for QA in LTCI

CPLTC QA provisions provide a comprehensive framework for QAin LTCI. The effectiveness of these QA provisions appears to be lim-


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ited, however, by inconsistent care monitoring, inadequate documenta-tion needed to assure quality and assess whether consumer needs arebeing met, and insufficient attention to the actual care policyholdersreceive.

Not all consumers are likely to require the same level of assistance inassuring the quality of the care they receive. More intensive care man-agement and QA efforts might best be targeted to policyholders whohave complex physical and cognitive conditions that make them espe-cially vulnerable, who are most at risk for deleterious outcomes, and forwhom care management has most often been shown to be beneficial(Challis, 1993; Challis, 1999; Kane, 1988; Quinn, Prybylo, & Pannone,1999; Scharlach, Giunta, & Mills-Dick, 2001; Schwartz, Stone, Camp,Mulvey, Kane, & Plough, 2000). Targeting requires that policyholders’needs for care management be a consistent part of the assessment pro-cess, as envisioned in the CPLTC regulations that care coordination andmonitoring will be provided when “desired by the individual and deter-mined necessary by the CMPA.” Worthy of consideration is a multi-level approach to care management, whereby the intensity of assessment,care planning, and care monitoring are determined in accordance withthe needs and capabilities of individual clients, based on a standard andverifiable protocol (Applebaum & Austin, 1990; Diwan, Ivy, Merino, &Brower, 2001; Searle, 1998).

Enhanced consumer protection also requires that policyholders havemore accurate knowledge regarding their benefits and how to use themefficiently, understand the role of care management in assuring thequality of LTCI benefits, and know where to turn if they have questionsor concerns. With a clearer understanding of the goals and potentialvalue of care management, consumers may be better able to make in-formed decisions regarding the amount of their benefits they want to in-vest in care monitoring. They may also be better prepared to advocatefor and participate in a quality assurance process that is responsive totheir needs.

Limitations

This study represents an intensive analysis of QA provisions in a par-ticular LTCI program with especially comprehensive QA provisions.While the findings are limited to the CPLTC, they are likely to have im-plications for other LTCI programs and policies, most of which haveless well-developed QA provisions. The limited sample of policyhold-ers, who were early recipients of LTCI benefits, may not reflect the ex-


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periences of subsequent cohorts of policyholders. Needed now is amore extensive, representative study of policyholder outcomes underLTCI, with particular attention to consumers’ perceptions and experi-ences regarding the need for QA in LTCI.

RECEIVED: 10/03REVISED: 04/04

ACCEPTED: 06/04

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Documents

Assuring the Quality of Long-Term Care Insurance Benefits Through Care Management