The Quest to Preserve Homecare BenefitsHomecare Benefits …iltciconf.org/2013/PDF/26-TheQuesttoPreserveHomecare... · · 2013-02-28Claims / Policy & Provider Tracks The Quest to

Claims / Policy & Provider Tracks

The Quest to Preserve Homecare BenefitsHomecare Benefits

Balancing consumer desires and carrier risk management needsg

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Speakers:Speakers:• Angie Forsell, Vice President, Clinical Services

Univita Health• Beth Ludden Senior Vice President LTC Product Development• Beth Ludden, Senior Vice President, LTC Product Development

Genworth Financial• Mary Lou McGuinness, Senior LTC Specialist

Long Term Care PartnersLong Term Care Partners• Michael Gilbert, President

HireFamily LLC

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A note about our survey

Survey Disclaimer:Th d t d i S M k t f th ti f thi t ti h ld bThe survey conducted using SurveyMonkey as part of the preparation for this presentation should be considered anecdotal and unscientific. The survey respondents represent a cross-section of the LTCI industry, both high-volume and lower volume claims payers. We will only present aggregated or averaged data, and no specific company or respondent data will be disclosed.

Companies whose claims, product development or management representatives responded to some or all survey questions include:

• Ability ResourcesB k Lif d C lt

• Munich American Reinsurance CompanyM t l f O h• Bankers Life and Casualty

• CNA• Employers Reassurance Corporation• Genworth Financial• Great American Insurance Group

• Mutual of Omaha• New York Life LTC• Northwestern Mutual• Penn Treaty Network America• Physician’s Mutual Insurance Companyp

• John Hancock• Lifecare Assurance• Lifesecure• LTC Partners• MedAmerica

y p y• Prudential• RGA• Senior Health Insurance of Pennsylvania (SHIP)• Teachers Protective Mutual Life Ins. Company• Univita Health

3Session 26: The Quest to Preserve Home Care Benefits

• MedAmerica• MetLife

• Univita Health

Presentation Theme: The LTCI Balancing Act

LTCI / l i t d i t i t h th l t t i tiLTCI consumers/claimants desire to receive care at home, the least restrictive setting where costs are typically lower. In concept, this is good for both consumer and carrier, but carriers report higher fraud, waste and administrative cost.

How can we balance consumers’ need for simple, accessible home care benefits with carriers’ needs to manage risk?

Simple, accessible

Carrier need to manage

home care benefits

manage risk


Presentation Structure

• Current policy language and business practice often limit

CURRENT LIMITATIONS

• Current policy language and business practice often limit the use of desired risk management tools

OPPORTUNITY WITH EXISTING POLICIES

• Despite current constraints, there are ways to balance risk and offer consumer choice for the 6-10+ million existing


gpolicyholders

STRATEGIES FOR FUTURE POLICY GENERATIONS• Future product generations must redefine home care

benefits to find the desired balance between priced risk d h i

GENERATIONS


and consumer choice

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CURRENT LIMITATIONSCURRENT LIMITATIONS



CURRENT LIMITATIONSCurrent policy language and business practice often limits the use of desired risk managementoften limits the use of desired risk management tools needed for claimant-desired care model

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Consumer Wants

Consumers want choice, and want care that is:– Provided by someone they know

• Plans may offer coverage of independent providersPlans may offer coverage of independent providers• Plans usually do not permit paid care by family members

– Provided by a caregiver referred to them by someone they trust• Plan provisions may not be inclusive enough

– Cost effective• Unlicensed care is less expensive than licensed care• Want options to purchase as much care as possible with available benefit

– Provided at home– Provided at home• Least restrictive environment• Lowest barrier to receiving care


Carrier Experience

Carriers want to offer choice, but need control to:– Ensure safe and appropriate care– Minimize potential for fraud and abusep

• By caregivers• By claimants• By families

Top 6 LTCI survey responses* to “Name a limitation your company currently faces when trying to manage risk from home care claims.”

• Can't verify services are provided• Difficult / inconsistent administration• Can't confirm whether benefits are needed• Inability to limit provider use / abuse of policy benefit• Difficult policy specs: Medical Necessity / Restoration of Benefits• Inadequate training/certification of ICPs

9Session 26: The Quest to Preserve Home Care Benefits*Similar responses grouped into categories

Care Continuum: Cost/Intensity vs. Risk

Unnecessary Risk Un‐managed Risk & Cost

I d dIndependentProviders

versight)

LicensedHome Care Agencies

Informal Providers

MUCH less regulatory oversight here; carriers must pick up the slack

(Lack of Ov

ALF plus HH Aide Services

Senior Housing

Certified Home CareAgencies

g

Consumers are increasingly accessing care from these providers

Fraud Risk HH Aide Services

Nursing Home Care

ALF

Lots of regulatory oversight here

providers

Low Risk & Cost Well‐managed risk

F


Cost and Service Intensity

Most Prevalent Modes of Home Care Fraud

• Services billed, services not provided• Inflated or padded hours• Seemingly excessive pay rates – but what’s the “right rate?”g y p y g• Misrepresenting level of deficit, higher incidence under cash benefits and

when care is by Independent Providers• Documented services don’t reflect actual services provided

– Caregivers who “check all the boxes” and/or report hours not worked

• Records kept by agency staff, not caregivers in the home • Victimization of vulnerable claimants

Cl i t ith iti i i t– Claimants with cognitive impairment– Claimants without local family/POA

• Care by an undisclosed ineligible provider but billed by an eligible provider– Among the fastest growing forms of fraudg g g

• Caregiver misrepresenting housecleaning or other non-ADL care• Side deals between claimant and IP or HC agency, e.g. bill for maximum

benefit, claimant retains a portion


Sample plan citations – Carrier A

• Home care benefits provide for care by:– Licensed Home Care Agency– Independent Provider (qualified/certified and non-family)

• Current Provider Eligibility Verification protocols – Agency verification includes confirmation of active licensure– IP verification includes:

Proof of license experience or training required for IP coverage• Proof of license, experience or training required for IP coverage• Disclosure of any relationship to claimant • Evidence of current disability status, if any

– Claimant must acknowledge in writing his/her obligations to perform the duties of an employer to the IP

• Current Claim Risk Management Protocols– Require itemized invoice from provider with daily visit notes

Allow assignment of benefits to IP– Allow assignment of benefits to IP– When no AOB in place, Claimant must provide evidence of payment to IP before

benefits will be issued


Sample plan citations – Carrier B

• Home care benefits provide for care by:– Licensed Home Care Agency (if required by law) or “persons licensed or otherwise qualified

by training or experience”– Independent Provider coverage only under Alternate Plan of Care provisionIndependent Provider coverage only under Alternate Plan of Care provision

• Current Provider Eligibility Verification protocols – Agency verification includes confirmation of active certification, licensure, insurance– Coverage of IPs limited as follows

• No IP approval of family members persons without adequate training and/or have claimant’s power of• No IP approval of family members, persons without adequate training and/or have claimant s power of attorney or similar access to and authority over claimant’s funds and health care decisions

• No IP approval for claimants with cognitive impairment unless competent, third party is locally available to manage the caregiver relationship

• Requires written agreement that claimant will abide any laws or regulations applicable to this type of household employer/employee relationshiphousehold employer/employee relationship

• IP approval subject to revocation if terms of agreement are not followed

• Current Claim Risk Management Protocols– Require itemized invoice from provider with daily visit notes

All i t f b fit t IP– Allows assignment of benefits to IP– Proof of claimant’s payment to IP is required


Sample plan citations – Carrier C

• Home care benefits provide for care by:– IPs covered as providers of Home Health Care, no special approval required

(licensed or certified, but only if required in the jurisdiction)C f• Current Provider Eligibility Verification protocols

– Licensure, where required – Evidence of qualifications to provide services in the care plan

• Current Claim Risk Management Protocols• Current Claim Risk Management Protocols– Require itemized invoice from provider with daily visit notes

• Offer standardized timesheets for IPs who have no mechanism to report services provided

– No requirement for proof of payment– No unique administrative protocols for IPs compared to other HHC providers


Sample plan citations – Carrier D

• Home care benefits provide for care by:– Includes cash benefit option for 12 months per lifetime – no requirement to prove

receipt of careH C b fit ft 12 th li it d t i b li d i– Home Care benefits after 12 months limited to services by licensed agencies or licensed individuals

• Current Provider Eligibility Verification protocols – None for cash benefitNone for cash benefit– Proof of licensure for care after exhaustion of cash benefit

• Current Claim Risk Management Protocols– Require itemized invoice from provider with daily visit notes, ONLY after

exhaustion of cash benefit – Involvement of SIU during cash benefit period due to increased incidence of

fraud

This carrier experiences substantially increased incidence of fraud during the cash benefit period


g p

Section Summary: Finding the Balance

• Understand the goal of the benefit– Choice for the consumer– Cost effectiveness– Potential to extend home-based care and delay facility-based care

• Understand the risks– Self-reported care (custodial care agency or ICP) with little p ( g y )

regulatory oversight– Difficult to ensure quality and adequacy of care– Inconsistent, unprofessional record-keeping– Risk of victimization of vulnerable individuals

• Find the balance– Change business processes / controls– Work within current policy language to:

• Mitigate the risk• Preserve the benefit


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OPPORTUNITY WITH EXISTING POLICIESOPPORTUNITY WITH EXISTING POLICIES



OPPORTUNITY WITH EXISTING POLICIESWe are able to make progress within constraints for the 6+ million existing policies; to offer insuredfor the 6+ million existing policies; to offer insured

desired options but better manage risk

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…and the survey says?*

Carriers are looking to make operational changes to improve risk management within the current constraints:• Want to verify that home care services were actually providedy y p• Should require more frequent reassessments

– Not necessarily in person

• Need better assessments of ADL capabilityNeed better assessments of ADL capability• Want better data integration / interaction with claimants / efficiency• Limit benefits to agreed POC or based on prevailing area average

ratesrates• Require ICP certification/training

19Session 26: The Quest to Preserve Home Care Benefits*Similar responses grouped into categories

Current Best in Class Tools (the “Wish List”)

• Commonly used tools:– Benefit eligibility assessments & CIC– Ongoing care management / periodic reassessmentsg g g p– Require proof of payment (e.g. cancelled checks)– Background checks on ICPs– Verify residence and relationship with claimants using on-Verify residence and relationship with claimants using on

line tools

• Newer risk management tools:Newer risk management tools:– 3rd Party Verification that home care services were

provided– Limit reimbursement based on prevailing area average p g g

rates– A tiered approach to fraud tracking and strategies to

maintain efficiency of processing.


LTCP Policies – Pre 2011

• Home care benefit includes:– Licensed Home Care Agency– Informal Care Providers

• Allows for family members (even POA) to provide covered services for 365 service days

• Pre-2011 Provider Eligibility Verification protocols – Agency verification included confirmation of active licensure– ICP verification included:

• Check photo identification• Accept reported relationship with claimant

• Pre-2011 Claim Risk Management Protocols– Assignment of Benefits allowed for both Agency + ICPg g y– Proof of payment sometimes required– Self-reported service invoices from claimant/Agency/ICP– Try to influence caregiver pay rates by informing claimant of prevailing area

taverage rates

All of the fraud LTCP identified in 2010 came from claims with ICP care;We suspected but could not prove that there was much more fraud/abuse that

t bl t id tif f BOTH ICP d A l i


we were not able to identify from BOTH ICP and Agency claims

Wish List Item 1: 3rd Party Verification

• Implemented in February 2011 for new ICP claims– Telephonic timecard system– 3rd part verification of voice/identity, location of care, actual start and end times

3rd t i f l i i t b i i t LTCP– 3rd party review of claims prior to submission to LTCP– Electronic submission of invoices (not hand written from caregivers)

• Desired to make it mandatory for all home care– Policy language did not allow mandatoryPolicy language did not allow mandatory– Offered it as optional to ICP claimants to start (60% of home care)

• Changed business practices to make it more attractive to claimants– Disallowed AOB for ICP– Enforced Proof of Payment prior to reimbursement– Implemented scripting changes in intake, care coordination and claims

processingf f ( ) f– Waived Proof of Payment requirement (prior to reimbursement) if

claimant elected 3rd party verification services– Tightened caregiver ID and eligibility requirements


What Worked

• Higher identification of fraud/abuse in the managed population– Significant fraud or abuse identified in over 20% of cases with 3rd party verification– Average projected 1-year savings for these fraud cases: over $34,600/claim

• Significant drop in billing for a large percent of claims for actual services render

• Multiple claimants simply went off claim

• Using verification services gave a lot of insight between initial assessment and annual reassessment leading to earlier recoveries in multiple cases

• Improved claim processing efficiency– Reduced time to process – no more hand written invoices– Allows CPs more time to focus on problem cases

• Multiple cases of claimant financial abuse identified due to increased oversight

• Identified “adverse selection” cases as red flags


– Able to focus other fraud identification methods on those claims

What Worked: Example

Log Sheet prior to using timecard• Claiming 7 AM – 7 PM every day(?)• Utilizing max benefit every day

After 4 weeks of using timecard• Claiming 7.2 avg hours each day• Billing for 40% fewer hours of careUtilizing max benefit every day Billing for 40% fewer hours of care

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Primary Business Process Changes

• Create incentives to elect verification services– Waived Proof of Payment requirement (prior to

reimbursement) if claimant elects 3rd party verification iservices

• What do we do when we identify fraud/financial yabuse?– Deny claims where frequency/amount of timecard issues

meets pre-set triggers– Require 3rd party verification services for repeat offenders

or if evidence of fraudulent activity – Disqualify from using certain providers

S ifi i f l id i b• Specific informal providers causing abuse; or• Require formal care providers

– Initiate surveillance / fraud investigation, if appropriate


Other carrier experience: APOC claims

• Alternate Plan of Care (APOC)– APOC arrangements can give more flexibility

Business and claim process more in LTCI control– Business and claim process more in LTCI control

• At least 2 carriers who approve ICPs under APOC arrangements have made 3rd party verification mandatory for those claims

• Consider business decision to use more APOC if greater oversight/management is possibleoversight/management is possible


Plans for 2013 include:

• Pursuing program expansion– All ICP claims

Include Home Care Agency claims– Include Home Care Agency claims

• Marketing program to claimants– Including verbiage and marketing materials about the program in

the claims package and brochures

• Developing new, tiered risk management approach– Allows time and resources to be spent on highest value cases– Allows time and resources to be spent on highest value cases

• Developing a SharePoint site to track “Red flags”– Improves communication between departments– Multiple touch points


Section Summary: Making Progress

• We were able to make progress within constraints for existing policies

Able to offer insured desired options but manage risk– Able to offer insured desired options but manage risk– Showed us what we suspected – that substantial fraud and

overbilling exist and are undetected

• Initial program results allowed us to create growth/expansion plans for 2013– Relax certain requirements (Proof of Payment)e a ce ta equ e e ts ( oo o ay e t)– Gain certain advantages (3rd party verification)


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STRATEGIES FOR FUTURE POLICY GENERATIONSSTRATEGIES FOR FUTURE POLICY GENERATIONS



STRATEGIES FOR FUTURE POLICY GENERATIONS

The industry must redefine the way home care benefits are d d d bli taccessed and managed, enabling consumers to access benefits while staying within priced risk

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…and the survey says?*Thi ki b t th LTCI d t thi ’d t lik tThinking about the LTCI product, name one thing you’d most like to change that would allow you to better manage risk from home care claims:

Li it b fit il bl f ICP• Limit benefits available for ICP care• Stricter licensing/qualification requirements• Require verification of ICP services• Eliminate cash benefits• Limit benefits to agreed POC or

prevailing area average ratesprevailing area average rates• Add claim pre-authorization• Eliminate Medical Necessity Trigger

d R t ti f B fitLIMITLIMITLIMIT

and Restoration of BenefitsSurvey Summary:

Consumers want MORE and EASIER access to home care benefits but


LTCI staff seem to want to LIMIT this benefit!*Similar responses grouped into categories

Trend towards home and community-based care

• Original policies were facility-only– Now prevalence is more comprehensive policies– When this policy language was developed, Home care / ICP care p y g g p ,

not envisioned

• Trend is consistent with Public as well as private payer programs – Medicaid HCBC– Waiver programs

• Current Situation– Comprehensive policies– HHC is the most desired claim site

About half may have IP involvement*• About half may have IP involvement*

• Future SituationWhat will be the care model in 20+ years that we can’t imagine now?

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– What will be the care model in 20+ years that we can t imagine now?*Varies by carrier

2011 Industry Claim Numbers

Existing Claims New Claims Filed

Existing Home Health Claims

New Home NewClaims

(~32%) Health Claims(~50%)

New Facility

Claims (NH + ALF)

ExistingFacility Claims

(NH + ALF) ( )

“Half of all new individual long term care insurance claims pay for home care services the Association’s research found… Less than one-third (31%) of new claims begin with th li h ld i i i i h ” J Sl 2011 AALTIC

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the policyholder receiving care in a nursing home…” – Jesse Slome, 2011 AALTIC Source Book

Long Care Insurance (LTCI) Claim Data

Why People Claim*

8%

44%

Stroke

Dementia

5%

8%

Parkinson's

38%

5%

All Other

Osteoarthritis

(~170 Other Causes)

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*Genworth Financial, 2012 claims data

Headline News - Growth of Home Care

“The pie is big enough for all of us and it will only grow.” This is how one executive with an established home healthcare franchise described the mood of the marketplace. - www.frandata.com; Feb, 2012

Strong Growth : The home care industry, mainly catering to the elderly, has seen a dramatic increase in new franchises and startups jumping into thi i h i th t i i d tthis niche in the greater senior care industry.

New York Home Health Industry Shows Growth Despite High UnemploymentBY ERIN HEGARTY ON SEPTEMBER 18, 2012 IN NEWS

Growth in home health care offers opportunities

BY ERIN HEGARTY ON SEPTEMBER 18, 2012 IN NEWS

BY TERRY SAVAGE [email protected] June 17, 2012

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Balancing Accessibility with Broad Appeal

• Lowest cost, least restrictive care environment beneficial for all parties– But lends itself to more fraudulent behavior– Less regulatory oversight – If policy is easier to access, could generate more claims

• Generous home care benefits sell policiesGenerous home care benefits sell policies– But survey results indicate claims folks seem to want to restrict benefits

• How consumers already view the home care benefit– Difficult to access– Difficult to access– Unclear boundaries

• Need to have our cake and eat it tooOffer benefits people want to access

OVERSIGHTOVERSIGHT ACCESSACCESS

– Offer benefits people want to access– Manage the risk through oversight and

administrative processes


Future Policy Generations - Suggestions

• Draft future policy language that “strikes the balance”– Enables better access to needed care– Allow for newer “wish list” items to manage risk– Contemplate future care models not yet envisionedp y

• Allow for effective operational management of that risk

• Specific Examples:– Move away from self-reported claims mandate verification of home care servicesMove away from self reported claims, mandate verification of home care services

• Better definition of Proof of Loss that includes verified evidence that services were provided• Allow access to independent/informal care, but only with appropriate oversight and verification

– Limit reimbursement to prevailing area average rates for all home care• Corollary is health care insurance – claimant can always balance bill a preferred provider

Better define Alternate Plan of Care to enable benefit options while minimizing risk– Better define Alternate Plan of Care to enable benefit options while minimizing risk• Cover additional/alternate/new care models under APOC• Enable the business to make tradeoffs and implement appropriate oversight

– Reduce limitations on proof of payment in exchange for improved oversight• Consumers are not used to a reimbursement product anywhere else in health care

M t ff d t f t b t lifi d t i• Many cannot afford to pay up front, but are qualified to receive care– Enable different rules in cases of proven fraud/abuse

• Tighter management or disallow providers


Presentation Summary

• Current policy language and business practice often limit

CURRENT LIMITATIONS

• Current policy language and business practice often limit the use of desired risk management tools


• Despite current constraints, there are ways to balance risk and offer consumer choice for the 6-10+ million existing


gpolicyholders

STRATEGIES FOR FUTURE POLICY GENERATIONS• Future product generations must redefine home care

benefits to find the desired balance between priced risk d h i

GENERATIONS


and consumer choice

Presentation Summary: The LTCI Balancing ActLTCI consumers/claimants desire to receive care at home the least restrictive

f f f

LTCI consumers/claimants desire to receive care at home, the least restrictive setting where costs are typically lower. In concept, this is good for both consumer and carrier, but carriers report higher fraud, waste and administrative cost.

To successfully grow our industry, we need to redefine the way benefits are accessed and managed to better meet the needs of our customers

Simple, accessible

Carrier need to manage

home care benefits

manage risk




Balancing consumer desires and carrier risk management needsg

40

Documents

The Quest to Preserve Homecare BenefitsHomecare Benefits …iltciconf.org/2013/PDF/26-TheQuesttoPreserveHomecare... · · 2013-02-28Claims / Policy & Provider Tracks The Quest to