One of the main issues I spoke about was the necessity of Providers understanding and taking an assignment of benefits from their clients. For those who are not familiar with the assignment of benefits, often times referred to as an AOB, the AOB is an agreement or arrangement between an insured and the Provider, by which the insured directs the insurance company pay applicable long term care insurance benefits directly to the provider, and to allow the provider access to all policy information necessary to perfect the claim. In the context of long term care, the AOB removes the client from the complicated approval and LTC insurance billing processes.

Throughout my career in the long-term care insurance space, I’ve come across a multitude of providers who for a variety of reasons, refuse to take an assignment of benefits from their clients. Often providers tell me that taking assignment adds to their back-office costs and negatively affects cash flow, or they argue that collecting payment from their client rather than from the insurance company directly is just easier to handle. “Let the client deal with the insurance company” is a common sentiment in the industry. While I understand that the assignment of benefits can seem daunting and these views on taking the assignment may have some merit to a provider that is not proficient in long term care insurance claim submissions and processing, I argue that failing to take the assignment is a serious mis-calculation on the part of providers. 

Why should providers provide care under an assignment of benefits? 

The simple answer is because it is good and smart business, and more importantly, it is a real and crucially needed service for the client.

An AOB is a legal device that gives providers rights that that they otherwise would not have. The AOB gives providers legal standing to bring direct legal action against the long term care insurer for a denied or short paid long term care insurance claims. Instead of worrying about collecting from the client, with an AOB, a provider can take recourse directly against the insurance company. This not only creates extra protection for the provider’s receivables, but it also removes the possibility of having to bring legal action against a client- something no provider ever wants to do. In many states there is the added benefit that if legal action is required against the insurance company and the provider prevails, the insurance company will have to cover the provider’s legal costs. Taking an LTC insurance assignment is the smartest insurance policy you can have.

Lastly and arguably the most important benefit of taking an AOB is that doing so allows a provider to be competitive in their market by offering a deeper level of advocacy to its clients. If the competition isn’t taking an AOB but you will, potential clients will see significant value in that. No client is in a position to take on the complicated LTC claims process, particularly a client who is trying to simplify her life rather than complicate it. As such, an AOB brings convenience and peace of mind to the client in knowing there a strong and competent advocate handling their long term care insurance claim. Alternatively, if you are in a local market where taking assignment is commonplace but you for whatever reason have not yet committed to doing so, then you are missing opportunities. Don’t let your competition get ahead just because you don’t think you can manage an assignment of benefits and all of its implications. The key to taking an assignment is fully understanding LTC policies, their nuances, and all that is necessary to properly advocate the claim. So what if a provider does not possess the knowledge and experience, or does not have the bandwidth to learn about and manage LTC claims for an insured?

Is there an experienced company that will take the assignment from the insured and handle all of the claims processing for the policyholders and providers?


The answer is yes. I am the founder and president of Paradigm Claims Services. Paradigm is a company that advocates for seniors and providers in the long term care insurance space. Paradigm accepts assignment from the policyholders, presents the claim to the insurance company, and processes and manages the claim throughout. Paradigm’s services will allow the policyholder to receive care without worry, and allow providers to do what they do best- provide care. For more information about Paradigm, visit the website at www.paradigm-claims.com or contact a Paradigm representative at 786-254-7688.

THE ISSUES AND STRATEGIES: 

PREMIUM INCREASES. The first problem arrives before it’s time to activate your policy. The long-term care insurance companies badly misjudged both how long people would live and the exorbitant cost of care. The result is that they significantly undercharged for their products. As time passed and this became more and more apparent, these companies had to scramble to raise premiums in order to cover these miscalculations. Long term care policyholders are now faced with serious and difficult choices. They can pay the increase in premiums which in some cases can be over 100 percent or, take a reduction in benefits for a lower premium payment or, get rid of the policy all together. The option they choose will have a serious impact on their quality of life down the road. This choice is not something that should be done without expert consultation.

Advice is required for a number of reasons. First, many people don’t really know or understand what their policy benefits are so, they’re not fully aware of what they may be giving up. Second, there are strategies for addressing the premium issue. For most policies, there is a waiver of premium provision included in the policy terms. This means that if you are benefit eligible and activate your policy, you will no longer need to pay premiums.

BENEFIT ELIGIBILITY. What people don’t understand is that in many cases they are already benefit eligible. Long-term care policies do not require the policyholder to be bed ridden before benefits are payable. For most policies, all that is required to trigger benefits is stand-by assistance with two or more of the activities of daily living. In other words, all that is required to be claim eligible is for an aide to be nearby to make sure you are safely carrying out your activities. The aide does not need to physically assist you. This is not a high bar to meet. An expert can help you determine if you are eligible for benefits. 

For those of you who have hit the point in your lives where it is time for policy activation, here is what you can expected to face when you begin the process: 

THE ELIMINATION PERIOD. If you are not familiar with this, the elimination period is similar to a deductible. The policy will say that before benefits can be paid you must satisfy this period. This means that you need to receive covered services and pay out of pocket for however long the policy dictates. The elimination period can range anywhere from zero to 180 days. Planning and strategies are required to effectively and efficiently manage the elimination period. Waiting too long to satisfy the period can mean thousands more out of pocket. If money is an issue, spreading out the process and satisfying it over time will allow you to satisfy the period in the most cost-effective manner. 

CLAIM SUBMISSION.The process formally begins with submission of clam forms to the insurance company. Sounds easy enough but, don’t be mistaken. Mistakes in claims forms happen frequently, and mistakes will mean rejections, delays and requests for re-submissions. For people who need care now, these delays can be costly and potentially life threatening.

ASSESSMENTS. Once the claim forms portion of the process is complete the next step will be an insurance mandated assessment. The insurance company is legally entitled to have their own assessment done. The insurance company will almost always exercise this right. Many seniors are proud. They hate to admit when they need help, especially to strangers. The result of this mindset is that they underplay their needs. Doing this during an assessment can leave the assessor with the impression that you are in good health. The insurance company will then conclude that you are not claim eligible and therefore will deny your claim. Engaging an expert for this part of the process is very important. An expert with experience in the process can assist with claim forms. An expert will also inform you that you are allowed your own independent assessment. This is an option you are encouraged to take. A home health provider can perform an assessment for you. It is crucial to choose a qualified and experienced provider that can properly and professionally carry out the assessment.

RECEIVING AND DOCUMENTING CARE AND GETTING PAID. Once the assessment process is complete, the insured can now begin to receive care. The invoices for care as well as proper care notes and documentation will need to be submitted to the insurance company on a regular basis. Mistakes and errors in the invoicing and documentation can result in denials, underpayments and late payments. It is imperative that the documentation be filled out correctly. Documentation should be continuously reviewed for errors so these issues can be avoided.

GET PROFESSIONAL HELP FROM THE BEGINNING. The process outlined above is complex and nuanced. Mistakes at any step in the process can and will result in denials and delays. Often times, these denials and delays can result in thousands of dollars out of pocket or, for those who don’t have the means to pay for their care out of pocket it can mean no care at all.

Our firm is well versed in this process and has dealt with all these issues. Our firm can help facilitate the care process, guiding you every step of the way. For those who have already been denied, our firm can assist in rectifying the denial and help get care started and paid for. Our firm can also assist in reinstating lapsed policies, facilitating a move to an assisted living facility or assist by recommending the best care providers in your area.

Your long-term care policy is too valuable to leave up to chance. Engaging experts is a smart investment. Don’t leave your care up to chance- get help. 

Some people have lifetime polices, which essentially never “expire”-as long as the insured keeps the policy active by paying the premiums. The majority of people though, have limited-time policies. In order to maximize these limited-time policies, it is crucial to understand how to utilize and maximize their features in order to fully benefit the policyholder.
One of the most crucial yet overlooked policy features is called restoration of benefits. Perhaps the most important characteristic of this “restoration of benefits” feature is its ability to essentially transform a limited time policy into a perpetual policy, when used properly.

How?

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A serious issue that I have encountered in the long term care world is when an insurance company undercuts a plan of care for an insured person. Oftentimes, even though a plan of care has been approved by an insured’s physician, the insurance company will disagree with the amount of care hours assigned. This is probably one of the biggest problems in the industry because there is a lot at stake for everybody.

Allow me to explain.
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Many of my registry clients are told that their policy benefits have been maxed out. Consequently, when registries or agencies are no longer getting paid by the insurers, they look to their clients to step in and pay. In many cases, these clients cannot afford to pay, and more often than not, the registry or agency will stop providing care, and essentially lose their client as a result.

This happens primarily for two reasons:

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This summer Frank Anania from Mesa, Arizona reached out to A Place for Mom with what at first glance, seemed like a simple question. “My wife is in memory care. Our long term care insurance, which pays $200.00 dollars per day for nursing care, will only pay $100.00 per day for memory care. Memory care requires more daily care. What can I do?” he asked. (more…)