Long Term Care Insurance
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Long Term Care Insurance


Here are some of the common reasons that insurance companies deny claims for long-term care.

  1. The insurance company says the nursing assessment shows that you are not "cognitively impaired".

    Most all long-term care policies contain variations of three different requirements in order to qualify for benefits: cognitive impairment, loss of functional capacity, or medical necessity. You are almost always required to satisfy only one of them in order to qualify for benefits.

    Cognitive impairment usually means that you require supervision and direction because of cognitive problems. Cognitive impairment is frequently defined something like this: loss of intellectual capacity which requires continual supervision to protect yourself or others, as measured by clinical evidence and standardized tests that measure your impairment in short or long-term memory, orientation is to person, place, and time, deductive or abstract reasoning.

    Insurance companies typically deny claims based on the words "continual supervision" in the language recited above. In other words, the company will interpret those words to mean that you must require someone in the room, actually watching you, pretty much 24/7. That is an extremely high standard to meet. As of today's date, no reported decisions from the courts exist interpreting the meaning of "continual supervision". So, the question remains what the word "continual" means. It could mean supervision every minute. Or it could be interpreted to mean supervision on a continuing basis several times throughout the day, each day throughout the week. It is a general principle of law that if insurance policy language is susceptible to different meanings, the court will apply the meaning that is most favorable to the policyholder. This is in your favor, and you can point that out to your insurance company.

    Another area that provides fertile ground for denial of claims due to cognitive impairment language, is the language "as measured by clinical evidence and standardized tests". The most common test relied on by the insurance company is the "mini mental" exam in which the patient is asked what day it is, what year it is, what is the season, what is the day of the week, etc. A patient can often achieve a perfect score on these tests, and yet still need supervision every day in order to ensure their safety and nutritional health. Review the testing that was done by the insurance company, or the test which it is relying on, to see whether or not the examination truly addressed the main issue of "intellectual capacity to protect yourself or others".

  2. The insurance company says the nursing assessment and nursing home records show that you do not need assistance with the activities of daily living required by the policy as a condition of benefits.

    Another trigger commonly included in long-term care policies is the "loss of functional capacity" trigger, sometimes called the "activities of daily living" requirement. Activities of daily living are referred to as "ADLs". See Activities of Daily Living Defined. Policies will usually require that you be unable to perform two or more ADLs. This number may be different depending on your policy language.

    Activities of daily living are commonly defined to include the following:

    Washing yourself by sponge bath; or in either a tub or shower, including the task of getting into or out of the tub or shower.

    Ability to maintain control of bowel and bladder functions; and when unable to maintain control of bowel or bladder functions, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag).

    Putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs. This includes buttoning buttons and tying shoes.

    Feeding yourself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously. Eating does not include preparing a meal.

    Getting to and from the toilet, getting on and off the toilet and performing associated personal hygiene.

    Moving into or out of a bed, chair or wheelchair. Transferring does not include the task of getting into or out of the tub or shower.

    As always, the exact language of your policy is critical. Do not rely upon the definitions set forth here. The actual language of your policy might, and probably does, differ in critical respects. For instance, some policies will describe "eating" as "you cannot, without the aid of another person, maintain an adequate food and fluid intake consistent with your dietary needs". This is much broader than the definition provided in the example above. Many people can easily take a fork and get food from the plate to their mouth. However, if they are also required to buy the groceries, plan the meals, and prepare the food, they may end up literally starving themselves to death and growing steadily weaker with malnutrition.

    You should examine carefully each of the ADLs and investigate whether or not the policyholder can perform them. For most people, bathing and dressing are the first ADLs that began to cause problems. For instance, the most common difficulty first encountered by elderly people is the inability to safely get in and out of a shower or bath tub. Safety requires that they have help. But people can be uncomfortable and embarrassed about this for obvious reasons. So, when asked, they explain that they are able to do a sponge bath by themselves. Of course, no one has ever seen them do it, due to modesty concerns. The insurance company seizes on the report that the policyholder can perform a sponge bath, and counts that as satisfactorily performing this ADL. In actuality, however, the "sponge bath" often only amounts to cleaning a few areas of the body, rather than a real cleaning sufficient to maintain normal hygiene for very long.

    With dressing, older people frequently began to encounter problems tying their shoes, or putting on socks, or fastening buttons. This counts as an inability to perform an ADL. However, the company will often argue that the patient can simply stop wearing lace up shoes, and instead rely on slip ons. The company will recommend using devices designed to aid putting on socks, and recommend pullover sweaters or garments that use Velcro, instead of buttons. The extent to which this can go often reaches the absurd.

    The problems with satisfying the insurance company as to inability to perform ADLs is often complicated by the patient himself. No one wants to emphasize how helpless they are, and loss of independence is a depressing experience. The company's best strategy is often just to send a nurse unannounced, to interview the policyholder while no other family members are around. Elderly policyholders are usually inclined to present themselves as independent and not needing help from anyone. The nurse conducts a 15 or 20 minute interview, and the company uses it as the basis for denial of the claim, refusing to give any weight or consideration to information from treating physicians and family members that runs completely contrary to what the nurse wrote down from the "interview". Point this out to the insurance company. Describe examples of when the policyholder could not perform an ADL.

  3. The insurance company ignores the medical necessity qualifier and instead denies the claim based on another provision.

    Finally, the policy often includes a "medical necessity" trigger. Medical necessity is frequently defined something like this: "you must require covered care due to sickness or injury. The care prescribed must be consistent with accepted medical standards for treating the diagnosed condition and could not have been omitted without adversely affecting your condition".

    The medical necessity clause is a big problem area for the insurance company. That's because "medical necessity" is the broadest of all the triggers. It is almost always the most helpful to the policyholder. Coincidentally, it is least favored by the insurance companies, and is the benefit trigger most often ignored by the insurance companies. Even though a policyholder can perform most all of the ADLs and even if they are cognitively intact, it may still be medically necessary for them to have assistance. Instead of dealing with this trigger, insurance companies often simply ignore that it is there and instead focus on the fact that the policyholder can perform al the ADLs and is not cognitively impaired. Write to your insurance company and tell them you are claiming benefits under the medical necessity trigger. Tell them it has been recommended by your doctor. Ask that they specifically address their rationale for denying benefits under this provision.

  4. The insurance company addresses the medical necessity trigger but says it is not medically necessary that you receive nursing home or assisted living care.

    Insurance companies have come up with a way of getting around the medical necessity trigger. They simply give no credibility to the doctor's opinion.

    The fact is, there comes a time for elderly people when they need assistance, and if they don't get it, their health will be affected. It is very typical for an elderly person to eventually require medical assistance in order to remain healthy, or as healthy as possible. This scenario also is one which frequently results in denial of the claim. They don't need to be bedridden, or significantly impaired, in order to still need assistance. For instance, an elderly person living at home, alone, can easily become depressed. Depression leads to apathy. Apathy leads to poor eating. Poor eating leads to a weakened physical condition. If the person sometimes has trouble making it to the bathroom, it is not uncommon for them to limit drinking in order to limit trips to the bathroom. Over a period of time, and it doesn't take long, malnutrition and dehydration set in. That causes weakness and dizziness, making the person more susceptible to falling and suffering broken bones.

    On the other hand, with social interaction, that same person is much less likely to become depressed. With assisted living, that person doesn't struggle to shop for groceries, and go to great efforts to prepare meals just for themselves. They sleep on a regular schedule, eat on a regular schedule, are helped to take their numerous medications on a regular schedule. This regularity is incredibly helpful in maintaining maximum functioning, and people who have this kind of assistance will often function much more independently for much longer. All of this is no mystery to doctors who deal with geriatric patients. That being the case, doctors usually have no hesitation in recommending this kind of assistance when it is needed.

    Here is how it usually works: the family becomes concerned because they know that mom or dad is no longer safe at home alone. The family doctor agrees and recommends assisted-living or nursing home care. Mom is no longer able to drive without constant risk of an accident, and she can't get groceries without driving to the store. Not only that, but she doesn't cook much anymore and doesn't seem to be able to regularly prepare meals. She is forgetful, and even though she says she does, the truth is that she doesn't always take all of her prescribed medications on regular schedule.

    Mom goes into assisted-living, and the family provides a claim form to the insurance company. The insurance company sends a nurse to interview mom at the facility. When the nurse gets there, mom is setting up in her living room chair watching television. After the normal amount of struggle, she is able to get up out of her chair. She has no problem knowing who she is, where she is, or what day it is. She denies that she ever wets her pants, and it's only 10 feet from her chair to the bathroom in her new apartment at the assisted living facility. Of course she has no trouble eating, since the meals are already prepared and ready for her each day. All she has to do is sit down and put the food in her mouth. She doesn't have to worry anymore about getting the food, planning the meal, and spending time every day cooking for herself. She denies having problems dressing herself, even though she confides that sometimes she needs a little help with her socks. She doesn't mention that it might take 10 minutes some mornings to button her blouse. As for bathing, of course she can do it herself. She doesn't take baths anymore, because it's kind of hard getting in and out of the bathtub. She fell 6 months ago and she doesn't want that to happen again. She doesn't take showers anymore for the same reason, and even though the people at the assisted living center have offered to help her, she prefers to just take a sponge bath. It's easier and she doesn't have to worry about falling down.

    The policy holder is (almost) able to perform all ADL's. She is cognitively intact ... to the point that she doesn't need "continual" supervision. What does the company do to get around the treating doctor's assessment that assisted-living is "medically necessary?" The company simply disputes that this could possibly be true, and argues that since the policyholder is independent with all ADLs, and cognitively intact, she couldn't possibly need assistance with living. The doctor is just plain wrong.

    This argument is frivolous, but the company makes it anyway. Why not? It is almost always successful. The elderly policyholder doesn't put up much of a fight. If a son or daughter does challenge the company's denial, the company simply stands its ground. If the family complains to the state Department of Insurance, the company still stands its ground, because the company knows exactly how to get the department to back off. The company simply makes it sound like a "he said - she said" dispute, as opposed to a situation where the facts are clear. This will cause the Department of Insurance to back away.

    In most cases, the family is simply not equipped to overcome the insurance company. To make it worse, the notion of hiring a lawyer is fraught with problems. The policy provides benefits of $100 per day, but a lawyer might charge more than that per hour. How much would a two-year lawsuit cost? Mom doesn't have a lot of money left. What happens if you lose? Maybe it is better to just spend the last of the money on the nursing home bills, and then go on Medicaid. What is there to gain by risking thousands and thousands of dollars on legal bills to fight this company?

    It doesn't have to end up like this. If this happens to you or someone you love, you should point out to the insurance company that medical necessity is a separate trigger and the policyholder has met it. Describe how the person was before they entered a long term care facility, and how their improvement proves that their health would decline without such care. If the insurance company persists in its denial, you may want to contact a lawyer. Call someone who wont charge you to evaluate your case and who is experienced in long term care insurance bad faith claims practices.

  5. The insurance company says the policy provides benefits for nursing home care, and the facility you have selected does not qualify under the definitions of the policy as a "nursing home".

    Long term care insurance policies provide for benefits if you enter a nursing home, and usually contain a definition of a nursing home. That definition generally says something like this: "a facility that has nursing care available 24 hours a day and is licensed for the purpose of primarily providing that type of care".
    Problems with this kind of clause typically arise when the policyholder enters an assisted living facility. The facility provides nursing services on an "as needed" basis and has a nurse on call 24 hours a day. Does it meet the definition of "nursing home"? Several courts have addressed this question and decided that it does not, because, in laws written by the state, an assisted living facility is one that can provide intermittent nursing care, but is not licensed for the primary purpose of providing nursing care.

    However, the outcome of this question is heavily dependent on the exact words used in the policy. The definition of "nursing facility" or "nursing home" varies widely from policy to policy, and under the language of many policies, an assisted living facility might very well qualify. Nevertheless, most insurance companies will deny the claim under these circumstances, and leave it to you to prove they are wrong. Look carefully at your policy, not at what the insurance company's denial letter says, to see if your long term care facility qualifies under the definition.

  6. They don't return phone calls and don't answer letters.

    Insurance companies know that they have the resources to wait you out. They know that more times than not, the policyholder and his/her family just go away, and the insurance company keeps the money. Ultimately, the policyholder who bought the insurance and paid premiums for years, ends up on Medicaid with the public footing the bill instead of the insurance company. So, insurance companies can make a huge profit by simply ignoring phone calls and letters. Be sure that you document every time you contact your insurance company by keeping copies of letters and recording the times you called. If you can not get through to your insurance company at all, you should contact a lawyer.

  7. They delay your claim unreasonably.

    Sometimes you will encounter the stonewalling approach. As amazing as it sounds, some insurance companies simply will not respond to phone calls or letters. Messages and letters seem to fall into the "insurance abyss." This can be extremely frustrating. If this happens to you, make sure you document all the calls you make. This means write down who you called and when. Explain in your letters how the insurance company's ignoring you is affecting you and ask what you can do to get an answer. If you can not get a response, you may want to call a lawyer. At the very least, your claim will be turned over to the insurance company's legal department and lawyers will respond to letters, or, if need be, a lawsuit.

  8. They require unreasonable documentation.

    Your insurance company will seek documentation of your loss like requesting medical records. They will also ask for updated medical records from time to time to establish that you still qualify for benefits. Tax returns are also sought to establish that you are not working as well as information from past employers. They may even ask for an insurance company paid doctor or nurse to evaluate you and your claim. These are normal requests. There are times, however, when an insurance company is just looking to delay a claim and the requests become a burden and repetitive. Insurance companies will claim that documents were not received or not on the "proper form" or the questions were not answered to their liking. The fact is, the more obstacles an insurance company can place in your way, the more likely you will feel overwhelmed. When people are overwhelmed, they make mistakes or they just give up. If you feel that your insurance company is asking for information you have already provided, or information that you don't feel is relevant to your claim, ask them to explain why they need it. If their answer falls short, contact a lawyer who will speak to you for free and evaluate your case.

    The more obstacles they can place in your way, the more likely you will feel overwhelmed.

  9. They deny based upon unreasonable interpretation of your long term care insurance policy.

    See our article entitled "The 10 Most Common Bad Faith Practices and/or Common Reasons for Denial and What to do About it"

  10. They say the claim is preempted by ERISA

    If your long term care insurance policy was provided by your employer, more than likely it will fall under the laws provided by the Employee Retirement Income Security Act (ERISA). These laws limit what you can recover and how you enforce the insurance policy. Remedies in connection with an ERISA insurance policy are limited to the benefits owed and, in the court's discretion, reasonable attorney's fees. In other words, if your insurance company unreasonably denies your claim, most courts hold that no consequential damages, emotional distress damages or punitive damages can be recovered in an ERISA action.

    However, there are a few exceptions to the ERISA preemption. You should speak to a lawyer to see whether or not your case is exempt.

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