Limit denials: Know what to ask insurance companies
Checklist helps reduce custodial care claim denials
Many consumers today buy health insurance policies that have "home health" benefits, just to find out later that these policies cover only skilled care. To be able to properly advise potential clients as to what home health services their policies will cover, a private duty home health agency in Langley, WA, has created a checklist that it uses in the initial consultation with insurance companies. The checklist helps clients and private duty companies identify up front what services are covered and what are not.
Clients usually are surprised to find that their policies do not cover custodial care, says Cleveland Hall, bookkeeper for Island Home Nursing. "Clients will buy long-term care policies that have home health care benefits, but their policies may exclude custodial care. It’s discouraging for people who have been paying premiums for a long time thinking they have home health care coverage."
Hall developed this checklist from working over time with insurers’ customer service representatives and case managers. The checklist, she says, is a list of reasons why most clients get denied. Asking them in the initial consultation with the insurer prevents a denial after care has begun. (For a copy of the checklist, see p. 30.)
Hall has encountered several stipulations from insurers including the following:
• The agency must be Medicare certified.
• The home care must be the result of the client having been in the hospital or having been in an accident.
• The home care is in lieu of hospitalization or nursing home confinement. "Often the policies will require a doctor’s orders stating that if the person was not receiving home care or if home care was not available, the person would have to be in the hospital or nursing home," Hall says.
Insurance policies often will include a lengthy discussions about home care and nursing visits, Hall says. "But in the list of exclusions, it will say, excluded from this benefit is custodial care.’ And that’s primarily what we do."
Custodial care is generally defined by insurers as care that is not medically necessary, she explains. Medically necessary care, for example, may be an IV treatment or care that requires the presence of a licensed RN or LPN.
"A lot of policies will take the Medicare model and will pay for the kinds of skills and nursing visits that Medicare pays for. But they won’t pay for assistance with bathing, ambulating, meal preparation and housekeeping," Hall says.
Some companies, however, will pay for custodial care if a person needs assistance with several activities of daily living, such as bathing and ambulating.
Hall says the agency has not had to negotiate rates with insurers. "Usually I just tell an insurance company what the charges are, and I ask if the kind of services is covered under its policy. I know negotiation happens a lot out in the world, but we have been fortunate in not having to deal with that type of thing."
Still, insurers that pay for custodial care are in the minority. About 75% of the agency’s jobs are private pay, Hall says. The percentage was even higher until the agency began servicing several state contracts.
As the demand grows, more insurers will have to address the issue of custodial care, Hall says. "They may have coverage for 40 skilled nursing visits a year, but they also need the hourly, custodial care benefit."
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