Spinal Disorders Claims in Long Term Care Insurance

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Spinal Disorders Claims in

Long Term Care Insurance

It’s such a pain, why bother?

Stephen K. Holland, MD Chief Medical Officer Univita Health, Inc. Long Term Care International Forum, May 2011 Albuquerque, New Mexico

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Agenda

• Amen to underwriting

• How common are LTCI claims for spinal disorders? • LTCI claims experience

• Compression of morbidity and recovery • Can we manage spinal disorder claims ? • Conclusions

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Spinal Disorders and Disability

UNUM Long Term Disability Claims

1. Cancer 12.1%

2. Complications of pregnancy 11.7%

3. Joint/muscle/connective tissue 10.1%

4. Back Injuries 8.1%

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Understanding

LTCI Claims

Experience

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 Carrier A - TQ Group LTCI policy

 73% Comprehensive, 22% Facility only, 4% Partnership

 Active members: 156,104

 Average age of active members: 69.3 years  Gender: 60% Female, 40% Male

 Average policy duration: 10.7 years (max 17+ years)  Total exposure: More than 24.2 million member months

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 Carrier A’s Claims Experience

 23,089 Requests for LTCI Benefits  17,927 Approved LTCI Claims

 13,325 Paid LTCI Claims

 $810 million in Benefits Paid to Date  Average Paid Claim: $60,796

 Median Paid Claim: $37,376  Claim Closure

- 3,961 Recoveries; 8,613 Deaths, 399 Exhausted Benefits

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

Risk Pool Disability profile

• 25% Cognitive Impairment (CI) • 45% 2+ ADL deficits

• 30% Combined ADL & CI 

Setting of Care

• 48.8% Home Health Care • 32.5% Assisted Living

• 18.5% Nursing Home

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Most frequent paid claimed events*

1. Pure Dementia 24%

2. Cancer 14%

3. Stroke 11%

4. Fractures/Injuries/Falls/Gait issues 7%

5. Arthritis and other Rheumatic diseases 5%

6. Parkinson’s disease 5%

7. Respiratory disease 4%

8. CHF, Cardiomyopathy 4%

9. Spinal disorders 4%

10.Diabetic complications 2%

*Accounts for 80% of Paid Claims

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As of 12/31/2010: 17,927 Approved; 13,325 Paid Claims 771 Spinal disorders claims

• Age at issue: 69.4 years

• Age at time of claims: 78.2 years

• $39,748,200 paid to date

• $51,554 average claim payment

17,146 Claims from all others • Age at issue: 71.1 years

• Age at time of claims: 77.6 years

• $770,361,424 paid to date

• $45,082 average claim payment

Spinal Disorders 4.3%

Other than Spinal Disorders 95.7%

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Most frequent paid claimed events Mean

1. Pure Dementia $78,315

2. Cancer $15,874

3. Stroke $79,679

4. Fractures/Injuries/Falls/Gait issues $56,588

5. Arthritis &other Rheumatic diseases $67,857

6. Parkinson’s disease $76,830

7. Respiratory disease $38,852

8. CHF, Cardiomyopathy $43,658

9. Spinal disorders $69,532

10.Diabetic complications $34,766

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Most frequent paid claimed events Mean Median

1. Pure Dementia $78,315 $54,899

2. Cancer $15,874 $4,024

3. Stroke $79,679 $51,854

4. Fractures/Injuries/Falls/Gait issues $56,588 $26,406

5. Arthritis &other Rheumatic diseases $67,857 $49,050

6. Parkinson’s disease $76,830 $53,119

7. Respiratory disease $38,852 $16,866

8. CHF, Cardiomyopathy $43,658 $23,575

9. Spinal disorders $69,532 $41,921

10.Diabetic complications $34,766 $21,699

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Typical Spinal Disorder Diagnoses

• Spinal compression fracture

• Osteoarthritis, degenerative disc disease (DDD)

• Spondylolisthesis, spinal stenosis

• Failed back surgery

• Spinal cord injury, traumatic vertebral fracture

• Ankylosing Spondylitis

• Radiculopathy

• Myelopathy

• Diffuse Idiopathic Skeletal Hyperostosis (DISH)

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0% 10% 20% 30% 40% 50% 60%

≤69 years 70-79 years ≥80 years

Spinal Disorders All Others

Age Distribution

Spinal Disorders versus All Other Diagnoses

LTCI Claims Experience

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Female Male Spinal Disorders All Others

Gender Distribution

LTCI Claims Experience

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Home Health Care 62.4% Assisted Living 28.6% Nursing Home 8.9%

Spinal Disorders Location of Care

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0% 10% 20% 30% 40% 50% 60% 70%

Home Health ALF SNF Spinal Disorders All Others

Spinal Disorders versus All Other

Location of Care

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

≤69 years 70-79 years ≥80 years

Deceased Recovered

70% Closure Rate

Spinal Disorders – Claim Closure

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0% 10% 20% 30% 40% 50% 60%

Recovered Deceased Exhausted Spinal Disorders All Others

Claim Closure

LTCI Claims Experience

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0% 10% 20% 30% 40% 50% 60% 70% 80%

Recovered Deceased Exhausted Spinal Disorders All Others

Claim Closure

LTCI Claims Experience

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0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

≤69 years 70-79 years ≥80 years Spinal

Disorders All Others

Age at Recovery

LTCI Claims Experience

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0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

≤69 years 70-79 years ≥80 years Spinal

Age at Recovery

LTCI Claims Experience

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0% 10% 20% 30% 40% 50% 60%

In Deductible ≤12 months 12-24 months Spinal

Timing of Recovery

LTCI Claims Experience

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Typical Spinal Disorder claim:

 73 years of age, multiple spinal compression fractures  2+ ADL dependencies

 Home Health Care, 13 months, $41,921 paid

Most costly claim to date:

 64 years of age, spinal cord injury (quadriplegia)  5 ADL dependencies

 Assisted Living, 10.9 years, $666,347

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Spinal Disorder Claims in LTCI

Can LTCI Claims for

Spinal Disorders be Managed?

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Benefit Eligible Grey _Zone Ineligible for Benefits 6/6 ADL Dependencies Coma Three or More ADL Dependencies Severely Cognitively Impaired Two ADL Dependencies; Cognitively Intact Moderately Cognitively Impaired; ADL’s Intact ADL Independent Mild Cognitive Impairment

The Spectrum of Benefit Eligibility

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The Spectrum of Benefit Eligibility

Benefit Eligible Grey _Zone

Ineligible for Benefits 6/6 ADL Dependencies Three or More ADL Dependencies Two ADL Dependencies ADL Independent Spinal Disorders

Careful Benefit Eligibility Determination is Critical

Spinal Disorder Approval Rate: 72.4% All Other Approval Rate: 89.1%

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Active LTCI Claims Management

Higher non-approval rates at claim submission

 Claimed event heavily biased towards IADL dependencies

Significant early claims closure

 More than 56% of closed claims close via recovery

 More than 48% recover during deductible period

 An additional 51% recovery during the next 12 months

There will be obstacles to recovery

 IADL abilities slow to recover; reinstatement of deductible

Potential for fraud

 Symptoms are subjective

 LTC Insurance as a means of qualifying for SSI or DI

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Active LTCI Claims Management

What Can We Learn from Acute Care

 Mechanical back pain rarely causes long term disability

 Pain and limitations from compression fractures are

usually self limited

 Early mobilization and continued activities are critical

 Mode of therapy is less critical

 Active care management is effective

 Adequate analgesia  Early mobilization

 Home Physical Therapy as bridge to outpatient therapy  Coaching and self management

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LTCI Spinal Disorder Claims

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 Spinal disorders are a fairly common LTCI claimed event

 Most claims for disorders of the spine are shorter than others

 Early intervention is important – active claims management  Many will recover during their deductible period

 A large number will recover during the first 12 months of claim

 Care Management can be very effective  Encourage close medical follow-up

 Reach out to insured’s PCP and care manager; coordinate efforts

 Encourage rehabilitation

 Recognize and focus on mitigating obstacles to recovery

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Spinal Disorders Claims in Long Term Care Insurance