Navigating the Future of Long-Term Care Insurance: Addressing Fraud, Waste, and Abuse

The long-term care insurance (LTCI) industry is navigating an increasingly complex landscape marked by significant challenges in fraud, waste, and abuse (FWA). As the industry evolves, integrating technology with human intelligence is essential to effectively tackle these issues.

Fraud, Waste, and Abuse (FWA) present distinct but interconnected challenges within the LTC space. Fraud involves intentional deception for financial gain, making it difficult to prove due to the necessity of establishing intent. On the other hand, waste and abuse, often considered "soft fraud," involve unnecessary costs and misrepresentation that, while easier to identify, still require meticulous management.

“Fraud is an issue, fraud is a crime, but fraud is tough to prove. We like to say FWA, fraud, waste, and abuse. Abuse is like you could say it's a soft fraud because, with fraud, you have to prove intent.” - Jane Menin Bagley, Esquire

Technological advancements such as electronic visit verification (EVV) and predictive analytics have revolutionized the detection and prevention of fraud in the LTC industry. However, technology alone is insufficient. Integrating human intelligence is crucial to assessing intent, understanding case-specific details, and conducting necessary interviews with caregivers and policyholders. This balanced approach ensures a more comprehensive strategy for fraud detection and prevention. Technology alone is not always the best solution. You really need the human factor or the human intelligence, with artificial intelligence or the analytic intelligence to work hand in hand.

Creating a culture of continuous training and awareness is vital for all staff members involved in claims processing. Regular, real-life case studies and ongoing education can significantly enhance the ability of claims examiners to identify potential fraud, waste, and abuse. This proactive approach, combined with advanced analytics, fortifies the industry’s capacity to address these issues effectively.

Looking towards the future, it is essential for carriers to conduct comprehensive capability assessments. Evaluating current processes, technology, and training programs helps identify gaps and develop an action plan. Starting now with a thorough assessment and a strategic action plan will be crucial as the industry anticipates an increase in long-term care claims. Preparing today ensures robust systems to manage claims efficiently in the coming years.

A significant issue in the industry is the adequacy of penalties for proven fraud cases. There is growing recognition of the need for stringent measures, with recent legal actions highlighting this trend. Increasing awareness and resources dedicated to combating fraud will enhance the industry's ability to protect honest policyholders and maintain financial stability.

The LTC industry must embrace a symbiotic relationship between technology and human intelligence to effectively address fraud, waste, and abuse. A proactive approach, continuous training, and strategic use of technology are essential to safeguarding the industry and ensuring the best outcomes for policyholders. By preparing today, the industry can navigate the challenges of tomorrow, creating a more secure and efficient system for long-term care insurance.

To learn more about this, please listen to the Insurance Sync podcast with my co-host Laurel Jordan with our guest Jane Menin Bagley, Esquire . https://podcasters.spotify.com/pod/show/insurance-sync/episodes/Insurance-Sync-with-Jane-Bagley-e2jdihn/a-ab8e6qm.