Fighting Fraud in Long Term Care

Like any line of business, Long Term Care insurance (“LTC”) is not immune from the exploits of fraud.

Typically comprised of older policyholders compared to other lines, it’s been suggested that the elderly do not commit fraud. Based on our experience investigating these claims, it’s clear that older populations have the same pressures as others, oftentimes more, with less earning potential than in their younger years and often living on a fixed income. Add this to rising inflation levels, the pressure to commit fraud in LTC may be higher than ever. It’s also worth noting that the individuals sometimes driving fraudulent activity are the younger family members or associates of the insured, thus nullifying the argument that the potential for fraud in LTC is lower when compared to other lines.

When looking at the potential avenues to fraudulently claim benefits in LTC, it's important to define the conditions for claim eligibility. Claim eligibility is typically driven by the insured’s inability to complete certain activities of daily living (ADLs), which are the primary criteria used to evaluate a claim. These activities include bathing, dressing, eating, and toileting, among others. In most instances, a caregiver assists the insured with the ADLs with which they require assistance, often in a home setting.

In our experience, an LTC claim investigation can be broken into two categories which can require validation:

• Validating an insured’s true need for assistance; and
• Validating that care is being provided as billed or represented to the insurance company

These categories offer some flexibility and unique strategies when developing an investigative plan of action. Unlike other claim investigations that often focus on occupational duties or a claimant’s ability to work, LTC claims contain unique components that should be used to guide your investigative strategy.

Identifying Potentially Fraudulent Claims

Awareness is key and knowing what to look for is often the best starting point to properly detect and identify potential fraud. Whether providing thorough fraud awareness training to your staff and front-line workers and/or incorporating fraud-based rules into your systems can often help uncover potentially fraudulent activity.

Some of the flags to look for often indicative of fraud include:

• Early duration claims
• Claims filed just outside of the contestable period
• Inconsistent medical documentation
• Exaggerated symptoms
• Unusual billing patterns
• Frequent caregiver changes
• Familial caregiver relationships
• Lack of cooperation
• Multiple policies with different insurers
• Inconsistent lifestyle activities

Investigating Suspicious Claims

Investigating suspicious LTC claims can involve a combination of methods to help gather the information needed to sufficiently evaluate the validity of a claim. The methods of investigation are broad and can include one or a combination of the following:

• Documentation Review
• Field Interviews
• Surveillance
• Open-Source Data Collection
• Expert Analysis including Independent Medical Exams and Professional Assessments
• Data Analysis

Below we will touch on a few of the most effective methods for investigating suspicious LTC claims.

Open-Source Data Collection

With the abundance of data now publicly available at our fingertips, open-source data collection or open-source intelligence (OSINT) can be an effective and efficient method of investigation. When conducting the investigation, publicly available information can be collected from various data sources including public record databases, social networking sites, and other online publications and information sources.

When searching and collecting information, these sources can often provide insight into the general lifestyle of the insured and whether the information developed is in line with the information being represented to the insurance company. Many of these sources can also reveal any undisclosed relationship between the insured and the caregiver, which may be inconsistent with the relationship being portrayed to the carrier.

Broadening the data collection to the public information associated with the caregiver is also another valuable method when conducting this research. This is also valuable when investigating an insured who maintains a limited data footprint and online presence. When investigative efforts are focused on the caregiver, similar information can be collected to assess the general lifestyle of the caregiver as well as information that would be expected from an individual with an occupation in patient care such as professional licensing and affiliations.

When conducting open-source research, ensure that a broad range of data sources are searched. Each claim is unique and information can vary by data source. If conducting public record searches, conducting a careful analysis of seemingly benign records can provide great insight into the background of the relevant parties. For example, a divorce filing or other civil record may uncover significant information related to the party that may be valuable when assessing a claim. Another clue of potential fraud is finding an insured who has past litigation with other insurance carriers. At times, the information developed from these sources can become the most valuable piece of information to your investigation, outweighing the value of other investigative methods including field surveillance.

A great example demonstrating the value of this type of data collection was experienced during a prior investigation that presented significant surveillance challenges. In an effort to gather additional information to assist with the claim evaluation, a civil record search was conducted on an insured containing a thin data profile. The civil record search revealed an older case pertaining to the petitioning of the court for a name change. Surprisingly the case revealed that the subject of investigation had previously changed their name. With the new name in hand, more information became available that wouldn’t have been known otherwise. The information developed became some of the most significant information collected over the course of a very extensive investigation.

Also valuable and a potential indicator of fraud in homecare is caregivers residing with the insured or conversely, a far distance from the insured. While conducting your data collection, it can be valuable to evaluate the distance from the residences of the insured and the caregiver. Far distances can lead to questions as to how reasonable it is that the caregiver travels to and from the insured’s residence on a frequent basis. Conversely, caregivers residing with the insured may be indicative of a close relationship between the two parties that may be hidden from the carrier. It’s worth noting that some carriers have exclusions for a caregiver to reside with the insured. This information can be uncovered while reviewing social network postings, address history and property deed information developed from public databases or even developed during ongoing claim correspondence with front line claim staff.

Field Surveillance

Field surveillance is often one of the most effective methods for investigating a suspicious LTC claim. Covert surveillance can provide a first-hand look into a claim to gather the information needed to ensure that the insured is eligible for benefits and/or that care is being provided as billed or claimed.

It’s important that surveillance be scheduled and coordinated at relevant times to provide the best opportunity for a successful surveillance investigation. Unlike other claim investigations that may focus on occupational duties and work schedules, field surveillance for an LTC claim can occur during non-traditional times, including weekends, and should be scheduled around the times care is reported. It’s not uncommon to conduct longer duration surveillance or even overnight surveillance if those are the times care is being reported to the carrier.

If caregiver information is available, ensure that the investigator is provided with this information to effectively document the potential arrival or departure of the caregiver. If surveillance conditions are not conducive at the residence of the insured, shift the focus of the surveillance to the address of the caregiver. This is an effective alternative strategy and focus is shifted to documenting the caregiver’s daily activities to verify the level of care being provided.

Also, ensure that the field investigator is well-equipped for undercover episodes if the opportunity presents itself during the surveillance. Shopping or dining activities conducted by the insured can often reveal an insured trying on clothes (dressing) or dining at a public restaurant (feeding). Specific activities such as these can provide definitive information whether the insured is truly eligible for benefits based on the ADLs claim.

Surveillance under any circumstance can be a challenging task. It’s been said that when the FBI conducts surveillance, they can utilize up to 5-7 different agents to adequately maintain coverage. Although an effective strategy, this would not be practical or cost-effective for a claim investigation. However, it does emphasize the challenge of surveillance. Outlined below are some of the challenges that investigators face during surveillance and should be considered by claim professionals for realistic expectations.

• Navigating through traffic dense urban environments or facing exposed and open rural settings leaving little room for investigator cover
• Home security systems including the proliferation of the Ring doorbell camera that may alert the homeowner of unknown vehicles or unusual activity
• Increased usage of social networking apps such as the Nextdoor neighborhood app or HOA sponsored apps where neighbors can openly communicate about unknown vehicles or unusual activity
• Gated communities containing multiple points of entry and departure

When investigating an LTC claim, an additional challenge comes to focus, the added variable of the caregiver. Effective surveillance during an LTC claim should start with a close evaluation of the identity of both the insured as well as the caregiver including developing addresses and vehicle information for both parties. All access points to the residence should be identified and considered to ensure best efforts are taken to document all household activity. Eliminating the possibility that a caregiver arrived on foot, via a ride-share app, or any other mode of transportation can be difficult and best efforts should be made to account for these scenarios.

An effective way to overcome some of these challenges is the utilization of more than one investigator on a surveillance assignment. Including more than one investigator can provide a number of benefits including:

• Adequate coverage if multiple departure routes exist when faced with a gated or guarded community
• Allows for better monitoring of other home access points including rear alleyways
• Increases the chance of remaining undetected while conducting stationary surveillance, one investigator can maintain closer surveillance near the residence while other investigators can be positioned further away
• Reduces the investigator’s exposure when conducting frequent covert surveillance in public locations such as retailers or restaurants
• Better ability to confirm vehicle passengers without missing activity at a residence

Utilizing more than one investigator for a surveillance investigation is more resource-intensive but can be justified given the challenges or desired outcome of the investigation.

Conversely, surveillance for an LTC claim offers some unique benefits and opportunities. As mentioned, if the location of the insured is not conducive to surveillance, surveillance can shift to the caregiver if the conditions are more favorable. Another unique benefit during surveillance on an LTC claim is that the absence of activity can provide value. During surveillance for other claims, observing and documenting claimant activity is the primary objective of the case. For LTC claims, the absence of activity can also provide value. If surveillance is conducted over an extended period and no caregiver is observed arriving or departing, the lack of caregiver activity can be an indication of fraudulent billing practices.

With the information detailed above in mind, it’s important that the relevant information contained in the claim file and any other information developed from other methods of investigation is provided to the surveillance investigator to maximize results. This data can be studied to coordinate the best days and times for surveillance and ensure that the field investigator is well-equipped for the investigation. Information such as photos of the relevant parties, vehicle information, and mapping data can greatly enhance the results of the surveillance.

Assessing the Results

After all information is collected from the chosen methods of investigation, it’s important to analyze the data in conjunction with the data reported with the claim.

A focused review of all video footage obtained from surveillance activities can help professionals evaluate the insured’s benefit eligibility.

Reconciling the dates and times of activities developed from the investigation with the dates and times of care reported to the carrier can help validate whether the information provided is accurate and consistent.

If seeking expert analysis as part of your investigation, consider providing the evidence collected from the investigation to the expert to include in their analysis of the claim.

Tips for a Successful Investigation Program

Before initiating an investigation, have clear objectives in mind that you would like to accomplish as a result of the investigation. Have clear expectations about the investigation and consider that the amount of information available for collection may be limited. Each claim is unique, and the investigation may not always create as much clarity as desired. Different methods should be considered depending on the unique characteristics of each claim.

It's also important to outline a clear strategy for an effective investigation program. Identify next steps if the investigation does reveal inconsistencies with the claim.

In our experience, it’s also imperative that enough information is gathered before considering sharing any findings from the investigation with the parties of the claim. Once the parties involved become aware or begin to suspect a potential investigation, future opportunities to collect information can be limited. Its best to carry on normally until all information is gathered before making any requests or requirements that may alert the party of a potential investigation. Any correspondence or requests that appear out of the norm could potentially increase awareness of the investigation. This awareness could lead to parties altering their online presence as well as their daily habits and activities. Potentially consider employing more discreet investigative methods such as open-source data collection or field surveillance before introducing any methods that require the cooperation of the insured. Starting an investigation with a field interview may not be the best choice if additional investigative efforts may be needed in the future.

When considering investigative partners, ensure that the partners are well trained in investigations and are well-versed in LTC claims including the unique considerations detailed above. These unique aspects can seem foreign to even well-trained investigators who are not experienced in LTC claims.