Legislators probe insurance companies

The New York Times recently had an interesting article regarding Congressional leaders questioning the policy and practice of the insurance industry in long term care settings.  The top-ranking Republican on the Senate Finance Committee has asked 11 long-term care insurance companies to explain “troubling data” regarding how policyholders’ claims are handled and paid.

Senator Charles E. Grassley of Iowa, referred to data collected by the National Association of Insurance Commissioners, which indicated that nationwide complaints about long-term care insurance rose 92 percent from 2001 to 2006. The data also indicated that complaints involving claim denials resulted, in a majority of cases, in reversals that favored consumers.

“This is a pattern of error not typically found in other lines of health-related insurance,” the association wrote.

Senator Grassley has asked the largest long-term care insurers to provide detailed information on how policyholder claims, inquiries and denials are handled and whether employees receive rewards for denying claims.

This week, Mr. Grassley also asked the Government Accountability Office to examine how private equity ownership had affected the quality of care in nursing homes. In particular, Mr. Grassley asked the agency to examine how many nursing homes had been bought by private investment groups and how conditions had changed after those homes were acquired, and to examine the number of health and safety deficiencies cited by regulators at those homes.

A report in The Times last month said that private equity firms had bought thousands of nursing homes and then often cut expenses and staff, sometimes below minimum legal requirements, to increase profits.

The nursing home industry has also faced questions recently. The Service Employees International Union, one of the biggest labor unions, sent letters to Congress this week asking lawmakers to examine the proposed acquisition of HCR Manor Care, the nation’s largest nursing home chain, by the Carlyle Group, a private equity firm. “Profit for investors cannot come at the price of patient safety and care,” the union said in a statement.

The acquisition of Manor Care is not yet complete. But, the Carlyle Group said, “We expect to maintain the same high quality care that seniors and their families have come to expect.”