How to Bill Long-Term Care Insurance as a Home Care Agency: Who Gets Paid, the Waiting Period and the Documents Each Invoice Needs

What the insurer checks before an invoice is paid

For a tax-qualified policy, 26 USC 7702B(c) defines what it covers. Qualified long-term care services, including “maintenance or personal care services,” are services required by a “chronically ill individual” and “provided pursuant to a plan of care prescribed by a licensed health care practitioner.” A chronically ill individual is one certified by a licensed health care practitioner as unable to perform, without substantial assistance, at least 2 of 6 activities of daily living for at least 90 days, or as needing substantial supervision because of severe cognitive impairment. The six are eating, toileting, transferring, bathing, dressing and continence. The certification must have been made “within the preceding 12-month period.”

None of that is the agency’s determination to make, and this guide makes none. What the agency can track is the paperwork the insurer will look for. FLTCIP’s plan of care, for example, includes “approved providers, dates of service, facility charges, hourly rates for caregivers, and quantified time for specific care services,” and the program says it is “used to validate invoices we receive for reimbursement.” To be included in an approved plan of care, a home care agency supplies a copy of its state-issued license and a Federal Employer Identification Number. Any requested change to the plan of care must be reviewed and approved by the program’s care coordination staff “to avoid reimbursement denials or delays.”

In practice that means four dates belong on every claim record: when the certification was made and when it is due again, when the plan of care was approved, and when it last changed. An invoice for eight hours a day against a plan of care approved for six is a delay waiting to happen, however reasonable the extra hours were.

The elimination period: calendar days or service days

The elimination period, also called a waiting period or deductible period, is the stretch after a client qualifies and before the insurer starts paying. The California Department of Insurance’s policy-comparison guide describes the counting choices. Under a service-day definition, a day counts toward the period only when care is actually received: “if your plan of care only calls for 3 visits per week you will only satisfy 3 days.” Some companies offer a more liberal reading, for example counting a calendar week with one home care visit as seven days. Under a calendar-day definition, every day after certification counts, whether or not formal services are received. During the period, the guide says, the insured is “responsible for paying the full cost of your care.”

FLTCIP shows what a service-day period asks of the agency. Its service-day waiting period is the number of days the client must be eligible “and receiving and paying for care,” and “If your plan has a service day waiting period, you must also submit invoices to satisfy your waiting period before you can be reimbursed for services.” It adds that services “must be paid at the time rendered,” and that services paid in cash “cannot be validated to count toward the waiting period or be reimbursed.”

So during a service-day waiting period, the agency’s invoices are the client’s evidence. An itemized invoice for each day of care, paid by a traceable method, counts; a monthly summary or a cash payment may not. Which definition applies is the policy’s call, and the family or the insurer can confirm it before the first invoice goes out.

The documents each long-term care insurance invoice needs

Each insurer sets its own claim rules. FLTCIP publishes its list for a formal caregiver — one “whose services are arranged and supervised by a home care agency” — and asks for an itemized invoice that includes:

• The name, address and phone number of the agency.
• Individual dates of service.
• Total hours per day.
• Total charged per day.
• A description of services provided.
• The total amount charged per invoice.

The same program says it typically reimburses within 10 days “after all required documents have been received,” and that duplicate submissions of the same invoice “will cause processing delays.” Read together, the agency’s side of the job is narrow: invoices built from visit records with daily hours and daily charges, rates and hours that match the approved plan of care, one submission by one channel, and a record of what was sent and when. An invoice that summarizes a month in one line, or carries a rate the plan of care does not show, is the one that waits.

A claim tracker and receivables by payer

Insurance claims sit beside family invoices in the same receivables report, and they age for different reasons. A family invoice ages because nobody chased it. An insurance claim ages because a document is missing, a plan of care changed, or the waiting period has not been counted. One row per claim, with no care details, keeps the reasons visible:

• Client ID, insurer and claim number.
• Payee: the family, or the agency under an assignment, with the assignment date.
• Certification date and the date recertification is due.
• Plan of care approval date, the hours and rate it approves, and the date of the last approved change.
• Waiting period: calendar or service days, days required, days counted so far.
• Daily or monthly maximum, and the share of each invoice above it that goes to the family.
• Invoices sent: dates of service covered, date sent, channel.
• Documents still missing, owner and due date.
• Date paid, amount paid against amount billed, and the balance moved to the family.

Then age receivables by payer type — families, each insurer, any other program — from the invoice date. Illustrative example: a client receives 56 hours of care a week at an illustrative $35 an hour, $1,960 a week. Payroll runs weekly. If the insurer pays 45 days after each invoice under an assignment, about six weeks of that client’s care, roughly $12,000, has been paid out in wages before the first insurance dollar arrives. That is not a loss; it is working capital the agency lends to the claim. It turns into a loss when a claim is denied for a document the tracker could have shown missing.

Billing an insurer and HIPAA: a question for counsel

One more reason to know who submits what. Under 45 CFR 160.103, a covered entity includes “A health care provider who transmits any health information in electronic form in connection with a transaction covered by this subchapter,” and the definition of a health plan includes “An issuer of a long-term care policy, excluding a nursing home fixed indemnity policy.” The claims transaction in 45 CFR 162.1101 is “A request to obtain payment, and the necessary accompanying information from a health care provider to a health plan, for health care.” CMS’s covered-entity page puts it briefly: “Providers who submit HIPAA transactions, like claims, electronically are covered.”

Whether a private-pay, non-medical agency is a health care provider under those definitions, and whether a given submission — a portal upload, an emailed invoice, a standard electronic claim — is a covered transaction, are questions for the agency’s counsel, not for this guide. What the agency can do is know exactly how each insurer receives its invoices, and bring that list to counsel before it starts billing an insurer directly.

When not to bill the insurer directly — and when not to hire anyone

If long-term care insurance clients are few and their families are paid by the insurer and pay the agency on time, direct billing may add work without adding cash; the agency can supply clean itemized invoices and leave the claim with the family. If the agency already keeps a claim tracker, ages insurer receivables separately and knows which documents each claim is waiting on, outside help would repeat work already done.

An outside look earns its fee when insurer receivables and family receivables sit in one undifferentiated aging report, when claims stall and nobody can say on what, or when payroll is being stretched to carry assigned claims. The Revenue Review reads receivables by payer type, invoice and payment dates, and the claim records the agency exports itself, by client ID with no care details. It never contacts an insurer, a family or a caregiver, and it gives no legal, tax or insurance advice. It takes two weeks and ends in a written report that puts a monthly dollar figure on each leak the records support. Agencies whose main payer is Medicaid, Medicare or a VA program need a specialist in that program instead.

If the numbers suggest it, the next step is a free 20-minute call.