Claims Dawn Mitchell Senior Vice President Policy Benefits

1. Claims Dawn Mitchell Senior Vice President Policy Benefits TMK1536 0510

2. Claims • Policy Benefits Overview • Liberty cancer/critical illness/other health claims statistics • Liberty life claims statistics • Filing Cancer Claims • What is required for processing • Filing Life Claims • What is required for processing

3. Claims • Life Claim Challenges • Branch Manager/Agent Involvement in Claim • What you should and shouldn’t do • How you can assist the claimant • Procedure for Claims Inquiries

4. Liberty Cancer/Critical Illness/Other Health Claims • 700 - 750 claims processed/week • Liberty Cancer claims are the most difficult of all claims to process • $1+ million paid on a weekly basis for Liberty cancer/critical illness/other health claims • 9 examiners dedicated to paying these claims

5. Turnaround time for Liberty Cancer/Critical Illness/Other Health Claims • 2007 turnaround – 13.9 calendar days • 2008 turnaround – 8.3 calendar days • 2009 turnaround - 7.5 calendar days

6. Liberty Life Claims • 700 Liberty life claims processed/week • $3.5+ million paid/week for Liberty life claims • In Q1 2010, 99% of Liberty life claims received were incontestable and only 1% were contestable • 7 examiners process incontestable life claims • 9 examiners process contestable life claims • 2 medical reviewers read and summarize medical records

7. Turnaround Time for Liberty Life Claims • Turnaround time for Life includes both contestable and incontestable claims • 2007 – 11.5 calendar days • 2008 – 10.4 calendar days • 2009 – 7.8 calendar days

8. Filing Liberty Cancer Claims • For initial claim, need Claimant Statement (claim form L-252)

9. Filing Liberty Cancer Claims • In addition, we require the Claimant Statement to be submitted annually (do not submit with each claim) • For initial claim, need pathology report showing a malignant diagnosis

10. Filing Liberty Cancer Claims • Most common types of bills submitted for cancer claims • UB04 (standardized billing form used by hospitals) • 1500 (standardized billing form used by Dr. offices) • Itemized bills showing the service date, type of service rendered, charge per service, number of units per service, and the diagnosis • Pharmacy receipts of the drug providing the date, type of drug, NDC number (prescription number), and the actual drug costs

11. Filing Liberty Cancer Claims • Example: Insured had inpatient hospital stay and cancer treatment was given • We need the UB04 which shows the diagnosis codes so we can verify that the confinement related to the treatment of cancer • From the UB04, we can pay room and board benefits that are owed

12. Filing Liberty Cancer Claims • We can not pay radiation/chemotherapy benefits from the UB04 because it will only list one summary charge for “drugs/pharmacy” • In this instance, the itemized bill with the CPT/HCPCS codes (procedure codes) are needed with a day by day breakdown of the charges so we can determine which drugs are payable under the terms of the policy (i.e. which drugs were given for the treatment of cancer)

13. Filing Liberty Cancer Claims • In this example, the examiner will pay the room/board benefits and send the insured a letter explaining that additional benefits may be due if the insured can submit the itemized bill

14. Filing Liberty Life Claims • Incontestable life claim – date of death occurred more than 2 years after issue date of policy • Need death certificate or funeral director’s statement • Funeral director’s statement is accepted in lieu of death certificate if face amount is $10,000 or less • A copy of the death certificate is accepted if face amount of policy is $10,000 or less • If face is more than $10,000, a certified copy of the death certificate is required

15. Filing Liberty Life Claims • Death certificate must include the cause and manner of death; we’re trying to determine if death was due to homicide (additional documentation may be required for homicide) • Obituary (we ask for this although it is not required – we will still pay benefits without it); obituary can be very helpful to Claims if we are having difficulty locating family members or determining beneficiaries • Documentation from beneficiary with his name/address (most beneficiaries utilize the Liberty life claim form R-425 although this is not a requirement to file an incontestable life claim)

16. Filing Liberty Life Claims

17. Filing Liberty Life Claims • Contestable life claim – date of death occurred within 2 years after issue date of policy • Death certificate and obituary requirements are the same as for an incontestable claim • Require the claim form to be completed – this contains the HIPAA authorization which we need to be able to order medical records from providers; also contains the physician’s statement

18. Filing Liberty Life Claims • Other documents that we may request in our investigation include: coroner’s report/autopsy, police report, toxicology report • Investigating a contestable claim can be a lengthy process since we are dependent upon providers and other 3rd parties to give us the information we requested

19. Liberty Life Claim Challenges • Many times a doctor or hospital will not accept our HIPAA authorization and will require us to use their “special” authorization • This causes us to have to go back to the family for another signature • Provider sometimes requires estate paperwork before they will release medical records • Some providers are very picky as to who can sign the HIPAA authorization (next of kin)

20. Liberty Life Claim Challenges Claims procedures are explained in the Agent Instruction Guide (Form 59)

21. Life Claim Challenges • Beneficiary is deceased; benefit would be paid to “estate of” deceased or beneficiary depending upon who died first

22. Life Claim Challenges • Benefit payments is due to “estate” but there is no estate that was established • If benefits are $10,000 or less, can use release and indemnity agreement • If benefits are more than $10,000, family will need to get a small estate affidavit from the court

23. Life Claims Challenges • Beneficiary is a minor • Beneficiary is a spouse but now is divorced from the insured • If a “divorce” state, we need the divorce decree in order to determine who receives benefits

24. Branch Manager/Agent Involvement in Claim – What you should and should not do • Agent should not express an opinion on whether or not a claim will be paid • Agent should indicate that benefits will be paid according to the policy provisions • Agent should not indicate to whom a claim payment will be made • There could be an assignment or other situation of which the Agent is not aware

25. Branch Manager/Agent Involvement in Claim – What you should and should not do • Agent should not guarantee when claim payment will be made • Agent should set expectations when a contestable claim is involved; processing time is increased due to conducting a claims investigation.

26. Branch Manager/Agent Involvement in Claim – What you should and should not do • Majority of investigations are complete within 90 days but can take longer if we don’t get cooperation from provider/facility or if insured/beneficiary does not return information requested from Claims Dept

27. Branch Manager/Agent Involvement in Claim – What you should and should not do • Agent should not promise a claim payment to be sent “overnight” to an insured • Claim payments sent “overnight” occur infrequently and are only sent in unusual circumstances • Once a claim is processed, the claim check is not generated until the following day; once generated (at our printing facility in OKC) the check will not be released for a couple of days (printing facility must go through their audit and balancing process)

28. Branch Manager/Agent Involvement in Claim – What you should and should not do • Pulling a claim check to be sent overnight is a manual process and involves several individuals • Manual processes are dangerous – we are relying on each individual to perform tasks that are outside of the normal process

29. Branch Manager/Agent Involvement in Claim – What you should and should not do • Agent and claimant should allow adequate time for an insured/beneficiary to receive a check before requesting reissue of a check • Claim Department policy is to not reissue a check for 30 days (exception exists if the check was sent to an incorrect address)

30. Branch Manager/Agent Involvement in Claim – What you should and should not do • Mail date can be affected by several factors: • Dollar amount of claim (claims over certain amount require extra review by Claims management) • System issues which prevent check from being generated when it should • Balancing and audit process which must take place at OKC printing facility • Slow postal service • Putting a “stop pay” on a check is costly to the Company (typically $35) and usually unnecessary

31. Branch Manager/Agent Involvement in Claim – What you should and should not do • We have many instances where we issue a replacement check and then the claimant receives the first check and tries to cash • If we placed a stop payment on a check and the check is received by the claimant, the bank will not cash the check; this is frustrating for the claimant and causes complaints • This delays the check process even longer because now the claimant must wait for the second check to arrive

32. Branch Manager/Agent Involvement in Claim – Assisting Claimant • Claimant contacts Agent for claim filing • Agent can assist claimant in completing claim form (if applicable) and ensuring that all information needed to process claim is included; make sure claim paperwork contains policy number

33. Branch Manager/Agent Involvement in Claim – Assisting Claimant • Claimant/Agent can submit claim paperwork • If cancer claim, should send to • PO Box 8080 McKinney, TX 75070-8080 • If life claim, should send to • PO Box 268892 Oklahoma City, OK 73126-8892

34. Branch Manager/Agent Involvement in Claim – Assisting Claimant • Or, claim can be sent in via fax (if original documents are not required); these are the fax numbers that belong to the Claims Dept. • If cancer claim, should fax to 214-544-5336 • If life claim, should fax to 405-270-1496

35. Procedure for Claim Inquiries - Claimant • Claimant should contact Liberty Customer Service for claim questions or status inquiries • Customer can call 205-325-4979 • Customer can send written correspondence to PO Box 8080 McKinney, TX 75070-8080 • Customer can inquire via email through Customer Service Express (click on “contact us” in website)

36. Procedure for Claim Inquiries – Branch Manager/Agent • Branch Manager/Agent should contact Liberty Customer Service for claim questions or status inquiries • Branch Managers/Agent can send email inquiries to custserv@libnat.com • Customer Service answers inquiries within 48 hours • If Customer Service can’t answer the question, it is forwarded to Claims Dept. through an internal messaging system (still work to meet the 48 hour turnaround) • This is best and fastest way to ensure a response

37. Procedure for Claim Inquiries – Branch Manager/Agent • Branch Manager inquiries sent to Customer Service should include • Policy number and insured name (telephone number is also helpful) • Branch Manager inquiries should not be sent directly to Claims Department

38. Procedure for Claim Inquiries • Branch Manager/Agent inquires which contain escalated items should be carefully thought out • Keep in mind, anything you write is discoverable • It’s easy to get caught up “in the moment” without having all the facts • We’re all on the same team and the same goals.

39. Procedure for Claim Inquiries • One of the most common inquiries is “Have you received the information that I sent in?” • Mail or faxes are not “logged in” as received until the claim reaches an examiner • On many occasions Customer Service will tell a claimant/Branch Manager that the system doesn’t show the claim information as received (in most cases, an appropriate amount of time has not elapsed to allow the information to reach a claims examiner) which causes frustration on the part of the claimant/Agent and duplicate claims to be sent in

40. Procedure for Claim Inquiries • The Claims Department processes claims in date received order so if our turnaround time is running 7 days, the claims information will not be logged into the system for approximately 7 days from the date the information was received by the company • The Claims Department works off of claim images instead of paper documents; need to allow adequate time for us to scan in the documents and put in a work queue for an examiner

41. Procedure for Claim Inquiries • Another common inquiry is “What is the status of my claim?” • Since each claim can be unique, it would be difficult to create a report showing claims status • Since claims can get complicated, don’t want Branch Managers giving out incorrect

42. Procedure for Claim Inquiries • Status is best answered by the Customer Service Department or Claims Department • Have had issues in the past when Branch Managers had access to listing of processed claims; the claim could look like it was paid while it is actually in the “audit” process waiting to be approved