Bulletin 1996-2

TO: All companies with policy and/or certificate forms approved to market Long-Term Care Insurance

FROM: Kathleen Sebelius

Commissioner of Insurance

SUBJECT: Revision to Regulation KAR 40-4-37 et seq.

DATE: February 2, 1996

The purpose of this Bulletin is to advise you of revisions to KAR 40-4-37 et seq. resulting from the passage of 1995 Kansas Senate Bill No. 8, as codified in KSA 1995 Supp. 39-923 et seq. which became effective July 1, 1995. Attached for your information is a copy of KAR 40-4-37 et seq. as amended which will become effective on February 9, 1996.

These revisions to our long term care regulations have been limited to those necessary to bring such regulations into conformance with current Kansas adult care home licensing requirements. A study to determine whether additional provisions will be made to our Long Term Care Regulations will occur in 1996. This will include, in part, a review of the NAIC Model Long Term Care Regulations by the Insurance Commissioner's senior citizen advisory committee.

Senate Bill No. 8 is the work product of a number of different long-term care advocates and providers. The reason for this legislation was to allow long-term care residents to receive a range of services in one location rather than requiring them to move from one facility to another, as their needs change.

Senate Bill No. 8 changed the Kansas Department of Health and Environment (KDHE) statutes which define nursing facilities and the levels of care they provide. Our long term care insurance regulation, KAR 40-4-37(c) (3) has been revised to maintain consistency with this state's licensing laws for nursing facilities. Prior to Senate Bill 8, the definition of nursing facility, as stated in KAR 40-4-37 (c) (3), included a personal/custodial nursing home licensed as an intermediate personal care home as defined by KDHE statute KSA 39-923 (a) (4). This bill removed this level of nursing home and replaced it with assisted living and residential health care facilities. In order to address this change, KAR 40-4-37 (c) (3) has also been amended to replace the term intermediate personal care home with the two new facility definitions, assisted living facility and residential health care facility.

Companies with currently approved policies which provide benefits for confinement in intermediate personal care homes will be expected to pay the same level of benefits regardless of whether care is in an assisted living facility, residential health care facility, or a traditional nursing home health care facility. Any policy provision which does not adhere to this benefit requirement should be interpreted or construed as unfairly providing benefits for confinements in assisted living/residential health care facilities will be allowed, as in the past, the contractual right to require a physician's recommendation as to the necessity of the confinement. In discussions we have had with officials of KDHE, it is our understanding that intermediate personal care homes currently licensed will be relicensed as either an assisted living facility or a residential care facility upon their next licensing renewal.

Our records reflect that almost all long-term insurance policies approved by the department since January 1, 1988 provide coverage for confinements in intermediate personal care homes at the same benefit level as provided for confinements in traditional nursing homes. With regard to new long term care policy form submissions, policy forms will not be allowed to differentiate benefit amounts based on facility licensure. In essence, this means that companies must provide benefits at the same level for confinements in skilled, intermediate, assisted living or residential health care facilities.

In reviewing Senate Bill No. 8, the department noted that the revised definitions of nursing facility and nursing care replaced the word "infirmed" with the phrase "functional impairment." In this regard, KAR 40-4-37d has also been amended to reflect this change.

As a result of changes to KAR 40-4-37 et seq. companies will need to submit for approval any necessary or appropriate amendments to be sent to existing policyholders. However, you will be expected to administer the provisions of any in force policies and certificates in accordance with the revisions outlined above. Companies should submit filings immediately in order to allow this department sufficient time for review. We wish to emphasize that it is each company's responsibility to have forms in compliance with this new regulation if they wish to issue long-term care policies on or after February 9, 1996.

Your acknowledgment of receipt and understanding of this Bulletin is expected within 30 days. It will be necessary to include in your response the steps your company will take to comply with this bulletin and K.A.R. 40-4-73, et seq. However, if your company no longer issues long-term care policies in Kansas, please so indicate in your acknowledgment of this Bulletin. If you have any questions regarding your company's compliance, please direct all inquiries and your acknowledgment to the Accident and Health Division of this department.

Please note: Legislation pertaining to this bulletin may be reviewed through the National Insurance Laws System (NILS)


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