Fuzion: Long-Term Care Insurance in a New Light

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Barry Staldine, President & CEO, FuzionBarry Staldine, President & CEO
There are eight million aging baby boomers in the United States alone today. It's true that with advancements in technology and medicine, Americans are living longer lives but the cost of nursing and healthcare is skyrocketing. While Medicare covers only short stays in a nursing facility, an illness that requires around-the-clock care can cause a huge blow on finances. This is where long-term care insurance (LTCI) can be a life-saver. LTCI is not a disability or health insurance but includes a range of nursing, social, and rehabilitative services for people who need ongoing assistance due to a chronic illness or disability. Despite its viability, LTCI is often not the preferred option for both insurers and policyholders due to its high premium cost and complex set of policies. However, this doesn't take away that fact that LTCI if managed correctly can be an indispensable financial plan for patients.

As such, committed to bringing a transformative and positive change in LTCI management, for both insurers and their policyholders, is Carmel-based Fuzion. The company pairs deep expertise in LTCI block management with best-in-class software and technology for superior business results. At its core, Fuzion is a third-party manager that provides unparalleled value through claims management and fraud mitigation services. But their success is driven by a focus on data analytics underpinning decision-making. Proprietary processes and systems, powered by data scientists, gather and organize data so that claims handlers, operations analysts, SIU investigators, and management can be informed with meaningful information. Behind Fuzion's unique value proposition is president and CEO, Barry Staldine who brings over three decades of insurance industry experience and specializes in predictive health analytics. His diverse experiences, strategic view of opportunities, and grasp on organizational dynamics have set a fast-paced, forward-thinking environment for Fuzion today.

Optimizing Performance, Minimizing Risk

Fuzion’s holistic LTCI closed block management capabilities encompass fraud mitigation, claims and financial management, legal and regulatory support, alongside financial and operating reporting. Keeping in mind that fraudulent claims are a costly and rising affair in the senior healthcare industry, the company provides state-of-the-art solutions for the identification and reduction of fraud. Effective data mining tools are combined with investigative techniques to detect wasteful claims and ensure that payment for care is appropriate. The company's Sentinel platform is an industry-leading framework for managing the auto-identification of claims at risk for potential fraud, waste, and abuse. In addition to fraud detection, Sentinel allows a fraud investigation team to view suspicious claims, manage investigation workflows, and track results. With Sentinel, carriers can uncover fraud in its earliest possible stages and costly false positives can be avoided, which in turn helps minimize the litigation costs associated with prosecuting and recovering fraudulent payments.

To measure the performance of blocks of long-term care, Fusion's other bleeding-edge offering is their proprietary business intelligence tool, Pulse. Fuzion believes that in a world that runs on data, there is no such thing as too much insight. Pulse allows carriers to utilize current and historical data to answer questions with precision and certainty, about claims and policyholders, as well as gain an executive level, long-term view of a business. It is a truly holistic solution that allows enterprises to closely monitor block performance and identify opportunities for further research, view data cohesively, including premiums, claims, reserves, and member population, as well as drill deep into the individual details of policies and claims.

Fuzion’s success is driven by a focus on data analytics underpinning decision-making

The Fuzion approach also helps better manage the incidence and severity of claims. While many carriers have different methods to improve their administrative processes, larger bottom line impacts can be realized by being laser-focused on the claims experience. Fuzion's approach in guiding carriers through efficiency gains significantly benefits its clients’ financial performance.

Trusted Stewards for Insurers

When a client company, providing an LTCI closed block that is over 20 years old was facing significant challenges managing their block, Fuzion was their go-to solution of choice. The block has a significant number of policies with home health care benefits, as well as a number of indemnity policies with lifetime benefits coupled with five percent compound inflation riders, yet the block was in a position where the rate of new claims notices was increasing, claim incidence was higher than expected, and policy termination rates were below expectations. When the policies were originally issued, the aforementioned factors were beyond the actuarial expectations and added to the complexity of managing the LTC block. Fuzion implemented predictive analytics, industry leading practices, and deep research to improve clients’ operational and financial results. After thoroughly understanding the factors impacting benefit payment of new claim requests, Fuzion used their state-of-the-art data repository platform, Pulse to analyze and predict specific outcomes of their clients’ block and dig deeper into the factors that influence claims decisions. To analyze the rate of acceptance, Fuzion undertook a series of actions. After benchmarking clinical decision quality, Fuzion sought to understand the gap between actual and expected termination rates. Another area of opportunity with the block was the client’s administration of the restoration of benefit (ROB) provision within its policies. The misapplication of the ROB provision elongated the duration of the policies, as well as increased claims payments. Fuzion applied clinical benchmarking results with predictive analytics to spot repeating ROB cases as well as those positioning for an upcoming ROB request. At the end of it all, the results witnessed by the client were multifold. The quality of initial claims decisions increased, claims durations and payments were reduced, and termination rates were positively impacted.

In another instance, Fuzion’s client was dealing with some of the oldest LTCI policies in the country. The original actuarial assumptions were fraught with inaccurate pricing assumptions that did not match the health care cost conditions that exist in current times. This resulted in loss ratios by far from what was anticipated. When Fuzion came onboard, they used their advanced analytical platforms to identify a series of classes that were the biggest drivers of the adverse experience. This involved analyzing a range of variables and applying algorithms to predict take rates, adverse impacts, and financial effects. After identifying the classes, Fuzion went the extra mile and identified a series of options that would limit the financial impact to policyholders. To avoid the rate increase, policyholders within the class could downgrade their policy benefits by electing to freeze their accumulated inflation benefits at current rates or increasing their elimination period while additionally obtaining a discount on current premium rates. Fuzion worked directly with states and subject matter experts to garner feedback on how the downgrade options would be perceived by regulators, incorporating feedback as necessary for clarity in the state rate filings. Policyholders could also maintain compound inflation benefits but they would be subject to the rate increase. Next, Fuzion moved forward with preparing and implementing the filings, prepared state objection and informational request responses, and tracked the progress of the filings via SERFF. Fuzion basically helped the client, manage their process from start to finish and came up with inventive ways to improve the client's financial position and overall stability.

Part of what makes Fuzion stand out in the industry is their culture of integrity, innovation, and mutual respect. The company steers away from a one-size-fits-all approach and constantly works with clients to come up with a menu of options. Clearly, there is endless scope for disruption in the LTC insurance space and Fuzion is well-positioned to lead this change movement.