In my previous post, I compared specific qualifications for four major Healthcare Cost Sharing Ministries (HCSMs). In addition to knowing what the qualifications are, several people have asked about what happens when its time to actually share expenses. For some, the question is simply whether any expenses are ever shared (is it a scam?). There have also been more detailed questions relating to what kind of paperwork is necessary for expenses to be shared, and how long does it take.
All of the major HCSMs have at least some type of explanation of their process. However, the level of detail is inadequate to answer two important questions. First, in comparison to insurance, how much reserve funding is necessary to get through a large event (>$10,000)? Second, if I have such an event, what important things must be done to receive care (without insurance), submit expenses, and track reimbursements?
There is no one perfect answer to those questions, and the answers vary depending on the HCSM in question, and the type and size of the event. Rather than try to give a general answer to that question, I will relay my experience with an actual case. Keep in mind, however, that this is only one case with Christian Healthcare Ministries (CHM), using mostly New Hampshire-based providers.
Narrative of events
Prior to this event, we were already established self-pay patients in the Dartmouth network. This enables us to automatically receive their uninsured discount. We have CHM’s gold-level membership plus their Brothers Keeper program. For this level of participation, the total cost annual cost for our family of six has averaged about $5500 per year (~$460 per month) for the last three calendar years. That includes annual administrative fees and the quarterly Brothers Keeper payment.
In early-2016, our oldest child, Edison (then age 15), was diagnosed with Crohn’s disease, which is a digestive system autoimmune disorder. The diagnosis process began with a regular annual visit to his pediatrician, and that visit was the first expense we submitted for sharing. That was early-February, and this narrative covers the first year of activity (February 2016 to January 2017).
Several forms are required to begin the sharing process for an incident. I submitted a HIPAA records release form, which allows CHM to obtain bills and medical records directly from providers. I also submitted a Letter Of Explanation form, a Needs Processing form, and a worksheet for bills submitteed (this is actually the back of the Needs Processing form). After submitting those forms, I did not submit any additional forms or update the bills worksheet until early-2017. The forms are required to be updated annually. For the rest of 2016, I only submitted add-on bills with no additional paperwork. I initially submitted the forms prior to receiving the Crohn’s diagnosis, but they did not require any updates and apparently get the information they need directly from the bills.
The CHM website is set up to allow members to upload forms and copies of bills for processing. The process for uploading is fairly simple. They do not have any way to distinguish who the bills or forms are for, which concerned me at first because we had two separate incidents with two people in our family happening concurrently. Additionally, there was a possibility that we may have had a second concurrent incident with Edison. When I asked, they said they are able to process each person’s incidents separately, but that if one person has two separate issues going on at the same time, it’s helpful to mark the bills as to which specific incident the bill is for. So far, there have been no actual problems despite submitting bills for two people for the last year.
In order for them to share the bills, they need detailed statements. Sometimes providers send only financial bills and those are not adequate for sharing purposes. In such cases, I have to call the provider and request a detailed bill. That has resulted in delays in a couple of cases, one of which led to a ~10 month lag between the date of service and receiving reimbursement from CHM.
Over the course of the last year, I submitted 46 separate bill files (some of them multiple pages) for various expenses. These bills included office visits, doctor/surgeon charges, hospital charges, anesthesia, lab charges, and prescriptions. A bottom line of the total amounts are as follows:
- Gross amount billed: $60,698.21
- Total discounts received: $26,108.89
- Average discount: 43%
- Net amount billed: $34,589.32
- Total paid to date: $34,589.32
- Reimbursed to date: $26,552.24
- Current out of pocket: $8,067.08
- Maximum out of pocket: $10,253.38 (June, 2016)
At the current time, I expect to be reimbursed for most of the remaining ~$8,000. There was a delay on a large portion of that due to a paperwork issue. We inadvertently went just over 90 days between lab tests which resulted in CHM erroneously concluding that Edison was in a maintenance phase of treatment for the last part of 2016, which renders prescriptions (~$1400/mo currently) non-reimbursable. They are now reprocessing those after I called to correct the error. Due to the timing, they might not all be reimbursed, but I expect at least most of them to be. There is also a small amount (~$40) from his first office visit that is not reimbursable due to it being unrelated to the Crohn’s diagnosis. Aside from those two items, we expect to be out of pocket zero until he goes into maintenance. A graph of the expenses is here:
As can be seen from the narrative and graph above, there is a cash requirement to cover expenses out of pocket. In this case, the amount out of picket reached or exceeded $7500 on three occasions: May/June, September/October, and December/January. The peak amount out of pocket was just over $10,000, but at times we were actually cash ahead due to receiving reimbursements for charges that were on a payment plan.
Due to several large expenses early on, we asked the main provider (Dartmouth Hitchcock) if they offered a payment plan for self-pay patients. Thankfully they do, and it does not adversely affect the discount received. They offered us a no-interest, 36-month payment plan for about $15,000 in expenses all incurred in March, 2016. The payment plan was initiated in April, 2016.
Managing the payment plan became a bit of a challenge due to the fact it had seven separate charges on it, one of which was coincidentally not part of the Crohn’s issue. Reimbursements for those charges came later and, due to a paperwork delay (this time on Dartmouth’s part), some of them came much later. Meanwhile, I made payments on the plan which were applied to specific accounts. That worked out okay initially, but when I discovered that the reimbursements were going to come out of sequence, I had to start tracking which accounts were being credited and asking for my payments to be applied to specific accounts that were reimbursed first. This payment plan was not fully paid off until January, 2017 due to the reimbursement paperwork issue.
CHM makes it clear that reimbursements need to be paid in a timely fashion to the providers, which I generally did, with one exception. Two large checks came within a short period of time, much of which was for expenses on the payment plan. Coincidentally, we had some high non-healthcare expenses at that time due to summer travel (the John Muir Trail hike that Edison and I went on). Despite increasing the credit limit on our primary credit card, which I pay off every month, we still couldn’t put all of the charges on it at once, so I staggered it over a couple-month period.
Needless to say, a spreadsheet is essential to track all of these expenses. Mine has columns for date, provider name, gross amount, discount, net amount, paid, reimbursed, out of pocket, and due. It also has a column for a filename which I use to reference the file I scan the bill into, and the CHM claim number when they send a reimbursement, along with a column notes. Each expense typically has several lines for the bill, payments made, and reimbursements received, finally leading to a zero balance.
One downside of CHM is that they do not cover routine expenses or maintenance expenses for chronic conditions. That means at some point the cost of Edison’s prescriptions and less-frequent office visits will become our responsibility.
Currently, he consumes prescription medications at the rate of about $1400/mo (which is discounted from a full retail cost of about $2500 using numerous prescription discount cards). Two specific medications make up most of that cost (over $1300). Last year, I investigated ways to reduce that cost in the long run.
One way to reduce prescription costs is to get medications from outside the U.S. However, this is technically illegal under federal law, despite the fact that millions of people actually do it. Consequently, CHM won’t reimburse important prescriptions due to potential legal consequences. But after maintenance begins, it would be theoretically possible to do so.
And theoretically, it would be way cheaper. Theoretically, I found that it could be possible to obtain western-manufactured brand name versions of those same two medications for just over $300 for a one-month supply (>75% cheaper), theoretically delivered to my theoretical mailbox. Generics from non-western manufacturers could be as little as $100/mo in larger quantities (>90% cheaper!), though I performed less theoretical testing on such a solution. Theoretically…
The financial impact of participating in a HCSM like CHM is significant. Though there are no insurance plans that are truly comparable (because such a thing would be illegal), roughly the same level of coverage through insurance would be much more expensive on a monthly basis. Family insurance coverage with low- or no-deductible costs several thousand dollars per month. CHM costs less than $500 per month.
However, with good insurance, the insurance company typically pays the provider directly, so no cash is required to float expenses. With CHM, we needed ~$10,000 available for this incident. Add in the cost of routine care and maintenance for chronic conditions and the cost of CHM increases. Even so, it remains considerably less expensive than insurance. I hope this post helps you make a better-informed decision regarding health care financial risk management.