Monday, December 11, 2017

Running Liberty by Our Providers Prior to a Decision

We felt it was very important to validate information from Liberty with independent sources wherever possible. For example, on Liberty’s website, it would give you the impression that your health care provider would submit bills directly to Liberty as if they were an insurer. If you review Liberty’s “How it Works” explanation you will notice Step 3 that reads “Your doctor sends bills electronically to Liberty HealthShare℠. In fairness to Liberty, I spoke to them last year when I first heard about healthshares to better understand what they do and the woman I spoke to indicated that healthcare providers do not always send bills directly to Liberty and instead this responsibility falls on the customer. This was just one of the points I raised with the Cleveland Clinic when I called them and asked the questions I had about Liberty. I spoke to two different financial counselors at the Clinic who could explain in detail how they treat healthshares, specifically Liberty, and this is what I learned:

1) We would be treated as self-pay customers. That is, the Clinic does not recognize Liberty as insurance, which they are not. This was not surprising to me and made perfect sense. If I was a major healthcare provider I would not submit bills directly to Liberty or treat them as if they were an insurer. My message to the customer would be the same as theirs to me – you are a self-pay customer, whatever you do to make sure the bill is paid is your business (my words, not theirs).

2) Serving as a self-pay customer means you arrange for your payment up front. I played out a scenario in which one of my sons needed a routine check-up and this is the process described:

  • We would call the provider and make an appointment. When we make the  appointment, we would indicate we are self-pay. At that point in time they would provide us with an estimate of the cost. It was acknowledged that routine procedures like the check-up we were using as an example have a very accurate cost but surgical procedures would likely not be 100% accurate. In a surgical procedure, there’s more going on that could create variation. I get this. (P.S. Why does it take being a self-pay customer to get a cost estimate prior to receiving healthcare?).
  • Once we went to the appointment we would be expected to pay for the estimated cost of the healthcare (check-up in this example). Based on my conversation with the healthcare provider you wouldn’t’ always need to pay the entire cost up front but at least a portion of the cost. Even for a check-up I imagine you could pay a portion up front then be billed. The required “pre-pay” amount likely varies based on services provided and the caregivers policies.
  • We would receive a 35% discount on the list price of the procedure as a self-pay customer. This made sense to me. If we cut out the insurer, and the provider gets paid significantly faster, there should be a discount. I would argue it should be greater than 35% but perhaps we’ll find that’s negotiable. As you likely know, insurers negotiate discounts with healthcare providers within their network. With a traditional insurer, even if you have not reached your deductible, you will receive a discount on the provider's list price as long as it is in network. I compared the 35% discount to the discount our current insurer offers. The discount our insurer receives is greater than 35% but it wasn’t drastically more. So, yes, you’ll likely receive a greater discount from a traditional insurer but you pay for it through your monthly premium.

After walking through this example scenario my next question was what would happen if we had a significant surgery or medical procedure. Pre-paying for a routine check-up is one thing but what happens when we have a procedure with an estimated cost of tens of thousands of dollars. Here is what I learned from my providers perspective:

  • In this scenario the healthcare provider would get in touch with Liberty (or more likely vice versa) and arrangement for payment would need to be made. The Cleveland Clinic (the healthcare provider I called) would not move forward unless there was assurances of payment. This is where Liberty would likely try to pre-negotiate the cost of the procedures with the healthcare provider (if they could).

However, I couldn’t just rest with one explanation. I found the name of a member of the Finance organization who deals specifically with healthshare ministries and other faith-based groups. He was very knowledgeable and informed me that, while the Cleveland Clinic had negotiated rates with another healthshare ministry: Christian Healthcare Ministries. They were not able to come to negotiated rates with Liberty and thus viewed Liberty members as self-pay. The difference, it seemed was that with Christian Healthcare Ministries they had agreed upon a 50% discount on medical procedures over a certain dollar threshold. That agreement was not reached with Liberty so Liberty members would just receive the same 35% discount that a self-payer receives. Frankly, they indicated they would not negotiate with Liberty in the situation a major procedure was performed. Thus the following questions came to my mind for follow-up with Liberty:

If there is a major procedure and the Clinic only offers me a 35% discount, and you feel there should be a 50% discount, who gets stuck paying the 15% difference? I mean how do I know they won’t just say the Clinic costs are not “fair and reasonable” and only cover a portion given they could not come to terms with the Clinic.

I’ll document the response we got from Liberty in our next post.