Scrutiny builds on cost-share ministry
Georgia officials refer complaints against Christian group to FBI
The Georgia Attorney General’s Office has turned over to the FBI 10 consumer complaints, including one from a Houston-area woman, accusing an Atlanta company of peddling deceptive faithbased health coverage to unsuspecting customers.
This action by Georgia authorities represents a marked escalation of scrutiny of Aliera Healthcare’s business practices, which have caught the attention of regulators in several states, including Texas. Last month, Attorney General Ken Paxton sued in state district court, accusing Aliera in the civil complaint of misleading consumers into paying thousands of dollars for coverage that often turned out to be worthless. Washington’s insurance commissioner has ordered Aliera to stop doing business in that state. Consumer warnings about the company now appear on state insurance department websites in New Hampshire and Massachusetts.
Authorities in Georgia confirmed they have referred complaints against Aliera to federal authorities. The Houston-area woman, Jill Baine, said Georgia officials told her that her complaint against Aliera, which denied $195,000 in claims for her cancer treatment, was among those sent to the FBI’s Atlanta office and that she should expect a call from an agent.
“It’s going to be a big case,” Baine said she was told by the
Georgia Attorney General’s Office. The FBI declined to comment because it is an ongoing investigation.
Aliera, which has denied any wrongdoing, said it was unaware of the referrals to the FBI but would cooperate with authorities.
“We remain committed to resolving member issues and to working with state regulators to ensure consumers continue to have access to healthcare sharing plans that meet their needs,” the company said in a statement Thursday.
Aliera said it does not sell traditional insurance — and makes that clear to customers — so it is exempt from most insurance laws and regulations, including the obligation to pay medical bills. In a previous statement, the company said it would “vigorously defend against the false claims directed at our company and we are confident we will prevail when these questions are ultimately determined by impartial judicial review.”
Obscure but growing
Aliera markets and administers plans through a Christian-based health costsharing ministry, an obscure but growing category of health care coverage based on the biblical principle that the like-minded help each other in times of need. Members make monthly contributions to pay for their future medical needs. Aliera, which said it had $215 million in revenues last year, has 100,000 members nationwide, including 17,000 in Texas.
Aliera members, though, have complained to authorities that they were misled into thinking they were buying full coverage and then their medical bills were not paid — often denied because of supposed pre-existing condition or other exemptions. Under the Affordable Care Act, it is illegal for a regulated insurance company to deny a claim based on a pre-existing condition, but healthshare ministries are not insurance and are not regulated by state insurance agencies.
The Texas Department of Insurance has fielded 24 Aliera complaints since July 2016; Washington insurance authorities have logged 18 complaints in the past year. New Hampshire has had 21 complaints since November 2017. Many customers also have turned to online reviews to air grievances. More than 120 people from 26 states have posted nearly universally negative reviews on Yelp.
The accusations against the company and criminal history of one of its founders were detailed in a Houston Chronicle story last Sunday. Timothy Moses, who could not be reached for comment, was convicted in 2005 of two counts of felony securities fraud and one count of perjury and sentenced to 78 months in prison and ordered to pay $1.6 million in restitution. Eight months after his probation ended, he and his wife, the current CEO, formed Aliera, court records show. Their son is company president.
Baine, who lives in The Woodlands, bought her plan in May 2018, lured not only by the promise of Christian principles but also the lower price for comprehensive coverage. She was urged to give it a try by a broker since she was healthy and rarely needed medical care. She signed up at $809 a month. Soon after, during a routine mammogram, a small lump was found in her right breast. A biopsy determined it was cancer.
Baine, then 57, was reeling. Two pre-approved surgeries at CHI St. Lukes Health—The Woodlands Hospital followed, removing the cancerous tumor and lymph nodes. Aliera paid for most of the two surgeries, Baine said, but only after many delays and repeated requests for medical records.
She then underwent a course of about 20 radiation treatments last September at Houston Methodist The Woodlands Hospital. The billed charge was $195,000 which Aliera denied outright, calling the treatment part of a pre-existing cancer and therefore not covered, according to her paperwork from the company.
“It makes no sense,” she said, “If they didn’t say anything about my surgery being because of a pre-existing condition, how can the radiation after the surgery be a pre-existing condition?”
Three months ago, she called the Georgia Attorney General’s Office because Aliera’s headquarters are in Atlanta. She later filed a formal complaint and sent supporting documentation. She has also filed complaints with the Texas Department of Insurance and the Texas Attorney General’s Office.
On June 25, her Georgia complaint was forwarded to the Atlanta FBI, authorities told Baine and confirmed with an email.
A spokesman for the Georgia attorney general said a batch of 10 complaints was sent to federal authorities and any future complaints could also be referred.
‘Sucker punched’
When the FBI reviews a potential case, it does not always result in criminal charges, said Michael E. Anderson, a retired special agent formerly in charge of the Houston FBI white-collar crime division. Anderson, who is not connected to this case, speculated agents would look for evidence of fraud or financial irregularities.
“The FBI is going to look at statements that the company made in selling its products to look for misrepresentation,” he said.
Baine, who is less than a year from her cancer surgery, worries not only about recovery but also about getting her bill paid. The hospital offered to reduce the bill to $70,000, she said, but that is still far out of her reach. This week she offered the hospital the entire $22,000 in her retirement savings account to settle the bill but has not heard whether it will be accepted. Houston Methodist declined to comment on the case, citing patient privacy laws.
Mostly Baine is angry with herself for falling for the Aliera sales pitch.
“When they say they are faith-based, as a believer, it just grieves me,” she said, “I feel like I was sucker punched.”