FBI Accuses Medical Ministry of $4M Fraud Against Participants, Feds Shut Down Its Website

According to the FBI, a so-called health ministry offered potential members an Obamacare alternative, but instead, left thousands of people with unpaid medical bills. 

While other Christian cost-sharing healthcare ministries have very good records of providing what they promised, the FBI says that was not the case for one in particular.

Multiple news outlets, including Forbes, report members of the Medical Cost Sharing (MCS) ministry had been promised their medical bills would be covered in return for a monthly contribution.

The plan worked this way: the monthly contribution or membership fees were to be shared with other Christians. From the outside, it looked like a legitimate faith-based nonprofit.  When its members needed aid, payments would be distributed to them. 

But according to an FBI search warrant, MCS clients were denied coverage for various reasons. And some members were left with thousands of dollars in unpaid medical bills, according to Forbes. 

The FBI claims it was part of a fraud perpetrated by MCS owners Craig Reynolds and James McGinnis. The partners allegedly took $4 million of the $7.5 million they collected in membership fees, leaving only $250,000 (3.2%) to go to members' medical expenses. 

Federal prosecutors say the company hasn't issued any payments to its members since 2021. 

The Justice Department has not filed any criminal charges, but an injunction on MCS was issued and the company's website was shut down. 

Reynolds has denied all of the allegations made by the Justice Department. McGinnis did not respond to a request for comment. 

The Kansas City Star reports some big examples of bills not being covered, like a Missouri woman left holding the bag for $45,000 in medical bills after a heart attack.

Forbes also cites specific examples as provided by the FBI, like two pregnant women who expected the ministry to cover their birth costs because MCS' promotional material said, "all preexisting conditions, including maternity, are covered from day one." But the FBI said that after the women gave birth, they each began receiving bills for nearly $15,000. One was told that she wouldn't be covered and her membership was going to be canceled, as MCS accused her of lying on her application about previous medical conditions—namely, being pregnant, the FBI said. Three years after the birth of her child, she still owes $9,000. The other paid nearly $12,000 directly to medical providers, on top of the $4,400 in membership fees she paid MCS.

And there are other horror stories. One member suffered a stroke and was life-flighted to a hospital, resulting in bills totaling $125,000. The Justice Department claimed after she had paid $11,000 in membership dues, she sent MCS the bills but was told by the company that none of the bills would be covered. She was also accused of lying on her original application, because of her high blood pressure. "Her medical records showed no evidence the stroke was caused by a preexisting condition," according to Forbes. Even though the member received help from the California and Missouri Attorneys General to reduce the bill's total without the ministry's help, she was still left on the hook for $20,000 after MCS finally agreed to pay $15,000. 

JoAnn Volk, research professor at the Center on Health Insurance Reforms at Georgetown University, told Forbes while some nonprofits claim to offer legitimate insurance alternatives, there's no real oversight of their operations.

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CBN News also reported about another cost-sharing ministry last year. The ministry abruptly shut its doors leaving about 10,000 families who shared one another's medical expenses facing more than $50 million in unpaid bills. 

Christianity Today reported in April of 2022 that Sharity Ministries, formerly known as Trinity HealthShare, filed for bankruptcy and then started the liquidation process in 2021. There are so many outstanding claims that its unlikely members will receive the reimbursements they're owed.

Sharity faced lawsuits as well as cease and desist orders in several states. Sharity and its vendor, Aliera Healthcare, both based in Georgia, were targeted by state regulators in 2019 after receiving complaints from residents about unpaid claims, according to NHPR.

As CBN News reported in 2020, Trinity was ordered by the California state insurance commissioner to stop selling a cost-sharing plan as a substitute for health insurance.

According to The New York Times, more than one million Americans have joined HCSMs, attracted by the prices which are far lower than most traditional insurance plans. However, these plans are not required to meet the same strict standards as health insurance companies. Because they are not defined as insurance, there's no guarantee that healthcare costs will be covered.

 But in a January 2020 op-ed posted on CBNNews.com titled Setting the Record Straight About Healthcare Sharing Ministries, Medi-Share CEO Scott Reddig defended the effectiveness of his group in covering medical expenses for their participants, rejecting accusations by the NY Times. "During 2019, more than $50 million in medical bills were shared each month by the faithful members of Medi-Share," he wrote.

"For our 400,000+ members, they are loud and clear that this program provides them a great experience with real value alongside the intangible blessing of community," Reddig said.

It's not clear if every health-sharing ministry has the same standards or high approval rating as Medi-Share. 

Questions to Ask 

Katy Talento, executive director of Alliance of Health Care Sharing Ministries released a statement concerning the unfortunate incident concerning Medical Cost Sharing, Inc. in Missouri. 

"The Alliance of Health Care Sharing Ministries condemns every instance of fraud and misrepresentation carried out in the name of Christ and is particularly outraged by such behavior among those pretending to be Health Care Sharing Ministries," said Talento. "An organization named Medical Cost Sharing, Inc. has recently been shut down by federal authorities for allegedly trying to trick Christians into handing over money to what they thought was a legitimate faith-based ministry that would help them share medical expenses with other believers."

"This organization was never recognized under the federal definition of a Health Care Sharing Ministry, it was never a member of the Alliance of Health Care Sharing Ministries, and was never accredited nor did it ever apply for accreditation by the Health Care Sharing Accreditation Board," she said. 

"Health Care Sharing Ministries are federally-recognized, tax-exempt (c)(3) charities whose members have a longstanding history of faithfully sharing one another's medical expenses," Talento explained. "They are transparent with their members every single month about how much money has been shared between the membership and how much the organization has used for overhead expenses. They are audited annually using Generally Accepted Accounting Principles and they make their audits publicly available either by request or posted on their websites." 

"Ministries who are members of the Alliance meet these minimum standards," she continued. "Governing members have further either been accredited by the independent, third-party Health Care Sharing Accreditation Board or have committed to do so within the next year."

Talento also reminded anyone considering joining a Health Care Sharing Ministry to ask that ministry the following questions: 

• Have you applied for or received accreditation from the Healthcare Sharing Accreditation Board?
• Do you have a certification letter from the U.S. Centers for Medicare and Medicaid Services recognizing that the ministry meets the ACA definition of a Health Care Sharing Ministry?
• Are you a governing member of the Alliance of Health Care Sharing Ministries? (Medi-Share, Samaritan Ministries, OneShare Health, Altrua Healthshare)
• Do you have a letter from the IRS recognizing you as a 501(c)(3) tax-exempt charity organization?
• Are your annual, audited financial statements publicly available?
• Do you provide monthly reports to your members disclosing the amount of member medical expenses shared by your members?