Fraudsters transported Native Americans to other states and billed insurance companies for treatments that did not occur or were not needed.
By Nora Mabie MONTANA FREE PRESS
Montana State Auditor James Brown announced Tuesday that his office had identified and worked to remedy a health care fraud scheme that targeted Native Americans.
In a Thursday phone interview with Montana Free Press, Brown and members of his staff said fraudsters visited reservations in Montana and pressured people, particularly those who appeared unhoused, to sign up for Affordable Care Act plans with the promise that they’d receive free rehab treatment at a high-end facility in another state, and in many cases, California. They also provided transportation.
Brown’s staff said people affected by the scam reported feeling immense pressure, almost amounting to coercion, to comply. Once people arrived at these fraudulent treatment centers, their condition was reported as needing emergency attention, which means insurance companies by law cannot deny treatment, according to Brown’s office. Fraudsters would then bill insurance companies for treatments that did not occur, were not needed or, according to a news release from Brown’s office, “performed at greatly inflated prices.” In one instance, Brown’s office told MTFP, fraudsters billed more than $900,000 for treatment for one person.
Brown and his staff said perpetrators took advantage of several gaps in the health care system. First, while non-Natives must enroll in Affordable Care Act plans during a specific time of year, provisions allow members of federally recognized tribes to sign up anytime. In the case of this fraud scheme, that provision meant fraudsters had more opportunity to approach and coerce Native Americans to enroll in Affordable Care Act plans.
Second, Montana has three Affordable Care Act insurance providers, and one of them, called PacificSource, covers Montanans for out-of-state treatment. That meant fraudsters in other states could bill a Montana insurance provider for care administered elsewhere.
Third, Brown’s staff said, people have figured out how to get around certain eligibility requirements in the federal system. They pointed to a recent Government Accountability Office report that found significant fraud risks in the advance premium tax credit, a program that lowers monthly health insurance costs for eligible people buying plans in the Health Insurance Marketplace. The report found that the federal Marketplace “approved coverage for nearly all of GAO’s fictitious applicants.”
Brown said federal entities approved the rescission of 80 fraudulent insurance sign ups, allowing his office to claw back more than $23.3 million. His office has identified 207 total enrollments suspected of fraud, which they say could represent $54.7 million in unjustified claims.
In 2023, Native Americans in Montana were similarly targeted in a Medicaid fraud scheme in which treatment centers billed the state of Arizona thousands of dollars per patient for services that were never provided. The scam targeted Indigenous people because a loophole in Arizona’s American Indian Health Program allowed individuals to serve as a treatment facility. Hundreds of people have been criminally charged for their alleged participation in that scheme.
Brown, who is in touch with other insurance commissioners nationwide, said he is warning leaders, particularly those who represent states with sizable Indigenous populations, to look out for similar scams.
His office said that because the scheme occurred on tribal land, it will be up to federal authorities to bring charges against perpetrators. Brown said his office has been in contact with the FBI and U.S. Attorney’s Office.
The scheme, Brown said, could significantly change insurance coverage for Montanans in the future. Some companies could limit their coverage for out-of-state services, for example.
“When scammers bill $10,000 a day in fake enrollments, premiums rise, provider networks shrink, and families pay more for worse care,” he said in a Jan. 21 news release. “Fighting fraud is how we protect affordability.”
Brown’s staff encouraged Montanans to stay vigilant. If something sounds too good to be true, they warned, it probably is.
