FRAUD: State auditor uncovers suspected $54.7 million health care fraud in Montana

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HELENA, Mont. — Montana State Auditor and Commissioner of Securities and Insurance James Brown says his office has uncovered a suspected health care fraud scheme that targeted Native Americans in tribal communities and generated tens of millions of dollars in improper Affordable Care Act claims.

Brown said investigators identified a network of recruiters who enrolled tribal members in ACA marketplace plans and then sent them to out-of-state treatment facilities, often in California. The facilities allegedly billed insurers as much as $9,000 to $10,000 per day for services that were unnecessary, never provided or far below what was claimed.

The investigation began after an insurance company reported unusual billing activity involving Native American enrollees, Brown said. Under federal law, members of federally recognized tribes can enroll in ACA plans year-round, a provision authorities say was exploited by recruiters who targeted vulnerable individuals.

Working with the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services, the auditor’s office said it has prevented more than $23.3 million in suspected improper payments. CMS has approved the rescission of at least 80 policies tied to the scheme, meaning the coverage was canceled and claims were not paid.

Brown said total suspected fraudulent billing connected to the scheme could reach as high as $54.7 million, though many claims remain under review.

Federal authorities, including the FBI and the U.S. attorney’s office, have received criminal referrals related to the investigation, Brown said. No criminal charges have been announced. Because much of the activity occurred outside Montana and involved nontribal actors, state officials said jurisdiction is limited.

Brown said his office has worked with tribal governments, insurers and federal agencies to notify potential victims and help them transition back to appropriate health coverage.

The investigation remains ongoing.