Keila Szpaller*Daily Montanan*

The Commissioner of Securities and Insurance Office helped stop a fraudulent multimillion dollar billing scheme by agents preying on Native Americans on reservations, Commissioner James Brown announced this month.

In cooperation with health insurers, tribal communities and law enforcement, the investigation secured more than $23.3 million of fraudulently incurred claims through the Affordable Care Act, Brown said. An additional $27 million is pending.

Commissioner James Brown. (Provided by the Commissioner of Securities and Insurance Office) Credit: Provided by the Commissioner of Securities and Insurance Office

The most reprehensible aspect of this scheme is how the people who were allegedly provided ‘care’ were vulnerable populations that were, in some cases, exploited, coerced, moved across state lines, and not even so much as given a way to get back home to Montana,” Brown said in a statement.

In an interview, Brown said some Montana victims who were taken out of state for treatment that never took place have yet to be found.

Brown said his office met with tribes in Montana throughout 2025 to alert them to the scheme. It also made referrals to federal law enforcement authorities in Montana and the FBI office in Los Angeles where the alleged crimes took place.

In an interview, Brown described the way bad actors used a provision in the Affordable Care Act to victimize Native Americans to try to defraud an insurance company, how the scheme led to as much as $54.7 million in unjustified claims, and discussed the work that remains in the aftermath.

In January 2025, PacificSource reported suspected fraudulent ACA enrollment to the Commissioner of Securities and Insurance, and the office launched an investigation a couple of weeks later, according to a timeline provided by CSI.

Under the Affordable Care Act, Native Americans are able to enroll in the federal marketplace at any time, Brown said; they don’t have to wait for open enrollment.

Fraudsters operating out of Arizona and, for the purposes of the Montana scheme, California, used that provision to entice Native Americans to disenroll from Medicaid and sign up for health insurance through the ACA instead, Brown said.

In particular, he said, the agents would set up information booths on reservations — he believes nearly every reservation in Montana has been a target — and tell people about free drug and alcohol treatment at a beautiful facility in southern California.

The schemers would then transport victims across state lines by buying them a plane ticket to California or driving them in a van; keep them for 90 days while providing “fake services”; and then bill the insurance company $9,000 a day for 90 days, Brown said.

The billing was for services that didn’t take place, were unnecessary, or were provided at “greatly inflated prices,” according to the Commissioner of Securities and Insurance.

Brown said the bad actors abused “Obamacare” and trafficked “vulnerable Native Americans.” He said at least 183 people were victimized.

“We’re still trying to find some of these people, honestly,” Brown said.

The Office of Indian Affairs could not be reached Monday about any efforts to find people. The FBI in Montana also could not be reached in time for this story.

Brown said insurance abuse leads to higher premiums for everyone, but the investigation from his office and work with the Trump administration has meant $23.3 million in payments don’t have to be made to date.

Brown said an additional $27 million is pending a decision by the Centers for Medicare and Medicaid Services. He said so far, 80 policy recissions have been granted, and dozens remain under review.

Brown said PacificSource first suspected a problem when it came across half a million dollars in alcohol and substance abuse being billed out of southern California and the southwest part of the country.

“That is what set their alarm bells off, and they approached us for help,” Brown said.

He said his office conducted an investigation that supported the ability of CMS to approve the non-payment of fraudulent claims and rescind the policies. CSI has a team of four investigators, and he said his office spent seven months on the investigation.

The team uncovered falsified records, unlicensed and out-of-state actors, fabricated addresses, and unsupported earnings information used to obtain coverage, according to CSI. It also found “immediate, high-dollar billing patterns designed to extract maximum payouts.”

In a statement provided by CSI, PacificSource spokesperson Erik Wood thanked Brown and his team for helping stop suspected fraudulent activity in the marketplace.

“As a nonprofit health plan, PacificSource exists to keep health care accessible and affordable for our members, and preventing fraud is an important part of that work,” Wood said. “We appreciate the state’s commitment to protecting Montanans and the integrity of our health insurance system.”

PacificSource is a not-for-profit health insurance provider and one of three insurers that offer plans under the Affordable Care Act.

Brown said his office is helping to re-enroll victims into Medicaid so they have coverage. He encouraged Montanans to be wary of any alleged agents advising disenrollment in Medicaid and recommending treatment programs in California through the Affordable Care Act.

Brown said Arizona and Alaska also have dealt with a variation of the scheme. He said any state with a significant Native American population is a target, and he has talked with his counterparts and insurance providers in Washington and Wyoming to alert them to the scheme.

Brown said his office has “zero tolerance for fraud” and it is focused on consumer protection that “works for the people of Montana as opposed to scammers.” He said his office is pursuing additional investigations and will ask for an additional investigator in the future.

“We don’t tolerate corruption, and we don’t apologize for enforcing the law,” Brown said in a statement. “If you exploit vulnerable people or try to game our system, we will come after you.”

Credit: Daily Montanan

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