In a shocking healthcare scheme under Obamacare, you paid $9000 a day, per addict, for months to put hundreds into luxury drug rehab. But not only did the patients not get treatment, some of them are now missing. Scott Thuman follows the money.

On the edge of Glacier National Park sits Browning, Montana, home of the Blackfeet Nation, and one of the largest reservations in the US.

As on many tribal lands, the Blackfeet Nation has been plagued by addiction. Many suffer severe drug or alcohol problems. That’s one reason fraudsters have targeted people here and on other reservations with an audacious scheme that state investigators just uncovered.

James Brown is Montana’s state auditor and insurance commissioner.

Scott: When you realized what this scam involved and you realized who was being targeted, what did you think of that?

James Brown: Oh, I was outraged, totally outraged. When we found out that Native Americans, who are often not protected by anybody, were the target of this, we made it the focus to act on this quickly.

This is how the scheme worked. Recruiters were sent directly into Native American areas, offering free luxury drug and alcohol rehabilitation treatment under taxpayer-subsidized Affordable Care Act policies.

Patients who signed up were flown out of the state, often to Southern California, but when they got there, they found little or no treatment, while the obamacare insurance companies were billed up to $9,000 per person per day.

Scott: Up to $9,000 a day. That's a big number.

James Brown: It is a big number. And if you times that out by 90 days, which is the period with which they could provide the treatment, plus we've determined at this point, there are probably up to 200 victims of this coming out of Montana. You can imagine that number grows pretty quickly.

What made the fraud easier to perpetrate was a loophole in ACA plans that allows Native Americans to sign up at any time.

James Brown: And so for the Indian health plans through Obamacare, in order to encourage more people to sign up for that, they did away with the enrollment period, so you don't have to wait for the two-month period at the end of each year to sign up. It's a rolling enrollment period. So this is why the scheme is particularly targeting Native Americans, because they can do it throughout the year.

It was one of Montana’s three non-profit insurance companies that runs ACA plans that first raised the alarm about questionable claims from out-of-state addiction treatment centers.

Ted Bidon led the team of investigators tasked with unraveling the fraud.

Ted Bidon: They understand how insurance works. They understand what different policies are out there, which ones are most susceptible to the risk. They understand how to operate within a state and to operate outside of states so that they can continue the scam without any state jurisdiction or authority from state to state.

Scott: Had you come across a scheme before this elaborate?

Ted Bidon: Not this elaborate, not in Montana. They get better every year. We're already seeing them change and adapt to the actions that we took. So it's amazing the amount of intelligence that's going in to try to continue this scheme.

Scott: It was a scheme that investigators say went way beyond just taking money from victims here in the Blackfeed Nation and in other tribal communities. They say it had a much darker side, one they’d never seen before.

Compounding the financial fraud, the patients were eventually kicked out and left on California's streets. Some are still missing as of this interview. Brown says it amounted to human trafficking.

Scott: They left them with no way to get home?

James Brown: That's correct, so this is a form of human trafficking, in my mind, taking someone out of Montana, transporting them across state lines, taking them to Southern California, and then literally dumping them on the street without any way to get back.

Investigators in Montana were able to stop nearly $24 million in payments, but they believe the fraud could involve nearly $55 million in unjustified claims. And Montana wasn’t the only state targeted. Similar schemes have been reported in Oklahoma, Arizona, Alaska, Florida, and California.

Scott: How long do you think they've been getting away with this?

James Brown: Oh, I think at least five years, five, six years US-wide. In Montana, we've been able to identify that it probably started around the end of 2024. But the bigger problem here, I think, is the size and scope of federal programs just continued to grow and grow and grow. And so these fraudsters are going to look at not only trying to defraud Obamacare or the ACA, they're also looking at defrauding Medicaid programs across the West.

Scott: So you're saying the bigger the government gets, the more targets there are for criminals?

James Brown: Absolutely.

Investigators believe the perpetrators used some of their criminal proceeds for lavish expenses, such as purchasing this $1.5 million home in the town of Great Falls.

The auditor’s office is now working with the Department of Justice and the FBI to try to build criminal cases against the perpetrators

For Full Measure, I’m Scott Thuman in Montana.