Why would someone from California, a state with a massive unhoused population, look to recruit unhoused people from Wyoming?

“Right away, we saw red flags,” Bocanegra said, adding that she immediately turned them away. “They were a little bit pushy, wanting to come in and really tried to do this sales pitch on how great it was.”

An alleged health insurance fraud scheme has been taking advantage of people with drug addiction, and it recently started happening in Wyoming, according to at least one health insurance company. The Wyoming Department of Insurance posted a public service announcement this month, warning people to be on the lookout for “body brokers” and health insurance scams.

“Body brokers” are people sent out to different states to recruit victims — often vulnerable adults with a substance use disorder — and send them to fraudulent treatment facilities. Scammers running these facilities bill insurance companies for services that aren’t actually being provided.

The epidemic of substance use disorders has correlated with an uptick in health insurance fraud, according to a 2022 article published by the National Library of Medicine.

In 2020, the U.S. Department of Justice brought criminal charges against a defendant for filing $6 billion in fraudulent claims to federal and private health insurance organizations for opioid-related treatment. This included $845 million for substance abuse treatment and more than $30 million for illegal opioid distribution, according to the article.

“Patient brokering … is a common unethical practice in many states,” the article said. “In many cases, patients are referred to facilities regardless of whether it is the best fit for their needs.”

Wyoming appears to be the latest target in this criminal scheme, according to Blue Cross Blue Shield of Wyoming. BCBSWY Executive Vice President Kris Urbanek said Native Americans and adults with substance use disorders have been victimized by fraudulent health care filings.

There was a 106% increase in major mental health/substance use disorder diagnoses from 2023 to 2024 under BCBSWY, which resulted in an extra $15.1 million in costs.

“The fraudulent enrollment is bad,” Urbanek said. “But the real tragedy is that these people are being trafficked into locations that do not provide the health care that they need, and in a lot of cases, are not providing any health care at all.”

Based on stories collected by the insurance company, Wyoming victims are showing up in treatment centers, most of them in California, but are not receiving any actual treatment.

Amy Scharaswak, who works in population health for BCBSWY, said a pregnant woman sought out at a Wyoming homeless shelter is currently stuck in California after she fell victim to one of these scams.

“When she went to California, her whole premise of going is she was pregnant, she was using, but she wanted to quit for her unborn child,” Scharaswak said.

The woman was dropped off in a compound, which is a residential area for patients of substance use treatments, such as an apartment or dormitory. But when she saw her roommate had crack pipes and other drug paraphernalia, she realized something was wrong, Scharaswak said.

“Because she was not willing to stay, the facility in question said, ‘We won’t buy you a plane ticket to get home,’” Scharaswak said. “‘We can’t help you if you’re not willing to stay, and we can bill your insurance company for your stay.’”

The most impacted population of health care fraud in Wyoming has been its Native American residents. Urbanek said there’s been a “dramatic uptick” in out-of-state residential treatment center utilization and enrollment in Native American plans.

Average annual enrollment jumped from 300 to 1,300, he said, which is “well beyond what is normal.” As of March 2025, internal reports indicate BCBSWY’s Native American enrollment is up 500% in 2025. In addition, the health insurance company’s Native American claims experience is up more than 1,000% in 2025. Overall, mental health and substance abuse disorder claims have increased over 300% in 2025.

“That was the red flag, right there,” Urbanek said. “We had an influx of calls in the call center — claims utilization was out of whack.”

As more stories started rolling in, staff at the insurance company began to suspect enrollments in the Native American plans were not legitimate, and that the claimed services were not actually being provided to members.

Urbanek said Native American health insurance plans have year-round enrollment, and there’s a 90-day period to verify whether an enrollee is an actual tribe member. It is unclear at this point if the Centers for Medicare & Medicaid Services (CMS) is monitoring this requirement.

This makes it easy for scammers to take advantage.

“You can just say that you’re a tribal member. Nobody’s looking and asking questions for three months,” Urbanek said.

When the BCBSWY legal team began investigating the alleged fraud schemes, it found a number of civil lawsuits and federal criminal cases and indictments related to illegal kickback operations.

Most of the cases were filed under the Racketeer Influenced and Corrupt Organizations Act, which indicates this is a criminal enterprise, said BCBSWY Vice President of Legal Services Rocky Redd.

“This is a network of fraud that’s happening, and we’re not sure how connected it is,” Redd said. “Whether all of these actors are connected, or whether the scheme has just been patterned and copycatted over and over again.”

BCBSWY has been in contact with a Blue Cross plan in California, and discussions between the two agencies have been productive, Redd said. This has been an ongoing issue in California for several years now, and the state has entire departments and teams investigating fraudulent facilities.

“They use very sophisticated software. One of those is called Fraud Shield, that can go through and identify potential areas of fraud that might be occurring,” Redd said.

But even with the large number of staff and use of sophisticated software to identify fraud, this type of investigation “takes years,” due to how intricate it is and how difficult it is to track people down, he said.

Part of the difficulty is thumbing through falsified documents, including fake utility bills and forged letters from shelter home directors. Bocanegra, the director at COMEA, said she was shocked to see a forged letter from her shelter with her name on it.

“It was a little disturbing,” Bocanegra said.

While the FBI has been investigating this issue for years, it’s a new problem for Wyoming federal law enforcement officers, Redd said.

“This is a very novel thing for them,” Redd said. “We have been doing the things that we need to do, which is reporting the fraud through their proper channels, having discussions with investigators, but that process just moves very slowly.”

BCBSWY is also partnered with the Wyoming Department of Insurance to investigate the health insurance scams. In addition, the health insurance company has contacted all three of Wyoming’s members of Congress to work with CMS to rescind coverage payments, and the delegation has paid “special attention” to this issue, said BCBSWY Government Affairs Principal and Privacy Officer Kelsey Prestesater.

“The federal government is very slow moving at times,” Prestesater said. “We need a more immediate fix, and so we’re hopeful that our Department of Insurance and (members of Congress) can really help us get in the door with CMS.”

Rep. Harriet Hageman, R-Wyo., said in an emailed statement to the WTE that she found the “alleged actions of these fraudsters” to be “egregious.” The Wyoming congresswoman confirmed her office is “fully engaged” with the state DOI to hold bad actors accountable.

“Not only are they damaging the insurance system, those individuals seeking help could suffer for the rest of their lives because, in their greatest moment of need, they were victims of crime instead of beneficiaries of care,” Hageman stated. “I will always stand in the gap for those unable to advocate for themselves.”