Arizona woman accused of being a 'body broker,' lawsuit alleges
The Brief
A woman from Goodyear accused of sober living fraud is among several individuals being sued for millions of dollars by a major health insurance company.
Blue Cross Blue Shield of Oklahoma accuses the woman of acting as a "body broker" to recruit and transport thousands of Native Americans across state lines to a treatment center in California.
GOODYEAR, Ariz. - A major health insurance company is suing several people, including a Goodyear woman, for their alleged involvement in sober living fraud spanning different states.
Blue Cross Blue Shield of Oklahoma accuses the woman of acting as a "body broker" to hunt down and traffic thousands of Native Americans, across state lines, and into a California treatment center.
FOX 10 Investigator Justin Lum breaks down the alleged scheme and its ties to Arizona.
What we know
Blue Cross Blue Shield Oklahoma says it's dispersed $36 million in wrongful payments.
The lawsuit says an "army of fraudsters" is responsible for taking advantage of tribal members, and lays out the blueprint for the defendants' alleged fraud scheme.
The plaintiff, Blue Cross Blue Shield Oklahoma, says Rad Life and Excellence in Everything Recovery (EIE) both acted as "body brokers."
The owner of EIE Recovery is Cari Passmore, and she's based in Goodyear. Her Facebook profile name is "Cari CC," which matches the profile disclosed in the lawsuit.
Passmore is accused of sending potential patients to an insurance agent in Oklahoma to be enrolled in Blue Cross Blue Shield insurance plans.
The lawsuit says the patients would then be sent to South Coast Behavioral Health in California for free detox treatment before returning to Passmore's sober living home for free housing and outpatient care.
Blue Cross Blue Shield Oklahoma says the defendants split payments being made to insurance.
One exhibit shows someone in a Facebook group asking who could get her sister into a California rehab, and passmore replies, "I can help with California."
The backstory
"They're targeting our most vulnerable people, and they go out there, and you see these recruiters blatantly, see these recruiters on these websites going to these different, whether they go to a homeless shelter or a homeless camp, and promising them steak dinners," said Reva Stewart of Turtle Island Women Warriors.
She's an advocate for indigenous people impacted and displaced by the sober living scheme due to the fallout of Arizona's Medicaid scandal.
AHCCCS, the state's Medicaid system, cracked down on fraudulent billing in 2023, suspending hundreds of behavioral health providers and cutting off payments.
Stewart says "bad actors" have switched from Medicaid to the health insurance marketplace for some time now.
"It's just as bad, it really is," she said.
Dig deeper
Blue Cross Blue Shield Oklahoma says Passmore falsified information, revealing a screenshot of a message between her and an alleged co-conspirator, discussing a P.O. box address for residency requirements to enroll patients.
According to the lawsuit, recruits were told by insurance agent Randall Eisworth to lie about their annual income, employment and residency. It's important to note that the plaintiff recently dismissed claims against Eisworth without prejudice.
Blue Cross Blue Shield Oklahoma says 23 members used a Buckeye address for a home operated by EIE.
Big picture view
Stewart says people she has helped on the streets tell similar stories.
"I've had a few people that I've spoke with that we've helped get home that said that they were told that once they got into the house, they had to get on Blue Cross Blue Shield and all they had to do was hand over their information and that it would be done for them, so then when they decided that they needed to go to the Phoenix Indian Medical Center and utilize the services there, they were told they couldn't because they were under Blue Cross Blue Shield," Stewart said.
The plaintiff says, "even worse, many of the alleged services provided at Excellence were not actually provided," and that Passmore gave patients "comfort meds" without professional administration or prescription from a stockpile of old medication she kept from prior patients."
What's next
Blue Cross Blue Shield Oklahoma is suing Passmore and EIE along with South Coast Behavioral Health and Rad Life Recovery under the Racketeer Influenced and Corrupt Organizations Act, known as RICO, as well as fraud, and negligent misrepresentation.
It's demanding a jury trial.
Passmore's attorney has no comment on pending litigation.
Attorneys for the rest of the defendants have not responded to FOX 10's requests for comment.
Stewart says she's not surprised that the sober living scheme is still very much alive across so many states, but she's focused on humanitarian efforts to get relatives home.
"These people are all of the people that have taken advantage of anyone and everyone who is vulnerable for their greed. That's what makes me angry," she said.
As for Passmore, she has some history with another insurance company.
Back in 2021, Passmore agreed to pay $50,000 to Premera Blue Cross as part of a stipulated judgment in which she accepted liability in their lawsuit against her.
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The Atlantic Daily, a newsletter that guides you through the biggest stories of the day, helps you discover new ideas, and recommends the best in culture. Sign up for it here. After years of trying to improve his hospital in Riverton, Wyoming—first as a doctor, then as a board member and volunteer activist—Roger Gose was ready to give up. Gose, a Texas native, had been in Wyoming since 1978, when he saw an ad in a medical journal looking for a small-town internist. Ever since he was a kid, he had wanted to be a community doctor, the kind who made house calls and treated his neighbors from birth into adulthood. He found his calling in Riverton, a town of 10,000 people in one of the state's poorer counties. For 35 years, he ran a private practice and worked shifts at Riverton Memorial Hospital, even serving for a time as the chief of medicine there. After retiring from his practice in 2012, he joined the hospital board, still eager to do whatever he could to help. 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Data from the Wyoming Department of Health show that the number of air-ambulance flights from the county where Riverton sits to hospitals elsewhere in the state rose from 155 in 2014 to 937 in 2019. By the time I spent several days with Gose and a dozen other Rivertonians in the spring of 2023, they didn't even have a hospital anymore, they told me; they had a 'Band-Aid station.' The only way to ensure that their town had a real hospital, they decided, was to build one themselves. The conventional wisdom about rural hospitals in the 21st century is that they are, in a word, screwed. Young people move away; older residents left behind need more expensive care and are less likely than urban and suburban residents to have private insurance, which is more lucrative for providers than Medicare and Medicaid. A 2018 report from the U.S. Government Accountability Office found that twice as many rural hospitals closed from 2013 to 2017 than in the five years prior, and the ones that remained were in much worse financial shape than their nonrural counterparts. Emergency funding during the coronavirus pandemic improved the financial health of rural hospitals, but after that funding dried up, many were left facing labor shortages and supply-chain problems that increased prices. House Republicans' proposed cuts to Medicaid could drive even more hospitals out of business, the American Hospital Association argued in a letter to congressional leaders this April. The ability to stave off closure has been the chief value proposition that private-equity firms offer to rural hospitals. In my reporting on private equity's growing dominance in health care, I heard versions of the story that LifePoint and Apollo told Riverton residents again and again: Without us, you will be left with no hospital at all. Yours is running out of money, and our ability to consolidate and find efficiencies across our ever-growing system is the only thing that can keep it alive. Your community is too small and poor to support an obstetrics department, or general surgery, or mental-health services, so you won't have those anymore, but isn't something better than nothing? Accepting that private equity is the only option for rural hospitals, though, requires accepting that rural Americans deserve less access to care than their urban and suburban counterparts, and that the care they do receive will be measurably worse. A landmark 2023 study found that in the three years after a private-equity acquisition, the rate of serious preventable medical complications increased significantly. (LifePoint hospitals were not included in the study, which focused on acquisitions made before 2018.) Patients were more likely to fall in the hospital and more likely to acquire infections at the site of a surgical incision. The number of central-line infections, which often result from improper insertion or cleaning, rose 38 percent. Though the study didn't delve into the reasons for the increases, the implication was clear: Focusing on short-term profits was leading to cost cutting that could be dangerous for patients. In Riverton, the hospital's owner was cutting costs aggressively, while also raising prices. In 2014, LifePoint formally merged the hospital with one in wealthier Lander, a town 25 miles away, and renamed them SageWest Riverton and SageWest Lander. In 2017, the year before Apollo bought LifePoint, researchers examined hospital data for 14 individual Wyoming facilities and found that SageWest charged the highest relative prices; data from 2020 show that SageWest maintained the largest price disparity of any general hospital in the state after the Apollo acquisition. (LifePoint referred questions about the Riverton and Lander hospitals to SageWest; SageWest leaders did not respond to several requests for comment.) At the same time, the Riverton hospital was shrinking. In quick succession, SageWest suspended its obstetrics services, closed its inpatient mental-health unit, and shrunk other basic services. By 2022, the last year for which Centers for Medicare and Medicaid Services data are available, SageWest employed 227 people across its two campuses, nearly 40 percent fewer than before the Riverton-Lander merger. According to Gose, the number of physicians based in Riverton had dwindled from 20-something to just seven. If they were going to build a new hospital, Gose and his neighbors first needed to know whether it could theoretically be financially viable. By 2018, they had formed a nonprofit, Riverton Medical District, and one of the board members, Vivian Watkins—the former head of commercial lending for U.S. Bank's 14 branches across Wyoming, and the kind of person who can't leave the grocery store without stopping four times to ask about someone's kids or their neighborhood drama—began cold-calling hospital CEOs across Wyoming, looking for advice on where to start. One told her that she should go straight to Stroudwater Associates, a Maine-based consultancy with a specialty in rural-health-care finances. The Riverton nonprofit was not Stroudwater Associates' typical client. The company's chairman, Eric Shell, and his team usually work directly with rural hospitals, or occasionally with a larger chain looking for system-wide strategic planning. Gose, Watkins, and their allies didn't have a hospital, didn't have concrete plans for a hospital, didn't even have any money for a hospital. 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The result was a huge, unexpected loss of revenue for many hospitals, and a correspondingly huge number of layoffs: 1.4 million health-care workers lost their jobs in April 2020 alone. At Mahaska, though, CEO Kevin DeRonde—a former NFL linebacker—ran in the opposite direction: He hired many of the providers who had been laid off from other area hospitals, Shell said. His hospital took a short-term financial hit, but DeRonde wagered that patient volume would recover once the worst of the pandemic eased up. The bet paid off. After the drop in 2020, the number of non-COVID patients skyrocketed. Now many hospitals were understaffed, but not Mahaska. The hospital hadn't been doing well even before the pandemic, losing more than $5 million in 2017. By 2023, it made $7.5 million in net income, according to Shell and Mahaska Health officials. Growth, though, is more difficult at hospitals owned by private-equity firms, because of the need to keep shareholders happy through quick returns. 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It would have 13 inpatient beds, a full surgical department, two labor-and-delivery rooms, two rooms equipped for intensive care, and space for physical and speech therapy. It would be staffed to perform surgery and deliver babies 24 hours a day. And the building would be designed to accommodate future growth, with the potential to add 11 new patient rooms, additional surgery space, and more parking, board members told me. In its report, USDA was more bullish than Shell and Stroudwater had been; the agency's official assessment of the project barely referenced the threat of competition from the existing hospitals. Citing numbers provided by the Riverton Medical District board, USDA found that the hospital could break even with just 30 percent market share, far less than SageWest's 44 percent. 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