Chappelle Roe said she was busy delivering gifts to two low-income Milwaukee families on Christmas Eve back in 2015.

At least that’s what she told the state when she billed Medicaid for her time. Her job was to help pregnant women prepare for new babies and then to advise them on caring for their children. The work was supposed to be part of a major effort to lower sky-high infant mortality rates, especially in the Black community. 

But prosecutors say Roe was actually in Huntsville, Ala., posting on Facebook that she was “Living and Loving the Life GOD has given me.” 

Three years later, she pled guilty to theft by fraud for submitting bills to Medicaid stating she was in Milwaukee with clients when prosecutors say she really was in Miami, Memphis, Atlanta or Huntsville. She was sentenced to one-year probation and ordered to pay $2,819 in restitution. 

At the time, she owned Mommy & Me Prenatal Care Coordination Services, a Glendale company that received taxpayer money as part of a state program to prevent infant and maternal mortality.

Today, despite the conviction, she is a privately paid consultant helping others open prenatal care coordination companies, an industry created in Wisconsin in 1991 that is experiencing explosive growth in Milwaukee. 

And evidence of fraud throughout the program has soared, a Milwaukee Journal Sentinel investigation has found. 

Created to combat Wisconsin’s dire problem of babies dying before their first birthday, a growing group of for-profit and nonprofit companies collected more than $22 million last year alone.

Yet Wisconsin continues to have one of the nation’s worst records for Black infant mortality, a troubling rate that has shown little improvement over the years despite the rapid growth of the prenatal care industry. 

A review of thousands of pages of documents and interviews with dozens of people, including regulators, clients, social services experts and those who own or work for prenatal care coordination companies, uncovered financial mismanagement and revealed an industry raking in millions with little government oversight. Indications of fraud included fictitious billings, forgeries and coordinators claiming to be in two places at once, the Journal Sentinel investigation found.

Among the newspaper’s findings: 

• Some Milwaukee-area prenatal care coordination companies, commonly known as PNCCs, are billing Medicaid between $1,000 and $5,000 per client. That’s compared with the Milwaukee Health Department, for example, which bills an average of $541 per prenatal care client, according to a confidential Department of Health Services memo obtained by the Journal Sentinel. The memo called the price differences “suspicious disparities.” 
• The industry’s meteoric growth in Wisconsin has created instant fortunes. One PNCC owner brought in more than $2.2 million in revenue last year with nearly half going toward her salary.  Several company owners could be seen showing off on Facebook, posting pictures of flashy vacations, pricey handbags and Gucci clothing. No experience is necessary to open a prenatal care business and collect taxpayer money.
• A number of the fastest growing companies have given away cash, clothing and baby supplies to entice potential clients into giving them their Medicaid numbers and signing up for services. State regulators and attorneys are questioning the legality of such giveaways. Investigators warn that some of the agencies may use the giveaways to get Medicaid numbers and bill for services that are never provided, documents show. 
• There have been numerous red flags, including state auditors finding repeated instances of suspected fraud over the last decade, but few safeguards have been added. Roe is the only prenatal care coordination company owner to have been charged and convicted in recent years, officials say. 
• In November, following months of inquiries by the Journal Sentinel, the state suspended the flow of Medicaid payments to four of the largest prenatal care coordination companies in Wisconsin — which brought in nearly $6 million in the first 10 months of 2021 — and referred them to law enforcement for possible criminal charges related to fraud. 

Karen Timberlake, the state’s interim health services secretary, defended the 30-year-old program but noted that her department referred the four companies to the state Department of Justice for criminal investigation.  

“When we have credible allegations of fraud, we absolutely investigate those,” Timberlake said in an interview with the Journal Sentinel. 

Jim Jones, the state’s Medicaid director who retired in December, said, “Fraud is always a concern for anyone running any public assistance program. I don’t know if it’s rising or it’s not rising.”

As for the program overall: “It is not as successful as I would have hoped,’’ he said in a November interview. 

The business is growing even though the birthrate in Wisconsin is falling. There were 60,615 babies born in Wisconsin in 2020 compared with 68,367 babies born in 2010 — a decline of 11%, state records show. 

Growing program ‘tainted’ by fraud

Despite growing fraud concerns, taxpayer spending on prenatal care coordination companies has skyrocketed in Wisconsin.

As the spending soars, the number of clients has seen little growth, a Journal Sentinel analysis found. Medicaid money spent on the program increased more than fourfold from about $5 million in 2018 to more than $22 million last year. Meanwhile, the number of clients increased by only one-third to 8,074.

The figures include funds for PNCCs as well as those for families of older children, known as Child Care Coordination services, or CCCs.

It’s unclear where the extra money is going.

Bria Grant, who has worked in the industry and now serves on a statewide committee focused on improving prenatal care, said she’s been trying to sound the alarm about corruption in the industry for years.

“Fraud is tainting the culture of PNCC work,” Grant said. 

She has repeatedly urged the state to step up its oversight.

“They can bill and you all don’t have any checks and balances,” she said of state regulators.

The flow of Medicaid dollars to four Milwaukee-area companies — Caring Through Love, Direct Care Prenatal, We Care Services and Here For You Prenatal Coordination Services — was cut off in November, days after state Division of Criminal Investigation agents and regulators seized boxes of financial records from each.

“The credible allegations in this situation include billing for services that were not rendered and offering unlawful incentives to Medicaid members,” read the Nov. 22 letters from Anthony Baize, the department’s inspector general, to each of the four companies.

No charges have been filed.

Markita Barnes, owner of Here For You, denied the allegations, saying they were the result of complaints voiced by disgruntled former employees. 

“We’ll see what happens,” she said before hanging up on Journal Sentinel reporters. 

Direct Care owner Detra Ferguson declined to comment when contacted after the flow of Medicaid funds was suspended. A Direct Care staffer referred reporters to Ferguson’s attorney, Kristen Nelson, of Gimbel, Reilly, Guerin & Brown, a prominent Milwaukee law firm. 

LaKia Jackson, the owner of We Care in West Allis, also referred reporters to Nelson, who declined to comment about Ferguson and Jackson. 

Precious Cruse, owner of Caring Through Love, could not be reached for comment after the records were seized. The door to her office on Fond du Lac Avenue was locked in recent weeks, and repeated calls from the Journal Sentinel were not answered.

No experience necessary

The goal of the prenatal care coordination program is to improve birth outcomes and help low-income pregnant women and mothers of young children gain access to medical, educational and social services.

Prenatal care coordination companies are supposed to provide a wide range of services, including risk assessments, care plans, and health and nutrition counseling. 

Help is especially needed in Milwaukee, where Black babies are three times more likely to die than white babies. The disparity is even worse in the city’s poverty-stricken neighborhoods, including those of Milwaukee’s most distressed 53206 ZIP code. 

“Black babies are dying,” said Grant, who also runs UniteWI, a community health group. “It’s definitely shameful that we continue to have this type of disparity with the dollars that we put behind it.”

Health Secretary Timberlake said addressing the crisis is a priority.

“Wisconsin has miles to go in closing this gap between the chances that a white baby will die before its first birthday and chances that a Black baby will die before its first birthday. This is a now several-decade-old gap,” Timberlake said. “This is truly a tragedy for our state.” 

In addition, Black women in Wisconsin are five times more likely to die during pregnancy and in childbirth than white women, statistics show.

Grant said there are some prenatal care companies that are legitimate.

“I know the coordinators that are really getting this work done, and they are not being compensated like they should be,” Grant said. “And then you have folks, like these other agencies, that are not doing the work at all, and they’re just living this lavish life.”

Erica Olivier, the Milwaukee Health Department maternal and child health director, agreed, saying there are “very well-intentioned service providers” but also “definitely some that leave a bad taste in people’s mouths.” 

“You’re doing a complete disservice to people who are in need and seeking help and willing to get help,” Olivier said. 

Wisconsin has seen a roughly 400% increase in new applications to open prenatal care coordination companies, jumping from 31 applications in 2019 to 158 last year, state records show. 

In all, about 110 prenatal care coordination companies and agencies in Wisconsin were eligible to receive Medicaid funds as of December, records show.

LaKia Jackson, who launched We Care Services in March 2020, said she is sure some are drawn by the prospect of a big paycheck.

“I think people are trying to get into it for money,” Jackson said in an October interview, before her company’s Medicaid funding was suspended.

Records show her company grossed about $2.2 million during the first 10 months of 2021. About half of that revenue went to her as salary, Jackson told the Journal Sentinel in the interview.

Barnes, a 29-year-old certified nursing assistant, created Here For You in late 2020 and began enrolling clients last year. Like many prenatal care coordination companies, Here For You also offers child care coordination services, which can bill Medicaid to provide support to the families in Milwaukee County until children are 7 years old.

“I didn’t know anything about care coordination,” Barnes said in a September interview, adding that she saw a Facebook post about it and “ended up looking into it on a website.”

Virtually anyone is eligible to operate a prenatal care coordination company as long as they pass a background check and have a qualified professional, such as a nurse, on the payroll. 

The Journal Sentinel reviewed state and federal court documents of a sample of about 70 owners of Milwaukee-area prenatal care coordination companies operating last year and found that more than half had serious financial issues in their backgrounds. The issues included bankruptcies, evictions and liens by the state Department of Children and Families.

Owners of about a half-dozen active and defunct companies have been convicted of theft or fraud for activity unrelated to their prenatal care companies. Many of the financial issues or legal problems occurred 10 or more years ago. 

Barnes has had some financial issues in the past, including being sued for eviction in 2018, court records show. Her company, Here For You, grossed about $2 million through the first 10 months of last year, including more than $500,000 in September and October alone. 

“It was really, really, really quick. Like overnight,” Barnes said in September. “It seems like the whole city wants to be with us.” 

She said that even though the state stopped giving her company Medicaid funds, her PNCC would continue working with clients. She did not provide details.

“Resources are free, hon,” Barnes said in a brief December interview. “Emotional support is free. You really don’t need funding to provide free resources.” 

Barnes attributed the rapid growth of Here For You to “word of mouth” and providing good service to her clients. 

State regulators, however, have raised concerns that part of her agency’s growth is linked to aggressive and questionable marketing tactics.

The confidential health department memo to Timberlake from Anne Bensky, deputy chief legal counsel in the department, noted that “agencies that have engaged in these incentives and potential kickbacks have seen a significant increase in clients.”

Barnes’ “Here For You Prenatal started with eight recipients in October 2020 and increased to 491” clients by May 2021. In July, Here For You had 652 clients, Bensky wrote.

The memo included examples of promotions from Barnes’ agency and several other prenatal care coordination companies advertising giveaways to potential clients, including enrollment bonuses of hundreds of dollars, raffle prizes and free diapers.

The memo cited a state statute that outlaws “soliciting or receiving money in return for purchasing a good or service” paid for by Medicaid.

“It really does depend upon the intent, and it depends upon what exactly is occurring,” said Jones, the recently retired state Medicaid director. “Paying people to enroll with you as a provider is not OK.” 

A visit to Barnes’ old office, located in a building that she shared with a U-Haul distributor, hinted at an operation that was scraping by. Late last year, she moved out of the rundown building on North Richards Street.

However, her recent success could be seen on her Facebook page, where Barnes posted pictures of Gucci products  while on a trip to the East Coast, visits to Las Vegas and children wearing designer clothing or posing with stacks of cash.

She also boasted on Facebook about celebrating Sweetest Day in Aspen, Colorado, a vacation that she said included a stay in a presidential suite and luxury gifts like Louis Vuitton clothes and a diamond Rolex watch: “Iced him out wit a 2-tone bussed down rollie Diamond all over that bih,” Barnes wrote on Facebook. “Versace just for him to Lounge in, Loui V for his attire.” 

Cruse, owner of Caring Through Love, a prenatal care coordination company that grossed more than $650,000 in its first eight months of operation last year, also posted on Facebook about her financial success.

For Sweetest Day last October, she shared videos and photographs on Facebook showing stacks of cash and Gucci shopping bags displayed in her Sybaris hotel room. 

“Sybaris Tonight Wit 40K Cash On That Dump Truck You Want & A First Class Trip To Puerto Rico For The Weekend,” Cruse posted.

Cruse brushed off critics of prenatal care coordination company owners who brag on Facebook about their newfound riches.

“We own a business, and the money that we make off of the business, we can do whatever we want with — it’s our money,” Cruse said in a November interview with the Journal Sentinel. “If someone is mad because Markita (Barnes) took a Gucci shopping spree, I mean, that’s her money. She can do what she wants to do with it.”

Timberlake said her department does not focus on how company owners are spending their profits.

“I cannot speak to the individual life circumstances of any given prenatal care coordination provider,” she said. “I can’t speak to people’s choices about what they share and don’t share on social media.”

Barnes defended her posts as “inspirational.”

“You hear it in rap songs all the time,” Barnes said. “You hear it from people that came from nothing to something.”

‘Avenues of fraud’

Criminal charges against people in the prenatal care coordination industry have been rare.

Chappelle Roe, the woman who claimed to be helping clients in Milwaukee on Christmas Eve while prosecutors say she was actually in Alabama, is the only owner of a prenatal care coordination company in Wisconsin to be criminally charged for using her agency to pocket Medicaid money in recent years, according to the state DOJ.

Candiace Pulliam, an employee of another PNCC, was convicted of Medicaid fraud in 2016 in a separate scheme. Pulliam was billing for services she claimed to provide to mothers of non-existent babies, court documents show. Pulliam was sentenced in Milwaukee County to three years of probation and ordered to pay $16,483. A two-year prison sentence was stayed. 

The Pulliam conviction came nearly a decade after a PNCC fraud case that involved an owner and employees falsifying Medicaid billing records. Five people were convicted in that case. 

Today, the recent record seizures and funding suspensions indicate regulators and prosecutors may be cracking down. 

“The data reveal several potential avenues of fraud,” the confidential memo said. Among the avenues listed in the memo were stealing Medicaid numbers and false billing.

State auditors found repeated instances of suspected fraud, forgeries and fictitious billing in audits of 17 prenatal care coordination companies from 2014-2018, according to a review of the documents that were obtained through the state open records law. The agencies, some of which have since shut, received overpayments of about $1 million, the audits show.

“They’ve discovered a way to make money quickly, apparently, and easily,” said Barbara Zabawa, an attorney and assistant professor at the University of Wisconsin-Milwaukee College of Health Sciences.

“That’s a red flag for potential fraud,” said Zabawa, who also owns the Center for Health and Wellness Law, a Dane County law firm specializing in health care issues. 

More aggressive enforcement of Medicaid fraud laws are needed, she added. 

A 2018 state audit of Life Enhancement Supportive Services Community found that the now-defunct prenatal care coordination company received more than $227,000 in Medicaid overpayments due to improper billing.

The company’s owner, Tonyetta Ross, blamed her competitors, whom she suspects reported her company to regulators.

“It’s one of those dog-eat-dog kind of competitions. If you can cause trouble for one provider, that pushes their clients out,” Ross said in an interview in her southside home.

Ross was paid $241,600 in 2017 even though her prenatal care coordination company brought in $570,000 that year — meaning the agency was spending 42% of its revenue on her salary, according to the nonprofit’s tax records.  

Ross denied wrongdoing.

“I did OK for myself,” she said. “So I don’t have any reason to steal anything from anybody.” 

It’s unclear from records how much money she paid back to the state.

Records show a prenatal care coordination company audit has not been completed in Wisconsin since 2019, in part because of a state Supreme Court ruling that limited the state’s ability to conduct the reviews. The state is revising its audit procedure.

In 2020, justices ruled that the state had exceeded its authority by demanding the repayment of Medicaid money because of paperwork errors by health care providers often found during audits. Kathleen Papa, a registered nurse, sued the Department of Health Services, arguing that despite the errors, the work was done.

Insurance giant United Healthcare said that in April 2021 it had stopped working with new prenatal care coordination companies in Wisconsin. Among the reasons it cited in a letter to the state Department of Health Services: Chappelle Roe’s continued involvement in the industry following her conviction for defrauding the program. 

“UHC has located a Facebook group titled ‘How to Start a Prenatal Care Coordination Agency,'” a United Healthcare compliance officer wrote in the June 8 letter. “It appears based on posts within the Facebook page, multiple current prenatal care coordination companies have used this entity for assistance.”

The insurance company declined to comment for this story.

In posts on the Facebook page, Roe’s company congratulated a variety of agencies, including Here For You and We Care, on their openings.

“Congratulations to Here For You, PNCC Services,” the January 2021 post read. “Thank you for allowing us to help you get open.”

United Healthcare wrote that in May it had submitted two fraud tips to state officials about “PNCC agencies enrolling members without their consent or knowledge and multiple PNCC agencies billing for the same member and timeframe.”

The confidential health services department memo states that from January 1, 2018, to August of last year there were more than 11,100 cases of “consecutive billing” — that is, two companies billing Medicaid for the same client. 

The department found 77 prenatal care coordination companies with at least one case of consecutive billing, including 27 that “have over 100 instances of consecutive billing,” the memo said.

In her new role as a consultant for prenatal care coordination company owners, Roe said she urges them to be wary of authorities and to keep detailed records.

“I tell them the state will not play with you. They will put you in a situation where you’re fighting for your freedom,” Roe said. “You do not want to be out here billing for services that you do not provide.”

A popular recruitment tool used by several Milwaukee prenatal care coordination companies is to hold “community baby showers,” where pregnant women may receive gifts or cash after they show their Medicaid cards. Some of the companies offer additional gifts for referrals.

“The old Tupperware party model, but it’s for defrauding Medicaid,” said Michael Arrigo, a California-based Medicaid fraud expert. 

In its June letter, United Healthcare urged the state to end the practice, saying that prenatal care coordination companies should refer the women to other agencies to get gifts and supplies instead of using them as a recruitment incentive.

Baize, the inspector general, cited “offering unlawful incentives to Medicaid members” as a reason for suspending Medicaid payments to the four prenatal care coordination agencies in November.  

“They’re taking dollars away from needy families or mothers who do need that care,” Arrigo said. “And that’s really sad. That’s really harming people.”

Erin Caughey, Sophie Carson and Andrew Mollica of the Journal Sentinel staff contributed to this report.

Contact Cary Spivak at (414) 550-0070 or cspivak@jrn.com. Follow him on Twitter at @cspivak.

Contact Mary Spicuzza at (414) 224-2324 or mary.spicuzza@jrn.com. Follow her on Twitter at @MSpicuzzaMJS.