ON JULY 8, 1990, JAMES MCELVEEN, 29, a house painter from New Orleans, was hiking near the Natchez Trace Parkway in central Tennessee with five friends. Scrambling along a slippery slope beside the Fall Hollow waterfall. McElveen took a step on what he assumed was a leaf-strewn rock. He was wrong; it was the top of a tree, and McElveen plummeted 30 feet through the foliage. McElveen's best friend, Benny Milligan, 29, rushed to his side. "He was lying facedown and unconscious in 18 inches of water," says Milligan. "It was a bad situation."

Convinced McElveen might die before an ambulance could be summoned, his friends put him in the backseat of their rented Toyota Camry and sped off toward the tiny Lewis Community Hospital in Hohenwald, about 10 miles away. En route, Milligan, a technician at a Martin Marietta plant in New Orleans, and his wife, Tammy, began to worry out loud about what might happen next. They knew that McElveen worked for a small company with no health benefits and had recently complained that he couldn't afford to buy insurance on his own. Would he be turned away from the hospital?

At the emergency-room entrance, as a doctor checked McElveen's vital signs, a woman with a clipboard approached Milligan and asked for the patient's name and insurance information. Unbeknownst to his wife and friends, Milligan said, "His name is Benny Milligan. He works at Martin Marietta in New Orleans." Then he proceeded to give her his own insurance account number. Says Milligan: "I thought James was going to die unless something was done immediately." Thus began a well-intentioned yet criminally fraudulent insurance switch that would lead to anguish and imprisonment for both Milligan and McElveen. It has become a nightmarish parable for many of the 35.4 million other Americans who have no health coverage.

At the hospital, Tammy Milligan quickly learned the role she was to play. "When [the medical staff] tried to straighten James's back out, he started moaning and whining," Tammy says. "So I said, 'Come on, James. Please be still.' Benny nudged me on the arm and said, 'He's Benny. Don't ask nothin'.' In my heart, I was relieved. I knew then that he was going to get taken care of." Assuming Tammy was the patient's wife, hospital workers summoned her into the X-ray room to help keep James calm. But when they started to pull his pants down, she hurried out the door in embarrassment and nearly collided with a second clipboard-wielding administrator who asked her to sign an insurance-authorization form. "I knew it was wrong," Tammy says. "But what else could I do?"

Two days later, while his friends returned to work in New Orleans, McElveen was transferred to the larger Vanderbilt University Medical Center in Nashville. Regaining consciousness, McElveen was disoriented. "I didn't know why I was there," he says. "I just knew I was in a lot of pain and I was being called Benny." Remarkably, though the Milligans insist he knew nothing of their plan, McElveen says he quickly realized what was going on and decided to say nothing about it. Doctors informed him a vertebra had been shattered and recommended he undergo surgery to remove bone fragments that might cause nerve damage. The alternative was to lie in a cast for three months in hopes his back would heal itself. "I figured they wouldn't give me the operation if they knew I didn't have insurance," McElveen says. "So I didn't tell them who I was. I was afraid I would end up paralyzed."

The surgery was successful, and eight days later McElveen was released into the care of friends who lived nearby. The Milligans, though, grew increasingly worried they would be caught. "I knew what I had done was against company policy and that I would probably lose my job," Milligan says. "The weight of this thing was just bearing down on me more and more each day. I'm not a very good criminal." A month after the accident, Milligan made an appointment to see an employee counselor at Martin Marietta but lost his nerve and cut the meeting short. "I was just really scared and couldn't come out with the truth," he says.

In September 1990, Milligan was called in by an investigator at work and confronted with the health-claim forms. Milligan, who had been treated for minor leg abrasions suffered when he helped rescue McElveen, lied, suggesting there must have been a records mix-up at the hospital. "They pulled my badge and told me I was fired," he says. Since Martin Marietta handles federal defense contracts—and is therefore insured by the government—federal agents interrogated Benny and Tammy separately a few days later. "I told the same lies, but as they went along they got bigger," he says. For her part, Tammy claimed ignorance.

"I felt awful," says McElveen, who had returned to New Orleans by then. "Benny didn't know what he was going to do about his family." Finally, in May 1991, federal agents with guns drawn surrounded the Milligans" home outside New Orleans. Both Benny and Tammy, who was pregnant with their third child, were arrested and held briefly before being arraigned for felony fraud. They left their frightened daughters, Amanda, now 6, and Kandace, 4, with relatives. McElveen surrendered that day and was also charged with fraud.

In federal court last November, Milligan tried to convince Judge Thomas Higgins that he alone should bear responsibility for the insurance switch. "When I took James lo the hospital, he was unconscious," Milligan says. "It was totally my fault that he ended up there fraudulently." Nonetheless, the Milligans and McElveen are now paying a heavy price for the deception. Last month, James and Benny began doing time at a federal prison in Carville, La. Milligan was sentenced to nine months, McElveen to seven. Meanwhile, Tammy was sentenced to four months confinement at her home. The Milligans and McElveen must also repay the $41,107.25 in medical costs from McElveen's accident.

Judge Higgins argued that he was as lenient as he could be with the trio. "These are not bad people," he said. "They didn't set out to scheme, to bilk anybody.... [But] it's the lying in this case that really gets to me.... I don I believe they made a full, candid and straightforward admission of the factual elements of this offense."

To compound their anguish, Tammy and her husband discovered during the trial that federal law requires that emergency care must be provided by any hospital that receives Medicare and Medicaid, regardless of whether the patient has insurance. "We didn't know the hospital had to take him in," Tammy says. "It was just a panic situation." Dennis Devito, the surgeon who was at Vanderbilt, says it was a shame McElveen was not more open with him. "I would have fixed him anyway," Devito says. "I've taken care of a lot of people who said they had no insurance."

Ironically, the Milligans, stripped of their coverage at Martin Marietta, were unable to procure any other medical insurance as they awaited trial. Medicaid covered the costs when Brittany Milligan was born in October 1991. But shortly after the trial, Tammy, who had lost a kidney as a child, was stricken with a severe and potentially life-threatening infection in her remaining kidney. A local hospital was obliged to admit her, and she was well enough to return home after a few days. But she and her husband now have unpaid medical bills totaling $8,000 in addition to the amount they owe for helping their friend.

Under the terms of her sentence, Tammy is allowed to go to work each day as a waitress, where she earns $100 a week but has no health benefits. Strapped for funds lo support her family, she is appealing a probation officer's order that she pay $300 a month in restitution for McElveen's medical expenses. McElveen and Milligan, meanwhile, find consolation in the fact that they are doing their time in prison together. "We have to watch out for each other, and that's what we do," says McElveen. "It's definite proof there are best friends in the world."

DAVID GROGAN
RON RIDENHOUR in New Orleans and AMY ESKIND in Nashville