What is the Medical License Verification Act?

In 2019, the nonprofit news service, ProPublica, published a story about health care fraud. The story, which included reporting about a Texas-based personal trainer, shows how easy it can be to bill health insurance providers for services despite lacking any legal basis for doing so.

Unfortunately, as the ProPublica report points out, there are some problems with the current health care billing system. The Medical License Verification Act would change that.

Obtaining a National Provider Identifier number

Insurance providers typically only pay for care that licensed medical professionals provide. Therefore, before billing insurers for medical services or receiving payment, health care professionals must obtain a National Provider Identifier number from the Centers for Medicare and Medicaid Services.

Defrauding insurance providers

The CMS does not currently verify whether an individual requesting an NPI number has a valid medical license that is in good standing in the state where he or she practices. Consequently, non-physicians may obtain NPIs and improperly bill health insurance providers. This, of course, may constitute a violation of federal law.

Correcting the problem

Purportedly to close the verification loophole and protect insurers and patients from health care fraud, a group of senators introduced the Medical License Verification Act in February 2020. The legislation would simply require the CMS to verify an applicant’s medical credentials before issuing an NPI number.

The Medical License Verification Act currently sits in the U.S. Senate Committee on Finance and has not become law. Still, if it passes, the bill is likely both to crack down on unlicensed medical providers and to reduce fraudulent billing, potentially saving taxpayers billions in health care costs.