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We Showed How Easy It Is to Commit Health Care Fraud. Now Senators Want to Close the Loophole.

by Marshall Allen

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

Four United States senators have introduced a bipartisan bill to close a little-known, but gaping, loophole that allows scammers to plunder commercial insurers by posing as licensed medical providers.

The Medical License Verification Act, introduced Thursday, comes in response to a July ProPublica story that showed how absurdly easy it is to commit health care fraud, which experts say could be costing Americans hundreds of billions of dollars a year. ProPublica told the story of David Williams, a Texas personal trainer and convicted felon, who represented himself as a licensed physician when he applied for National Provider Identifiers, the unique numbers required by the federal government to bill insurance plans.

The Centers for Medicare and Medicaid Services administers the NPI program. But ProPublica found that it did not verify whether applicants had valid medical licenses, which could be done easily by checking with state licensing boards. That missing step allowed Williams to collect at least 20 different NPI numbers and bill some of the nation’s most prominent health insurers, Aetna, Cigna and UnitedHealthcare, for millions of dollars in bogus medical services.

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The insurance companies auto-paid the claims without checking to see if Williams had a license. Over more than four years, Williams filed more than $25 million in false claims with the companies, reaping more than $4 million. Some insurers actually sent him letters noting he wasn’t a doctor and was filing false claims, but they continued to pay new claims anyway. In 2018, a jury convicted him of health care fraud and he’s now in federal prison.

At his trial, investigators for the insurers said that their companies assume people are being honest when they file claims.The insurers told ProPublica it wasn’t easy to stop the fraud because Williams billed them using different organization names and tax identification numbers.

The proposed Medical License Verification Act would require Medicare to verify that an NPI applicant’s license is valid and in good standing before approving an NPI number. Sen. Rick Scott, R-Fla., called it a “commonsense step” in a statement released by the legislators. Consumers pay for fraud losses, Scott said, so the proposal will “prevent bad actors from defrauding families.”

Cracking down on unlicensed providers will prevent fraud and lower health care costs across the board, Sen. Chris Van Hollen, D-Md., said in the statement. The bill was also signed by Sen. John Cornyn, R-Texas, and Sen. Catherine Cortez Masto, D-Nev. The bill’s next step is to be assigned to a committee, where it will be considered, according to Scott’s spokeswoman.

Health insurers are regarded as fierce defenders of health care dollars. But the case of David Williams shows one reason America’s health care costs continue to rise. The personal trainer spent years posing as a doctor and billing the nation’s top insurers, making off with millions.

A Medicare official said the agency does not comment on proposed legislation. The trade group America’s Health Insurance Plans, better known as AHIP, did not reply to a request for comment about the proposed legislation.

In the Williams case, the insurers and regulators were slow to stop the personal trainer’s fraud even though his ex-wife and her father, Jim Pratte, had been reporting the criminal activity to them. Pratte said Thursday that he was pleased to hear about lawmakers’ proposal to block scammers like Williams from easily getting NPI numbers. Politicians have talked for years about how to pay for the high cost of health care, Pratte said. “One major thing you can do without hurting anybody is cut out the fraud,” he said.

The failure of insurers to take prompt action against Williams, and the ease of his fraud, led ProPublica to look at how aggressively such scams are pursued. Across the country, ProPublica found that insurance carriers not only made it easy for fraud to happen, they seldom pursued the fraudsters or referred them for prosecution.

Have you worked in health insurance or employer-sponsored health benefits? ProPublica is investigating the industry and wants to hear from you. Please complete our brief questionnaire.

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