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Are you being Credentialed Illegally?

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How to spot illegal credentialing

The industry of provider enrollment needs more integrity and consistency. Provider enrollment often encounters challenges from various illegal enrollment practices. From fraudulent activities to systemic loopholes, people try to cheat the system in many ways in hopes of getting more money faster.

In this article, we delve into different ways individuals have been unlawfully enrolled with insurance companies, shedding light on the methods and consequences of such actions.

  1. Identity Theft and Fabricated Information: Identity theft remains a prevalent method for illegal enrollment. People acquire and utilize personal information to enroll individuals without their consent or knowledge. Additionally, fabricated information, such as falsified identities or credentials, is employed to bypass verification processes, leading to unauthorized enrollments. This is commonly seen when providers leave previous employers/credentialing specialists on a sour note.

  2. Forged Documentation and Altered Records: Fraudulent documentation, including forged signatures, altered records, or falsified eligibility criteria, serves as another avenue for illegal enrollment. By creating counterfeit documents, individuals seek to deceive insurance companies into approving enrollments based on misrepresented information. This is most common when an office worker or someone other than the owner is listed as a legal representative for the clinic. This is also common when owners try to skirt the legal requirements of an insurance company.

  3. Exploitation of Vulnerable Populations: Vulnerable populations, such as the elderly or individuals with limited English proficiency, are often targeted for illegal enrollment schemes. Clinics or credentialing specialists can use their weaknesses to enroll them illegally. This is commonly seen with clinics utilizing the provider's information to obtain credentialing with an insurance company and leaving the provider out of the loop.

  4. Systemic Gaps and Weaknesses: Inadequacies within enrollment systems and processes can inadvertently facilitate illegal enrollments. Systemic gaps, including lax verification protocols, inadequate oversight, or outdated technology, create opportunities for exploitation by individuals with malicious intent. This is becoming less common as insurance companies tighten their requirements and standards.

  5. Cross-State Enrollment Violations: In cases where insurance regulations vary across states, individuals may exploit regulatory disparities to engage in cross-state enrollment violations. By circumventing regulatory requirements, perpetrators enroll individuals in states where they are not eligible, thereby evading scrutiny and detection. This is very common with clinics near state borders.

Here are a few real-life illegal scenarios that I have seen/cleaned up.

Scenario: Provider A leaves the clinic mid-credentialing. The clinic continues credentialing provider A so that provider B, provider A's replacement, can use it to bill provider B's services until provider B is credentialed.

Why it's illegal: When a provider is credentialed with an insurance company, they have a contract with that insurance company. It says the named provider will provide specific services to a particular location. Once a provider uses another provider's information to bill, they open both providers and the practice up to legal liability for breach of contract and any liabilities should something medically go wrong.

Solution: Notify the insurance company that Provider A is no longer with the clinic. Start the credentialing process for Provider B. Wait to see patients with that insurance until Provider B's credentialing is complete.

Scenario: The credentialing specialist or office employee lists themselves as an authorized official for PECOS, so the owner doesn't have to sign anything.

Why it's illegal: An authorized official can legally represent the clinic. By listing someone who is not legally able to speak on behalf of the clinic, the owner is putting the clinic, themselves, and the individual listed at risk.

Solution: Only list people who can legally speak on behalf of the clinic. Everyone else should be listed as an access manager or staff.

Scenario: An owner has a clinic in state A. State B, which is adjacent to state A, requires that you have a physical location in state B to be enrolled. The owner lies and says he has a clinic in state B so that they can get patients from those states. The owner fakes an address to enroll with the insurance in state B to get approved.

Why it's illegal: Not only is the owner lying to the insurance company and will get in trouble, but they could also get in trouble with the state


  1. Only enroll for the states in which you have a physical clinic.

  2. Check with the insurance to see if it's legal to be enrolled with it if you're on the border of a state.

  3. If necessary, open a second clinic in the adjacent state.

The ramifications of illegal enrollment extend beyond financial losses, comprising healthcare quality, erosion of trust in insurance systems, and legal repercussions for perpetrators and unwitting participants. To combat unlawful enrollment effectively, owners and providers must collaborate to strengthen verification mechanisms, enhance regulatory oversight, and promote awareness of fraudulent practices.

Ultimately, safeguarding the integrity of insurance enrollment requires everyone involved. Owners and providers need to do their part by understanding the nuances of illegal enrollment practices. By working together, we can strengthen fraud defenses and ensure integrity in insurance enrollment.

If you're unsure how you are credentialed or want to check for peace of mind, schedule a free 30-minute consultation today. 

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