You Can’t Afford Not to Monitor Healthcare Licenses and Sanctions

Person taking notes and using a calculator with a form pulled up on their computer

“An ounce of prevention is worth a pound of cure.” At least that is what Benjamin Franklin said a century ago. He is right, and that was insightful – even before his face would appear on U.S. currency. Little did he know how many “Benjamins” it would cost a healthcare company in fines for non-compliance with licenses.

Benjamin_blog.jpgA license to practice as a healthcare professional such as a Nurse, Doctor, Physical Therapist is a privilege and not a right. To obtain a medical or healthcare professional license, a person must meet certain education and proficiency requirements.

How important is it that a medical professional has a current license? What if any restrictions are placed upon that license by a healthcare board or disciplinary action? What role is that healthcare provider playing in the delivery of healthcare services in your organization? These are all important and relevant questions to your HR, Compliance, and Risk departments. 

To provide lawful and reimbursable care, a healthcare professional must be trained and educated according to their chosen concentration. In certain positions, they must also be licensed. Today there are over 80+ healthcare boards that license individuals. Each state regulates these disciplines, and most have a disciplinary board that can take action against a license.  

It is the responsibility of the employer to verify and monitor the status of the healthcare professional’s license. Common law doctrines of Respondeat Superior hold the employer liable for the actions of its employees and/or contractors. In addition, it is the employer that will be fined for hiring or conducting business with an unlicensed healthcare provider. Needless to say, reimbursements for unlicensed care or even for services that were claimed to be provided, but not actually provided, can result in fines and penalties.

Did you know, the most common reason a person is listed on the OIG List of Excluded Individuals and Entities (OIG-LEIE) resulted or stemmed from a license revocation or action taken by a state licensing board?

29,479 exclusions out of 67,890 are a direct result of a license revocation or suspension.

How Much Does it Cost to Verify a Healthcare License?  

State licensing boards for each profession or specialty publish their list. You can search an individual’s license one name at a time, and all you need in most cases is a name and license number. Some states require more data to search. Records contain status, date of issuance, date of expiration and any restrictions and/or disciplinary actions associated.

(NOTE:  Be aware of multi-state licenses and the rules around their use in other states).  

If you want to control the entire process, you can download some states’ license data and build your own database search engine; this is costly and requires some heavy duty programming.

Many providers are choosing to outsource the process to a third party. ProviderTrust offers license verification and monitoring for disciplinary actions. A license needs to be verified at hire and at least upon expiration (for most providers, every two years). However, if you are only searching on or before the date of expiration, you will not find a restriction, suspension or limitation that may be placed upon the license by a state board or disciplinary board action, in between renewal periods.

For example, if a nurse gets her license on June 1, 2016, her renewal or expiration might be May 30th or June 1, 2018. However, if she is brought before the board for disciplinary action resulting from illegal drug diversion or use in February 2017, and you are not monitoring that license for any monthly disciplinary actions, you will not discover the infraction until June 2018.

Gaps in License Verification Put Your Company at Risk

State License Board Fines

For example, take a look at the Texas Board of Nursing Disciplinary Matrix. Fines are based on regulations of the board and depend on a threat to public safety, the seriousness of the violation, the number of offenses and aggravating or mitigating factors. Offenses are tiered and sanctions associated depending on the level of offense. Lowest levels require education and a $250.00 fine for each violation. Fines escalate depending on levels and can include reprimand, cease and desist, random drug testing, suspension or revocation of a license. Fines can increase to $500 per violation.  

CMS Reimbursements for False Claims  

The submission of a claim for services that were not actually rendered, not billed correctly, or provided by an unlicensed provider can result in the submission of a false claim under the False Claims Act. These fines can exceed $11,000 per violation, and result in loss of billing privileges.

Civil Monetary Penalties for Excluded Individuals

Fines issued by OIG for an excluded individual can be up to $10,000 per item claimed, plus treble damages (if not self-disclosed) or three times the salary and benefits of the individual during the time he/she was excluded and working for the employer while billing.

Possible Lawsuit for Negligent Hire/Retention

Malpractice Lawsuit 

Healthcare License Verification is a Small Fee for a Big Reward

The cost of verifying a license can be less than a cup of coffee (even a double macchiato at Starbucks). The cost of monitoring each month for disciplinary actions can be less than $2.00 per monthSo ask yourself, is the cost of a movie ticket too much to pay per employee to avoid thousands if not more in fines and penalties? That is an ounce of prevention to avoid a lot of Benjamins! 


Written by Michael Rosen, ESQ

ProviderTrust Co-Founder,

Michael brings over 20 years of experience founding and leading risk mitigation businesses, receiving numerous accolades such as: Inc Magazine’s Inc 500 Award and Nashville Chamber of Commerce Small Business of the Year.

 Connect with Michael on Linkedin

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