Tackling Healthcare Fraud With Medical Licensing

Updated May 1, 2026

Healthcare fraud isn't a fringe problem. It's an industry-wide crisis. It touches every part of the ecosystem: patients, doctors, insurance companies, hospitals. It drives up insurance premiums, exposes patients to unnecessary medical procedures, and increases taxes. The losses run into tens of billions of dollars every year, according to the FBI. And just like fraud in other contexts, much of it revolves around identity. At its core, healthcare fraud is an identity problem. Impersonation of doctors, patients, and insurers alike is the mechanism behind most of the losses.

Healthcare fraud is difficult to detect. Fraudulent transactions can look legitimate, and given the high costs of services and medicine and the sheer amount of paperwork involved, few transactions arouse suspicion. Fraudsters exploit the trust placed in healthcare providers to operate at scale, spreading false billings across multiple insurers and public programs like Medicare and Medicaid simultaneously, which increases their proceeds while reducing the chance that any single payer catches the pattern. In some cases, they even use records of deceased patients to fabricate claims.

Healthcare fraud actors operate across every level of the system. Here are some of the most common tactics:

Medical professionals

• Double billing: Submitting multiple claims for the same service to collect duplicate payments
• Phantom billing: Billing for services, visits, or supplies the patient never actually received
• Unbundling: Submitting multiple separate bills for a single service to inflate the total charge
• They also send patients more than one bill for the same service, or bill for a more complicated or expensive procedure than the one the patient received (known as upcoding)
• Doctors falsify records to justify fraudulent claims and bills
• Doctors perform unnecessary procedures or tests on patients
• 24% of healthcare employees know someone who has sold their medical access to an outsider, giving fraudsters access to services, products, or money
• Some doctors provide kickbacks to other doctors for referrals
• Doctors put false diagnosis codes into medical records to generate false disability payments or reimbursements

Patients and others

• Patients use other people's health insurance, or allow others to use their insurance
• Patients create fake bills for services they didn't receive, often using other people's personal information, and then bill insurance companies or Medicare
• Fraudsters use bogus marketing schemes, convincing people to provide their health insurance ID and personal information under false pretenses, to bill for non-rendered services, steal identities, or enroll victims in fake benefit plans
• People impersonate medical professionals to bill for or obtain health services or equipment without a license
• Patients forge prescriptions
• Patients sell their prescription medication
• Patients jump from doctor to doctor to obtain prescriptions
• People impersonate doctors to collect income from patients, bill insurance companies, or create online personas that generate advertising revenue or other benefits
• People steal doctors' personal information, such as Social Security numbers, to forge documents, including prescriptions for medications like Oxycodone. Sometimes this information is retrieved from third-party doctor portals by hackers.

Like real estate fraud, healthcare fraud succeeds because of the amount of money, paperwork, and parties involved. But the financial losses are only part of the story. Healthcare fraud has a human cost: patients subjected to unnecessary or unsafe medical procedures, medical records compromised by identity theft, and legitimate insurance information used to subsidize fraudulent claims that erode coverage for everyone.

Combating healthcare fraud through medical licensing

One way to combat healthcare fraud is through the medical licensing system. Medical licensing ensures that only qualified doctors are allowed to practice medicine. The backgrounds and qualifications of healthcare providers must be verified by medical licensing boards before they can practice medicine, and anyone with a history of unethical behavior, including fraud, will not be allowed to practice. Medical licensing boards also require licensed doctors to follow strict codes of conduct and abide by ethical standards, which can serve as a deterrent to fraud.

Identity verification in medical licensing is one of the most direct defenses against healthcare fraud. Knowing who is on the other side of that license application isn't optional; it's the foundation of a trustworthy healthcare system.

Proof can make the licensing process more secure and efficient by verifying medical providers online. With Proof, medical licensing boards can put a simple link on their website for applicants to verify their identity. Proof will scan a person's ID, validate that the person physically in front of the camera matches the person on the ID, and then run the applicant's information through an industry-leading fraud decision engine. If successful, the applicant will sign a form to confirm their identity.

In the end, the licensing board receives a Proof Identity Report, which captures all the information that was verified and provides the organization with all the evidence. If an applicant can't verify their identity, they will immediately be connected to a live human: a notary from the Notarize Network. Notaries can also serve as a trusted agent to verify an identity, with almost no wait times and no need for an appointment.

Ensuring that doctors are properly licensed and that their identity has been properly verified is a concrete step toward reducing healthcare fraud. Effective, efficient identity verification through Proof during the licensing process helps medical licensing boards complete this critical step.

How medical licensing boards can use Proof

Most healthcare fraud depends on an identity gap: someone pretending to be a licensed provider, a covered patient, or an authorized biller. Closing that gap at the licensing stage means fewer fraudulent actors enter the system in the first place. Platforms like Proof verify applicant identity through credential analysis, biometric matching, and fraud-risk scoring before a license application can be completed. That evidence is captured in a verifiable identity report, creating a defensible record for licensing boards.

Proof integrates directly into the licensing workflow. Medical licensing boards can place a verification link on their website, and applicants complete the identity check online: ID scan, biometric match, fraud scoring, and digital signature. If an applicant cannot verify their identity automatically, they are connected to a live notary from the Notarize Network, with no appointment required. The licensing board receives a complete Proof Identity Report documenting exactly what was verified and when.