Do You Know Where Your Medical ID Card is?
by Michael Brandt

If you think identity theft and fraud are only associated with lost or stolen credit cards or Social Security numbers think again. As the fastest growing form of healthcare fraud, medical identity theft continues to be a significant financial drain on the health system.

Medical identify theft is a criminal activity that involves someone using a health plan member’s name and health insurance without the member’s knowledge or consent to get medical treatment, benefits, prescription drugs, or goods. It’s the most complicated form of identify theft. It’s easy to commit and difficult to detect. It leaves a trail of falsified medical information, which can have a devastating long-term effect that may be difficult and costly to remedy.

In 2005, 3% of the 8.3 million identity theft victims had their personal information used falsely to get medical treatment and services. The Centers for Medicare and Medicaid Service (CMS) indicates that $60 billion to $100 billion of the $2 trillion spent on healthcare in 2006 is attributed to healthcare fraud, which is about 3% to 5% of the total spent on healthcare in this country, according to the Federal Trade Commission’s 2006 Identity Theft Survey Report.

There appears to be no shortage of unscrupulous people responsible for these thefts. Theft is coming from elaborate fraud rings that use complicated schemes to use stolen medical identities. It is also coming from medical professionals who bill for services that have not been performed. Friends and family members have also been known to use members’ medical identification to take advantage of services, such as receiving hospital treatments, ordering prescription medications, or getting durable medical equipment.

When medical ID cards are misused, health records may be compromised, which can wreak havoc on the targeted prey. Victims can be subject to inaccurate medical treatment. They may fail pre-employment medical exams or even become uninsurable. If left unchecked, a victim’s credit records could be at risk and lifetime health plan coverage maximums might be reached prematurely. On a global scale, the fraud associated with medical identity theft could affect the overall cost of healthcare, resulting in higher premiums and taxes, as well as increased co-payments.
No one is immune to this threat, but brokers can help their clients understand the perils of medical identity theft, provide assistance and instructions on ways to safeguard personal information and on steps to take if they are victimized.

At a minimum, a victim of medical ID theft should be advised to file a police report immediately, notify their insurance carrier, and alert their provider of the problem. They should also check their credit rating for discrepancies and file a complaint with the Federal Trade Commission, which can provide some consumer protection and legal assistance. Victims should review their medical records and work with their providers and health plan carriers to correct any misinformation to avoid inappropriate life threatening treatment.

Perhaps, the simplest rule of thumb is to treat a medical identification card and its account numbers like a credit card with a $1 million limit.
Here are some tips that may help clients protect their medical information:
• Keep tabs on all medical identity cards. Do not leave them at a provider’s office, hospital or with other medical service providers.
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Restrict all access to medical ID cards and don’t allow anyone else to use an ID card for any medical reason. Unauthorized use will compromise health records and could be considered a criminal offense.
• Do not give a medical ID number to telemarketers, unauthorized persons, or clinics providing free services. They can use that information to submit false claims to the insurance company without the member’s knowledge.
• Review explanations of benefits (EOBs) and other information from your health insurer carefully to validate the services received. Look for any red flags that could signal deceptive filings, such as errors in group or account numbers and inaccurate names of medical professionals and facilities or procedures. Alert the health plan provider of any inconsistencies. Let your insurer know if you did not receive the medical care identified on the EOB.
• Consider shredding all medical documents, including EOBs, registration forms for inpatient or outpatient services, and pharmacy prescription labels once the information is no longer significant to your healthcare. Any necessary medical information that needs to be retained should be stored in a locked file.
• Check credit reports annually for any discrepancies since incorrect information could lead to legal liabilities and financial losses. Identity theft insurance can be purchased from any home insurance carrier, which should provide a certain amount of protection.
• Be wary of e-mails with recommendations to update your account immediately since most of these invitations are scams. When in doubt, call the healthcare provider and verify the request.
• Maximize protection to online medical records by rotating access passwords frequently.
One final note: Everyone has the right to review and correct errors in their medical records. Providers are required to make copies of their records available to patients upon request. Even if the provider charges a fee for the report, get a copy annually to monitor for accuracy.
For additional assistance and information about medical identify theft, contact the World Privacy Forum at www.worldprivacyforum.org, The Coalition against Insurance Fraud at www.insurancefraud.org/medical_id_theft, and the Federal Trade Commission at www.ftc.org. Identity theft complaints can be filed online with the FTC at www.consumer.gov/idtheft.
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Michael Brandt is the senior manager for special investigations at Blue Shield of California. He is a certified fraud specialist, an accredited healthcare fraud investigator and a California private investigator. He has lectured on national healthcare fraud issues. In 2007, Brandt participated in a State Blue Ribbon Commission for the California Department of Insurance’s advisory task force on insurance fraud focusing on combating disability, life and health insurance fraud in California.